Christmas Spending/Fund…

Since my family AND boyfriend are amenable to a giftless Christmas, I think that I may be able to pay for the remaining presents with my paycheck. I have one more paycheck before the student loans officially start to kick-in. This means I have $400 free to buy gifts for my little cousins, co-workers, neighbors, etc.

If I am able to do this, that means that I can take the $500 I have saved for Christmas and add that to my regular $300 payment and put $800 towards my credit card debt in December. This would bring the balance down to $7,800 or 69.7% to goal. I plan to put my entire bonus which was $3,400 after taxes last year towards the balance at the beginning of February and my tax return which should be between $2,500 and $3,000. So, I am well on my way to paying off my credit card balance by April 2008.

Excellent! I hope this works out.

Another Credit Card Cancelled…

Citibank closed my Diamond Preferred Card. The letter said:

In recent review of your account, we noticed that it has been a long period of time since you last used your Citi Diamond Preferred Rewards credit card. To help better manage you credit accounts, we have closed your account.

Yeah right. Tell the truth…The cost of capital is too high to have open revolving credit to someone who doesn’t use it. So when I pay off my final credit card bill in April, will all of my credit card companies follow suit and cancel my credit cards? All I can say is we’ll see because credit card debt is the Devil and I have no plans to accumulate anymore in the future.

Private Loan Consolidation…

I am thinking about private loan consolidation. My private loans are all variable and the highest interest rate is 9.37%. I may be able to qualify for a lower fixed rate and extend my repayment term from 20 years to 30 years. It’s worth exploring.

Citibank looks like they have the most attractive offer right now. The rate on the loan will of course depend on my FICO score and I haven’t pulled my credit report in almost a year. I think that I am going to pull it through AnnualCreditReport.com and just pay the extra fee to get my scores. Before, all of my scores were over 700 but not over 760. All my credit commitments have been handled as agreed and with paying down the balance on my credit card, my balance is now only 45% of the credit limit. That should help my credit score.

I am not sure how my credit score will get impacted by cancelling my AMEX rewards card but it did not have a set limit so I don’t think it will harm me too much. I am also unsure how AT&T Universal/Citibank cancelling my card will affect my score. I hope that it doesn’t harm it because it’s not like I didn’t pay on time. I just didn’t use the card for 4 years. We’ll see.

I am going to wait until later this month or December to check my credit report/score just to ensure that the cancellations are reflected and to allow time for my paydown on my credit card to be accurately reflected.

October 2007 Financial Recap…

My net worth declined this month primarily due to 1) receiving $700 less in income due to 4 unpaid working days, 2) $1,100 in interest expense that capitalized on my student loans, 3) $220 for a new car tire, and 4) $250 for a medical bill.

I still spent too much money eating out but I am going to try to focus on bringing my lunch more in November. This task shouldn’t be too hard considering the fact that it’s getting very cold in Chicago and I don’t want to go outside.

I used $7,000 in savings and $300 in income to pay down my credit card to $8,800 from $16,100. Over the next few months, I am going to try to reduce this balance as much as possible and pay it off with my bonus and tax return. I am hoping to have it paid off by 4/2008.

Thankfully I received $2,000 from my parents as a graduation gift. Otherwise, my net worth would have declined significantly. The $2,000 remains in an emergency fund.

Christmas Fund…

My Christmas Fund is complete. I received an unexpected $50 graduation gift in Monday that will bring the grand total to $500. I also noticed that my piggy bank is almost full so I need to get the change counted to see how much I have. Nevertheless, one more goal achieved which is a good feeling especially since October was a tough month with over $1,000 in student loan interest capitalizing. I can’t seem to keep up.

Credit Cards Cancelled…

I cancelled my American Express rewards card last week. I didn’t want to pay a $100 annual fee for a card that I didn’t even use. Plus, I didn’t have an extra $100 just to give away for no reason. I still have my American Express Blue card. The only thing about the Blue card is that it doesn’t offer any good balance transfer offers and the APR isn’t that attractive either.

Citibank/AT&T Universal cancelled my credit card because I didn’t use it. This is the second time this has happened to me. I opened the letter last night and I just kind of smiled. I wasn’t upset at all. It was just a crappy card that offered me very little so in the end, I guess they did me a favor. It wasn’t closed because it wasn’t handled appropriately which is great. I just haven’t used it in 4 years. Oh well! One more credit card bites the dust.

My life just got a little simpler.

Bad News on Paycheck…

My paycheck is going to be even lower by $700. I will get $2,400 at the end of the month versus the $2,800 that I estimated and my regular $3,100. The lower paycheck is due to taking 4 days unpaid to attend my sister’s wedding this summer. I took all of my vacation days to prepare for the bar exam and didn’t have any left to travel to Cancun.

This is exactly why I was hesitant about making any strong financial moves because crap always seems to happen. So I am not going to bring in enough money to pay the bills and will have to use the remaining $1,000 in my unemployment fund to supplement my income. Major bummer!

Other expenses that I have been incurring lately relate to networking and my job search. Tonight I am going to a lawyer mentoring dinner which is going to cost me $25 in addition to parking expenses.

November:

$2,400 – income

(875) – mortgage
(225) – assessments
(340) – SBC and home security (cell, cable, internet, phone, brinks)
(140) – electric bill (need to call and see why it’s so high)
(100) – car insurance
(220) – commuting
(200) – personal care (hair)
(350) – credit card min
(100) – groceries

$(150) – shortfall

Smaller Paycheck…

Getting paid once a month can be a challenge especially when you are swamped with debt. In August, I took 4 days unpaid to attend my sister’s wedding and I am not sure when I am going to get hit with a lower paycheck. I entered the days into the computerized system at work but it has yet to impact my paycheck. After taxes, 401k, insurance, etc., my take home pay totals approximately $3,100. Assuming that I bring in $2,800 this month, here is how I will handle my cash flow.

$2,800 – income

(875) – mortgage
(225) – assessments
(340) – SBC/Security (cell, cable, internet, phone, brinks)
(140) – electric bill (need to call and see why it’s so high)
(100) – car insurance
(220) – commuting
(200) – personal care (hair)
(350) – credit card min
(100) – groceries

$ 250 – remaining

Living single is hard and my mortgage outside of Chicago for a three bedroom condo is cheap compared to what it would cost to live in the City. Even rental prices can be what I currently pay so I am careful to do everything that I can to remain where I am for the foreseeable future. With the remaining $250, I am going to try my best to spend as little as possible. Anything remaining at the end of the month will go towards debt repayment. If my paycheck is the full $3,100, then I will put an extra $200-$300 towards my credit card debt.

Credit Card Payment…

I have been hesitant about making any strong financial moves without knowing whether I will be switching jobs in the near future. For the most part, all I have done is plan when I should take some action. On Friday, I put $7,000 of my $9,000 in savings towards my credit card bill, retaining $1,000 for irregular expenses and $1,000 for my own sanity. I have a $2,000 emergency fund thanks to my parent’s graduation gift.

Today I have to pay $200 for a new tire, wheel balance, etc. and also pay my last $240 medical bill. I didn’t have any money in my checking account so I put the $1,000 there to pay for the irregular expenses. The other $1,000 is still in my WaMu savings account. I also have a big load of cleaning that I need to pay for which includes alterations. Last year, I purchased a few suits and I just got them altered for interviews I hope to be going on in the next few months.

Here are my balances:
Credit card: $15,800 - $7,000 = $8,800
Emergency Fund: $2,000
Savings $1,000
Checking: $1,000 - $240 (medical bill) - $200 (new tire) - $100 (cleaning) = $460

Disclosure: I feel a little guilty about using my parent’s gift as my emergency fund. I know they wanted me to do something special or get something special for myself with the money so I am hoping that I will not have to use it for any type of an emergency. However, the something special right now is some security knowing that I am not flat broke.

Snowball Calculator…

I found a pretty good snowball calculator yesterday for those that are interested. It was pretty simple to enter in the information and get started and it is a major improvement over the spreadsheet I’ve been using. The spreadsheet works with excel and there are two versions: 10 creditors and 20 creditors. You can find it at the link below.

Vertex^42

How I Stay Organized…

The main way that I stay organized begins with three important things: 1) a file cabinet, 2) a shredder and 3) financial software/spreadsheets.

I have a 4 drawer file cabinet.

Drawer 1: A folder for each accounts that I receive statements for monthly/quarterly and a seperate folder for receipts and gift certificates for easy access

Drawer 2: Dormant accounts that I rarely use, important receipts and gift certificates – each has separate folder

Drawer 3: Law school and student loan documents

Drawer 4: Mortgage, employment and insurance documents – very important documents

Shredder

Shred, shred, shred – you do not want your information stolen

Remember: with catalogs, the inside order form has your address as well

Sort through mail right away

Throw out junk mail immediately

Financial Software

I access Yodlee every morning and get a glimpse of my financial status and for bill alerts

Pocket quicken saves me time with my finances – I enter on the fly expenses during the day

I set up my desktop quicken for automatic updates. Then I sink it with my pocket quicken in the evening or every other day.

Comments

When you first start to get organized, it may seem like a daunting task but it doesn’t have to be. By setting up your folders first, organizing will be a lot simpler. Buy some hanging folders and use the labels that come with them to mark each account/lender/bill payee.

When you go through all of your paperwork, put the oldest account statement towards the back and that way they will all be in order with your most recent in front and easy to access.

Bankrate has an article entitled What Financial Records to Keep, How Long to Keep Them. Check it out to see how long you should keep certain records.

I had a problem once with AT&T. They had a system conversion during one of their mergers and I received duplicate bills. I called and was told to disregard the duplicate bill. Somehow, the bill got transferred to collection but luckily I had the records to prove that I paid the specific bill in question and that I paid on a monthly basis and timely. They never bothered me again but I was very thankful that I had the information handy.

I Got Tagged…

Debt Hater tagged me to tell everyone 7 little known things about myself.

1. My boyfriend and I have been together since junior high. It is comical relief for some people that we haven’t tied the knot yet but all in perfect time. 16 years and counting…
   
   
2. My favorite color is Purple. Plus, I am a Northwestern graduate. Go Cats!
   
   
3. I have a thing about socks. OCD tendencies but if a drop of water gets on my socks, I have to change them and under no circumstances can I sleep without socks.
   
   
4. I have birthmarks on almost every limb on my body. It’s true. I have birthmarks on my face, arms, legs, fingers and my back. It’s crazy. My grandfather’s entire back was covered with a birthmark. Mine are actually pretty but they’re smaller and not so overwhelming.
   
   
5. I talk in my sleep. At lease the conversations are one-sided so I’ve been told.
   
   
6. I am scared to practice law. I mean, one day, millions of dollars will be riding on my skills and people are going to trust me with their lives. That is a huge responsibility that I don’t take lightly.
   
   
7. I play the lottery…Often. You do crazy things when you are desperate.

Irregular expenses…

I received my final medical bill yesterday for a surgery that I had in 2005. My doctor’s office neglected to bill my insurance carrier who is now refusing to pay the bill. So, that’s $240 that will have to be paid out of my emergency fund.

In addition, I need a new tire for my car which will run me another $200. Over the weekend, my Dad noticed a bubble on the side of my tire. This time last year, I replaced all 4 tires to the tune of almost $800 so I am not pleased with having to replace another so soon. The woman at the repair center said that the bubble is the result of impact. I am going to call the service place later to make sure that it’s not covered under warranty.

So, more money goes down the drain and out of my savings account in a matter of a week. I decided on $2,000 for an emergency fund versus $1,000 because since I loved into my condo, the irregular expenses such as repairs, etc. have ranged from small amounts to as large as $800. With very little extra money to rebuild the emergency fund, I need a buffer in case another $800 repair comes along.

Significant expenses in the last 4 years (estimates):

$600 – new water heater
$750 – small fire in the electrical/circuit box
$800 – new tires
$800 – car repair

Changed Some Goals…

I changed some goals after reading About Tree Fiddy's blog.

Emergency Fund:

$2k emergency fund for repairs, minor emergencies, etc. – Funded

Unemployment Fund

$15k goal for 3 months of expenses

Will be slow going because I am in debt repayment mode.

Credit Card:

Here is the plan. I will be using the remaining $9k that I have in savings in October and November to reduce the balance to under $6k.

Beginning Balance: $15,800
October: - $4,000 ($11,800)
November: - $5,500 ($6,300)
December: - $500 ($5,800)
January: - $300 ($5,500)
February: - $3,300 ($2,200)
March: - $2,200 ($0)

Student Loans:

1/2008: $150
4/2008: 870
6/2008: $330

Total $1,350 (Interest Only)

My Current Budget…

Here is my current budget. It will change very soon with my student loans going into repayment.


I need to change my tax withholdings next year. In the past, I have received on average about $3,000 for my tax refund. With paying about $16k in student loan interest annually, I should be able to claim the maximum deduction.

Another area where I can increase my cash flow is to cut my cable package and also my internet on my cell phone. I am hesitant to do the latter because depending on what legal work I pick up in the next few months, I may need my mobile internet service on my pocket pc. You never know. It’s kind of crazy to think that I won’t even be able to have cable. I feel like I need something if I am not going to be able to go out for dinner, meet up for drinks, etc. Can’t I at least have some entertainment in my own home other than reading a book which I already do daily?

My commuting costs have decreased significantly from ~ $500 per month to $220-$250. Now that school is over, I am able to take the train and I don’t drive nearly as much which also saves on gas. I have to fill up only twice a month as opposed to every week.

Irregular expenses are anything like repairs, birthdays, water bill, and anything else that does not recur monthly. Unfortunately, irregular expenses have totaled way more than $70 on average. The quarterly water bill alone is usually in the $100 range and next month I have to renew my license plate sticker which is another $100. This is generally the category that does the most damage.

I am still contributing 2% to the employee stock purchase plan. I will stop that contribution when 1) I leave my current position or 2) when my student loans enter repayment.

I am very dedicated to contributing at least the minimum amount to my 401k to receive the employer match. Otherwise, I am giving away free money which I simply cannot afford to do.

Until my student loans enter repayment, I will pay an additional $200 per month on my credit card and once I receive my bonus and tax return, I will be using the bulk of my savings account to pay off the remaining balance which should $14,000. That will leave me about $3,000 in an emergency fund which I really wanted to be $5,000 at a minimum.

Budgeting for the Next Few Months…

I came up with a budget for the next few months. My student loans from law school will enter repayment at different stages.

• 1/2008 – $150 per month
• 4/2008 – $870 per month
• 6/2008 – $330 per month

Total: $1,350 per month (interest only)

I came to five realizations:

• I have to pay off my credit card balance – the monthly payment is too high
• I have to change my withholdings – tax return is too high and I need more monthly income
• I have to get a part-time job if I don’t land a law position within the next 6 months.
• I may also have to suspend my 401k contributions to pay the minimum on my student loans.
• I may be able to reduce expenses a little further to keep my 401k contributions

While I fully believe that I will be working at a firm very soon, I also believe in being prepared as much as possible for life’s curve balls. When looking at the bright side of things, what I am most happy about is that I am in a position to not only pay off my credit card debt but I will also be able to pay the interest on my student loans so that my net worth will continue to improve a little. Lastly, depending on my possible yearly salary increase, the part-time job and/or income earned from real estate closings, I may be able to keep my 401k contributions which would make me very happy. Then my net worth will really improve.

On a side note, based on my income, I may also be able to forbear my federal student loan payments a little longer.

Graduation Gift Update…

My mom and dad gave me a beautiful card along with their $2,000 graduation gift yesterday. I deposited it today into my account and will immediately transfer $1,500 to my savings account to bring it back to $11k. I don’t have any cash in my checking accounts so I am going to keep the remaining $500 there but I am still keeping a watchful eye on spending.

As for Christmas, I have $416 saved in petty cash: $200 from graduation gifts and $216 from singles. At the end of the day, I take out any remaining $1 bills from my wallet and save them as petty cash. The account has grown over the past few months and it is a rather painless way to try to save some money. This petty cash fund is earmarked for Christmas spending. I have a $500 budget for Christmas so there is only a slight shortfall.

I am in the process of applying for law positions. It seems like the majority of postings are for lateral attorneys with over 2 years of experience but I am not giving up hope or the search. I also joined a number of bar organizations which are going to provide the opportunity to network.

Frustration Looms…

I am so frustrated with everything right now with work, my finances and finding a job.

As for work, I love my co-workers but the work has become so mind numbing that I just want to scream. And the micro managing has truly taken its toll. For the last year, we are now required to track every hour we spend on a deal like we’re lawyers billing hours (NOT). Even down to lunch. Ridiculous! It seems like I spend more time filling out stupid tracking sheets than I do working. Plus, the tracking is duplicated on multiple occasions which frustrates me even more. On top of that, my team leader told me not to make all my hours come out to 40 because the “managers that be” have a problem with that. I guess only working a regular workweek is not enough that I have to work more when my co-workers who do the same job as I do work the same hours and make $10-30k more than I do. Go figure. To tell you the truth, I work more than 40 hours but I just hate filling out the darn sheets that I just make it work out to 40 so I don’t have to think about it any more. Whatever!

My finances are driving me mad. With everything in limbo, it’s hard to set any concrete and realistic goals. I don’t know where I’ll be in the next month let alone the next year. I could be making more money, the same money or heck, even less money. So, it’s just blowing my mind right now because I am tired of feeling strapped and well…Broke! Sure I got myself into this position but I worked my butt of over the last 4 years to get myself out of this position.

Finding a job…where do I begin. Apparently some people (ok...one person) speculate that I don’t have the right pedigree because law firms haven’t hired me yet and others seem to be of the opinion that I am not committed enough because I didn’t quit my job while I was in law school to gain legal experience. Well, that is all well and good to be on the outside looking in, speculating and making assumptions but it simply is not the case.

I was on track to finish law school in 4.5 years as opposed to the standard 4 years for part-time students primarily because I was working over 40 hours and attending class 4 nights a week so I needed to spread it out a little. I had hoped that I would be able to apply for summer associate positions between my 4th and 5th year of school but a lot got in the way of my plans.

For one, I got sick during the spring semester of my second year of law school and needed to have surgery during the summer. Now with my employer I had good insurance, much better than the insurance that the school had to offer. With getting sick, I also needed my insurance even more. Sure I could have used cobra but it would have run out eventually. There was no guarantee that I would have a job, just a hope like everyone else that the law firms would grant you an offer. At least I have a job with good benefits now and if I ever got sick again, I would be able to seek good treatment.

Second, following the surgery during the summer, I had additional treatment during the fall semester which made me even more stressed out to the point of exhaustion and where my blood pressure was high for the first time in my life. I was worn out to the hilt. So I petitioned the dean of the school to allow me to take more hours during the semester so I could finish in 4 years. I felt like the sooner I was done with law school the better. My health and relationships were suffering.

Pedigree…well I believe I am of the best pedigree to succeed. You are talking about a woman who worked her butt off at work and in school. I graduated with almost a 3.2 GPA working full time where there are people who went full time that couldn’t even pull that off. To top it off, I passed the bar exam the first time with only 3 weeks away from work to study. I am way smart people and I am going to show all the haters out there one day what they passed up on. They are going to wish I was on their side when I achieve the best results consistently for my clients. Just you watch.

Pedigree my foot…you wish you had my brains, style, and skills. I just wish I had your job! LOL

*** Thanks for listening to my rant. =)

2007 Financial Goals…

I know how important it is to set realistic goals or as Single Ma would put it, "S.M.A.R.T." goals. Check out her post here on annual goals.

S.M.A.R.T. stands for:

S - specific

M - measurable

A - achievable

R - realistic

T - time based

I realized today that I didn't set any 2007 goals. When the year began, I knew it would be a tough one with me finishing school, preparing for the bar and looking for a job. I felt like and still feel like my life is in limbo and that things can change any minute for the better. I could get a new job next week that could keep my income the same, double my income or even triple my income. It's just a matter of opportunity.

In the back of my mind, I think that I knew I wanted to reach $30,000 in my 401k by the end of the year, establish a $15,000 emergency fund (3 months of expenses) and that I wanted to be below -$90k for my net worth.

I am on course to be below -$90k thanks to my parent's graduation gift, with $28.5k in my 401k but only 2 paychecks remaining for the year, I will come really close to the $30k goal but I will need some help from the market. As for my emergency fund, I fell short. I will only have $12k. Some might think that my emergency fund goal is too high but when you add in my upcoming $1,650/per month student loan payments into the mix, my monthly committed expenses grow by leaps and bounds. While I know during times of unemployment, I can probably put my loans into forbearance, I also know that it takes a little processing time and I want to be prepared for a hostile lender situation if need be.

Christmas Update…

I just got a comment from a reader telling me that it was crazy to spend $1,000 on Christmas when I am in so much debt. I just smiled/half laughed thinking…Get out of my head! It’s funny sometimes when you feel like someone else is reading your thoughts. Needless to say, I feel the same way about my debt and about Christmas. I agree wholeheartedly. There is no rhyme or reason for me to be spending that kind of money when I have so much debt.

On Monday while my family was gathered for my cousin’s birthday, we discussed Christmas. Everyone is on the same page that this is the year that we need to be more practical. We decided to just all come together for a nice family meal without the pressure and financial strain of gift giving. The only gifts we are going to buy are for my 5-year old cousin who is really the only child in the family. That would come to about $50 for me.

I still haven’t talked with my boyfriend about Christmas but I am sure that he will be on the same page as well. So, my goal right now is to spend no more than $500 on Christmas and to cut costs whenever possible to reduce that figure even further.

Debt Free in 7 Years…

It is my goal to be debt free in 7 years by the age of 37. That means NO student loans and NO credit card debt. Mortgage debt is fine. Once my student loans are paid off, I will accelerate payments on my mortgage but it currently has a good 5.65% fixed rate for 30 years.

As it stands, I have $16,100 in credit card debt. The credit card debt resulted from a refinance of my HELOC at Prime + 2.5% variable (currently 10.25%) to my credit card at 3.99% fixed for the life of the balance. The interest rate on my HELOC was high because I did 100% financing. I gave up the interest expense write off on my taxes in lieu of actually having a chance at paying it off. I currently pay ~ $350 per month on my credit card with $300 going to principal. I only need to make monthly payments of $300 to pay it off within 5 years. Therefore, I am well on target to be debt free in 7 years.

My student loans are another story. I have a total of 14 student loans totaling $207k. I am prepared to pay off 2 of the smallest with a combined balance of $8k thereby reducing the balance to $199k. In 3/2008, I will be prepared to pay off an additional $5-6k with my bonus and tax return, thereby reducing the balance even further to $194k. To be honest, if I could at least pay off the $148k in non consolidated debt by age 35, I would be a happy camper. I have federal consolidated loans totaling approximately $59k at 3.5% over 30 years. The payment each month is $274 which is minimal. So, if I can knock off the $148k in higher interest student loans, I would be in good shape. I have a mountain to climb but I am ready for the challenge!

Despite my efforts to reduce debt, I am still planning to save for retirement. I will continue to contribute 5% to my employer’s 401(k) plan which they match 100%. For 2008, I will be changing my withholdings so that I don’t get such a large tax return. Instead, the extra money per month will go towards debt repayment. Lastly, I certainly don’t plan to remain in my current position but rather, I DO plan to practice law. So, that will presumably mean a higher salary in the near future and thus, more income for debt repayment.

With a salary of $90k, I will be able to pay off my loans in 7 years. With a higher salary, I can accelerate payoff. It is certainly my goal to payoff my debt in less than 7 years but right now, I am trying to be realistic. Just stay tuned and watch my progress!!

Graduation Gift…

My mom informed me over the weekend that she and my dad are giving me $2,000 as a graduation gift. They wanted to get me something special but I couldn’t think of anything that I wanted real bad other than a living room set. That is something that I will purchase myself down the line because I know it is going to cost a pretty penny and I didn’t want them to break the bank just to make me happy. My futon in the living room will just have to do for now.

I am very grateful but surprised at the amount of the gift. I knew they wanted to do something but I also knew that my mom recently retired from teaching in May and my dad retired last year. Plus, my sister got married this year. Now that they are on a fixed income, big spending is not allowed.

My mom is the first to graduate from college in our family. She was a teacher and my dad was a truck driver for over 30 years. They don’t have a lot by the way of liquid assets and I won’t be inheriting a large portfolio. But what they have given me my entire life is so much love, support and encouragement. They are my best friends and the best parents a girl could be blessed with. Some kids can’t wait to grow up and leave the nest but I still call and talk to my parents every day and visit several times a week. There is nothing like family. One of best by products of going to law school is that I value my family a lot more. I could not have made it through the last 4 years without them and without them, all the money and the degrees in the world wouldn’t mean anything.

Thanks Mom & Dad! You are going to bless me with my new $2k emergency fund. =)

I Passed the Bar Exam…

OMG…I passed the IL Bar Exam!!! I passed the exam the first time with just 3 weeks to completely devote to studying. I am finally a lawyer!!!

The bar exam results were posted this morning on the website. I forgot the paper at home with my exam number on it so my mom went over to my place to get it for me. I told her that the number that I remember was on the website but I just want to match the numbers to be sure. I told her that I could wait until I got home but well…she couldn’t. (LOL) She and my dad went over to my place and got the paper right where I told them it would be and she called me with the number. I immediately looked on the website and saw my exam number right there. I PASSED!!!

My mom was so excited. As the website was coming up, she kept repeating my exam number over and over. I was smiling and half laughing at her nervousness. I told her my number was there and that I passed and she just screamed with happiness. My dad got on the phone and he just started crying he was so happy and proud of me. It feels good to make them proud. He said, “You’re the best. Someone has to be a princess.” Can you tell I am Daddy’s little girl?

It’s been such an amazing year for my family. My mother retired after teaching for 37 years, I graduated from law school, my sister got married, I passed the bar, and my grandmother is still healthy and happy at age 84. I just feel enormously blessed and charged for the future!

Chitown, Esq. =)

WaMu Online Savings Account…

With falling interest rates and Emigrant, ING, and HSBC lowering their savings rate, I checked on my rate with WaMu. I am happy to report that my online savings account with WaMu is still holding steady at 5% APY. Therefore, my money is staying put.

If the interest rate falls, then I will have to consider depleting my savings for sure to pay down debt since I am not earning much on the balance and the interest rates on my student loans are still much higher.

Need Some Friends…

Hi everyone! I need some friends. I am really going to try to reduce my debt and I could use some friends along the way to support and encourage me. So, if you read my blog or come across it, leave a comment and let me know you’re there AND tell a friend about me to see if they would be interested in reading too.

Always feel free to leave me a comment or ask me a question. I am certain that I am not the only gal that’s in a financial mess. Let’s take this journey together towards financial freedom. In return, I will do my very best to continue to post my progress or interesting tidbits of information that I come across. Take this journey with me. I am going to get my financial house in order and say goodbye to my debt!

Now…who wants to be my new friend?

September 2007 Recap…

This was a better month for me. Finally!

This is the first month I stopped using my credit cards and moved to an all cash/debit system. I had to draw a little from my savings accounts but overall, I would say that the switch helped me control my spending considerably. I am going to continue this practice going forward. I need all the help that I can get right about now.

The value of my car is holding steady. I am about 18,000 miles less than the average mileage on my car which is excellent since I need to drive it for some time to come. The best thing about working downtown and riding the train now is that I drive less than 10 minutes a day. So, other than the crazy Chicago winters, I won’t personally do any more damage to my car and should be able to preserve it as long as possible.

The tough pill to swallow is the interest that is accumulating on my student loans. This month alone, $951 in interest capitalized to my loan balance. I am going to have to figure out how I am going to tackle my student loan debt quick, fast and in a hurry. At the very least, I need to find out a way to pay the interest on a monthly basis.

Hopefully October will be another good month. I am going to put $500-$600 towards my credit card debt until I figure out what I am going to do about my student loans. I am still scared of being without savings because I don’t currently make enough money to pay interest only on my student loans. Push come to shove, if I don’t find a better paying job soon, I may need the savings to float me until I do land a new job. Right now I have about $700-$800 in discretionary money after bills. Estimated interest on my student loans will be $1,350 per month (Ouch I Know!!!). Something good will happen for me soon. It has to. In the meantime, I need to chip away at whatever I can and control my spending.

Yodlee Mobile…

Wow…I just found out from FiveCentNickel that Yodlee, an account aggregation service, has a mobile solution. He has a great post called Mobile Money: Five Tips for Managing Your Finances 0n the Go .

For those that read my blog, you know that I use pocket quicken on a daily basis to keep track of my on-the-go expenses. I have always been “that” person who never knows where the cash goes. So, pocket quicken is working out quite well for me because I no longer use credit cards and I have all my checking account and cash balances at my fingertips. I use a pocket pc so downloading pocket quicken was quite easy. They also have a 14-day trial.

As for Yodlee, I use it everyday. It is a great aggregation service. With my busy lifestyle, it is going to be nice also having it on hand at all times. Lastly, I know there are some folks out there that are not happy with Bank of America due to their higher ATM charges but they also offer mobile service which I use for my Keep the Change checking account. Since I use my BoA checking account for my personal debit expenses, the mobile service comes in handy if I need to transfer money from savings to checking.

Financial Strategizing…

Now that law school is over and I will no longer incur additional education debt, I am finally on the road to financial freedom. Therefore, I need to strategize to figure out the right moves to make. I put it off for a while due to the uncertainty in my job situation with finishing law school and trying to find a new position. While I may not have a law position yet, I am still working as a financial analyst making a decent salary. Therefore, until things change on the job front, I have to proceed in the best fashion with my current $55k salary.

I am not going to make excuses for myself. I am in poor financial condition because I made bad financial and spending choices. Period! Four years ago, I bought a condo that I could barely afford with no reserves, 80/20 (100%) financing, $10k in credit card debt, and $25k in auto debt. During the last four years, I used debt to support a lifestyle that I could not truly afford and it slowly mounted.

So, here I am. I have a negative net worth of approximately (-$91,000), $207,000 in student loans to repay and $16,100 remaining on a credit card that I refinanced the 20% mortgage financing over to. With Christmas around the corner and repayment on my student loans looming, I have to figure things out. So…What now?

Current Financial Condition:

$16k in credit card debt at 3.99% fixed for life of balance

$207k in student loan debt – not in repayment at this time

Emergency Fund: $10,000

Current Action Plan:

Contribute 5% to 401(k) plan to get 100% employer match for 10% total

Contribute 2% after tax in my employer’s stock purchase plan

Removed credit cards from my wallet – use only cash and debit

Minimum payment on Credit Card is approx. $350 - $300 goes to principal

Student loans are still in deferment with half my federal loans in forbearance

Future Liquidity Events:

Bonus in 2/2008 expected at $3k

Tax return in 2/2008 expected at $2k

Scenario #1: Deplete Savings, payoff ccard, snowball student loans

Continue using only cash and debit cards for spending

Continue 5% 401(k) contributions for 100% employer match and 10% total

Stop 2% contribution to employer’s stock purchase plan

Defer fed student loans that enter repayment 1/2008 until 1/2009

Pay off credit card balance before private loans enter repayment in 4/2008

Use $8,000 of my emergency fund and reduce credit card balance to $8,000

Increase cc payment to $600 to reduce cc balance to $4,600 by 4/2008

Use $5,000 in bonus/tax return money to pay off $4,600 cc balance

Tweak Christmas budget and use $1,000 for Christmas gifts

Keep $1,000 as Emergency Fund

Snowball remaining student loans

Scenario #2: Deplete Savings, Min on CCard, payoff 2 student loans, snowball remaining student loans

Continue using only cash and debit cards for spending

Continue 5% 401(k) contributions for 100% employer match and 10% total

Stop 2% contribution to employer’s stock purchase plan

Defer fed student loans that enter repayment 1/2008 until 1/2009

Pay $300 on my credit card until the balance is $0 - payoff in 5 years

Use $8,000 of savings and payoff two smallest student loans

Tweak Christmas budget and use $1,000 for Christmas gifts

Keep $1,000 as Emergency Fund

Snowball remaining student loans

Comments:

I am leaning towards scenario #2. For one, my student loans have a higher interest rate than my credit card at 3.99% fixed. The downfall to scenario #1 is that my credit card still has a pretty high monthly payment which if eliminated, can go towards repayment of my student loans. While both plans are tough, they can be done. I may have to tweak credit card payments here and there due to irregular expenses like the occasional birthday gift (cheaper now of course), the quarterly water bill or license plate renewals. The tough part is the psychological part of not having savings at my fingertips. On the other hand, that may not be a bad thing because with a cash/debit only system, I will be less tempted to spend and spend big. I may even be forced to make a few lunches.

I get paid once a month. Here is what I am going to do for October.

Send credit card $600

Move $8,000 into second high yield savings account

Keep $2,000 in emergency fund and use $1,000 for Christmas

Stop 2% employee share contributions

Continue applying for law positions

Christmas…

Christmas is just around the corner and it’s beyond time to prepare for it. My sister threw out the idea of a grab bag which I think is a good idea but we don’t have a large family to come together anymore and the members who do join us may or may not come. So, I think a grab bag is an excellent idea but not one that will work particularly well for my family. Likewise, Secret Santa would also not work.

ANY IDEAS???

For Christmas, I generally budget the most for my boyfriend and my parents. My sister and I have a pact and since we both have birthdays in December, we just give each other $25 gift cards to our place of choice and just a card for our birthdays. I may see if she would like to forgo the entire gift giving this year especially since I have a new brother-in-law this year to add to the Christmas list. I think she/they will be just fine with that since they had a very nice wedding to pay for just 2 months ago and I’m sure that building back up their savings is priority for them right now.

As I get older, it is much more fun to sit back and watch the kids tear through all the wrapping paper. I am amazed that as I get older, I am less enthused about getting gifts as I am about giving them. I love seeing the smile on someone’s face when they get my gift. But, on the other hand, my bank account is screaming, “don’t you want me to be happy too?”

I haven’t saved at all this year for Christmas and judging by what I spent last year, I would need at the very least approximately $1,300 for gifts. I sure wish I would have put aside $100/month into an ING or HSBC account to pay for gifts. Hindsight is well….hindsight.

My current budget includes $500 for my boyfriend. I am going to talk with him to see if he would like to spend less on Christmas this year. We’ve been together for years and he also had an expensive year with my graduation, buying his first place, and buying a car. He may be inclined to reduce the amount we spend this year too. Hmm….sounds like dinner conversation to me.

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Upgraded Site and Blogroll…

I finally decided to upgrade my blog and change it around a little. I started by upgrading the template and then I just tried some other stuff to see if it would work. I put off upgrading as long as possible because I am not that familiar with blogging and HTML and I didn’t want to mess anything up. Thankfully, the migration was smooth and the functionality of the new template allows me to make changes a lot more easily. Had I known that, I would have changed over a long time ago.

I also added a few blogs to my blogroll that I’ve been reading lately. I am still holding on to the hope that some of my favorite bloggers will come back and update us on what’s been going on in their lives. Since my life has been so interesting and busy this year, I know what it’s like to need a break. While I was away, I am sure I lost a few of my readers but I still have some of my loyal friends. =)

So, what do you think?

Monthly Paycheck…

I was expecting my monthly paycheck to be less this month because I took 4 days off unpaid to take the bar and attend my sister’s wedding. Fortunately, the unpaid days did not go into effect this month but will probably affect my next paycheck. By then, I am hoping that I will be well on my way to finding another position in the law arena. This is good news because I am running low on cash in my accounts and I don’t want to pull any additional money out of my emergency savings. Sometimes it's tough to get paid once a month.

Right now, I am looking at a slight improvement in my net worth. I will post final results for the month on Thursday or Friday. =)

Debt Repayment: Snowball Method….

No Credit Needed has an excellent post on how he used the Debt Snowball Method, made popular by Dave Ramsey, to pay off $11,500 in 10 months. Check it out HERE. The post provides an excellent illustration that you may be able to tweak to help you on your debt payoff journey. I know I am going to use this method when it comes to paying off my student loans.

Best wishes on your journey to financial freedom!!!

Working my butt off…

This has been a very busy week at work. With a team of 4, balancing schedules can be tough. Today, I am covering our team on my day off which is okay for so many reasons. For one, my team leader’s mother passed away on Tuesday and he got the call right here at work. Today was the funeral and he will be out until Monday. He really gets 2 weeks bereavement but the poor guy just wants the distraction of work. I don’t blame him. My other co-worker had the week already scheduled off for vacation and today, my third co-worker is sick. So, here I am. I work a flex schedule, Mon-Thurs, so I’ve worked well over 40 hours this week. It’s cool...Just getting me ready for the law job. =)

I should get my bar results in less than two weeks. I am nervous and excited. The feeling of being done with law school after 4 long years in a part-time program is like floating on a cloud.

Have a great weekend!

Net Worth & Expenses…

I did some preliminary calculations/forecasting this morning and it looks like I am going to have a very slight improvement in my net worth for the month. I am very excited. Moving to an all cash/debit system is working well for me and while I still have a long way to go with controlling my spending, I’ve already witnessed an improvement in my behavior.

Cash flow improvements. Now that I am finished with law school, I am able to commute to work by train. Driving into downtown Chicago and parking is very expensive. The savings by taking the train is tremendous plus I don’t have to deal with traffic and crazy drivers. I live less than 2 miles from the train station so it takes less than 5 minutes to get there. The monthly train pass has increased over the last 4 years but it is still much more reasonable at $117 plus another $20 to park in the parking lot. I don’t drive as much so now I find that I only have to fill up every other week to the tune of approximately $80-90 a month.

Before (Average):
Parking - $12/day at 4 times a week = $192 per month
Gas - $45/week = $180 per month
Taxi - $10/day at 4 times a week = $160 per month
Grand Total = $532

Now (Average):
Train Pass - $117 per month
Parking - $20 per month
Gas - $90 per month
Grand Total = $227

Difference = $305

**** In addition, now that I get home at a reasonable time, my mother includes me in their dinner plans so I usually don’t have to make or buy dinner. This is also savings me a lot of money because when I was in school, I usually bought breakfast, lunch and dinner.

Financial Update and Retirement Accounts…

With the Fed’s interest rate cut and subsequent lowering of rates at ING, I checked my WaMu account and was happy to see that my online savings account is still holding steady with a 5% APY. It currently has a $10k balance.

When I get another job in the next few months, I am toying with the idea of opening and funding a Roth IRA and maybe paying off my lowest student loan with a $5,000 balance. That would leave just $1k left but hopefully my salary will be strong and I should get roughly $2-3k back in a tax return to help beef up my savings. If anything else, I am still thinking that I should at least open the Roth and fund it for the year.

At age 29, I estimate that my pension is worth approximately $15-16k and my 401k has a $27k balance for a total of $43k. I know that it could be better but it’s not bad for my age and my $55k salary. I believe that when I leave, I should be able to take my vested pension with me and roll it over. Here is the language on my employer’s website and below is a chart that I used to estimate the current value:

If you are vested when you retire or leave the Bank’s employment, you can take your benefit with you regardless of your age. You may take a lump-sum distribution (mandatory for benefits valued at $1,000 or less). If your benefit is more than $1,000, you may elect a single lump-sum payment, elect one of the annuity or cash refund payment options, or defer payment until age 65.

Benefits are taxable in the year received. You may defer income taxes on a lump-sum distribution by electing a direct rollover to an Individual Retirement Account (IRA) or another qualified plan including a 403(a), 403(b) or 457 plan.

*** With the year almost over, I estimate my pension balance is closer to $15-16k. The chart uses a 6% interest rate which is what my employer recommends we use to estimate our balance.

Tough News…

This morning my co-worker and I were sitting here having our morning laugh/talk like normal. He is actually my team leader and almost 25 years my senior but he’s a great guy. His mom has been ill for quite some time and she suffered another setback in September. About a half hour ago, his cell phone rang and he got the call that all of us have been dreading. His mom passed away. Thankfully, she was in her 90’s, was receiving hospice care and had a 24 hour caregiver so she wasn’t alone. While we knew it was just a matter of time, it’s still tough. You could tell he loved her very much.

I called my own mother just to tell her “I love you.” Those of you who are blessed to have a parent in your life may want to take the time and do the same.

Pocket Quicken and Employment Update…

Pocket Quicken:

I am getting the hang of pocket quicken and I am really pleased with the software. While it took a little time to figure it out, it extremely helpful to have my account balances at my fingertips since I transitioned from credit cards to only cash and debit. No more credit cards for me. Since I have money in different accounts, I am able to decipher which account I can use for a particular transaction. Also, now that I have the hang of using the software, the quicken sync process with my desktop takes no more than 5 minutes. Huge time savings!

Just today, I needed cash but I am running low on it before I get paid again. To avoid ATM fees, I used BoA’s mobile service and transferred funds from my short-term savings to my checking account. Then, I went to the grocery store, did some much needed grocery shopping for cleaning products and also got some cash. I was able to check my Quicken account balances, see which account I could transfer funds from, use my pocket pc to transfer the funds and I was able to one stop shop for groceries and cash. Excellent!

Employment:

I applied for 2 positions at work today. Both positions are for the same job in the same area of the bank. While it isn’t an attorney associate position, it would give me more transferable skills in the short-term until I am able to land a law job. Plus, it is a higher job grade which means more money than I currently make. I will keep you posted on how that goes. As for the bar results, we are closing in on the October 15th date. I think results will be posted in a couple of weeks online. I am nervous but I am excited as well.

HTML for Thumbnails

Can anyone help me with html for thumbnails?

I am trying to figure it out but it's tough. I am trying to use it to make my charts smaller in my post but allow viewers to click on the image and enlarge it in a seperate window.

I figured out how to get the link to finally open in a new window but I don't understand how to get the image to enlarge and still be a good picture.

I hope I am making sense. =)

Student Loans and Access Group…

Can you tell that I am becoming a little nervous about my student loans from law school? Well, I am for sure. They go into repayment in 5 months and I still haven’t landed a law position. Thankfully, I am employed with a current base salary of $55k.

A reader by the name of Bill (Thanks Bill) provided me with some good insight on my student loan payments. Bill was also an Access Group borrower and informed me that I may be able to pay interest only on my larger loans and apply as much principal as possible to my smaller loans, thereby snowballing the amount. Excellent! I am going to call Access Group today to get better clarification. But this is great news because I may be able to make more progress towards eliminating my debts.

Below is a chart that I threw together that details what my student loan repayment will look like next year. Repayment begins in stages: 1/2008, 4/2008 and 6/2008. The chart below shows what the payment on the capitalized amount will be based on interest that accumulates over the next few months, the interest rate and various terms. The chart does not take into account the payment incentives that I intend to take advantage of which will reduce the various interest rates over time. I will detail those incentives later. The amounts have been rounded for simplicity (not overly so) and I took a conservative approach and increased the interest rate to 9.2% on my private loans which currently rage from 8.9 – 9.1%. The remaining loans have a fixed rate.

This chart makes my eyes pop out! Since starting school, I have accumulated $18k in interest on my loans. If I don’t pay anything over the next few months, I will accumulate another $11k in interest making that a grand total of $29k in capitalized interest. I am seriously considering how I can make interest payments over the next few months to keep the loan amounts as low as possible. I wonder if I can pay the accumulated interest off before it capitalizes on the loans when they enter repayment. Hmm…I have a lot more questions to which I need answers.



*** Edited Chart. Accidentally switched principal and interest columns. Wishful thinking. =)

Student Loan Update…

I called Access Group, my student loan provider, yesterday to ask them a few questions on loan repayment. Currently, my loan repayment status/schedule is as follows but these numbers are on the low end. I just called again to find out that the estimated payment on the website does not include the interest that’s been capitalizing. Crap!!!

• Total loans: ~ $206,000
• $250 monthly beginning 1/2008 – federal unconsolidated
• $875 monthly beginning 4/2008 – private loans
• $500 monthly beginning 6/2008 – federal consolidated and federal grad plus loan

Good news for federal loans:

• I was told that my federal loans can be extended for 25 years because I have more than $30k in aggregate federal loans. This is called the extended repayment option.
• Monthly payment for my federal unconsolidated and fed grad plus loan will decrease slightly.
• Consolidated loans are already on a 30-year repayment plan at 3.5% fixed.

Repayment options for my private loans:

• Private loans have a 20 year repayment schedule
• Easy Pay 2 – interest only for 2 years and then straight-line amortization for remaining 18 years
• Easy Pay 3 – interest only for 2 years, interest and part principal for 3 years and then straight-line amortization for the remaining 15 years
• Modified (MGRS – One time option) – 6 months of 50% payment, 6 months of 75% payment, 1 year interest and then straight-line amortization for the remaining 18 years
• Forbearance options are limited to a one-time, 12-month period that you can use in 6 month increments.

Comments:

• Repayment Plan: I think I am going to go with the Easy Pay 3 option and hope that I will not have to switch to the MGRS option since you can only use it once. I may need to exhaust that option down the line.
• Student loan interest: I am looking forward to paying on my student loans. I know some people may think that’s weird but the sooner they enter repayment, the sooner my net worth really starts to improve. Right now, approximately $800/month in interest capitalizes on my loans. I try to offset this increase by paying $300 in principal on my heloc/cc, $100 on my mortgage, $400 towards retirement, and $100 towards investments. But with the large expenses I’ve been incurring and market fluctuations, my net worth has remained pretty stagnant with slight declines every month. Once the loans enter repayment, even if it’s just interest, my net worth will begin to make some strides towards improvement.
• Upcoming months/expenses: For the time being, I am trying to be patient and wait for my bar results, network to find a new job and control expenses as much as possible. Potential major expenses: Christmas of course and I may have to pay back my tuition reimbursement from my employer should I take a position outside the bank. I only have to pay back the last 2 years which would amount to approximately $11k. So, my savings would be depleted. One option is to try to get my new employer to pay the bank back in lieu of a signing bonus.

That’s where I am right now. I really put myself in a bind but I am trying not to get down about it. Push come to shove, I may have to sell my condo and downsize to an apartment or move home for a while, take the equity and pay off some of the private loans. My parents have already offered but I love my freedom and independence and it would just kill my spirit for that to happen after all of my hard work. I need to find a better paying job soon no matter what.

35 Minutes to Riches…

CNN Money has a good article in their personal finance section entitled 35 Minutes to Riches. It details 47 ways to get on the right financial track providing tips on improving your credit score, saving money, investing and retirement.

Check it out!!!

I spend a lot of money…

By using Pocket Quicken this weekend, I realized just how much. For the weekend alone, I spent $390. Way too much! I am the type of person who says, where did all of my money go? Well, since I am only using cash and debit now, pocket quicken is helping me see.

Here is a breakdown:

Personal Care: $165
General Merchandise: $72
Auto: Fuel: $52
Entertainment/Recreation: $49
Petty Cash: $29
Medical: $10
Groceries: $7
Office Supplies $6

Pocket Quicken…

I started the 30-day trial of pocket quicken and I can already tell that I am going to purchase the software for my pocket pc. The program downloaded easily and it syncs with my Quicken program on my desktop. Nice!

Already today I made a million stops on my day off and money was flying out the door, a few bucks here and a few bucks there. I was able to easily and quickly make note of them on my handheld. When I got home, I linked my computer with my pocket pc and everything went through smoothly and my desktop and handheld are all matched up. This is going to save me a lot of time trying to figure out how much that cab ride cost or that cup of coffee that I shouldn’t have bought in the first place.

Since I am no longer using my credit cards, the pocket quicken program also gives me a quick balance on the front of my phone for my cash account and my checking accounts so I can use my debit without the worry of whether I have the funds available.

I will keep you posted on how things go.

Blogroll…

I updated my blogroll and checked to make sure all the links are working correctly. There are some bloggers who have not blogged in a while but like me, they could be going through something where posting is the last thing on their minds. For the time being, I will leave them on the blogroll until it’s been 3 months with no posts.

Some of the blogs I added are blogs that I came across this week. If you would like for me to add your blog, please leave a comment. Thank you.

Medical Bills…

I still have one medical bill hanging over my head. My doctor’s office apparently did not send in the claim within the time frame allotted by law so my insurance company rejected it. According to the claims letter, it says that I am also no longer responsible for the debt. So, I am sending a copy of the claim form to my Dr.’s office along with a letter to get the matter settled. I am so tired of unexpected things coming up. I want to be free from all this mess and get back on track to getting my finances in order.

The bill is for $150 so I will soon see if I have to pay it. I have the money but I work hard for my income and my benefits and it makes me a little peeved that I may have to pay when the Dr.’s office made the mistake. On the other hand, I don’t want anything sent to collections.

Need to Update Blogroll...

Over the last couple of days, I came across quite a few new PF Blogs that I missed out on while I was finishing up law school and studying for the bar. I am going to update my blogroll tomorrow.

Also, I am going to start posting more frequently now that the dust is settling a little. I am so excited about the future and about becoming financially free!!!

While my posts will have a little more content to them, my blog will still continue to focus on my financial journey. Therefore, there will be more posts on how I measured up to my monthly budget, my constant fights with Quicken, etc. =)

August 2007 Monthly Report…

Despite a dip in my net worth, I am actually excited about my finances for the month.

Sister’s Wedding
My sister’s wedding stuff is finally over as of Labor Day weekend. I gave her and my new brother-in-law a nice monetary wedding gift which is reflected in the asset decline. Should I have? Probably not from a financial standpoint but she is my only sibling and it felt right. Besides, of all the weddings I have been in, she took care of a lot of the expenses that the wedding party would have traditionally taken care of. Since I was the only attendant, I was spared a lot but prepared to do more.

Credit Card
I do not have a credit card balance so that is another good thing. The credit card balance was paid off in full so that is also reflected in my financial performance. All of my bar exam/ law school expenses and vacation expenses are now paid for. *** For the last month, I have completely stopped the use of my credit card. I just couldn’t handle it so I took it out of my wallet. I will miss out on some rewards but for the time being, that’s just what I have to do until I get things under control with my spending.

Student Loans
Interest that is being capitalized on my student loans continues to make progress tough. Once they enter repayment in January – April, my net worth will really begin to improve.

Plan
For the time being, I am going to try to sock away some savings so Christmas doesn’t hit me too bad. I have a few leads on job positions so I am going to pursue those as hard as possible. Once I get “favorable” bar results, I will be able to make moves.

July 2007 Monthly Report…

I have to say that I did not keep a close eye on my finances in July or my ending balances due to studying for the bar, taking the bar and immediately traveling the very next day to Mexico for an entire week to attend my sister’s wedding.

Therefore, I came up with an adjusted month end balance sheet that figures in full repayment of my current credit card balance which was generated during the month of July (except the $750 for my car repairs) and $600 in unexpected residual medical bills that I received in July from a surgery that I had in 2005. I decided to pay off my credit card with savings versus carrying a balance forward. I also removed my credit card from my wallet. This is finally the end of that nonsense once and for all. No more excuses.

So, the balance sheet below is more reflective of my financial condition today rather than at month end. I will report at the end of this month on how I did for the rest of August.

Basically, my net worth declined ever so slightly but certainly in the right direction. I finally received the tuition reimbursement from my employer so a portion went to savings and the remainder went towards paying off my credit card balance and the medical bills previously mentioned.

I am finally on my way.

Getting Back to Business…

I just got back from Mexico on Thursday and now I am back to work after a month off. The bar exam is finally over and my sister also had a beautiful wedding in Cancun.

Not so good news for my finances…

I am getting hit with $600 in residual medical bills from a surgery I had 2 years ago, my car needed repairs on Friday to the tune of $750 and my hotel roommate for the bar exam decided not to stay with me and I got stuck with the entire $400 hotel bill.

Needless to say, I have a credit card bill hovering around $3,000 which includes my car repairs, hotel stay/parking expenses for the bar exam, and other travel expenses. But, it does not include the $600 in medical bills which I still need to pay. So, the figure is more like $4,000.

I have to decide whether to take the money out of my current savings balance of $15,000 thereby reducing it to $11,000 or to transfer the balance to a 0% credit card and try to pay it off over the next 5 months before my student loans kick in. I don’t really want to take on any more credit card debt but at the same time, the $15,000 that I have in savings is my emergency fund and 3 months of living expenses (including $1,500/month student loan payments).

I am leaning towards a cash only system and a balance transfer. There are no more major expenses on the horizon for me and with passing the bar exam, I should be able to land a better paying position very soon. I better pass that darn test or I am in trouble. =)

Bar Exam Next Week…

Sorry for the lack of posts. The bar exam and my sister’s wedding are both next week and I am going a little crazy at the moment.

I still haven’t received my tuition reimbursement from work yet. There is a new process and I have to say that it absolutely sucks. But anyway, studying is going well. I am off from work for the next 2 weeks…yeah for me…so that I can study, take the exam and attend my sister’s wedding in Mexico. Thank god!!!

Hope everyone is well. I won’t be back to post until after I get back from Cancun…Cheers!!!

June 2007 Monthly Report…

Bad month but good news…I am finally on the path to financial freedom!!!

My net worth took what could be its last negative dip this month and I am very excited about the future. I officially graduated from law school and I am taking the bar exam at the end of this month. My current employer is allowing me to take all of my vacation in July so I can really focus and pass the exam the first time around. Otherwise, I will be taking the exam in February. I feel a little behind with my preparation because I have been working full-time. It’s my hope that the time off will allow me to not only catch up but to center my mind and focus on what is the most important exam I will ever take in my life.

This month, I had some pretty big expenses including my sister’s wedding shower and more bar exam expenses. Plus, my 401k did poorly this month and my car depreciated a lot. I haven’t received my tuition reimbursement so that will be reflected next month and will improve my net worth.

Therefore, my journey officially begins here at ($92,445).

Neighbor’s Condo on the Market…

While completing a total random search, I found out that I have a neighbor who is moving and their condo is on the market. It is a 3 bedroom, 2 bath condo just like mine. The asking price is $165k. I currently value my condo on my balance sheet at $160k. I cannot wait to see how the sale pans out.

Student Loan Repayment Plan…

LawsFinance asked me a great question on what my plan is to repay my student loans. The current balance is $202,933 which is astronomical but not fatal.

Below is a schedule for my student loans including current interest rates, balances and terms.

The IDEAL order of payoff will be as follows:

1. Perkins Loan ($3k and easiest to pay off)


2. Private Loans


3. Grad Plus Loan


4. Federal Unconsolidated Loans


5. Federal Consolidated Loans

Current Repayment Schedule:

1. Federal Subsidized/Unsubsidized – 1/2008


2. Private Loans – 4/2008


3. Federal Consolidated & Grad Plus – 6/2008

My Plan:

1. Save $20k over the next 6 months.


2. Forbear Federal Subsidized/Unsubsidized for 6-12 months.


3. Forbear Private Loans for 6-12 months.


4. Payoff $3k Perkins Loan with bonus.


5. Payoff first $4.9k Private loan with a combination of tax return proceeds and cash flow.


6. Begin repayment on Federal Consolidated & Grad Plus – 6/2008. Total estimated monthly payment will be $525.


7. Continue paying off my HELOC/CC which is at $17k and 3.99% fixed for the life of the loan.


8. Land a law position paying a minimum of $90k.

May 2007 Financial Update…

Now that I am officially a graduate, I received the proceeds from by Bar Loan during May. This is the last student loan I will ever have to take out. Thank goodness. Right now, the funds are sitting in my WaMu savings account and will remain there as Emergency Funds.

I did some accounting changes to help sink my personal spreadsheets with Quicken. I get paid once a month at the very end of the month so the below balances include my April and May paychecks and 401k contributions. Going forward, everything will balance and reconcile better.

My student loans are still in deferment until next year so accruing interest will hurt for the next few months. For the remainder of the year, I will be trying to get a handle on my post-law school expenses, find another job, and improve my net worth as much as possible.

Going forward, June should see some slight improvement with the payoff my credit card in full and my last tuition reimbursement check. Then, everything will go back to a normal person with a crap load of debt.

*** Had to edit chart due to a mistake.

I am crazy…3-Flat Apartment Building…

I want to buy this three flat apartment building that is right down the street in a neighboring town. It’s a well-maintained building and boasts 2-three bedroom units and 1-two bedroom unit. There is no garage but there are 6 parking spaces in the back. Tenants pay their own heat and electricity. The building is in an excellent, excellent neighborhood with award winning schools so I don’t think it would be hard to rent out.

The price for the building is steep at $425,000. There was a similar building that sold in my neighborhood a few months back for $360,000 but it only had 6 bedrooms as opposed to this building having 8 bedrooms.

I could live in one unit and rent out the other two but that would mean giving up my condo which I love. I have enough equity in my place and savings to pay the down payment on the building but it’s a huge gamble that can either pay off well or sink me.

My current salary is $55k but with annual bonuses, I bring in just over $60k. I just graduated from law school a few weeks ago and I am preparing to take the bar exam. I anticipate that my income will increase substantially once I pass the bar and get a law position.

What to do, what to do? This is type of building is exactly what I have been looking for and what I have always wanted. I think over the long haul, it could be an excellent investment.

Returning Items…

I am spending some time today returning a few items to the store which amount to a little over $400. My mother also has a few items to ship back for me which total approximately $800. These returns should reduce the balance on my credit card so I can pay the balance off in full. Currently, the balance stands at almost $1,900.

Some of the purchases are related to trying unsuccessfully to find a dress to wear for graduation. So, my mother is shipping those purchases back. I purchased multiple dresses because I wasn’t sure what would work. I ended up wearing a black suit with a nice blouse, go figure. =) Regardless, my credit cards are always paid off in full.

I am still waiting to receive my final grades for the semester so I can submit my forms for tuition reimbursement. The good news that I have is that my employer is semi working with me and is allowing me to take all of my paid vacation time off in July to study for the bar and 4 days unpaid to attend my sister’s wedding in Cancun, which is just 2 days after the bar. The time off will also give me a little time to decompress following the exam.

The bad/tough news…no vacation time left for the remaining 5 months of the year. Therefore, finding a new position will be paramount.

Forbearance Application Approved…

The forbearance for my consolidated student loans has been approved by Access Group. I have to say, I have been very pleased with Access Group as my student loan lender. So far, they get an “A” in my book.

I called yesterday to confirm that the forbearance was approved and also spoke the customer service representative about loan consolidation. Since my federal student loans for my last year are already fixed at 6.9%, I can perform a separate consolidation for those loans in January and extend repayment from 10 years to 15years. While it is my hope to eventually accelerate loan pay down, the immediate relief would be nice while I tackle higher interest private loans.

Law School Graduation…

The Commencement Ceremony on Sunday was excellent, short and sweet. I am so happy and extremely grateful that my close family members and friends were able to come and celebrate with me. My family means a lot to me if it weren’t for them, all the struggle wouldn’t be worth it. But, I am a believer that every generation is supposed to get stronger.

As the daughter of a retired (soon-to-be) school teacher and truck driver, the sacrifices that they made for me will be worth it in the end. I hope to make them very proud. As an African American woman, I strive to set a good and positive example for those around me. I am determined to find a law position where I am able to earn a competitive salary and one that will afford me the opportunity to mentor young people and provide valuable community service via pro bono work. I know that it will always be a challenge to find time but if it’s important, I will find the time.

For the past 4 years, I’ve worked full-time in a Banking Financial Analyst position while attending law school part-time. Classes were generally four nights a week from 6-9:30pm. Then, I would make a 1-hour commute home to do it all over again the next day. To say that the last 4 years has been tough would be an understatement but I hope it will be worth it in the end. One thing is for sure, I am no stranger to hard work. =) I am preparing for the IL Bar Exam now and will take the exam the last week in July.

As for my finances, I filled out a forbearance form for my student loans to give me a reprieve until I am able to secure a law position. According to my student loan website, it appears as though I was approved because it now reports that my first payment that was due 6/1/2007 is now due 6/1/2008. I am in the process of simplifying everything and separating long-term savings from emergency funds.

My goal for the remainder of the year is to improve my net worth to under (-$80k) and double my $55k salary. I will be happy if my salary increases to a minimum of $85k.

7-Day Money Challenge…

Yahoo! Finance has an article today called the 7-Day Money Challenge .

Basically, the challenge calls for 3 steps:

1. Calculate how much cash you need to cover a week’s worth of variable expenses such as gas, groceries, quick fast food stops, books, music, gifts, etc.
2. Be honest and don’t overestimate to give yourself a big cushion.
3. Set the calculated amount aside and only use cash, no debt or credit cards.

Okay…I am feeling up for the challenge except I will allow myself to use my debit card for gas since this is actually more of a fixed expense for me. I will let you know how it comes out. =)

Finished Law School (Long Post)…

I finished my LAST law school final on Wednesday night and I am sooo excited. =) I graduate this Sunday and I start the bar prep course next Wednesday. Yippee!!!

On a financial note…

I received the funds from my last and final student loan. I am placing the money directly into my high yield savings account, which has been depleted almost completely over the last few months. The only remaining money that I expect to receive is tuition reimbursement. I will also be placing this money into the savings account. All in all, these funds will serve as my emergency fund and should total approximately $20k.

As for upcoming expenses, I need a new computer. My Dell computer was temporarily fixed but, now the mouse on my laptop is not working. To top things off, it makes beeping noises for no apparent reason and I am always afraid of when and if it will completely black out again. I am going to back-up all the rest my files this weekend and keep a look out on deals. I am hoping that I may receive a few graduation gifts which may help me with paying for a new computer. Who knows? I don’t expect anything and I shouldn’t but you never know.

Student loans…

Repayment of my federal student loans starts in June according my student loan website. I am a little startled by how quickly the first payment is due but of course I knew that I was giving up the grace period on my federal loans when I decided to consolidate. I looked into forbearance and filled out the form to see if I can put off payments for a few months until I am able to pass the bar exam and find a better paying job. Right now, it looks like total monthly payments once all loans kick into repayment will be $1,650 per month. Can you scream….OUCH!

The initial federal loan payment is almost $500, which would leave with $50 after all expenses for the month are paid. So as you can see…there isn't any wiggle room and certainly not enough cash flow to pay all my student loans. I will definitely need to land a new job before April 2008 when my private loans enter repayment.

Here is the student loan breakdown:

- Consolidated Federal Loans: $497 – payments begin 6/1/07
- Unconsolidated Federal Loans: $238 – payments begin 1/1/08
- Private Loans: $915 – payments begin 4/1/08
- Total Monthly Payment: $1,650

Okay...it kind of hurts to put everything out here but this is my reality (my current reality...soon to be my past reality)!

Thank You Dell Computers…

Okay, Dell came through for me. I had 30 days remaining under my 4-year warrantee when my computer seemingly died last Thursday. Fast forward one week and my computer is alive and up and running again thanks to prompt customer service. They were actually very nice to me on the phone. It also pays to be nice to them!!!

I thought the warrantee was a rip off but in retrospect, I am so glad that I paid the extra bucks. If I had to go through an independent repair service, the repair might have taken longer and would have definitely been more expensive since I needed my motherboard replaced. Additionally, I now have my computer to take my exams. I have two take home exams this semester so the timeliness of the customer service is very appreciated.

Thank you Dell!!!

BTW...I still have all of my files too. So my Quicken info is still available and just needs to be updated. =)

Dell Computer Died…

My Dell computer died last Thursday. It’s 4 years old and has been falling apart for quite some time. Unfortunately, it happened at the worst possible time because finals are this week and next week. I looked online to see if I can purchase another one but the estimated delivery date is May 22nd. I would have already graduated by then.

Fortunately, I called Dell and I literally had 30 days remaining on my 4 year warrantee that I purchased. They sent someone out today to fix it while I was at work. Thank goodness my father is retired and he was able to be home for the service call. I think they replaced the motherboard (whatever that means). Hopefully, my files will still be on my computer.

The bright side? About 5 minutes before it died and wouldn’t turn back on, I was able to e-mail all of my class notes and financial spreadsheets with the exception of a recent Quicken backup. I backed up my important files about a month ago but hadn’t backed them up in a few weeks so I may be SOL when it comes to that. The most important thing is that I have my class notes and I am going to be able to study for my exams.

The bad side? I will need to fork over some cash for a new computer in the near future.

April 2007 Recap…

I decided to revalue my condo. See commentary here. I decided on a lower, more conservative valuation of $160k although I think that Zillow may be more accurate at $165k. I will keep a close eye on the surrounding market in the next year.


Not much to report other than huge amounts of cash going out the door for with big ticket items related travel and school and other discretionary spending. After this month, all school related items should be paid for, travel plans should be paid for, and I should be moving into repayment mode on my student loans. My federal loans will kick in come July 2007 and my private loans will kick in next year in March 2008. So, I have until then to find a better paying job.

I invested my 2% raise into the Company Share purchase plan. The Bank pays all the related fees for the plan and employees are able to buy shares at a 20% discount. I also contribute 5% to my 401k with the bank matching 100%.

I graduate from law school in less than 2 weeks. Finals period begins this Wednesday and ends next Friday. I will report back after I finish finals with an update. Hope all is well with everyone!




*** Had to edit chart.

Condo Market Value…

I am trying to decide whether to increase the valuation of my condo on my balance sheet. I’ve been taking a look at what closed near my residence and comparing my condo to those that have recently sold.

A 2 bedroom/2 bath condo across from my 3 bedroom/2 bath unit closed in November 2006 for $155,000. From the likes of what’s on the market and what’s sold, 2 bedroom/2 baths are going in the $150k-$155k range.

Three bedrooms condos are rare where I live and hardly ever go on the market. There was one recent sale of a three bedroom down the street from where I live in another development that sold for $178k (98% of asking).

I know that I should adjust up from my personal $150k valuation that I have on my balance sheet but what would be a good valuation? Zillow.com values my unit at $165,325.

I am thinking that I should adjust up to $165k because it is a good middle ground between the 2 bedroom that recently sold in my complex and also the recent sale of the other 3 bedroom unit. In addition, I put in new wood floors last year, new carpeting and completed some other minor updates to my unit which is in excellent shape. With the recent replacement of my washer/dryer stackable unit (don’t ask), all of my appliances in my condo are relatively new including the water heater which was replaced in 2003 by yours truly.

Decisions… =)

March 2007 Recap...

Sorry for the lack of posts. I've been a little busy winding down my last semester of law school. Just 2 more weeks of class and then it's finals time. Graduation is May 20th. I am so happy!

March and April will mark (hopefully), the final declines in my net worth. I've been paying the last of my bar fees and just today, I paid the last of my trip to Cancun for my sister's wedding. That payment should show up in my next monthly recap.

I got a measly 2% raise this year and decided to put that increase towards the employee share purchase plan. I already contribute 5% to my 401k, which is the maximum amount that my employer matches. Under the employee share purchase plan, employees are able to purchase company stock at a 20% discount. The bank pays for all brokerage and/or administrative fees associated with the purchase and shares are credited to my account within 5 business days following their purchase. Cash dividends are automatically reinvested, less 15% withholding taxes for U.S. residents. I wish that I could really start investing so this gives me a little comfort that I am moving in the right direction.

So, here goes my March recap...

Tragic Day…

I feel so awful about what happened yesterday on Virginia Tech’s campus. This tragedy of senseless measure has shaken my soul to the core. My heart and prayers go out to everyone for peace and healing. I feel so lost as to how something like this can happen to beautiful people deserving of a full and happy life.

March Madness...

Hello everyone!

March is coming to a quick end and so is my last semester of law school. I am very excited.

On the financial front, I received my tax refunds for the year. I received approximately $3500 from my federal tax return and almost $200 from the state. This income will go towards payment of my bar classes. Everything else is moving right along and my net worth is still hovering around (-$94k) excluding my tax return since this money is already earmarked for something else.

It should be improvement or minimal declines from here on out. =)

Spring Break…

Hi Everyone.

I’m on Spring Break. I went out of town to relax for a few days but now I am back. I still have the rest of the week off from work. If you haven’t guessed, I’ve been a little burned out from 1) work, 2) school, 4) bar exam stuff and 3) trying to find a law position. A little frustrating to say the least. My finances are moving along. Here is my recap from February.

Reasons for Improvement:

• Annual bonus of $3,500
• Tuition Reimbursement of $1,300

The improvement is a little misleading because in March, I’ve already paid off $4,300 in credit card spending from bar fees, Spring Break vacation to Mexico, the deposit for my sister’s wedding in Cancun, as well as regular monthly discretionary spending. So as of today, my net worth is hovering around (-$91.6k) which is still an improvement from January’s (-$94k).