Wednesday, October 31, 2007

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.

Tuesday, October 30, 2007

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.

Thursday, October 25, 2007

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.


$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

Tuesday, October 23, 2007

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.

Monday, October 22, 2007

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.

Friday, October 19, 2007

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.


Thursday, October 18, 2007

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


  • 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.


    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.
                      • Wednesday, October 17, 2007

                        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.

                        Tuesday, October 16, 2007

                        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

                        Monday, October 15, 2007

                        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)

                        Thursday, October 11, 2007

                        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.

                        Tuesday, October 09, 2007

                        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.

                        Monday, October 08, 2007

                        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 ( 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. =)

                        Friday, October 05, 2007

                        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.

                        Thursday, October 04, 2007

                        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.

                        Wednesday, October 03, 2007

                        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!!

                        Tuesday, October 02, 2007

                        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. =)

                        Monday, October 01, 2007

                        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. =)