Minor Woo December 2, 2008

Lots going on in my world right now.

I feel a lot better about my job situation now, than I did a few weeks ago. I’ve had some good conversations with my current boss, as well as the CEO, and I feel a lot more solid about what my role in the company is, and will be in the future. Things are shifting around, and while I won’t get to go back to the job I was doing for most of 2008 anytime in the near future, I will get to take on some new responsibilities and challenges, and overall, I think some of the new stuff will be both more interesting and a better fit for my skill set.

Another good piece of financial news: I’m very, very close to finishing my Master’s degree, and have simply lacked the time/motivation to do so. Its a priority to my job that I do finish it, so they are willing to work with me to make that happen. The details have yet to be ironed out, but the general idea is that they would let me take some regular, 9-5 time to take a class, if necessary, and would also contribute financially to the remaining credits, either outright or as some sort of a bonus. This is fabulous, because one of the things that has been holding me back is my desire not to accrue any more student loan debt. Now I just need to get moving on it, and contact my (former?) advisor and see what the process is to get enrolled for Spring classes.

I paid off the Target card in full yesterday, largely because I could, and I needed to mental boost of actually paying something off, rather than just making a dent in it. I’m also making pretty good progress on the Bank of America card. Its all a little bittersweet, though, because Christmas is coming, and as much as I am trying to cut back and control costs, and not over-do it, my giving nature is geting the better of me. Yesterday, I spent $260 on the Gap Card, which had previously been paid off, and $80 on the Old Navy card, which was also cleared. I also have a $50 J. Crew rewards card that needs to be used by 12/15, and I know I’m not going to be able to just spend the $50, its going to go slightly over. But, I have the money budgeted to pay off those store cards again by end of the year, and should hopefully be entering 2009 with no balances on store cards! I should also have the Bank of America and Chase cards paid in full a few months into 2009, which will give me a really good feeling of accomplishment.

Boredom May 20, 2008

I’m having the world’s most boring day at work. Our brand new server has some sort of major problem, and all of our files have been offline for the better part of the last two days. Its extremely frustrating, because I literally have about an hour worth of work to do on a particular project, and then its done, but I can’t do any reviews to it until this server comes back online. So, I’ve been killing time most of the day, working on other, ancillary projects, as well as a little personal project I’ve been meaning to spend some time on.

Using excel, I’ve projected out exactly what needs to be paid every month, and figured out when I will be able to be debt free. By my calculations, I should be consumer debt-free by February, 2011, if I stay the course. I’ve done projections like this before, but they are usually a bit too austere for reality. Its not an exact projection, obviously, but I think that it leaves plenty of room to adjust for unexpected inputs and outputs.

Assumptions:

• I’ve assumed the same base salary from now until 2011, which seems like a very conservative choice, given that we’ve been getting 3% raises every year, as well as the promise of a significant bonus at the end of this year, should the company goals be met.

• I’ve also assumed an additional $800 a month in income, starting 2 months from now. I fully intend to get a part time job to meet this goal, and I think that a part time job, as well as other sources of found/unexpected income will easily add this much to my monthly budget.

• I’ve factored in $600 a month for food/gas/transportation/cell phone/gym membership. This might sound like a lot, but my train pass alone right now is $235/month and my cell phone is $105/month. I’m working to reduce these amounts, and any extra will get transferred over to the debt repayment money.

• I’m leaving myself a cushion in my checking account. I know that it makes me queasy to not have at least $100 in there to cover any emergencies, so I’m deliberately not draining myself entirely.

• I’m not explicitly planning for any other significant influxes of money – tax refunds, bonuses, gifts, etc. I will factor that money in, and readjust, as it comes to me.

I’m not good with total rigidity in a budget/spending plan, so I think this method will work for me. Its got enough structure so that I’m not just flailing about, left to my own devices, but also enough flexibility that I should be able to make it work.

Numbers Update May 15, 2008

Ah yes, its my favorite (well, one of 2, really) day of the month – payday. I know I was a little depressed to not actually make any progress on the numbers last week when I paid some things using my federal tax return, but I feel much better today. I’ve finally gotten the total debt level under $47,000 – which is the first reduction in that number that I’ve seen, so I’m pretty happy about that. I’ve also got the total number of credit cards that I’m carrying a balance on down to 7 – which definitely feels like an accomplishment for me! Even better is the fact that next pay period, I will be able to pay off another card, bringing the total down to 6, which will include only 1 store card.

I had some hard decisions to make with the money this week. I really desperately wanted to pay off both the Old Navy and the Gap cards in full, but I realized that doing so would leave me with basically less than $40 to get through to the end of the month – including the planned mini-vacation, for which I will definitely want to have some cash. So, I paid $665.16 to the Gap card, and left the Old Navy alone for now, knowing that I will be able to get it next time.

Its hard for me to operate without a little bit of a cushion in my checking account – its not that I don’t know when things are getting auto-debited, but anything under $200 in there makes me feel sort of nervous and uneasy. I’m not entirely sure why, as I’ve never actually over-drawn a checking account – I guess I just want to keep my record clear. So, I’m leaving the extra money alone for now, and will be down to 6 in 2 short weeks!

Must….resist…. May 7, 2008

J. Crew just sent me an email letting me know that things have been added to their sale page. So, i clicked through, fully intending just to take a peek. Well, I’ve now added $200 worth of flip flops and t-shirts to my shopping cart, and I’ve closed the window to keep myself from ordering them. Online shopping is my one, true weakness, particularly when i’m stuck at work on a beautiful day, and I’ve finished my latest project.

Must resist the temptation!

Why be debt free? May 7, 2008

I was thinking this morning, as I was getting ready for work, about this whole push to become debt free that I, and many many other people, are engaged in. I could be wrong, but it seems that it has become an increasing focus over the last year for many people, in large part because of our collective fear over the economy. I know that I personally could not pay my bills if I were to lose my job, and be forced to take a job that paid less.

So, besides the overall feeling that debt is a burden that I would like to not have to deal with, here are some of the reasons that I want to be debt free.

1. I want to buy a condo/house in the next few years. And I know that if I keep going the way that I am going, there is no lender in the world that will approve me for a mortgage!

2. I (probably) want to start a family in the next 5-10 years. I’d like to have the option to have children, and to feel like I could possibly stay home with them, or work part time, at least for a little while. If i don’t get the debt under control, there is no possible way that this will be an option.

3. I want to be able to give people nice presents, and not feel mind-numbingly depressed after I do it. My family tends to be a little extravagant in the present giving area, and, honestly, I like spending the money to get someone something really nice, that I know they will treasure and enjoy. I just want to be able to do so and not then feel so guilty that I charged it all, and will be paying it off for who knows how long!

4. I want to indulge my expensive hobbies, guilt free. A few months ago, I really got interested in genealogy, and was in the process of creating a family tree on ancestry.com. To go along with it, I started paying close to $60 a month for access to their databases. I really got a lot of use out of it the first 6 weeks I had it, but then the holidays happened, and life got really hectic, and I got away from it. I eventually cancelled it in February, but I certainly wasted some money there first. I’d like to be able to re-sign up for a subscription there, and not feel terribly guilty when I do, even if I only have 10 hours a month to devote to the research.

5. I want to develop new hobbies. I’m really really interested in learning how to SCUBA dive, and I’ve looked into the process of getting certified, but all signs point to it being a fairly expensive hobby to take up. I’d like to be able to set aside the money for that, and for a few dive trips to the Caribbean, and not feel like I’m doing the wrong thing.

6. I want to travel more, and plan for it. I’ve actually gone quite a few different places, and I’ve got a long list of other places that I’d like to see. But I can never quite seem to justify spending the big money on travel, so I haven’t yet made it to Australia, or New Zealand, or Thailand or Japan. I want to be debt free so that I can plan a trip like this, and feel good about my decision.

I guess what it really comes down to is the idea that I want to be able to spend money without feeling guilt that it should be going towards debt repayment. Or that I am just adding to the debt by spending on credit cards. So, for me, being debt free is buying peace of mind.

Reason #1083 that I hate Bank of America May 5, 2008

Of all the credit cards that I have, the one that I find is the least lenient, least easy to deal with has to be Bank of America. Ironic, since my main checking account is held there, as well as 2 credit cards. A few months back, I (somehow) screwed something up, and managed to not hit “confirm” when making a credit card payment on one of my Bank of America cards, and they very happily raised the interest rate on that card from 1.24% to 29.99%. Well, I wasn’t terribly thrilled with that, so I transferred that balance off to a 0% card as soon as I could get things in order. I then paid the remaining $200-ish balance on the card as soon as I could. Well, the billing cycle has now closed, and I now have the last little bit, just under $18, to pay on that card. What gets me, though, is the fact that they moved up the due-by date a whole week! I just looked through my little notebook, and noticed that the due dates for that card have all been between the 26th and the 28th of the month, for the last 9 months. Now, with this last statement, the due date is the 20th. Gee, are they trying to trip me up and get me to pay it late, since they know they have lost my nice big balance to collect interest on? Shady, shady business practices.

Numbers update April 15, 2008

I get paid on the 15th and 30th of each month, and its usually disturbingly quick how quickly the money is allocated out. This time around felt pretty good, though, as I was able to pay off 3 credit cards in their entirety. My Capital One card, Bank of America US Airways card, and Chase Amazon.com card are all at $0 now. Its a little bit cheating, as these were the cards where I transferred the majority of the balances to the US Bank card, leaving me with just odd amounts and interest to pay off. Still, I feel good that the number of accounts I am paying on each month is going down – it makes you feel like you are making more progress to be able to send a larger amount to something, rather than having to worry about many smaller amounts.

So, I’m down to 9 cards with balances, and I will pretty easily have 2 more of those paid off next pay period – 3 if I happen to get my tax refund before the end of April. Between the tax refund and the economic stimulus check next month, this is looking like a really good few weeks to catch up and get things paid off an under control.

As I mentioned before, I am trying to move to a credit-free lifestyle. One of the ways I am trying to accomplish this is to put a total ban on using any of my cards, with one exception: my UPromise card. I’ve decided to still use the UPromise card because it does earn rewards towards paying off my student loans (a debt that I can’t really even begin to think about until I’ve got the credit cards under control, though I am currently making the monthly minimum payments). Also, the UPromise card only has a $500 limit, so I really can’t get myself into too much trouble there. I’ve switched all my auto-payments over to that card (Verizon for my cell phone, Netflix, which I am considering canceling, and my gym membership, which is definitely worth the $15 a month I pay). I’m also going to charge my $235 a month Train pass to this card. My intentions are to pay it off every 2 weeks, as part of my bi-monthly bill pay, but doing it this way will let me both earn the rewards and stretch out the dollars a little further, particularly at that tight, first of the month time period

Adding up the numbers April 9, 2008

When I checked my Capital One card this morning, I noticed that the balance transfer request had finally cleared. I wanted to get a good idea of what exactly I was looking at in terms of Credit Cards and payments this coming pay period, so I ran through my usual account checking procedures. This resulted in that lovely total debt figure you see over there on the right hand side. Yeah, not thrilled. In any case, the numbers as they stack up today:

Card                       Balance        APR        Amount due   When?

Citi Card                 $9931.35    21.24%   $244.46          4/21
AT&T Universal       $2247.08    21.76%   $78.77            5/2
Capital One             $264.40      25.9%      $0                 4/28
Bank of America      $2036.13    4.92%      $0                 4/14
US Airways Visa       $481.98     29.99%     $0                4/27
Chase Amazon.com $85.57       29.99%     $0                4/15
American Express    $7470.19   14.24%     $0                4/3
J Crew card              $1475.03    20.99%    $0                4/19
Gap Card                 $687.47       21%        $0                4/9
Old Navy card         $450.40       21%        $0                4/28
Upromise Visa        $20.50        11.99%    $0                4/4
US Bank                  $22,820.67    0%        $0                4/16

As I mentioned, not terribly thrilled by it all. I can’t believe how financially stupid I’ve been. Regardless, I do have a pretty solid plan in place to get the Capital One card, the US Airways card, the Chase card, the UPromise card and the Old Navy card all paid in full over the next 2 pay periods. After that, things get a lot more interesting.

I’ve been operating under the idea that its going to be ok to just keep using the credit cards for the next few months, until BF and I move in together in September, and I get a better idea of what the financial picture is going to be. I had the realization today, though, that continuing to use the cards just isn’t going to work. I’ve figured out that I need approximately $850 a month to cover my basic, non-credit card and student loan expenses – including $235 for a monthly train pass, $44 a month to park my car at the train station, and $100 a week to feed myself and pay for social activities. However – my grand get get out of debt by December 2010 doesn’t really account for this extra $850. So, I need to make the part time job thing I’ve been dithering over for a few months a reality, particularly now that the summer is coming. And, honestly, having a part time job will help in other ways too, because it will mean less time for going out and spending money.

Progress April 8, 2008

I’ve been holding off on writing a post about the exact details of my financial nightmare, but I do intend to do so soon. I’ve been waiting for the balance transfers I spoke of a few posts ago to go through, and for that all to settle down so I know exactly what needs to be paid. As things currently stand, 2 of the 3 transfers have credited to their respective accounts, so I should be able to do a wrap up soon.

Until last September, the way I approached paying my bills was…haphazard is putting it nicely. Despite having not officially lived there since 2002, I still have all of my mail delivered to my parents house. Its just across town from me, and I’m generally over there at least twice a week anyway, so getting the mail wasn’t a huge issue. I would gather the mail, and throw it in my purse or my work stuff bag. At some point, usually no more than twice a month, I would pull out all the mail that I’d been collecting, open it, and pay everything that needed to be paid. This method had some distinct disadvantages, such as the fact that I would often wait too long to get to the mail and the bill paying, and things would end up being late. It also meant that I was physically mailing out all of my bills, which only adds to the time problem. Late last summer, I decided that something had to change.

The first thing that I did was to buy a small Moleskine notebook and start tracking all of my accounts. I keep things pretty simple – I list the account name, the total balance, the current APR, the current amount due, and when it is due. Then, I set up all my accounts to be paperless, and to send me email alerts when things are due, or when I get within a certain percentage of the limit on the card. I also only get paid twice a week, so once I got a handle on things, I’ve gotten into the habit of only making entries in the notebook twice a month – Usually the day I get paid, or the day after, I physically visit every one of my accounts, note the balances and such in the book, and parcel out the payments. Its obviously not a system that would work for everyone, but its worked well for me, and I haven’t missed a payment since I started doing it 7 months ago.

It also helps to hold me accountable for my financial mis-steps. I see exactly how much I am paying on credit card interest, and how much I owe overall. In an effort to lower the balances, I’m keeping the amount of cushion in my checking account pretty small, so I’m not terribly comfortable setting up things to auto-debit – the only things I currently have auto-debiting are a $40 student loan bill on the 1st of the month, my car insurance around the 15th, for $62, and $11 a month for life insurance, also around the 15th.

I should be getting paid on or around the 15th, so I’ll do a full financial recap of the outstanding cards, and my grand plan to get it all paid off, then.