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 Post subject: sdkramer's Extreme Financial Makeover
PostPosted: Sun Jul 01, 2007 3:09 pm 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
I initially resisted the idea of a Fiscal Fitness Journal because I was concerned about disclosing my finances to complete strangers, but I think now that it would be helpful to get suggestions from others, and it may create some accountability. So here goes nothing.

My net worth: ~-1,500

Here's how I break it down:

Assets

401k
12.5k I contribute 10% of my salary and I receive a 3% match from my employer with whom I have been working for 2 years which means 50% of the match is vested.

Roth IRA
$148.48 paltry I know but I just opened it about 2 months ago, and deposited $200. Decided to try to buy a few stocks and lost 50 bucks to fees. Meh. I hate Fidelity.

ING Checking
$0. I never use it, and the savings makes a slightly higher interest. I love ING.

ING Savings
~1500

Credit Union Checking
$0

Credit Union Savings
$10. Required minimum. Basically I only use this to funnel money to ING. I hate credit unions...don't get me started.

Debt

Rewards Credit Card
-2k With ~1200 due in a few weeks. I use this card for EVERYTHING I can. Work, Personal, you name it. It delays my having to pay for everything for 30 days and I get a 1.5% return in the form of an investment in my (Bleh) Fidelity account and I always pay it off so the interest rate is irrelevant.

Dumb old credit card
-24.25. This is the credit card I used to use. I haven't closed the account for credit score purposes, but apparently I reserved the Harry Potter book on it a few months ago and I just saw this charge show up the other day. Normally this is always zero.

Car Loan
-$2.5k A year ago my car was acting up and I just wanted to get it fixed. Well my parents thought it was time for me to buy a new one, and lets just say I didn't fight them all that. Hard. This was a 6-7k loan. It should be gone in about 2 months if my calculations are correct. the Interest rate is at something like 6.5%

Student Loan
-11.2k This is the real bugger. It's not as bad as say a doctor's, but it's pricey. Here's the kicker. Because I graduated in the midst of the Bush II recession and interest rates were ridiculously low, plus consolidation, and a .75% break for paying on time this is at a 2.75% Fixed rate. As you can imagine I'm not really that into paying it off at this rate. That may change. I don't like debt, but when the rate is lower than inflation I dunno. I'm definitely going to fully fund my Roth before I pay this off. That's for sure.

So that's where I stand right now.


Last edited by sdkramer on Fri Jul 06, 2007 11:15 am, edited 1 time in total.

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 Post subject: Strengths and Weaknesses
PostPosted: Sun Jul 01, 2007 3:29 pm 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
Strengths

I'm a cheapskate (generally, more on that later). I use natural light to light the house when I'm there, I open the windows and doors instead of turning on the air conditioner unless it's oppressively hot. In the winter I wear layered clothes. I wash dishes by hand because I think I get them cleaner and I use less energy. For 3 years I didn't have cable because I didn't want/need it. I even unplug things wantonly in my apartment to cut down on http://www.grinningplanet.com/2004/10-26/vampire-power-electricity-article.htm. In short I can be a tight-fisted miser when I want.

I have a pretty good job. For a 25 year-old I think I'm not doing too badly for myself. I make just a little above 52k a year.

Weaknesses

I'm a sucker for my boyfriend. I'll give him anything he wants. He wants to go to our favorite Indian restaurant (~50 bucks a trip) I'm game. He wants cable tv, it's his (he's the reason I have it now).

Books. I'm a book addict. For the longest time I went to the local book stores and would come home with 4-10 that I'd read in a month or two and then repeat. It was bad. When I moved I had to give a bunch of my books to the local library. I winnowed it down to 2 bookshelves. and a few months ago I sold everything in one of them, but I've noticed that I've been adding to the one shelf. It's now stuffed with books. I need to learn to check them out from the library. I currently have 4 I need to read so there's no threat.

Maximizing Strength Minimizing Weakness
Boyfriend has taken a job in another state on a trial basis. This should seriously cut down on my wild spending with him. Although his last weekend was a blowout on my part. I easily spent 400 dollars. As much as I'll miss him I won't have to worry about buying food for both of us, and I will be able to return to the cheap ways that I could never do with him.

I've been trying to lose some weight so weekdays after work I go to the gym. I find it's almost impossible to spend money when I'm at the gym. (There's nothing there I want to buy, except maybe my membership.) It keeps me out of the mall, shops etc, and it's good for me to get exercise. :)

I'm salaried so there's not really an easy way for me to increase my earnings, and work keeps me too busy on a very irregular basis for me to do a part-time job, but I do have a bunch of crap around the house I ought to get rid of. It's not going to bring a lot of money, but it will bring a little, and I need to get rid of it in the event that I need to move down with him. So we'll have to see about that.


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 Post subject: Budgetary Plan for July '07
PostPosted: Sun Jul 01, 2007 3:57 pm 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
This is not going to be a good month
Paydays on 7/13 and 7/27

401k
+522.50 contributions (2 payroll contributions)
+~80 market changes (completely wild guess)

Income
$2639.26

Expenses
Rent $700
Cable $100 (investigate getting rid of this, my apartment people tell me the internet service is supposed to be free very soon, and I don't really watch tv)
Electric/Gas $76 (way more than I use, budget system is a very bad guesser, I should phone them about decreasing it)
Netflix $14 (they just lowered the price by a buck)
Web hosting $4
Car Payment $203
Student Loan $100
Speeding Ticket $125 (I was bad)
Credit Card Payment $1270
Total ~2600

Notes:
Pretty much just making the minimum payments this month. Ugh.

Upside:
Debt Reduction:
-$160 Car Loan
-75 Student Loan

Investment Increase:
$600

Change in direction: $835
Result: Net worth ~-700

If this month works I should be at 0 by September 1.


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 Post subject: July addendum
PostPosted: Mon Jul 02, 2007 8:53 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
I phoned the cable company. Since Boyfriend is no longer here to enjoy the cable television I was going to discontinue it. I found that for only 3 dollars more than I would have to pay for the internet alone I could continue to get a good picture (our antenna is not so great) and get PBS (which doesn't come in nicely for me). It seemed worth it. So now my cable bill is ~53$ instead of ~100$. Its already been paid so I'll probably have a credit on my bill for next month. I'm in talks with my apartment complex to potentially reduce my rent by a little bit more than 10%. My electric and gas bill went up 10 dollars on my budget plan this year. Last year there was a problem with the heater that left it running for a whole week while I was out which drove my gas bill up astronomically, and I never got caught up. They're basing my new budget amount on that, so I'm hoping to negotiate a lower budget rate, or just pay the actual amount.


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 Post subject:
PostPosted: Mon Jul 09, 2007 5:28 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
As I look back over my previous posts I think it's worth noting that the electric and gas bill, Netflix, hosting, and cable bills are all already on the credit card so they are part of the overall CC bill. Also since the July budget is really for money already spent it seems silly to call that a budget. So I think I'll discuss my upcoming month's budget. Next month I'm aiming the credit card for <$1000 which should give me about 700 extra dollars to pay down my car note. The following month I'm hoping to cut the CC down to 635. Which should give me 1k to pay down debt.


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 Post subject: Bad news
PostPosted: Wed Jul 11, 2007 7:45 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
I saw the dentist yesterday and he gave me some bad news. Apparently I need a root canal, possibly two. I don't quite know how I'm going to swing that on my budget and pay down my car, but I'm going to see what I can come up with and post back with my plans. So far so good on my sub 1k spending for the month, just 10 more days until the counter resets.


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 Post subject:
PostPosted: Wed Jul 11, 2007 9:11 am 

Joined: Sun Apr 15, 2007 1:33 pm
Posts: 42
Location: FL
Hey sdkramer,

In your first post you said you hated credit unions (and not to get you started). Can you please expand on that a little? (without getting you started :D ) I have always prefered credit unions to banks. And I prefer Vanguard, ING, HSBC, and FNBO to my credit union. Thanks!

BTW, looks like you are making god progress! Keep it up!


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 Post subject: Re: sdkramer's Extreme Financial Makeover
PostPosted: Wed Jul 11, 2007 10:39 am 
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Joined: Wed May 30, 2007 11:23 am
Posts: 859
Location: Portland, OR
sdkramer wrote:
401k
12.5k I contribute 10% of my salary and I receive a 3% match from my employer with whom I have been working for 2 years which means 50% of the match is vested.

Roth IRA
$148.48 paltry I know but I just opened it about 2 months ago, and deposited $200. Decided to try to buy a few stocks and lost 50 bucks to fees. Meh. I hate Fidelity.


I'd focus on this. My suggestion would be to lower your 401k to allow yourself to max out your Roth. Also, you really shouldn't be buying individual stocks until you have at least $15k or so in the account. Otherwise, as you learned, you lose too much to fees and you don't have enough to be diversified. Additionally, IMO, most retirement money should be in funds. It's rare for an individual stock picker to beat a fund so why not just take the easy road? If you want to play with stocks, do it in a separate account after you've fully funded everything else.

As far as Fidelity goes, they're a good company. Not the best for buying stocks but also not the worst. You can't blame them for the fees - they have them pretty clearly outlined on the site...if you didn't read them that's on you, not them... If you want to buy stocks, open a brokerage account at a place that specializes in stocks not funds. You'll get lower fees.


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 Post subject: Re: sdkramer's Extreme Financial Makeover
PostPosted: Thu Jul 12, 2007 1:55 am 

Joined: Mon Jun 11, 2007 8:13 am
Posts: 211
sdkramer wrote:
Rewards Credit Card
-2k With ~1200 due in a few weeks. I use this card for EVERYTHING I can. Work, Personal, you name it. It delays my having to pay for everything for 30 days and I get a 1.5% return in the form of an investment in my (Bleh) Fidelity account and I always pay it off so the interest rate is irrelevant.


What?! You have a CC that gives you 1.5% back to investments? I have a crappy capital one card that gives a point per dollar, so I have something like 32000 points. My only options are to get nearly worthless gift certificates. In fact, the closest thing to direct cash that I've found using it is to get a Shell gift card and just use the money to pay for fuel that I would normally have put back on the card so I'm losing an additional 1% on it. Plus, since I rarely buy fuel anymore, this isn't even much of an option for me so I've been letting the points accumulate for about a year now.

Also, you pay for your BF's food? Damn, I need to find a woman like that.


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 Post subject:
PostPosted: Thu Jul 12, 2007 4:38 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
jgs9455 wrote:
Hey sdkramer,

In your first post you said you hated credit unions (and not to get you started). Can you please expand on that a little? (without getting you started :D ) I have always prefered credit unions to banks. And I prefer Vanguard, ING, HSBC, and FNBO to my credit union. Thanks!

BTW, looks like you are making god progress! Keep it up!


I've had 2 credit unions in my life, so I clearly can't speak for all of them, but my experiences my two have been nerve-racking. Their customer service people have been disappointingly uninformed (In one instance I called to get my routing and account numbers for an EFT--I don't use checks--and they gave me a "number" that was too short, and had letters in it.) They've also usually had sort of rinky-dink (for lack of a better word) online banking. It doesn't do bill pay. It doesn't show pending items, and generally looks like it was developed in an afternoon. And last but not least (particularly my current one) they're a blast from the past. When I opened my account the lady actually used a typewriter (electric, but still) to type up forms and gave me what amounted to a laminated business card, the purpose of which I still have yet to understand which doesn't fit in my wallet. For a techno-weenie like me it really shakes my confidence to deal with people who are way more comfortable with paper checks, and paper statements, than online banking and bill pay, electronic statements, and ATMs. Call me crazy but I'd rather deal with a computer than a person when it comes to finances. People are idiots. At least when something gets screwed up electronically I can blame no one but myself.

To contrast it I have nothing but positive things to say about my experiences with Wells Fargo (which I had to leave when I moved to Michigan) and ING which makes my little heart go pitter-pat.


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 Post subject: Re: sdkramer's Extreme Financial Makeover
PostPosted: Thu Jul 12, 2007 4:57 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
pf101 wrote:
sdkramer wrote:
401k
12.5k I contribute 10% of my salary and I receive a 3% match from my employer with whom I have been working for 2 years which means 50% of the match is vested.

Roth IRA
$148.48 paltry I know but I just opened it about 2 months ago, and deposited $200. Decided to try to buy a few stocks and lost 50 bucks to fees. Meh. I hate Fidelity.


I'd focus on this. My suggestion would be to lower your 401k to allow yourself to max out your Roth. Also, you really shouldn't be buying individual stocks until you have at least $15k or so in the account. Otherwise, as you learned, you lose too much to fees and you don't have enough to be diversified. Additionally, IMO, most retirement money should be in funds. It's rare for an individual stock picker to beat a fund so why not just take the easy road? If you want to play with stocks, do it in a separate account after you've fully funded everything else.

As far as Fidelity goes, they're a good company. Not the best for buying stocks but also not the worst. You can't blame them for the fees - they have them pretty clearly outlined on the site...if you didn't read them that's on you, not them... If you want to buy stocks, open a brokerage account at a place that specializes in stocks not funds. You'll get lower fees.


I didn't really go into it, but I'm making the 10% deposit to the 401k and funding the Roth at a later date because am receiving a check for about 3.5k as a bonus at the close of Q3. That, coupled with a few hundred dollars should fully fund my Roth for this year. I only put the 200 in to open the account. I went with Fidelity because they have my 401k. I certainly should have shopped around more, but it is convenient I suppose to have them both with the same login (trying to spot a silver lining here). As for the fees yes, mea culpa. It bothered me to just have $200 sitting there doing nothing, and since they require at least 2k to put any money into a fund I elected to go a single stock route. Probably should have paid more attention to the fees, but I never imagined they'd charge 20 bucks for a single trade. Please, like that's anywhere near their cost. Anyway the whole thing left a bad taste in my mouth and has kind of soured me on Fidelity. I'd agree it's my fault I lost 50 bucks, but that doesn't mean I have to like them for facilitating the process, and I'm certainly not going to go recommending them to anyone.


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 Post subject: Re: sdkramer's Extreme Financial Makeover
PostPosted: Thu Jul 12, 2007 5:03 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
144mph wrote:
sdkramer wrote:
Rewards Credit Card
-2k With ~1200 due in a few weeks. I use this card for EVERYTHING I can. Work, Personal, you name it. It delays my having to pay for everything for 30 days and I get a 1.5% return in the form of an investment in my (Bleh) Fidelity account and I always pay it off so the interest rate is irrelevant.


What?! You have a CC that gives you 1.5% back to investments? I have a crappy capital one card that gives a point per dollar, so I have something like 32000 points. My only options are to get nearly worthless gift certificates. In fact, the closest thing to direct cash that I've found using it is to get a Shell gift card and just use the money to pay for fuel that I would normally have put back on the card so I'm losing an additional 1% on it. Plus, since I rarely buy fuel anymore, this isn't even much of an option for me so I've been letting the points accumulate for about a year now.

Also, you pay for your BF's food? Damn, I need to find a woman like that.


Yeah, the card info is here:
Fidelity Investment Rewards (of course only useful if you have a Fidelity account)
http://personal.fidelity.com/products/checking/content/mcplatplus.shtml.cvsr

As for the food situation, generally we'd split the grocery bills if we went shopping together, but since I do the cooking, and generally stop at the grocery after work there are a number of times that yes I do wind up buying his food. I don't mind though. The other thing is that he likes to eat out a lot more than I do, so money I would otherwise be saving I wind up spending (even if we go dutch.)


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 Post subject: Funny how birthdays get you thinking.
PostPosted: Wed Jul 18, 2007 8:10 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
Well today is my 26th birthday. Now 26 isn't that old, but I think it's just recently hit me that it's inevitable; I'm going to be 30. Again 30 isn't that old, but it's a milestone, and not that far away at that. I create goals for myself every month. Fitness, financial, social, professional, educational, etc. Sometimes I achieve them, sometimes I don't , but when it comes to long-range planning I'm not so good at that. I think I tend to think, "Well that's so far off it's hard for me to wrap my mind around what is and isn't a realistic goal." But as I'm getting older or at least today I'm thinking, "Hey. Are you happy with where you're at?" and "Do you want to be here at 30? If not, what are you going to do about it?" that sort of thing. So, without further ado here's the answers.

Am I happy with where I'm at? No. On a scale of 1-10 I'd say I'm a 3 with respect to happy with where I'm at financially.
Student Loan
I never thought I'd still have my student loan 5 years after I graduated. Worse yet I've only paid about $2700 of it down. I've discussed it before. It's at a rate of below inflation, so financially it doesn't make much sense for me to pay it off, but on a personal level. I think it's got to go, especially by the time I'm 30. More on that in a minute.
Auto Loan
Of course first is the car. Long term this is negligible. As I've said it's pretty much gone in the next month or two, but worth mentioning only in that I just can't see myself taking on car debt again. I shouldn't have done it the first time and I think I've learned my lesson there.
Renting
Oy, still renting. Not terrible, but it would be nice to be able to paint my damn walls, to replace my own carpet, to buy my own appliances, etc. I'm tired of living in a one bedroom (I can't justify a two bedroom apartment for the cost, I might as well have a mortgage.) Unfortunately given Boyfriend's immigration issues. It's probably 5 years before he can get his greencard through the H1B process, ergo I have five more years of uncertainty as to where I'm living, and there's really no point in buying a house if I'm only going to be there for a year or two.
Job
I don't dislike my job. In fact there are moments when I quite enjoy it, but I took this job because it was more lucrative and I wanted to pay down my debts, and prepare for a return to my previous career in education, which I found really rewarding (personally, not monetarily).
Education
I had hoped to return to school last year for my Master's degree. That hasn't happened in large part due to my job, and also in part due to my financial situation.
Retirement
I'm actually pretty happy with how things are going in this department. Although I do need to finish funding my Roth for this year.

So what am I going to do about this?
Student Loan
Like I said, at a rate below inflation paying it directly is senseless, but I think I will (once the car loan is gone) begin to put my savings into a nice pile, and when the time comes that I can safely discharge that note and still have a safety cushion I will do so. This should allow the wonders of compound interest at 4.5% to trump the wonders of compound interest at 2.75% and help me add a little money to the pile. No reason I should still have this when I'm 30.
Car Loan
That pile will eventually be needed to buy a new (to me) car. I'll probably spend about the same amount I spent this time 8-12k for a regular old car, nothing special.
Renting
Like I said there's probably nothing I can do about this except as previously established pile up money for the purposes of a down payment.
Job and Education
Returning to school will likely give me an inroads to returning to working in education. Grad school of course costs money, though depending upon the situation perhaps less than my undergrad. So again, piling cash in my savings.

Anyway, just me thinking out loud.


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PostPosted: Wed Jul 18, 2007 7:36 pm 

Joined: Sat Apr 28, 2007 9:37 pm
Posts: 99
Location: Ottawa
Happy Birthday! :D


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PostPosted: Thu Jul 19, 2007 6:27 am 

Joined: Mon Apr 30, 2007 11:03 am
Posts: 298
Location: Michigan
Thanks Kate. :wink:


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