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Archive for February, 2007

Wednesday!

February 28th, 2007 at 07:03 pm

I got a reimbursement check today for $105.18 so that's nice to throw right back into the bank account. My birthday is on Friday so we're planning a budget-conscious birthday celebration. The wife postponed grocery shopping one day so she's going tonight. I can't wait to see how she does. Let's get to the nitty gritty (I'll update it later tonight!)

***Weds spending log***
$6.99 on food (it was my turn to buy donuts for the department this morning)

I'm going to start subtracting from the $300 budget we made to last us until March 7th (next payday!) so here we go:

Remaining budget until Mar 7th: $293.01

Keep in mind this budget is for ALL non-mandatory expenses but includes groceries. I'm only going to track the lump sum so my wife doesn't shoot me dirty looks when I ask her for receipts. She did promise to tell me where she spent it so I can at least categorize them myself (I can only let go so far of my crazy OCD over categorizing our spending!) Hopefully we come out well tonight at the grocery store!



My debt reduction tracker

February 28th, 2007 at 04:40 pm

This category is where I am going to track my debts and anyone with suggestions feel free to chirp in. As I mentioned in my main blog the goal for me right now is increase FICO as fast as possible so we'll be ready for the refi in March of 2008 on our mortgage. SO the main goal right now is to get the balances below 50 percent and then start attacking the interest rates one-by-one. So I will post accounts, balances, limits and APR's and each reply will have the payments made and updated balances (I think I may even post when I get notified a bill is due so that when I come back here it's just another reminder to pay the bill!) The sooner we see 0 the better!

Card/Balance/Limit/APR

Card 1/$12416/$20000/14.23
Card 2/$15215/$31000/12.24
Card 3/$8135/$12500/12.24
Card 4/$6363/$9000/18.24
Card 5/$6214/$9000/18.24
Card 6/$6143/$8000/0.00*
Card 7/$6023/$10000/4.99**
Card 8/$3821/$10000/0.00***
Card 9/$3681/$7250/17.24
Card 10/$3464/$4400/16.99
Card 11/$2882/$3900/13.99
Card 12/$2100/$2500/0.00****
Card 13/$4000/$4500/5.82
Card 14/$416/$5000/15.99
Card 15/$135/$17500/19.99

*Teaser rate ends 4/1/07 (up to 13.99)
**Balance Transfer rate
***Teaser rate ends 8/22/07 (up to 24)
****Teaser rate ends 5/1/07 (up to 13.99)


Now for some number crunching. When you total it all up it's $81008 in unsecured revolving debt. Ow that hurts! Now as I said we're talking about reducing balances to limits to increase my credit scores for a better rate at refi time. The cards that actually report on my credit reports are Card 1, Card 2, Card 9 and Card 11. So those are the cards I am focused on first. Card 1 needs the most help to get to below the 50 percent mark ($6399) followed by Card 11 ($932) and Card 9 ($56) so that's where I am focusing my efforts on first. I have some plans going forward so stay tuned to the blog and I'll be sharing them with everyone!

We went cash today!

February 27th, 2007 at 07:20 pm

Yes it's true...after figuring out what our mandatory expenses were (mortgage, insurance, utilities) we came up with a number of $375/week for groceries and all other non-essential expenses. My wife seems to think we can beat that but we'll see when it all adds up. I went to the ATM today and pulled $300 (fee-free of course) from the checking accounts and handed it to her in exchange for all of her credit cards. That was fun...I told her I would "buy" all her cards for cold, hard cash. She is much more of a cash fan than I am so I am including her as the cash holder. This way I'll go to her when I need cash (as will the kids) and since she does 99 percent of the grocery shopping (and really shopping period) she'll know where she can save and where she can spend. She's more budget conscious than I really thought she was (which is great...because I'm not...hence I don't carry the dough!) I asked her if she could make it to next payday (8 days) on the $300 and she said "no problem!" She's going grocery shopping tonight so I'll let you know how we do!

TUESDAY SPENDING LOG****
None! Whoo hoo!
Sat-Tues total: $76.04

Our daughter has a playoff bball game tonight against a very good team so we'll be going to that. The good thing about being parents is you get in free to the games (so we save $20!)

Another cost cutting measure...I cut $25/month recurring fee for a subscription I had online. $25 I figure is way too much for any kind of online subscription (especially if I'm not getting reimbursed for it!)

Oh AND I listed an old laptop on ebay. Hopefully that will sell and give us a little extra $ (I have a bunch of old computer stuff that I'll be listing so I can't wait to hopefully see that stuff leave my house!)


Monday number crunch (and a good book!)

February 26th, 2007 at 09:21 pm

I took zetta's advice and decided to purchase a book called All Your Worth and I have to say that it's really getting me going about exploring how and where the money goes. I paid $9.99 for the ebook after researching at Amazon (who had it for as low as $3.67...but with the additional $3.49 s/h and waiting for the book I figured an extra $2.83 was worth getting the book immediately and starting in on it!) I usually check to see if the book is available in ebook form and also check ebay and amazon (you can usually find great deals but make sure you figure in the s/h!) for cheap copies. Ebooks are good because you're not having to make room for the book and it's more portable (I can put a copy on my PDA or laptop and it goes with me.) Now to the book!

I'm about 60 pages in but the book's fundamental principle so far is to have three groups: Must have's (to live!), Wants (can you live without it?) and Savings. Your goal is to be able to fit each category into a percentage (50 percent on must have's, 30 percent on wants and 20 percent on savings.) Now there are a lot of little tidbits I will not go over because I'm not going to give away the book in a blog (not fair to the authors!) but there is one part of the number game that I thought would be helpful to people with credit card debts. It's so simple I wish I had thought of it on my own. Basically figure out what your credit card balances were one year ago (if you can get a statement or if you have the statement) and what they are today. Then subtract 1 year ago from today and put it down. Do it for every card you have and you'll get a real idea of how much of a dent you made in paying down your credit card debt. If your balance today is higher than it was one year ago you'll know you need to do a better job paying down that card's debt because you're not making enough of a dent to get yourself above water! It's simple enough and to me it was a very effective tool in seeing what lenders see as far as account history. Now this is just one small part of your journey through this book (like I said I'm only on page 60) but so far it makes a lot of sense and I will certainly be applying some of the ideas to get our spending under control. The nice thing about this book is it allows you to be very flexible and not have to micro-manage your finances. If you're someone that would rather work with a simple percentage for spending and savings this book is for you. They also help you get what you spend on in the right places and they do a good job of explaining it in simple terms. So far I highly recommend reading it (and I thank z for recommending it!)

***Monday spending***
$9.99 for ebook
$17.05 at Eckerd for personal care

The ebook I put under books and the Eckerd trip was toothpaste (bought a couple of tubes) and deoderant (Degree was on sale so I bought a few!) The wife got some candy for her desk at work. So from Sat-Mon we've spent $76.04 on entertainment, books and personal care. OR if we followed the budget advice in this book we spent $65 on WANT's and $11 on MUST HAVE's (though we didn't go to the grocery store for the toothpaste and deoderant where we usually get these items but it was because the sale price was better than our grocery store!) See if you're more of a lump sum budgeteer your life can be made easier by reading All Your Worth. I sound like a salesman but there really seems to be some good advice in this book.


Sunday Spending Log

February 25th, 2007 at 09:29 pm

Well we went to see the Number 23 today and it cost us $13.50 including concessions which is a great price. I again used coupons for free popcorn and soda and only had to pay weekend matinee prices so I'm happy. When you can make it through a weekend with the kids and only spend $50 it's a good weekend.

I'm basically making the blog my spending log so I can track everything we spend and post it right here. I have also been scanning all of my receipts into my computer so that way I have to look at everything I purchase and I don't just forget about it. Hopefully I'll be more conscious of the spending by doing this (and it's a great spot to remember what and why!)

Saturday spending log

February 24th, 2007 at 11:03 pm

We spent $37.50 today on entertainment. Not that I'm really thrilled with that but a family of four to the movies with a popcorn and soft drinks isn't too bad. I am a member of the Regal Crown Club (if you go to the movies and you have Regal theaters this club is worth every penny. I have had everything from free food, drinks and movies so far in this club) and today we used coupons for a free small popcorn and soft drink and had it applied to our total at the concession. As you know movie theater concessions are a huge ripoff but the club makes it a lot easier when you actually do want to purchase concessions there. The nice thing about this club is you can accumulate points when you get your tickets AND when you get concessions so they add up rather quickly (just make sure you remember to give your card to the concession stand...a lot of people I know didn't know you could do that!) Also you don't have to track your own rewards. When you earn one it prints out with your movie tickets when you purchase them. We saw Ghost Rider and it was pretty good (it's not a deep movie but it provides plenty of entertainment!)

Stock update: CRWN I bought at $3.90 at open on Tuesday closed on Friday at $4.25. Now I only own 25 shares so it's not like it's a lot of money but it's nice to see an investment growing instead of shrinking.

The company I work for pays our gas and car washes so we were able to not spend $33 of our own money today on that.

I noticed today our outdoor lights (sconses around the front door, side door and garage doors) were staying on 24/7 so I turned them off and will continue to turn them off during the day. We have our landscape lighting on timers but for some reason the sconses are not on timers. I will need to find timers for them (or dawn-to-dusk sensors) to save money on our electric bill. Just a reminder to check your lighting and don't leave lights on during the day!

Lastly, on the debt front: a new bill from Bank of America due 3/22. Minimum payment $152.00 and the only charge was finance charge of $89.36...doh!

The last two months!

February 23rd, 2007 at 08:33 pm

I'm beginning to realize there is a lot of information at my fingertips that I have yet to fully take advantage of. I really hadn't played with MS Money's reporting feature too much in the past but I spent some time looking at one report and it looks like it will make it a lot easier to come up with a budget. The Spending by Category report! The one thing I am very particular about is making sure the information is in Money and making sure it's assigned to a category that makes it easy for me to relate to (if Money doesn't have the category I create it.) This report wouldn't be half as useful as it turned out to be if I didn't have the categories assigned to the transactions (memo to self: continue to be diligent!) I looked at a year-to-date (around 2 months) to get a satisfactory baseline and here are the scary numbers in order of spending:

1. Mortgage Interest Payments ran away with first place but obviously that's not too disheartening.

2. Utilities came in second. That's ok though since I pay our gas bill when they fill our tank (I have propane heat with a tank buried in the ground.) We actually went from 6/24/06 to 2/8/07 and had the tank filled for just under $1100 so it works out to about $137/mo which around here isn't too bad. I have a bill in Money to put away $150/mo for when I have to make this payment (and this time I have a little left over to keep for the next fill!) Other utilities include:

-Cable $155/mo (yes I know...but we do get our money's worth)

-Electric $200/mo (this was around $220 the last couple of months but I just got this month's bill (due the ides of March) and it's $160 so that's a beautiful thing.

-Water/Sewer: $120 paid quarterly

-Garbage: $75 paid quarterly

Cell Phones for us and the kids, our home phone and high-speed internet are paid by the company so that does save us a lot BUT our utils have to be budgeted for $570/mo. It always looks so much worse when you look at it as one big lump sum but it's a reality check and something we desperately needed to see! I had a personal Cingular account that I cancelled a few weeks back so that saves us $100/mo and I have a plan to sell the 8125 on Ebay so hopefully that gives us a little income boost! I also had duplicated a payment to the electric company in Money (one was auto-downloaded and one was manually entered and I failed to combine them...oops) so I now have an extra $211 in my checking account I thought I didn't have (and that will go right to them for this month's payment!)
I can actually say this blog is making me money! Smile

3. Finance Charges came in third. I have to say that again to ground myself. FINANCE CHARGES CAME IN THIRD!!! Ack! In two months the CC companies collected $1800 in finance charges. $900/mo! What the heck?!! Well at least I have a debt reduction plan that if I can stick to it I will be out of this nightmare in about 2 years and 3 months. You can refer to my first blog post to get the skinny on the current ugliness. I have to keep the mortgage refi in March of 08 in mind so I'm attacking high interest debt AND high utilization at the same time. I made a $2500 payment on a Chase card that had a 17.23 APR and a $5900 balance with a $7300 limit and it felt good to cut it down like that! The card has been one of our best for rewards but Chase will not budge on the APR so I'm looking to pay it off FAST (being well ahead on the mortgage has afforded us the opportunity to do that.) Ugh...$900/mo! Crazy.

4. In 4th place: Household expenses which include $265/mo for house cleaning service (2 times a month), $172 for snow removal (it's $86 per removal) $95 for dry cleaning (not a monthly charge...more of a quarterly charge...I'll end up budgeting $50/mo I think...it's all the wife's stuff as I can wear sweaters and jeans to work) and a group of retail charges at places like Amazon, Target, Pottery Barn, etc. The same company that does our snow removal/salting also does our lawn cutting/maintenance so I'm planning on coming up with a monthly budget for them year-round.

5. Fifth place: Groceries! $668/mo! There has to be a way to chop that down. I need to sit down with the wife and go over this together. I'm hoping to get it down to $100/wk but we'll see if it's possible.

6. We get into Income Tax and Escrow payments before another tangible category: Clothing. $350/mo! That will end immediately. These aren't needed purchases...these are teenagers want purchases. I'm going to try to cut that down as much as possible. We have too many clothes as is.

It does get better after the clothing category but it's still interesting to see the numbers staring right back at you. There is a lot of work to do in this household that's for sure. I have some ideas swirling around in my head but if you want to throw out some suggestions I will certainly appreciate them all. Thanks to everyone here as I'm really on a roll to get us on the right track!





Ahead on the mortgage

February 22nd, 2007 at 08:13 pm

The wife and I get paid every other week which means we get 26 checks a year each. Since March of 2006 I have been alternating paying each mortgage with each paycheck. One payday I would pay the first and the next payday I would pay the second. I never skipped sending a mortgage payment and now it has opened up some time in the calendar to use some money to attack our debt.

Thanks to due diligence the 1st mortgage isn't due until April 1 and the 2nd mortgage isn't due until May 1 so I can take our next two paychecks (roughly $7k) and make a nice dent in our debt. I ended up making minimum payments on 5 cards and made a huge dent in the Visa she uses the most (Amazon Visa by Chase) which looked like this: 17.23% APR, $5900 balance and $7300 limit. I was able to make a $2500 payment on the card so it has a lot more breathing room. I have an email into Chase about cutting the APR down so I'm hoping we hear good news in the next day or two. It feels good to see such a gash in a card like that! I plan on gashing that card again but if Chase ends up dropping the APR I'll probably find another higher APR card to gash. One step at a time of course!

Welcome to my blog!

February 22nd, 2007 at 07:48 pm

I'm not much of a writer but I'll try to keep it at least a little bit interesting as we dive into our financial madness one small step at a time. Here is the skinny on the situation (a family of 4):

HH income: $140k/yr (we net $7k/mo after deductions)

Mortgage: We have an 80/20 that will have to be refi'd in March of 2008. So one of our goals is to improve our credit enough to get into the 700 club and save us a bunch of money a month on mortgage payments. Currently we pay $2500 and $700 on the two mortgages (I round up and add the difference to additional principal.) We just recently had an adjustment to the 80 that saved us $300 a month. I took that $300 and added it to my 401k. I never saw it so I will not miss it!

Credit Scores (these were pulled a few days ago at MyFico): 662/665/627. Wife: 692/697/684. I have one negative left and she has none. Our biggest killer? Utilization! Which I will get into in a sec.

Retirement: We have about $60k combined in our retirement accounts and we only have 401k's currently. I currently contribute 10 percent and she currently contributes 6 percent (she has an outstanding 401k loan that she has taken from her paycheck every month at a fixed rate.) The contribution amounts will increase over time because our employer provides a 25 percent match with no cap (so if we max fund the 401k at $15k they will add $3750.) We are both 100 percent vested in all accounts and our funds are American Funds. I am currently 50 percent into the World Growth and Income Fund, 30 percent into the Growth Fund and 20 percent into the New Economy Fund. I want to be aggressive in my retirement savings and these three funds seem to be the most aggressive. I only have 6 funds to choose from and of the other 3 two are bond funds and one is an Investors fund which hasn't exactly shown great movement. We will be increasing our retirement funds a lot once we get our next category under control.

Revolving debt: This is the ugly part of our financial picture. The harsh reality is we have about $80k in revolving debt and we're working feverishly to knock it down. I really spend more time staring at the numbers than anything else just to come up with as many possible scenarios as possible to pay it off and pay it off fast. I know the APR's and the balances like the back of my hand so I've probably had more ideas on how to attack it than anything else but never actually a real implementation where I've seen results. If I break it down by card, APR, balance and limit you see this:

AMEX 1: 14.23%/$15.9k/$20k
Wach 2: 12.24%/$8300/$12.5k
BofA 3: 13.99%/$6200/$8k
BofA 4: 18.24%/$6200/$9k
AMEX 5: *4.99%/$6100/$10k (B/T rate)
BofA 6: 18.24%/$6200/$9k
Chas 7: 17.23%/$5900/$7.3k
HSBC 8: 0%/$3800/10k (Teaser rate)
PETA 9: 16.99%/$3400/$4.4k
BofA 10: 13.99%/$2900/$3.9k
AMEX 11: 12.24%/$14k/$31k

Ok so when you add it up you're talking just under 79k in CC debt! As you can see by the APR's they're not very pretty but I have a plan to get out from under this rock in around 2 and a half years. I will say this for now. Most of the larger debt was money put into our new house (landscaping, builder upgrades, etc.) rather than on something we're not getting a return on in the long run so I feel somewhat comfortable about the debt BUT obviously this is our #1 red flag issue. I'm in the middle of asking everyone for APR rate reductions and B/T offers just to see what we can do to get the debt consolidated so we can start making larger dents at a faster rate. I came across some software that you can input the above info and it gives you a plan to pay off the debt while at the same time keeping your FICO score in mind and getting your utilization down and that's really where I'm at right now since we're heading into a refi in a year. I'll be going over and revisiting this debt reduction plan ad nauseum in my blog to let everyone know where we stand as we go along.

Software: I am always playing with new computer software to try to come up with somewhere to store all of my financial information. I have been using MS Money for about 7 years and I have everything and anything in there. I also use a basic excel spreadsheet that I input the names of the cards, current balances, dates due, minimum due, actual paid and date paid so that I have a quick snapshot of what I did that month to impact the debt reduction. I have a debt snowball spreadsheet that I can input the same info and it calculates the cards to pay off first and how much to pay on each card. It's not fool proof but it works well for me. Lastly I use the above mentioned software that allows me to input the card info to come up with a financial plan of attack with keeping my credit scores in mind when it figures out payment plans. So there is a small arsenal of weapons to go at the debt we currently have.

Budget: It currently doesn't really exist in any true form. This is going to be another critical step for my family as I will be revisiting all of the data in MS Money and coming up with what we spend per month in every category I can (we have all the data already categorized, now it's just a case of crunching the numbers to fit us.)

Savings/Emergency Fund: Doesn't exist...the sad thing is we have savings accounts with Bank of America, Wachovia, ING Direct and M&T Bank and in all of those accounts we maybe have $500. That will have to change sooner rather than later!

Oh one more thing...I had forgotten about $114.27 I had in a Sharebuilder account that I had basically neglected. I did a little research on cheap stocks (under $5/share) and decided on buying 25 shares of Crown Media Holdings (CRWN) at $3.90 a share on Tuesday morning (when the markets opened.) It's not a really serious investment but I figured this way I have 25 shares in a stock that has some potential rather than the money just sitting there lifeless. If it does well great and if not the most I stand to lose is the $114.27 (assuming the stock totally tanks out!) I could've just put it into a fund or even an ETF but I thought why not try a stock and see how it plays out? It's more of a fun thing to do right now.

So there you have it...that's the baseline of the family's financial plan and now I can begin to really attack our problems and have fun while I'm doing it. Hooray for blogs!