Chipping Away - Busting Debt in Boston

My Question of the Day!

2006-08-24T11:07:00.000-05:00

Today's my day to post a question fo the day for the Question of the Day Marathon, and after a bit of a late start, and some thinking, here it is:

If tomorrow you were to suddenly find yourself unemployed, what would your action plan be and how much trouble do you feel you'd be in?

I'll publish my response after work today as a reply, so as not to influence anyone else's answers. Sorry I'm late on this, it's been pretty crazy at work!

Anotehr Question of the Day

2006-08-23T12:25:00.000-05:00

My apologies for not keeping up with these as well as I should, works been pretty insane. In any case, today we are asked by mapGirl:

How much of a balance do you leave on your checking account(s)?

Enjoy!

Gift Giving - An excersize in planning

2006-08-21T11:46:00.000-05:00

This past weekend was my girlfriend's birthday, and being the kind of person I am, I was pretty excited to get her something that she'd consider an awesome gift. Like many others, I'm sure, I really enjoy giving people gifts. I'm fairly well off, all things considered, and love knowing that I can do nice things for the people that make my life better by being themselves and being involved in my life. Now, this isn't a whiny post about how giving people gifts affects my personal finances, because I love doing it. It's more a question of how you folks plan for it. Do you keep a separate account for gift giving and contribute to it like a vacation fund? is it just something factored into each month's budget? etc etc etc...

Considering that the major days are pretty predictable (Christmas, birthdays, Valentines, etc...) I usually just plan it out in that month's budget. But the more i think of it, it might eb simpler if i was stashing away a little extra on the months when there aren't any big occasions, to lessen the impact on the big months. Also then there is money sitting around for spontaneous gifts (like flying my mother and brother out for Thanksgiving this year...).

So? Anyone want to share how they consider this?

Question of the Day

2006-08-21T08:23:00.000-05:00

For today's Question of the Day, ConsumerismCommentary asks us the following: While growing up, what were you taught about personal money management by your immediate family and surroundings (directly or by example, positive or negative), and how do these ideas factor into your life now?

Head on over to see what myself and lots of others have to say about this. Click it like it ain't no thang. :-)

Finally, My Amex Balance Transfers

2006-08-18T08:59:00.000-05:00

After waiting two weeks for my American Express "convenience" checks to come in, I finally have paid off my car loan of over 13%, and the smaller of my two student loans (only $2,800 @ 5%) in full. My new balance on the American Express Blue Cash card is just under $14,000, at 2.99% interest for the life of the balance. I'm still waiting for the student loan payoff check to clear back to Amex and post to my account summary, so I will know what my minimum payment is for the new balance going forward. The plan is to take whatever the initial minimum is and just pay that amount each month going forward, regardless of what Amex decides my minimum payment should be.

Once that is squared away, I'll be able to budget out a monthly amount for aggressive paydown of my large student loan, starting in September. I was hoping to start hammering away at that loan this month, but with my upcoming moving costs, I feel I might be better off keeping some extra cash on hand and delaying my serious loan payments until I'm settled in the new place.

Question of the Day #8

2006-08-10T15:47:00.000-05:00

First, my apologies to those who have posted questions of the day that I missed. I'll recap when I have a spare moment or two to breathe (arranging my upcoming move is sucking up the bulk of my time, and work's been crazy... but more on that later). Now, with that in mind, today's Question of teh day is brought to us by SavvySaver, who asks the following:

If you had to pinpoint the one financial decision (good or bad) that put you on the path to where you are now, what would it be? If you could do it over, would you change your decision?

Click that like it's goin out of style! :-)

Expensive Move: The Importance of Shopping Around

2006-08-09T07:41:00.000-05:00

As with anything else, shopping around and/or haggling will almost always get you to a better spot than you would be at if you just took the original price offered at face value. At the end of this month I am moving from my current apartment to one just outside the city (less money, more space. hooray!), and since the 1st of the month falls on a Friday it's just about impossible for me to rally up a bunch of friends to help me move. So in the interest of saving myself a lot of headache, I'm shopping around for a moving company to get the job done for me. I'm paying for cnovenience, as is the style in these times.

This definately isn't something I feel badly about, however, since I consider my time and well being quite valuable. Having a moving company take care of relocating my possessions is going to take far less time overall, and save my back/arms/legs/knees/etc... a lot of grief. Is this worth a few hundred bucks? Sure it is. But teh process of selecting and subsequently hiring someone for the job has defniately reminded me about the power of shopping around and haggling. Long story short, the first estimate I received was in the order of $1500 to move my very small apartment a distance of about 10 miles. After some price shopping, comparison, and haggling, I'm likely only going to end up paying $500 or so for essentially the same thing. While I'm sure I could shave another hundred or possibly two off of this total, I only have so much time in a day and only so much time before my move, so I'm considering this a win and booking these movers.

This is just a reminder to all out there. As much as we might think it's the simplest piece of advice out there, don't forget to shop around. Whether it's a digital camera, engagement ring, your favorite chilli-chese dip, or a moving company, someone out there can probably beat your current price with almost the same service or better. Don't put off buying forever, but just make sure you've looked around sufficiently to be sure you're getting the best price you can. Sometimes it can save you hundreds or thousands of dollars.

Likewise, with almost anything, the first price you're told is almost always somewhat negotiable. Give talking them down a shot. The worst thing that'll happen is you'll pay the original price. You were going to do that anyway, so what's the harm? As with shopping around, this can sometimes save you considerable amounts of money without sacrificing quality of service.

Question of the Day Marathon: Day 4

2006-08-04T12:30:00.000-05:00

Today's question is brought to us by Experiments in Finance and asks How many credit cards do you have and what's their combined limit?

Enjoy! :-)

Raises, Bonuses, and Budgeting

2006-08-04T09:26:00.000-05:00

When I got home from vacation one of the first things I did was jump online to check out my bank statement to see where I stood once all the dust settled. As I mentioned, I wasn't quite as careful with money when I was out on vacation. But again, I think that's sorta of the point of a vacation, right?

In any case, I was delighted to see that my first new paycheck had been deposited, as well as this half's profit sharing bonus! The new paycheck was nice to see, since I was promoted recently and got a nice hefty 16.7% raise along with the new title. As far as the bonus, it was considerably larger than I had expected. Long story short, I have a nice emergency stash sitting in my emigrant account now and boguht myself a present (new fuel management for my miata, yet another money-draining hobby of mine, but more on that later). So this month is looking very good, budget-wise.

Now, I SHOULD be up for anotehr pay increase in sepetmber according to the regular schedule of when our company reviews salary and does merit/cost of living increases. This brings me to the following question: When planning out your rough budgeting for a few months out, does anyone ever take this sort of thing into account? And more generally, how does raise/bonus potential affect your budgeting overall?

Anyone? Anyone? Beuller? Beuller?

Consolidating My Debts - Thanks American Express!

2006-08-02T09:44:00.000-05:00

Whew, what a crazy couple fo days since I've returned from vacation! It's definately good to be back into the swing of regular life, but I certainly miss not having to worry about anything (especially money! yuck) for awhile while lounging in the Southern California sun. ;-)

In any case, I had taken an extra day off on Monday to sleep in and reduce the east-to-west-coast jetlag effect on the rest of my first week back at work (and, well, why not take just one mroe day off?), and decided that a good use of the time off was to continue my quest to consolidate my higher-interest debts into something at a significantly lower rate. As a bit of background, because I know I have only mentioned it in passing, I received an offer in the mail a few weeks ago from American Express for a Blue Cash card with an awesoem balance transfer offer: 2.99% for the life of the balance! I'd have to be braindead not to try and do a ton of consolidation onto that card, right?

So looking at the Debt Roundup post I made soem time back, I saw that of my four sources of debt, the one that needed to be dealt with immediately was my Citibank balance which was carrying an insane rate of 15.99 percent! This was my priority balance, so when I applied for the card online I included that balance's transfer information right up front. Long story short, I was approved for the card and the transfer, but my overall credit limit was only a few hundred dollars higher than the transfer. Having the card so close to maxed out didn't give me any room to attempt to move any other balances to my great new rate, though, so on my day off I spent some time on the phone with American Express's customer service folks.

On top of having very friendly and reachable customer service, I'm VERY happy to say that I was quickly awarded a large credit line increase and two more balance transfers that will cover my remaining car loan balance (13.25%) and the smaller of my two student loans (5.00%). My credit limit jumped to $15k and will have a grand total of approximately $13.5k moved over to it by the end of the month. Not only does this DRASTICALLY reduce the interest dollars I'll be charged every month, but it also means that I'll only have two debt balances to send payments to. While this second point doesn't necessarily make things better for me financially, it's a lot easier and has a nice mental effect since I'll be sending a much larger payment to my remaining student loan which carries a 7.25% inetrest rate.

What's the moral of this long winded story? By jumping all over a very nice balance transfer offer that I received in my "junk mail" and aggressively persuing a higher line of credit, I was able to save hundreds or thousands in interest over the payoff period of my debts. Next stop: Finding a way to get a better rate on my student loan while I'm atacking its paydown in earnest.

Question of the Day Marathon: Day 2

2006-08-02T07:46:00.000-05:00

Today's Question of the Day is brought to us by Maggie over at Caustic Musings. Click Click Click! :-)

Question of the Day: Day 1

2006-08-01T11:02:00.000-05:00

Today is the first of many Question of the Day posts that will be running throughout the month. Each weekday this month some volunteering blogger will post a question that we can all ponder and hopefully add our own ideas and feedback.

Today's question is posted over at AllFinancialMatters. I'll leave you in suspense as to what teh question actually is, though. Happy clicking!

Back From Vacation!

2006-07-31T09:18:00.000-05:00

My apologies to anyone who might have been following my blog and hasn't see anything new in awhile. I forgot to mention in my last post that I was headed out for a vacation to visit Vegas and southern California to have fun and visit family, respectively. As with most vacations, I definately spent a LOT more money than I usually would for the month, but isn't that what a vacation is for? To me, vacation's not just about getting away from work and your everyday surroundings, but also from worrying about things like money and other stressors. Not to say vacation means go hog wild about spending, but if you've saved up to take a vacation then take it!

Short post for now, but I'll post again later today about my recent salary increase and bonus check that came in yesterday. And maybe if I'm really ambitious, about my current debt consolidation strategy and how that's going. balance transfers with 2.99% apr for the life of the balance? Thank you very much American Express! :-)

Denied for Credit - Check Those Reports, People

2006-07-17T18:03:00.000-05:00

After waiting almost two weeks for Capital One to process and respond to my application for a card with them, and an associated balance transfer from my current Citibank card, I received a letter stating that my request for credit had been denied. I was more than a little surprised since my credit score is a 714 and I've held credit with ZERO problems (minus one that will be repaired on my credit report by next cycle) since 2000.

The two biggest reasons they cited were that I haven't held a revolving line of credit for a long enough period of time and that i had too many delinquencies on my record. As I mentioned, I've held a credit card in good standing since 2000, so I'm not quite sure how long is long enough for Capital One. Also, my credit report, unbeknownst to me at the time of applying for the new line of credit, has a single ">30 day" late mark from an Old Navy credit card which I held for some time last year. There was a period shortly after I moved where the customer service folks over at Old Navy couldn't seem to take down my new address properly, because it took three calls to eventually start getting statements sent to me again. All in all, I didn't see a single shred of paper from Old Navy for a little over three months.

Long story short, the final time I called and was successful at having my address properly changed, I paid off the remaining balance. I was sucessful in getting the representative to remove the late fee that had been assigned and was informed that the late payment would not be reported to the credit beaureu due to the circumstances. Apparently that wasn't the case...

Fortunately, this will all be behind me by next billing cycle as after a short chat with yet another representative at Old Navy, the late payment mark on my credit report will be corrected and all the accounts listed will have nothing listed except timely and accurate payments. But the moral of the story here is that had I been in the habit of checking my credit report before I applied for that new card, I would have spotted the error sooner and had it corrected. Keep an eye on those credit reports, people. Especially if you're looking at anything like a house or car purchase anytime soon. Don't let someone else's mistake cost you money!

Next post I'll explain why getting denied for that card by Capital One turned out to be a blessing in disguise, since it opened my eyes to a better possibility for consolidating and shifting my debts...

How I let Debt Pile Up - Part 1

2006-07-14T11:15:00.000-05:00

Just read a post over at My Money Path entitled Work is Holding My Money Hostage, and it reminded me of two things. One is that I have done a lot of thinking about the same issue. And two, I actually allowed this phenomenon to assist me in building up more debt...

Similar to the issue mentioned above, when I go somewhere for work, I pay out of pocket with my credit card and later get reimbursed in the form of a check. That check goes into my bank account and then needs to be paid back to my credit card immediately (to avoid racking up extra finance charges). This SHOULD be done in addition to whatever regular monthly payment I was planning on sending to that card anyway. The problem is that more than a few times, I ended up making no additional payment to my card on top of the reimbursement from work, and subsequently let more debt and interest stay on my balance.

Do it once and it's not a huge deal. Do it several months in a row and suddenly you're not only a few months behind on your planned payments, but you're also further in the hole due to additional interest that's built up. To make matters even worse, think of what happens if you purchase a couple things during that period of not really paying into the card... Now where's that balance, again? ;-)

Question of the Day Marathon

2006-07-14T10:11:00.000-05:00

Well this should be fun. I've secured myself a spot in All Things Financial's August Question of the Day Marathon. I'll be posting my contribution on the 23rd of August, and every morning will be linking to the relevant post for the day which will be provided by other like-minded bloggers. Keep an eye out on August 1st for the first question, since I'm sure there will be a good response to this.

Debt Reduction - When to Change Gears?

2006-07-13T09:00:00.000-05:00

I just read a good post over at A Penny Saved... which in turn linked me to a post on Mighty Bargain Hunter's blog entitled "Why is being debt-free so unpopular?"

I wanted to take a second to point this out because the combination of those two posts got my brain wondering about when enough is enough, and when it's time to start shifting my main focus away from simply hammering down as much of my debt as possible and when to start looking more at saving/investing those would-be debt reducing payments. Right now, I have it in my head that until I've reduced my debt to zero, I don't really have any reason to be thinking about somehting like home ownership or investing...

Now, I know what the financially savvy of you are thinking. It's pretty simple math, right? If an investment vehicle offers a higher rate of return than the interest rate on a particular debt, you're better off making the minimum payment on said debt and putting the remainer would-have-been-payment money into the investment. Oversimplified, I know, but that's the basic idea and it makes sense at face value.

However, the picture gets a little muddier if you consider that not all investments have a guaranteed rate of return (in fact, anything reasonably high probably isn't), and muddier still if you want to include the psychological effects that debt vs. no-debt has on you personally. If you're the type of person that can logically understand the fact that your investments are making you mroe money over the long haul than the loss you're taking to interest, then by all means invest away. But if that's a stretch for you and having debt hanging over your head is more worrisome (as I suspect is where most of us live, mentally) it might be a better idea to stay focused on becoming debt-free so you don't get distracted by your debts and allow that to affect your savings and investment goals.

I think there's probably a lot of gray area in there, and lots of points to reasonably start switching gears from aggressively paying down debt to focusing more on investing/saving, it's just a matter of where you're comfortable with it personally. As for my switch-point? I'm not 100% sure, but I'd definately like to hear some opinions on the matter.

Grocery Cards - PILES of Savings

2006-07-13T06:34:00.000-05:00

The last couple of times I've been to the grocery store, I've been pleasantly surprised to find that some brand of almost every item I needed/wanted was on sale if I used my Stop&Shop card at checkout. $10 for 10 for items that usually cost $1.29, ice cream for $1.99 instead of the regular $4.99, or packages of rasberries for $2.50 instead of $4.00... The list goes on and on, and even though the individual discounts never seem like much at the time, it's amazing how much they add up.

See, every receipt I get when I check out has a running total of how much I've saved for the year by taking advantage of the card-specific sale items. The running total? A little over $250 so far this year (keep in mind it's only July). That's more than a whole month of groceries in savings! Suddenly I'm starting to think that coupon-clippers aren't that crazy after all...

Free Money - Thanks PartyPoker!

2006-07-12T07:58:00.000-05:00

This morning as I was getting situated for another day of work, I did the usual things and checked a couple of email accounts and glanced at a couple of blogs I keep tabs on. The blogs hadn't been posted to yet, since it was pretty early, but one of my email addresses had smoething to read which put a big smile on my face. My withdrawal from PartyPoker went through and is waiting in my Neteller account. :-)

This withdrawal doesn't have anything to do with my finances, really, since the money was only in my account for a few days and was only there to take advantage of a bonus code they sent me a few days ago. This time, I only had an extra $150 that I knew I could do without for a few days, which netted me a $30 bonus after I played the required 300 raked hands to release it. Since my quest with poker is to grow a bankroll organically from an initial investment of $50, and eventually be playing high enough stakes to generate a few hundred a month in additional income, I considered the recent deposit a loan to myself. Now that the loan's paid back, I've netted a 20% return on the "investment" in a couple of days, for doing something I would be doing anyway. Thanks PartyPoker!

Pretty soon I'll get motivated enough to add a poker section to this blog to help document my progress on growing my bankroll and generating usable debt-reducing income through poker. Until then, who else likes free money, and where have you found some recently?

Community - A Quick Survey

2006-07-11T08:00:00.000-05:00

I just wanted to take a few moments out of my day to see how the rest of your folks think you'd fare with your finances if PF-blogging didn't exist. I'm sure that most of us would get along just fine and not really see any difference if it were all gone tomrorow (well, except maybe for those of us who take in any reasonable amount of revenue through advertising), but are there some of us out there who actively use blogging as a tool to help achieve goals?

I'm probably somewhere in the middle, to be completely honest. I'm quite motivated enough at this point to see what i want to do and get it done, but all this stuff definately helps. I find it's MUCH easier for me to get my feet wet learning about investing topics, real estate, etc etc etc... when it's in someone's blog versus a book on ths subject. Of course, that wetting-of-the-feet tends to be followed by a desire to understand the topic in much greater detail than blogging allows, so I tend to end up doing a bit more research after the fact. But the blogger/blogging tends to be what gets my butt in gear, so to speak.

So back to the question, how much do you think your financial life is affected by blogging? Is blogging, or reading blogs, something that is driven by your financial life being relatively on track? Or is it the other way around?

Anti-Miser - Frugality without being "Cheap"

2006-07-10T08:32:00.000-05:00

Just a quick post this morning that I thought would be a good thing to pass along, since although it SHOULD be something that makes you think "well duh...", it could be something that you notice you don't quite adhere to all that frequently. The idea is recognizing the difference between being frugal and wise with your money/finances, and being a cheap and miserly bastard. This goes beyond whether or not others view you as a tightwad, because it comes down to how much you let your fear of spending (or your love for saving, depending on the spin you want to put on it) affect your quality of life.

Meandering through some old posts at Worthwhile Living I stumbled across this post which I think paints the difference quite clearly.

Without going into too much more of a rant, I'll just add that this is possibly the most important thing I've learned over the past few months of gradually taking control of my financial life. The whole reason I'm trying to pay off debts, put money away in savings/investments, make some plans for building wealth, etc... is to improve the quality of my life from a financial perspective. If doing so starts to negatively affect my overall happiness, or deprives me of things I really enjoy... Well, what's the point?

Thoughts?

Roundup - A Summary of Debt

2006-07-04T09:32:00.000-05:00

Since this is the first month of my new blog, I figure a good place to start would be to post a roundup of all my debts and associated interest rates. So without further hesitation, my total debt picture in descending order of interest:

Citibank Card - $7,302.23 - 15.990%
Car Loan - $3,802.38 - 13.25%
Student Loan #1 - $15,843.06 - 7.14%
Student Loan #2 - $2,839.87 - 5.00%

There it is, a grand total of $29,787.54 of debt. As I said before, ick. So first things first, look at those interest rates! Based on those, my first order of business is to try and reduce those interest rate numbers as much as possible, so my total payout for these amounts is as close to the actual principal as possible. I've applied for a Capital One card with a promotional balance transfer rate of 0% for 12 months and indicated that I'd like to transfer the full balance of my Citibank card over to it. Once that goes through, I'll have no balance on the Citibank card and will have 12 months to pay off the $7,300 on the Capital One card with no interest.

Recently I also got an offer in the mail from American Express which specified 2.99% for the life of any balances i transfer on application. I'll have to think about whether I want to utilize that right now, though it seems like a no-brainer to apply it against my smaller student loan and my car loan...

First Post.- A Short Intro

2006-06-30T17:20:00.000-05:00

So here I am, starting my very own personal finance blog. After browsing several others for the past few weeks, i have to say that many of you have inspired me to share my own journey in a similar fashion. Essentially, the short version of the story is that I'm 26 years old, have a well paying job, and a whole bunch of debt. Over the past six months or so I've been getting more and more serious about attacking my debt issue (which isn't nearly as bad as I'm probably making sound right now) and getting myself on a plan to be debt free in a reasonable amount of time, and now I'm finally really starting to do it.

I have debt in three places: student loans, a car loan, and credit card debt. The first two I don't mind in principle because they don't really stem from living outside my means and/or being sloppy with my money. The credit card debt, however, is essentially from exactly that. The amount of debt is roughtly $19,000 in student loans, $3,600 that I still owe on my car, and somewhere around $7,000 on the credit card. A ballpark total of nearly thirty thousand dollars of debt. Ick.

One last thing is that right now I have nearly no savings to speak of, no retirement savings, etc etc etc... I'm living paycheck to paycheck, and I'm sick of it. It's time to break the cycle and start charting my progress to a debt free life of building net worth in the black, rather than the red.