it’s paid off!
CAR’S PAID OFF! CAR’S PAID OFF! CAR IS PAID OFF!!!!! I have been looking forward to this for a long time, and now that the big day is here, I’m just going to be happy for a minute. I’d like to take the money I was spending on the car payment each month on debt reduction, but first, I’d like to save up for next year’s insurance payment, which is due in December.
Stocks suck. I took money out of the money market and put it in my checking as a buffer when I was low on allowance, so my stocks didn’t go down as much as it may appear that they did. But the decline in my retirement – oh that’s real, and it sucks. Today was a bad day on the market though… I’m not too worried about it.
Doesn’t matter what my car’s worth now that it’s paid off – I’m considering taking it out of the equation all together, but I’m afraid it may confuse my comparisons, so I’ll probably just leave it in.
What’s my next goal? (You know I always have one.) I have to rebuild my emergency fund and pay off my small student loan. I’ve done the math – if I use the amount of my car payment, it would take me a year to pull it off.
So, by the end of this month, I won’t have credit-card debt, because my vacation will be paid off.
By the end of this year, I’ll have paid my 2012 car insurance.
By the end of next year, my only debt will be for my mortgage and one student loan.
I also have a plan for saving the down payment for my next house (more space, better school district), and for paying off the remaining student loan. (That will take considerably longer – something like 10 years, depending on how long I can go without replacing my car.)
I’ve been trying to give myself a better, more realistic allowance – so far so good.
One foot in front of the other,
Sistah Ant.
the wisdom of my youth
You know, when I bought my car, I said to myself, “Get what you want and choose wisely, because you’re taking your kids to the first day of school in this car.”
I wanted a new car for myself because my fifteen-year-old car was at that point where I started having to replace parts here and there. It had some weird colored exhaust, and even though it was totally fixable and keepable, I didn’t want to go through that. I wanted a nice modern car, befitting an adult with a real job. So after some research and online searching, and a pull of my credit report, I went with some cousins to the dealer and bought my car. It was everything I wanted: four wheel drive, three years old, fuel economy comparable to my old car, good safety ratings… handsome, new-car-scented, and mine. The first car I’d ever bought. I was so very proud.
I didn’t notice until years later that it didn’t have alloy wheels.
Or a sun roof, leather upholstery, an in-dash nav system, an mp3-player jack, heated seats, tinted windows, remote doors, remote start, or bluetooth. Then again, I wasn’t thinking about that stuff when I bought my car. At the time, all I needed – all I wanted – was a nice late-model car that wouldn’t be in the shop every other month. I wanted something that would have longevity. And I wanted to pay for it and then live without a car payment for a while.
Now that I’m almost done paying for the thing, I want another one with all that chi-chi-frou-frou stuff, all those bells and whistles. A warm butt. Keyless entry. Oh yeah… I’m salivating. That would be so nice! I keep getting all these offers from the local dealership for thousands over blue book value for my trade-in, if I come in and get another car for like, negative billion percent financing. Have you noticed how many articles there are about the new car market and how you can get a better deal on new cars than used now?* Did you know there’s an article in the paper every day, reviewing a car?* Did you know my credit is good enough to get myself a really nice car?
Oh, I’m very tempted. But I just can’t do it. The $300 that I’m currently paying every month could be put to better use on getting out of student loan debt. Or beefing up my IRA. Or I dunno, anything but replacing a depreciating asset that doesn’t need replacing with another depreciating asset and more debt. Ain’t nothing wrong with my car. It’s still handsome. Still gets me from A to B. Still saves me gas money. And really, I can still get some of those features I like installed on this car if I want them so bad. I actually meant to do that before now, it’s just that I keep finding smarter things to do with my money. Anyway, I was right when I bought this car – it might not have any luxury details, but it has staying power and I really still do like it. I’m still proud of it. And, most importantly, it still does what I bought it to do. I’m not saying I won’t get another car before my unborn kids are starting school, though. I’m just saying that I think I need to wait for a while.** As long as my car is running well, I need to take advantage of the time I’ll have with no car payment to do other stuff with my money. It’s a good thing I bought a late-model car*** I actually liked, instead of a beater. Or I’m telling you, I’d be driving around with a warm butt and a brand-new $450 car mortgage right now.
*Propaganda, I tell you!
** I reserve the right to seek out and enter contests for new cars. Yes, I know I’ll still have to pay tax and tags. Still worth it. Maybe I’ll go on The Price is Right, even though it’s not the same without Bob Barker. (No offense, Drew, I like you too!)
***Well, it was late-model when I bought it. Now it’s an aging-model.
head in the game
From my latest Net Worth update:
I have fantasies of paying my car off before October 2011, when it’s scheduled to be paid off. My other fantasies include paying off my $2,900 student loan by the end of 2011. You know what’s keeping me from doing that? See that $2,234 in credit card debt? Most of that is not revolving – it’s for carpet and furniture, and Mister Ant and I are paying it off with discipline. But it’s digging into the money I would be using to make my fantasies come true. Well, it’s the debt plus the traveling (tropical hot spots – all paid in full, no credit). Oh yeah and the aggressive savings (I bumped my 401K contributions up 2% in January, and we’re saving a nest egg too)… the savings is taking a lot of my disposable income as well. As a matter of fact, Mister Ant and I are purposely eating at home a lot more often just so that we can have more money in our pockets after we pay ourselves and our creditors!
One thing I do know: I am not backing down on my goals. I want to put 20% down on my next house, instead of the 10% I put down on my current home. It’s arguably the biggest part of my retirement plan, and I want to start my next mortgage off on the right foot. I will leave 2011 with no credit card debt and no car loan debt. I will find a way to pay off that $2,900 student loan by this time next year – maybe even by Christmas!
It’s all about the hard work. Five years ago, my net worth was over 70 grand in the hole, I was living check-to-check, and I owned absolutely nothing. I have proven to myself that I have the discipline to get out of big messes – I am now a hop, skip, and a jump away from having a positive net worth, a five-figure retirement savings, and finally, my car title! Now 2010 was really fun – getting married and having a wedding, traveling abroad for the first time – I literally earned every positive experience I had with my husband. But it’s time to knuckle down a little bit. I’m not saying there won’t be anymore fun, but 2011 is about taking my finances to the next level. I’m not a little girl anymore. I know how to shed debt and build savings.
Now let’s see what else I can do when I get my head back in the game!
how it’s going
From my November 2010 Net Worth update:
“Spent a lot of money on the wedding, but we paid for everything up front after saving for it. It kept us (and me) from making as much debt reduction and savings as we otherwise would have, but hey, we didn’t go into debt for the wedding, reception, and honeymoon, and that in itself was a gift! Still contributing to the 401K. Happy with how the money grows without me having to think about it. We’re saving for our new house that we plan to get in another 4-6 years, and we’re saving for a baby. Not pregnant yet, just preparing. I am disappointed that I didn’t kill more of my debt this year, but no wedding debt was a good trade for that achievement. Next year should be better. Oh – and that credit card debt is for carpet and bedroom furniture. We’re paying off both debts in less than a year, and one of them has no interest. These amounts include money we hold jointly and my own funds, but not my husband’s personal funds.”
Yup, very happily married. It’s been a very busy year! Blogging has been pretty far from my mind. But money’s going okay. I’m saving a lot – we’re saving a lot. We saved for the wedding, reception, and honeymoon, and woke up wedding-debt-free the morning after, which was nice. I got to finally use my passport!
I’m really happy to see that I’m less than $5,000 in the hole! I was honestly shocked to see that I’m even down to four figures. I remember when I started keeping track of my net worth. Yes, the progress has been happening slowly, and the hole didn’t get this shallow overnight, but it’s all in your perspective. I think things really started to speed up when I increased my income and started to work the the deficit from BOTH ends – increasing assets AND decreasing debts. I’ve been blessed to continue the march towards a positive net worth. It seems like it’s only a matter of months now before my net worth is finally in the black. I’m not trying as hard as I used to, actually. I used to check my balances more often and make concerted efforts to work on this, but now, a lot of these things are really just automatic for me. I save without thinking about it – my direct deposit and automatic transfers do the work for me. I still bargain-hunt. Though I have more money to spend, I still don’t spend like a mad woman. I’m finally saving with a 401K – between me and my job, 10% is being put away.
2011 is starting to get me excited! I’m slated to pay my car off, get a positive net worth, increase my emergency fund, pay off my small student loan (FINALLY!!!) No house purchase or wedding to interrupt my progress this time – I can’t wait to see how well I can progress!
I am very encouraged and thankful.
competing priorities
From this month’s Net Worth Update:
“I did OK, I guess. It’s home improvement season, so I’m not sure how much progress I’ll be making in the coming months. We got some landscaping done (paid in full up front), and we bought some furniture (No money down, no interest for 12 months – we plan to have it paid off in the next couple months, and yes, this does mean that I have another credit account – but I wanted it, because we’ll be buying quite a bit of furniture this year). But we’re still saving for the future (wedding, baby) and I’m paying down my student loans – about $300 more than the minimum payment per month (The $300.00 comes from the payments I was making on other bills that I have now paid off.) My car payments are mostly principal at this point, which is great. And all that money in “cash” includes money we’re saving to spend on the wedding (the planning/spending for which is already under way), so I’m not sure how much stock you should put in that number. And oh yeah, how ’bout that bear market? I’m down about 10% from last month.”
I’m still up about$400, but it would be so much better if I hadn’t lost that amount in the market, and if we hadn’t bought furniture. But look, we need furniture. Our hand-me-down furniture has literally fallen apart. My room is atrocious. That’s bad for my peace of mind. I’m not too worried about the additional debt. We’ll be paying it off in the next few months. And still, that doesn’t really matter, because after it’s paid off we’re getting carpet and more furniture.
The good news is, we pay for this stuff with the money that’s left over after we contribute a big chunk of our money to our various savings goals and the household expenses. The other good news is that we’re only buying one home improvement at a time. We know we can’t afford do everything at the same time while continuing to save, so the one-at-a-time approach will keep us able to continue saving and paying down debt. I have no interest in being miserable and completely dissatisfied with the decor of my house just so that I can boast about being debt-free. I will spend my money on things I want to have – I’ll just do it as responsibly as I can think to do it. We have savings and steady work, so now is the time to take advantage of being dual-income-no-kids.
Although, I’ll admit that I hate it when my net worth graph doesn’t shoot up in the air.
hate mail
So when I got home tonight, a letter from one of the companies that has issued me one of my credit cards. Let me let you in on my credit situation: I have four credit cards.
The first is my first card from college, that I got because I wanted a free candy bar. I’ve had it for over ten years now, and the only reason I keep it is for the longevity of my credit history. (Because I hate the interest rate, and because they’re always sending me “convenience checks” that are inconveniently jamming up my PO Box. They never reduced my interest rate when I asked. They only increased my spending limit once. I pretty much hate them.) It has no balance and is in good standing. I use it once or twice a year to keep it active.
The second was offered to me when I opened a checking account while I was still in college. I’ve also had it for over ten years, and it has no balance. I only use this card for very large purchases. It has a rewards program, so I can get stuff by using it – last year, I used my rewards to help pay for my new TV. I usually don’t use the card, but if a high-dollar purchase comes up, I use the card to get the reward points and then I pay it right back. It has a relatively high balance, so it’s great for stuff like contractors or furniture. I had a line of credit with this company which helped me to consolidate my debt. I paid it off, and in the past year, they cancelled it. That kinda pissed me off, but I was kinda expecting it too. Either way, this is my highest balance card with my lowest interest rate, and I’m glad to have it. It has no balance and is in good standing.
The third card is my AMEX, which I’ve had for about ten years. It’s a classic green AMEX card with financial rewards. It’s my only card with an annual fee, but I love this card! When I was struggling through college and grad school, it helped me avoid using my other cards, avoid accruing a balance since it had to be paid off at the end of each month, and it gave me a little advance on my paychecks when I needed it. When I got this card, I was right at the point in my financial development when I learned how NOT to run up a bill. If I’m using a credit card nowadays, it’s usually this one. It’s in good standing, and I clear the revolving balance every month.
I just got the fourth card, a department store charge card, in the last year. Department store charge cards are pretty evil and not for the faint of heart. I have it because I like the store and I like the discounts I can get by using the card. I cleaned up on Christmas shopping because of this card, and as long as I don’t carry a balance, the ridiculously devious interest rate, typical for cards like these, won’t affect me. It doesn’t have a high balance, but I like the discounts. Again – no balance, good standing.
Well, the letter I received today was about the second card. It says in part,
Dear Sistah Ant:
I am writing to inform you that the Financial Rewards credit card program will be ending… [and] will be replaced with the new Cash Rewards Visa Signature credit card – one of our premier cash rewards programs… Your APR will not change… Your unredeemed rewards will be transferred to your new account… [and the card] comes with exceptional features and benefits. …You will receive credit for your continuous account relationship going back to the old card. Blah, blah, blah,
Sincerely,
Fake Signature
Name that means nothing to me
Stupid Bank
I know this doesn’t sound like a bummer, but check out what’s in the fine print on the back of the letter – “As a result of this upgrade, your account will have a revolving line, rather than a preset spending limit. This does not mean that all transactions will be approved. We will consider transactions for approval on an individual basis, including transactions in excess of the revolving line. If we have previously permitted transactions in excess of your revolving line, it does not mean that we will permit another transaction in excess of your revolving line. Your revolving line, which may also be referred to as a credit limit, will be disclosed to you when you receive your card and, generally, on each monthly statement. We may change your revolving line from time to time.” Some upgrade.
It’s hate mail, I tell you! My predictably high credit limit – *poof*. The predictability of knowing what I can spend – *poof*. Going up to the counter knowing that my card will be approved – *poof*. What I like about this card, opposed to my AMEX, is that I KNOW how much I’m approved for. I don’t have to call before I spend to see whether or not I’m going to be embarrassed at the register. The high balance on this card makes me look as awesome as I am on my credit reports. Now the only cards I have that have regular credit limits are the first card and the department store card, and their credit limits combined don’t add up to my current Visa limit. Do you know what this could do to my credit score, less than a year after my line of credit has been cancelled (by this same stupid bank)? My ratio of debt to available credit will still be “zero” to “combined credit limit,” but that combined credit limit is shrinking, and I didn’t do anything to deserve it.
I wouldn’t care if I wasn’t trying to buy a bigger house in the next several years. But I am. It’s hate mail, I tell you. They hate me because they don’t get interest from me anymore. They can’t hold a big balance over my head anymore, ’cause I paid it off. I probably take more money from them with my rewards that I earn them in merchant fees. So they send me this stupid letter, which is all happy and stuff (“upgrade” my foot!) when they’re really sticking it to me. I hate them now. That is all.
Broke.
You know why I’m broke? Bad planning and overuse of my AMEX. If I would think farther ahead, I would realize that racking up $500 of charges that have to be paid off right before graduation season is a bad, bad thing for my cash flow. You’d think I’d have gotten better at planning by now…
uneasy
Did you ever get the feeling that it has been too long since you looked at your bank balance? I’ve been doing the no-checkbook-register thing for a few months now, and it’s really hard. I went on a short trip recently and though we had a budget, I was often thinking about whether or not we were overspending. I’m not sure if I can keep this up without the detailed record keeping I ‘m used to…
Let’s try this
How about I try blogging on the go with my phone? This may make it easier to come back…
pleasant surprise
I updated my net worth (with a few minor details yet-to-be-updated, like the big reduction in my student loan amount and the actual amount of my stocks’ value) and lo and behold, there was a $6,000 net worth increase sitting there staring me in the face! Wow. Praise God!
This progress, despite my newest material acquisitions – clothes, a smart phone, a data plan, weekly visits with a personal fitness trainer – is nothing short of amazing.
Here’s my latest net worth explanation:
“The amount shown in my net worth is incorrect because I’m having technical difficulties with one of my student loan accounts and with my ShareBuilder account, so I can’t see the actual balances. Until I can get these numbers, the amounts shown here are incorrect.
I used my tax refund to pay down some student loan debt. I made my last medical bills payment in April. Yay!!! That is why my “other debts” category has gone down. Another reason it’s declined is because I’m paying back the $7,500 tax credit from 2008 through payroll deductions, since 2010 is the first tax year in which Uncle Sam will start getting his money back from the homeowners who took the 2008 home buyers’ tax credit (i.e. “loan”) – which, in my case, is sitting in a bank account collecting an insulting amount of interest (when are the rates going to go back up?!?!?) and augmenting our emergency savings.
Mister Ant and I have been saving for our wedding expenses and for start-up costs for a family (no, we’re not trying yet!).
The credit cards get cleared by the end of each month, and I’m pretty much using them for rewards points. My main priority is to use the payment amounts I no longer have to pay to the medical bills to pay down my smaller student loan. I’m really excited about seeing that final 0.00 balance when I log in one day! I hate this loan with a passion.
I haven’t been saving much in my IRA, because so much of my money is going towards wedding/household savings and debt reduction. Apparently I lack the drive/discipline to contribute regularly to the fund, but at least I am saving something somewhere, and next month after open enrollment, I’ll start contributing to the 401K at work, since I become eligible this month. I looked into converting the IRA to a Roth, but it’s really not worth the initial tax costs to me right now.
Someone dinged my car, but not so significantly that it would have been worth paying my $1000 deductible, so I took some value ($500) off of the car, since the body is no longer in “excellent” condition.”
But, perhaps most importantly of all – my net worth has broken the -20,000 mark and I feel like I’m oh-so-close to going positive! I was so excited to see that, and then my jaw dropped when I saw that I’m 77% closer to a positive net worth than I was when I started this journey three-and-a-half years ago back in 2006. Oh joy! Negative 87K seems so far away now. I mean, what’s another 16K? I’ve already improved by about 70. This is so awesome!
