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Archive for March, 2007

Transferred!

March 30th, 2007 at 06:09 pm

Looks like our balance transfer from a credit card at 9.9% to a card at 0% for 12 months is going through as I type. It is going to be a big savings over the next 12 months, to the tune of $800. And if you can do the reverse math to figure out the balance we transferred, you are right we have too much in CC debt. But we are working on it. Slowly. Too slowly, or so it seems some days.

How is it that we can be making this much money and still be broke? Man, this cycle of earning and spending is scary. I would LOVE to live on one income and save the other, but that just isn't possible. Even if we cut out all the "extras" like cell phones and internet and cable that won't make a dent and then we would be miserable on top of it.

I guess I am just getting frustrated and depressed as I look at where we are, where we want to go and how it is going to take forever to get there. Ever feel like you are walking on a treadmill with this debt crap? You are walking and walking and walking but never getting anywhere? That is definitely how I have been feeling the last few days. I just hope next month is better. It has to be or I am going to scream.

Update on American Card, etc.

March 30th, 2007 at 02:49 pm

So I finally got some more of the story on the American TV card that I posted about earlier. It turns out that there were TWO charges on the card one for the $700.69 and the other for $77.85. We have been paying interest on the $77.85 all along and that is where the finance charges are coming from. Problem is, I don't know WHY there were two charges that day. Of course, the bank can't help me out with that because they "just take care of the financing, not the selling". Now I have to dig through my giant "to be filed" pile to find the original receipt. Had hoped to do that last night but it didn't happen. At least it will maybe give me the incentive I need to tackle and deal with my laziness.

Looks like today is basically going to be a no spend day. I packed my lunch and my hubby's lunch, we will be having leftovers for dinner, and both trucks are full of gas as of yesterday. We did have to give Caleb $4 for a special lunch they are having at school today, but we took that out of the pig at home.

Also, it turns out my battle with Wells Fargo is going to continue for another month. DH just spent the last week in Detroit and he only had the WF card in his wallet. Which meant that food, hotel and rental car for 4 days ended up on that card. Great. Even if he puts his expense report in today, he won't get reimbursed until the next pay period (4/12) and the payment is due on the 16th. Since it takes them 5 days to clear an ACH we are going to be cutting it really close. AGAIN. Grrrr....I just want this card GONE! Tonight I am going to take the card out of DH's wallet and put it into the lock box. Or better yet, shred it. *insert sinister laugh here*

Budgeting nightmare

March 29th, 2007 at 05:35 am

I have spent the last several hours with my new budget and software (YNAB) and I think I am going slightly nuts. First off, I picked an awful month to start budgeting. There is income coming from some unusual sources that is making the numbers screwy, like tax refund, expense reimbursements, extra paycheck this month, etc. So I have an unusual amount of money to "spend" and I don't want to put it into the wrong places. If I do end up with a bunch of "leftover" money at the official end of the month I am definitely going to be paying back the money that I owe the savings accounts. Borrowed WAY too much from them over the last couple of months. yes, I am paying it back to myself, but it still needs to be done.

Since it is almost the end of the month, I am trying to get a handle on our actual expenses. Biggest shocker is food. We spent over $600 on food, both in groceries and period dining out. Last month we spent $500 for the same thing, but we ate out A LOT more ($430 worth). I thought that we were going to save gobs of money by staying home more but that doesn't seem to be true for some reason. I don't think I went overboard on the food buying but maybe I did. Will have to take a closer look.

April should prove to be a more "run of the mill" month. Two pay checks, maybe a couple expense checks, but nothing we can't handle. We still aren't going to be working with a "buffer" that YNAB seems to love, but that is going to be quite a while coming I think. We have a long ways to go and a lot of debt to pay off at the same time.

My mind is really spinning right now though. I am trying to figure out some historical numbers from MS Money and that is proving to be a nightmare as well. I can't get a read out of a single category for the past 12 months for gosh sakes! I just want to know a trend for how much money we spent on food. Shouldn't be all that hard. Argh! The new software (YNAB) is going to be much more powerful for that kind of thing, but I have to get the numbers in there first.

We're havin' a party

March 28th, 2007 at 07:09 pm

DH's turns 32 in a couple weeks and we are going to have a small get together with friends. Just going to do a cook out with burgers and sides. But the challenge is that I am going to try to do it for as little money as possible.

The menu should be easy:
Burgers and buns (Sam's club)
Potato Salad
Baked Beans
Chips/Triscuits and Salsa/guacamole
Cake

Do you think it would be tacky to make it BYOBeer? That is where we end up dropping the most money. I already have the paper plates, napkins, cups, etc. leftover from Caleb's last couple of birthday parties so that save a little. I am planning on making the potato salad and buying the baked beans in bulk. I will also make the cake and possibly the salsa. Depends on time allowed.

Any tips for planning a party on a limited budget? All help is appreciated!

Blog title change

March 28th, 2007 at 06:38 pm

The former title of this blog "Debt Free Living, Here We Come" just wasn't working for me. Hope you like the new title! Seemed a little catchier and a lot shorter. Not that I am known for being brief...

Strange Interest Charges

March 28th, 2007 at 04:19 pm

This past January we decided it was time to move my son into a "big boy" bed. We went shopping at our local big box electronic/furniture store, American TV, and found a bed, mattress and dresser. Total cost $700.69. We asked if they had any financing deals so that we could pay it off slowly without putting it on the credit card. (yeah, us.) They said they could give us 6 months interest free with equal payments. Perfect! [For those of you following along, this is the first of the debts in our debt snowball]

I didn't pay much attention to the statement when the first bill came and simply paid the minimum amount that it indicated, $132.00. NBD. I have now made 3 payments of $132 but DH is getting an unexpected reimbursement from his company and we want to pay off the balance this Friday. SO I check the bill for a payoff balance. That is when I notice that they have only been applying $117 of each payment toward the principal amount and the other $15 has been going towards a revolving balance for interest charges. But this interest charge seems to be a "threat" since the bill states right on the front "pay $XXX by 7/1/07 to avoid finance charges". Huh? So we have paid $45 towards interest charges that we don't have to pay? They sure as heck better credit that money back to us on this final payoff or send us a check for that amount. Ridiculous!

Has anyone ever heard of this before? Generally if you have 0% interest the entire amount you pay is applied to principal, not some fictitious finance charges.

Of course, since the card was opened in my DH's name only the CSRs won't talk to me. So DH is calling them today, while on a business trip, to get the whole story. Go figure.

Another child=forever in debt?

March 27th, 2007 at 02:21 pm

So recently my DH and I have been talking about having another child. We already have Caleb who is 2.5 and he is wonderful. But daycare costs in this area are insane. Having another child in daycare would mean another $1000 a month in daycare charges alone (we are already paying $950/month for Caleb). Even figuring that we won't be buying anymore diapers than we are now because Caleb will be potty trained by the time Baby 2 were to come along and all other expenses could be easily absorbed, it seems almost impossible to carve $1000 out of our already tight budget.

Yes, we are working hard at getting out of debt. In all likelihood, we will be out of revolving debt in the next year, but that would only free up about $500 per month. In order to come up with the rest we would have to stop putting money away in savings, which I am hesitant to do.

Everyone we have ever talked to has said, if you wait until you can afford kids you will never have them. And I can understand that you do what you have to and make sacrifices where needed, but I can't seem to wrap my head around the economic implications.

I know what some of you will be thinking...Could I stay home with the kids? While it is true that 2 kids in daycare is expensive, I currently make the same amount of money as my DH. So one of us staying home would mean cutting our income in half! Plus, I have worked VERY hard to get where I am and I ENJOY working. Many of my "friends" don't get that but I am done apologizing to them for making the decision that is right for me.

OK, whine fest over. I know I should stop being so selfish and just get over my hang-ups. *sigh*

Hot water?

March 23rd, 2007 at 03:20 pm

This afternoon our new water heater is being installed. Our existing one has been making continually more noise for the last several months and we have put off replacing it as long as possible. It has gotten so loud that you can hear it while you are in the shower 2 floors away. You can even feel the vibrations through the floor if you are standing right above it (in the kitchen). Just crazy loud. Also, the current one was the piece of junk model that our builder stuck us with. It only had a 2-year warranty but now at only 5 years old is falling apart.

Since both DH and I are engineers we have been very anal about examining all our options from every angle. We looked at a tankless model, standard models and high efficiency models. The problem is that we have a gas heater that has to be power vented through the wall. Pretty much the most expensive standard type you can get. We decided on a middle of the road option that is priced reasonably but is energy efficient at the same time. And oh yeah, has a 6 year warranty. Smile

The bad news is that it is setting us back about $1000. The good news is that we are using money we had in our emergency fund to pay cash for it. That is definitely a step in the right direction.

Debt Tracker

March 22nd, 2007 at 09:11 pm

I am hoping to list my debt payments and totals periodically so that I can visually see the progress I am making. Here goes:

Original Balance as of 3/01/07:
UWCU CC = $10285
American Furniture = $648
Slumberland = $631
Circuit City = $1055
Jeep Loan = $9389
2nd Mortgage = $13162

Total = $35104

Current balance as of 3/22/07:
UWCU CC = $10285
American Furniture = $516
Slumberland = $581
Circuit City = $855
Jeep loan = $9234
2nd Mortgage = $13095

Total = $34566

$35104-$34566 = $538 paid off!

Also, since this is an extra paycheck month for us, I hope to be able to payoff the American Furniture debt completely next week and then pay our savings back for what we had to "borrow" due to shortages that last few months. Of course, that was the whole reason I started getting serious about getting out of debt. Being short every month was not my idea of a good thing.

CC juggling

March 22nd, 2007 at 04:14 pm

Oy! I know I have no one to blame but myself, but I think I am in a bit of a pickle.

First, I reported a couple posts ago that on Tuesday I applied for a new CC with a 0% interest rate on balance transfers. When I filled out the application, I put in the account number for the card that I wanted a balance transferred from, my UWCU Visa card. OK, at this point no big deal.

Then, yesterday DH suggested that we try to simply upgrade our UWCU card to one with rewards as was advertised on our credit union website. Notice is said UPGRADE, not REPLACE. OK, so I call and they upgrade my account, but they have to issue me a new card and a new number. Hmmmm...

Basically if my balance transfer doesn't go through before the new number is issued, we may have a big problem. So, this morning I called the new CC company to ask when the balance transfer would occur. After some confusion, I found out that the balance transfer is set as pending until I activate the card. Should get the new card sometime in the next few days. In the meantime, they are sending me some paperwork to sign for the upgraded Visa card so if I delay that a few days until I get the new card I should be OK.

How do I do these things to myself?

Score!

March 21st, 2007 at 10:06 pm

OK, so I know many of you don't like the credit scoring concept and I completely understand why. But I just have to let you know that even though I was worried about our finances being in the toilet, it turns out that our credit score is pretty damn good.

Since Scott is going to be doing a lot of traveling soon (2 weeks in New Zealand, 1 week in Italy, misc. trips across US) he is going to need a credit card to make the purchases during these trips. Company policy is to make him pay for hotel, food, etc and then reimburse. They are usually pretty timely and we don't end up owing interest so it works out. So since he is going to be racking up all those charges, we thought it would be a good idea to upgrade our existing Visa Platinum to one with the "rewards". So I called and asked what to do and they said that we have to "reapply" which is silly because they are going to replace a card that we already have with the same limit.

Anyway, the nice lady doing the application happened to mention that we both have excellent credit with a score of 748. Whew! Nice to know that the score isn't hurting us. Not that I really CARE exactly what it is, just nice to know that it isn't awful.

Wow, 3 posts in 1 day. Hmmmm...don't think I will be quite this prolific in the future. But you never know....

Wells Fargo problems

March 21st, 2007 at 06:31 pm

We have taken a step forward in our quest to be free of Wells Fargo. I have always hated working with them as they can never seem to post anything in a timely manner (and end up charging us late fees we don't deserve) and the customer service has always left a lot to be desired. We have had a Wells Fargo credit card since we were forced into taking it as part of our first mortgage when we built our house almost 6 years ago. Never really used it for much, but ended up with a fraud claim when some one charged more than $2000 worth of stuff to the card both in Canada and Japan. That was a nightmare process that involved the closing of our number and the issuance of a new card. When the new card arrived, I didn't activate it for almost 2 years. Then, Scott decided to use that card to go to Germany for business recently, so he activated it. It has been nothing but a nightmare for the past month because of it. BUT, I didn't want to close the card because I was afraid that it would negatively affect our balance-to-limit ratio for the credit report. (i.e. having $10,000 in CC debt looks better if you have $20,000 in limit than if you have $12,0000) So, we decided to try applying for a different card so that we could cancel the WF card altogether. I applied online yesterday for an MTU alumni Mastercard and was approved with a much higher limit than I expected, $15000! That means I can close the WF account and still be ahead! Plus, this card offers a 0% interest rate on balance transfers for the first 12 months so we are transferring all of the balance from the UWCU card (9.9% interest) to the new card and will end up saving $500 in interest over the next year. Since we are planning on having the balance paid off in the next 12 months, that is a great deal! Then, that frees up the UWCU card, which I have never had any problems working with, for Scott to use as his travel card.

However, here are the other accounts that we have with Wells Fargo:

* Slumberland furniture
* American furniture
* first mortgage on house

We are working quickly to get rid of the first 2, but we will probably never be able to get rid of the mortgage. Up until recently we were with Washington Mutual, and never had any problems with them. Then we got a letter last month saying that our mortgage had been sold to WF. I cried. If we could get the same rate, I would even consider refinancing just to get rid of them, but that isn't possible and is rather silly. I will just have to make sure that I play their games. And it is even more incentive to make sure we can pay cash rather than financing all future purchases.

Off and running...

March 21st, 2007 at 06:23 pm

I have been blogging for my family for a little while, but I keep finding that what I have talking about recently is our personal finances. I have recently gotten my DH and I on the path to debt freedom and it is nice to be able to hash things out in print, but I am going to try to focus on that here and my family on the other blog. At least for now. Smile

Where to start. I guess I will start with the present and move backwards a little from there. Currently we have the following debt short term/revolving debt:

* Credit card: $10300
* Truck loan: $ 9600
* Furniture loans: $2096
* Second mortgage: $13100

For a grand total of more than $35,000 in debt. That is the number scared the crap out of me. We also have a first mortgage of $189,000, but for purposes of this blog I am only going to focus on the debts listed above. These are the scariest to look at and the easiest to work on.

The good news is that we have been working on putting money into an investment account for the last 9 years. We put the money in automatically each month and then promptly forgot about it. As of the end of the year, that fund had $26,000 in it. Wow! So we are skipping the emergency fund step that most gurus advise because we already have it.

My plan:
Step 1) I am working at implementing the Debt Snowball along with using the You Need A Budget (YNAB) program. YNAB works best when you have a buffer equal to 1 months expenses in your checking account so that you are using last months money to pay this months bills. That way we won't be living paycheck to paycheck anymore. Obviously, we aren't anywhere close to that, but I am going to work towards that while using the debt snowball, just not paying anything EXTRA to the snowball until the buffer is in place.

Step 2) Once buffer is funded, aggressively paydown debt with snowball method. Maintain this to get out of revolving debt in 12 months, car debt in 24 months and second mortgage in 33 months.

Step 3) Make maximum contributions to IRAs and other retirement funds, fully fund savings for planned future purchases (i.e. car, etc) then pay rest to first mortgage.

Step 4) Start breathing easier.

I know we are not as bad off as some, but as the daughter of 2 accountants, I am ashamed of where we have landed. We have been doing some things right, but we have also been doing a lot of things wrong. That stops right now. We are done using credit cards forever (with the exception of DH's travel for work) and once we have worked to pay off the debt we are not going back.

A word of caution: I tend to be long winded. Read this blog with caution! Smile