Refinance Complete & Credit Cards Paid…

The refinance is complete and the new loan funded. I took the refinance check over to the bank on Tuesday and paid on my CC right away. I got paid yesterday so I scheduled the last of the payoff on my CC for today. The refinance was $1,100 short of completely paying off the CC but since I don’t have a mortgage payment for the month of November, I was able to use my regular mortgage funds to pay off the remaining balance. DONE! I am so excited. I don’t have a lot of reserves but I have enough money to make it through the rest of the month. I have a pretty strict budget going forward so I am going to have to be disciplined from here on out.

My family decided on a grab bag for Christmas so I don’t have to worry about Holiday spending this year. With my sister’s first child due in March 2009, we are all aware of our spending and we would rather buy stuff for the Baby once the time comes.

As for my little car accident, I decided to put in a claim on my insurance to get my car fixed and my garage repaired. The damage to my car was a little more than I thought and since I plan to drive it for many more years, I decided I better take care of it as much as possible. The total end cost will be the $250 deductible. In the meantime, I have to put up the funds and get my garage fixed for $400. My insurance company will reimburse me so long as I keep all of my receipts. I am going to take pictures of all the damage this weekend. I am still embarrassed that I even backed my car into my garage. I mean, WHO DOES THAT???

The only last expense looming is a $260 medical bill which I also have the money to pay. I will probably wait to pay it with my December paycheck since I only get paid once at the end of the month and I haven’t received the bill yet. I am sure the payment terms are Net 30. So I will send a check to pay it off at the end of the month when I get paid.

So, there you have it. I am finally CC free. Now, time to find a better paying job and stick to my budget. Coming soon…

Refinance Complete...

The new loan will fund on Friday and my credit card will be paid off by the end of the month. I had another small accident on Saturday where I accidentally backed into my garage door. That is going to cost me $400 to repair and I still have a $270 medical bill to pay. At the end of this month, I will have sufficient cash flow to 1) pay off my $24,583 credit card balance, 2) pay for the garage repairs and 3) pay the medical bill.

What is helping me is that I do not have to pay a mortgage for November. Once the refinance is over, I will also be able to establish a $1,000 Emergency Fund.

Getting Some Relief…

I am in the process of refinancing my condo for 30-years at 5.875%. I started the process almost a month ago and I have been wavering every since but once my mortgage escrow increased $100 anyway due to higher property taxes, I decided it was the best move.

With the escrow adjustment, my mortgage payment went from $875 to $975. My mortgage will just increase slightly more to $1,045 with the refinance. I am closing the loan on Monday. My condo appraised at $165,000 and I am doing a 75% LTV refinance at $123,750 which will pay off my current $96k mortgage and provide me with roughly $24k to pay off my credit card balance in full by month end. I don't have any plans of relocating or selling my place anytime in the near future.

My student loans begin repayment in January, April and June 2009. It will be the first time in almost 12 years that I don't have credit card debt and God willing, it will be the last time. With the refinance, I will still have roughly $40k in equity in my home and a few months to save an emergency fund before my student loan payments begin.

While some may ask, what are you doing? A portion of my student loan and credit card debt went to pay off a $25k HELOC which at the time had a variable rate of over 10%. The HELOC was the result of an 80/20 home purchase that required no money down in 2003. The truth. I purchased a home that I couldn’t afford at the time and I did not have sufficient reserves. The HELOC was at a low 4% variable rate but once the Fed started increasing rates, the payment on the HELOC became too high. So, I refinanced the balance onto student loans that weren't in repayment and my credit card at a lower fixed 3.99% rate.

I am in a little better spot than most people today in that my property value increased from $129k to $165k, I have a decent paying $67k job and I have excellent credit.

With the refinance, I will be able to start paying on my student loans that are currently capitalizing at least $900 in unpaid interest per month onto my student loan balance. I have a complicated situation but all hope is not lost. It is going to require a lot of discipline and I will also have some reserves soon.

Please keep me in your thoughts. Thanks a lot!

Tight Job Market…

Two Chicago law firms to lay off attorneys and staff. This is going to make it even harder for entry-level attorneys like myself to find positions. There is an oversupply of experienced yet unemployed attorneys here in Chicago.

What Happened...

Credit Cards:

I had some unexpected expenses and start-up costs for my own firm. In order to get the legal experience that I need to break into a law firm environment, I started to do some research and writing for attorneys who own their own firm. They suggested that I start my own firm so that I can seperate my regular income from my law firm income and write off expenses. So several thousand went towards getting a laptop and starting a small firm of my own. Additional expenses that I have incurred on a monthly basis are also for my business so that I can have online access to legal resources and professional liability insurance. I haven't generated enought income to pay back those start up fees. I am still actively looking for a better paying permanant position but as everyone knows, the market is tough. I am paying between $500-$600/month on my credit card which is fixed at 2.99% and 3.99% for the life of the balance. I have only one credit card with a balance.

Student Loans:

My loans are still in forbearance. I just consolidated the totals in the chart. Before I had $10,000 there but that was just my goal payoff for the year. Starting in January, I will beging some type of repayment on my student loans but I am not sure how much. Things are really tight.

Charts...

See the charts to the right. Need I say more.

Short Update...

I am still alive. My personal tank of energy completely ran out so I needed to take a break. Everything with the new job is going well. I am still looking to land with a firm by next year but the experience I am gaining is invaluable.

The finances are still struggling but I am making the best of it. The next few months should show some significant improvement so I am happy about that.

Hope all is well with everyone.

Update on Chitown…

My new job is going well. Today makes 2 weeks. It’s both challenging and interesting and the days move by really quickly which is a definite plus. I have been much busier than usual so I don’t have as much internet time.

My debt refinance is complete, I paid my parents back in full, I have a plan going forward and I am doing well with my spending. In the next week, I will post the final damage, the plan going forward and I will begin posting a little more regularly as I get back into the swing of things.

Thanks for keeping up with me guys. =)

New Job...

I start my new job tomorrow at the Bank. My new salary kicks in at the end of the month since I am on monthly pay.

I decided to refi all of my credit card debt into one balance fixed at 3.99% for the life of the loan. Instead of 36 months, it will take me 48 months but I can now attack my student loan balances. The consolidation will be complete by the end of the month and I also made sure that I will be able to pay my parents back in full by the end of the month, if not by the end of this week.

Hang in there with me guys. At the end of the month, the picture will be bleak but from here on out, it should finally improve each month. No more catching up, just getting ahead.

Thanks for all of your support, comments and encouragement.

Debt Refinance/ Balance Transfer…

I am so tired of catching up!!! I currently have two credit cards with a combined balance of $9,300, $2,400 and $6,900.

The $6,900 balance is the remaining balance on a $25,800, 20% second mortgage resulting from my 80/20 home purchase 5 years ago. The current rate on this credit card balance is 3.99% fixed for the life of the loan. I have been paying $225/month to have the balance paid off in 3 years by 12/2010.

The $2,400 balance is the result of spending in March 2008. Thus far, I have been fortunate to be able to pay off the balance on my revolving card in full each month but there is no way that I will be able to pay this balance off by the end of the month.

My new $67,000 salary will not kick in until May 1 and will be first reflected on my paycheck at the end of May. Until then, I am in a cash flow crunch. I can continue to find ways to pay off the $2,300 balance or I can refinance the balances together and increase my monthly payment from $225/month to $250/month and have it repaid within the same 3-year timeframe. The payment will only increase to $250/month because I will pay down the balance by $800 within the next month with my tax rebate check and my regular monthly payment.

I just took a look and my credit card company is offering a 3.99% fixed rate for the life of the loan. For simplicity purposes, I am thinking about refinancing the balances together at the 3.99% rate and increasing my payment to $250/month. I can keep the balances separate but I like the idea of paying just one company, once a month.

I am just tired of being behind each month. I feel like if I refinance the balances together, then I can finally start attacking my debt in an orderly fashion, including my student loan interest which is accumulating at an unbelievable pace. So far, each month I have been so behind that any extra cash flow goes towards paying off my revolving balance in full versus have a balanced plan towards paying off revolving debt and attacking my student loans.

With the balance transfer, I would refinance my credit card debt to 3.99% fixed for the life of the loan, pay off my parents in full and finally be able to completely move to an all cash/debit system so that I can completely eliminate credit card debt from my life within 3 years.

March 2008 Goals in Review…

Pay off Revolving Credit Card Balance with Tax Return: $2,800

I am in a serious cash crunch to say the least and I have had to pay for a number of unexpected expenses including insurance deductibles and required minimum continuing education. I paid off the previous month’s balance of $2,700 in full but I have a new $2,300 balance to pay off for March. Don’t ask. I don’t know exactly how I am going to pay that balance off in full.

Pay Parents Back with Tax Return: $600

I decided (with my parent’s permission) to pay them back $100 per month. I am going to try to accelerate that payment but I already paid them back $100 in March and I gave my mom a $100 check last weekend for April. They really don’t’ care but it matters to me. I may have enough money in the coffers to pay them back by the end of the month.

Land a New Job and Higher Salary: Min $90k

I landed a new job but not with the $90k salary. I have a new job that I will be started on April 16th with a salary of $67k, up from $55k. I am still looking and posting for more positions at a higher salary. I am hoping to land another position by the end of the summer. This new job is still a step in the right direction and will ease my cash flow crunch.

Update…

There hasn’t been much to report as of late. I just got good news that a friend from law school landed a job at a mid-size firm in Chicago and I am so happy for him. I’m a little jealous too because he is in the Firm’s Restructuring Group which is the type of law that I want to practice. I am hoping to make the transition to a Firm by year end.

I am working on a plan to pay down debt over the next few months. My goal is to pay down $5k in loans this year and this is a lofty goal considering my lower income level. Despite accepting a job here at the Bank, I decided to send out my info anyway and apply for jobs in hopes of landing a higher salary sooner rather than later. I also want to keep my interviewing skills fresh.

That’s about it. I should be posting my new budget soon and my monthly report for March. My first day in the new position is April 16th but I’m not sure when my new salary will go into effect since I am paid just once at the end of the month.

Job Offer…

I received and accepted a job offer from the Bank. I will be moving into the position within the next 30 days. I am excited and a little nervous. The job definitely did not come with the salary I was hoping for but I did receive a $12k increase which is going to help out a lot. Additionally, sometimes you need to force change in order to get your career moving in the right direction. I have been working in the same position since graduating from undergrad 8 years ago so I need something else on my resume. I got too comfortable so I am taking this position to force change on myself, to learn new skills and get more experience. I am still looking to move into a Firm position within the next 12 months so this is hopefully just a stepping stone on my way to practicing law.

February 2008 Financial Review…

In February, my private loans capitalized so there was a huge increase in my student loan balance. All the principal and accumulated interest got rolled into a new loan balance on 8 different loans. My car if finally depreciating a little quicker and my 401k balance held relatively stable despite huge fluctuations during the month. Liquidity continues to be an issue as I don’t have any huge reserves.

Credit Scores for February

Transunion: 750
Equifax: 730
Experian: 777

March 2008 Goals…

• Pay off Revolving Credit Card Balance with Tax Return: $2,800



• Pay Parents Back with Tax Return: $600



• Land a New Job and Higher Salary: Min $90k

February 2008 Review…

Move to an all cash/debit system…

Not yet. I don’t foresee this happening until I land a new law position and until I pay off my credit card balance in full which should be this month.

Apply for law jobs…

I have all of my cover letters completed and my resume, writing sample and transcript copied but I haven’t sent them out. My first preference is the position I interviewed for last week. When/If I get that position, I can save the copies for later or send them out in the month of March is necessary.

File Tax Return…

Done. I filed my tax return over the weekend and should receive a refund in about 10-12 days electronically. The total for fed and state is about $3,300. The refund will go to pay off my accumulating credit card balance in full and repay my parents back for the help they gave me with my car/home repairs.

Thoughts on Second Interview…

The second interview yesterday went very well and I believe that I will get an offer. The good thing is that the Bank is looking to hire 3 Consultants in that area so my chances improve significantly. This would be a great move for me in terms of moving my career along.

I had a great day yesterday starting out with the good interview and followed up with the last Black History Event for the month at the Bank. There was a ceremony where educational and career achievements for African American workers at the Bank were recognized and celebrated. I got recognized for getting my law degree and passing the bar exam.

At the event, I was able to network and talk to a lot of people including the CEO of the bank (I had to pinch myself) and several other member of the Executive team. It was such a tremendous opportunity and one of the reasons why I love working for my Bank in particular. Where I work, we are a large regional bank with a close feel that I don’t think you get at other larger international banks. This is just one of the many reasons why I want to stay there because I can see myself getting the opportunity to advance. It amazes me also how much more comfortable I am with networking and meeting people. Two years ago, I would have broken into a cold sweat and quickly walked from the room hoping nobody noticed.

I will keep you posted on how things turn out. When all goes well, I should be transitioning from my position by the end of March. Either way, I feel like things will be getting better for me and soon.

Second Interview…

I just got a call from HR and I made it to the second round of interviews for the position at the Bank. This is excellent and welcome news especially since it’s my hope that this job will open doors for me in the restructuring / bankruptcy area of the law in the future.

I will keep you posted on how things go but the position will earn me no less than $90k/ year which will be a significant boost in income from my current $55k salary.

On a side note, my current manager is making me give up my flex schedule now that law school is over. While I knew it was coming, it is and was my hope that I would land a different position before having to return to a full five day workweek. I have the 4-day schedule for another month so I am hoping to make my transition to the new position within that timeframe. Besides, we’ve been so busy that most weeks, I end up working 5 days anyway and working late.

I’m Back…

Sorry for the lack of posting. I’ve been really sick with a sinus infection and I am on vacation this week. A lot has happened recently. For one, the interview went well and I am waiting to see if I get a call back interview. The HR representative spoke with the hiring manager and he was impressed with my interview so my fingers are crossed that I will land in the second round.

I went to the doctor today because my throat has been sore for 8 days now despite the antibiotics. Of course since I was going to the doctor, I automatically started feeling better (why does that happen?). One thing that wasn’t better is that my chest was still very congested and I would get winded very easily so she prescribed a different inhaler for my asthma so that my chest can clear up. Hopefully, I will be in tip top shape by next week.

I got into a car accident this morning on the way to the doctor. I was on the expressway (Chicago’s famous Dan Ryan) and a car in front of me thought he could cut into the next lane but couldn’t. So, he played car hopscotch and jumped right back into my lane and when I slowed down, the guy behind me rear-ended my car. I had to wait for the state police but despite the large impact, the damage is minimal.

On Saturday, my car started making the worst grinding noise and I knew something was wrong with the brakes. I was right. On Monday, I took my car in and I needed new brakes. That was $280.00

So, my luck hasn’t been so good lately in the financial arena and I am financing everything with my credit card which will have to be repaid with my tax return. I am looking to file my taxes by the end of next week. With everything that has happened to me in the last few months, I am trying to keep a smile on my face, think optimistically and believe that good things to come are right around the corner.

Charitable Donation…

I made a $35 donation to SOS Children's Villages today as part of Wooly Woman’s challenge over at Clawing Our Way. I have a $500 charitable goal for the year and I also make a recurring monthly donation of $35 to World Vision.

If you can make a donation to SOS Children's Village, please do and let Wooly Woman know so she can add the donation to the final tally. Let's give from the heart and help others less forunate. Despite my debt load, I am truly blessed.

Sick Again…

I am sick once again. My throat is on fire and my head is hurting. Why am I at work??? This is the fourth time since Christmas and I am just plain tired. I called the Doc yesterday and she said that it is probably a sinus infection that won’t go away without medication. So, she called in a prescription for me and I’m on antibiotics. Great!

Interview Update…

My interview yesterday went well. The hang ups that the guy had were my lack of banker experience and minimal experience dealing with clients. So, I had to sell myself on my strong ability to interact with people and my strong negotiation skills. I think I did a good job but I have to say that I am a little frustrated with the idea of working for a company for 8 years and having them continue to tell me that I lack experience in one area or another. This is especially the case when the only way I can the experience is to get an opportunity to advance.

I will keep you posted on how it goes but I am off on vacation next week. While I am off, I will be applying all over the city for jobs in the area and just mass sending out info to firms.

Retirement Allocation…

For the last few months, I have been making contributions to my 401k but the balance has not moved from the $27k - $28k level. I am thinking about moving all the funds to the balanced fund which is a mix of 60% equities and 40% fixed income.

What do you think??? Here is my current allocation. I am 30-years old and the current balance is $28.6k.

Here is the performance for the last 12 months.

Applied For Another Position…

I applied for yet another position last week at the Bank. Not to worry, I am also sending out information to law firms. I am just trying to hit all of my bases to increase my chances of success.

The position at the Bank would provide me with some transferable legal skills so it is a positive move in the right direction. There is another possible position here at the bank that may materialize in the future. However, I would prefer the one I posted for because it at least involves a small legal angle.

I got a call from Human Resources last week to ask me a few questions. Overall, I believe that I am qualified for the position and I am eager to move my career along. I have an interview on Wednesday.

February 2008 Goals…

I know this post is late but here are my goals for February:

Move to all cash/debit system

• I have a little cash so I am moving to an all cash/debt system as of today.

Apply for Law Jobs

• My goal is to land a law position within the next few months. I want to get out my information to firms by the end of the month.

File Tax Return

• I have yet to file my taxes. I am still receiving information. I just got more tax forms in the mail yesterday but I think I have everything now.

Don’t Forget to Vote…

January 2008 Recap…

Not much to report. January was not a good month. I put a portion of my student loans in forbearance until 2/2009. My private loans enter repayment in 4/2008 and I will be putting those into 6 months of forbearance.

My goal is to secure a law job within the next two months.

January’s credit check was good and clean. My credit scores are as follows:


Transunion: 738 (750 in December)
Experian: 777 (777 in December)
Equifax: 730 (733 in December)

I am not entirely sure why my credit score declined in January. It may be because Equifax was late in reporting two of my student loans. I am still pleased with my scores.

Review of January 2008 Goals…

It was a tough month for sure but here is how I did with my January 2008 Goals. This is the first time I set monthly goals but I actually liked the concept so I will continue in the future.

1. Move to all cash/debit system
   
   Negative. What cash? Broke is the word of the month.
   
   
2. Set up automatic payments for my student loans
   
   Done. Not only did I set up automatic payments for my student loans, but I also put the federal loans that entered repayment 1/1/08 into forbearance for 12 months since I did not get the legal job and my cash flow is strained.
   
   
3. Get job offer to join the Legal Department
   
   Negative. I got turned down for the position but I did have someone who has decision making power ask me if I would be interested in another position. It’s non-legal but it would be a step up in pay along the lines of the legal position that I posted for. Although it is non-legal and not particularly the direction I want to go in, I can’t be picky at this point if the job is going to increase my salary from $55k to at least $85-$90k. I have to get out of this debt chokehold.
   
   
4. Put $1,000 towards Emergency Fund
   
   That would also be a negative. Not only is my emergency fund depleted but I owe my parents $600 for the garage genie and my new windshield. My mom said there is no rush to pay them back. When I asked if I could pay them back with my tax return, she said sure. Thankfully, I have wonderful parents. They helped me out tremendously financially and also by making the phone calls to being there to get everything fixed and replaced.
   
   
5. Pay off December/Christmas Damage: ~ $3,770
   
   Done. It was paid off with my bonus which was supposed go towards repayment of my cc/heloc.

It was a tough month for sure. No doubt.

Feeling Cursed…

Someone must have put a hex on me or something. Last night when I got off the train, a storm was brewing which was blowing freezing snow all over the place and my car was covered with ice. There were whiteout conditions where you could barely see 5 feet in front of your car. So, I put the heat on to defrost the windows.

Well, as I was driving home later that night, I realized that a divot that I had in my windshield from a rock this summer spread the entire width of the windshield. D*mn! So, of course that has to be replaced now because 1) I could get a ticket and 2) it is rather distracting.

The cost will be $225.

So, I get home safely and the wind created a huge snowdrift against my garage door. Once I pull in, the garage door won’t close/stay down because there is too much snow compressed under it. After clearing the snow and trying several times to close the garage door, I am starting to give up and think there is something just wrong with the garage door…again. So I look up at the garage door genie (For those of you who don’t know, it’s the electric box on the ceiling that automates the garage door.) and it smoking, I mean really smoking.

So imagine this…I panic like SH*T, OMG, FIRE, call the fire department….NO…NOT YET…get the fire extinguisher. So I am running to the door between the garage and my condo and of course it’s locked. Fumble with the keys like in my movies when you are like (Lady come on!!!) and finally get it open. Then I am running to my door, dropping every bag on my shoulder and fumbling yet again with the keys. As I try to get my condo unit’s door open, I am thinking…Please God…let the extinguisher be where I remember…Please. Finally I get to the extinguisher and of course, I have no freaking idea how to use it. So, I am running back to the garage, hurriedly reading the directions and finally spraying the thing. Great, the smoke is dying down, it smells, and man…the ceiling in the garage is a little browned. Thank God that crisis was averted. Mind you, it’s like 10 o’clock at night and I know my neighbors are asleep and anyone who rides by will think I am a nut.

So finally, I was able to move my car back outside, manually lower the garage door and unplug the genie from the electrical socket. So, I obviously need a new garage door genie (I have the original one which much be at least 15 years old).

Cost + labor will be $360.

So, today is a $600 day for me. It has to go on my credit card because Chitown is officially flat broke. Shoot me where I stand!!!

Attacking My Student Loans…

I decided to attack my student loan balances before paying off my credit card. As it stands, my credit card/heloc stands at $7,500 with the balance fixed at 3.99% until paid in full. My private student loans carry an interest rate just below 9% and are killing me with interest every month.

I am committed to paying $200/ month on my cc balance which means it will be paid off in about 3.5 years and I will pay less than $600 in interest. I am also committed to ensure that I do not accumulate any more debt from this point on. It makes sense to me to throw whatever free money I have towards my student loans so that the load gets a little lighter.

I DIDN’T GET THE JOB…

I didn’t get either of the law positions here at the bank. There are no real words to express the disappointment that I feel. The hiring manager said that she would have hired me in a second if I just had 4-5 years of experience. She complimented me, said she was very impressed by me but said that she felt like she would be doing me a disservice because the department did not have the time and resources to train me properly. She was very kind and this is a person with a lot of power and influence, she offered to help make a few connections for me with other firms in Chicago, and even gave me a hug after I reached out to shake her hand.

With everything going on, I really needed something good to happen for me so I am tremendously bummed out right now. I wanted very badly to have some good news to share with you, my family and friends. I feel like I am somewhat letting them down as well. So, it’s back to the drawing board. I am probably going to take off a few days to research and apply for other positions.

I faxed over my forbearance request for the loans that entered repayment in January. I am going to be doing the same for my private loans in another month and again in May for the federal loans I already have in forbearance. In one simple word, I am TIRED.

Crazy Market…

There has been a lot of talk about a recession. A Recession is two consecutive quarters of the US economy slowing down. Thankfully the market rebounded yesterday. I guess I am not too troubled because at 30, I am in it for the long haul. The only thing that is truly bugging me is that I have been hovering around the $28k mark for my 401k despite my monthly contributions because of the massive fluctuations. It was my goal to reach $30k by the end of 2007 so to see myself down to $27k makes me a little peeved but I have to keep thinking long-term.

I made it through my second volunteer class for Junior Achievement. Yesterday, we discussed the decision making process and how decisions have either positive or negative consequences. The teacher was unexpectedly absent but the children still behaved pretty well and I was pleased with the lesson.

I am still battling my cold and everyone at work says I sound horrible. Ordinarily, I would stay home and not risk getting anyone else sick but we are swamped at work and still short-handed. Good news is that my second co-worker showed up yesterday and today and he looks better so perhaps he will be coming in more regularly. I know it’s been tough on him dealing with his ailing mother and his own personal health concerns. I am trying to suck it up and be understanding.

Sick Again…

I am sick again. This is the 3rd time in less than 2 months and I am a little irritated. I just got over a cold where I lost my voice about a week ago and here I am again, congested and irritable. While I love Chicago, the weather has been so loopy lately that everyone has the sniffles. While I am not surprised that I got sick, the weather isn’t the only reason why my system is down. The main culprit is STRESS!

You got it…STRESS. I am still waiting to hear about the job in the Legal Department, I am getting all kinds of notices that my student loans are entering repayment, the market is in turmoil which means I have to report yet another decline in my net worth, my managers want me to give up my flex schedule now that school is over and I dread coming to work every day doing my current job.

I just need a break. One break and I can begin to see something positive coming out of all of my hard work for the past 4 years. One good thing that is coming out of this mess with the market is that the interest rate on my student loans went down a little which means less interest will capitalize on my loans over the next few months.

Dream: A Balanced Approach to My Finances…

I wish that I could have a balanced approach to my finances. I love the idea of the 60% Solution and automating my finances. It would be a dream come true to see myself making progress in all areas including retirement savings, long-term investments, debt repayment, and short-term savings. Right now it’s definitely…Look at all that debt Chitown – In your dreams! It seems like something always comes up which lets me know that I definitely need an emergency fund at all times.

60% Solution

60% - Committed expenses:
Basic food and clothing needs
Essential household expenses
Insurance premiums
Charitable contributions
All bills -- even non-essentials such as satellite TV service
ALL taxes

10% - Retirement Savings
10% - Long-term Savings or Debt Repayment
10% - Short-term Savings for Irregular Expenses
10% - Fun/Personal Money

Here is how I stack up today against the 60% solution.



*** With the employer match, the total retirement contribution is 10%.

Note: Edited to include current minimum payments on my cc/heloc and student loans as committed expenses.

Volunteer Work…

I spent the morning volunteering with Junior Achievement. I was a little nervous because I have only volunteered in a camp counselor capacity and this was actually teaching a lesson to 30 students in 8th grade. I have to admit that I procrastinated on going to the school because I was second guessing my decision to volunteer but it was actually very rewarding. I will be going to back over the next 5-6 weeks to teach the remaining lessons on decision-making, education, career options, budgeting, credit and financial risk. Today’s lesson was about choices and self-knowledge.

Essentially, self-knowledge is a combination of your skills, interests and values. When you evaluate your own personal skills, interest and values, you are better able to find and choose a career that you will enjoy and find-rewarding. The kids behaved so well and they had some interesting career choices: school counselor, attorney (Smile), dancer, court reporter, actuary, singer and teacher.

It just goes to show you that when you give, you tend to receive much more in return. I had a blast and I am looking forward to meeting with them again next week. Also, as crazy as it seems, it made me feel more confident about getting up and talking in front of people. More practice is always good and sometimes, kids can be one of your toughest audiences.

Chase Upping ATM Fee to $3…

Chase hiked their ATM fee for non-customers up to $3 effective January 13th. For those of you in the Chicagoland area, you know that’s significant because there seems like a Chase on every corner.

$3 Chase ATM Fee

Credit Card Skimming...

This was an article published on CBS2Chicago.com today on a credit card scam.

Garrett's Popcorn Employee Charged With Skimming

This article just supports my decision to pay for credit card monitoring and it hits close to home.

TrueCredit Monitoring…

I pay for the TrueCredit 3-in-1 credit monitoring service and received my first alert today. I got an e-mail this morning from my student loan company informing me that my student loans would be entering repayment soon. This is the second tranche (and the largest) of loans to enter repayment 4/2008.

Just a few moments ago, I received an alert from Equifax so I went over to see what was up. Well, Equifax is late in reporting two student loans that I opened in 2006 so my credit score went down just a bit. I am thankful to know that the service is working properly. It is really important to me to keep a clean payment history and I want to be alerted right away when something changes. My sister and mother have both fallen victim to identity theft, I had my wallet stolen once a few years back and sometimes I receive my dad’s mail and vice versa because our names are so similar. The service allows me to sleep a little more comfortably at night.

TrueCredit Monitoring

Starting To Cook More…

I am starting to cook more now that I am done with school. I am learning a little each week because I am not a culinary master by any means. I am still learning about my grocery shopping habits and I haven’t mastered how to go into the store and not spend a fortune of stuff I don’t need. But, I am doing better.

I’m still not frugal enough to bring my lunch to work but I keep it reasonable and I don’t buy breakfast or dinner at all. Lately, I’ve been going over to my parents' house for dinner since I am single and they live only 10 minutes away. It’s a good chance for me to spend a little quality time with them throughout the week and although I told my mom she didn’t have to bother, she says it’s no problem. It’s a tremendous savings.

$2,000 Emergency Fund…

Based on PF Blogs, I know some finance experts advocate that you have $1,000 in an emergency fund. I am more comfortable with $2,000. One "real" emergency can cost you $1,000 and then you have nothing. I had a small fire once in my condo’s electrical box and had to have several panels replaced. That cost me almost $800 in one day.

With a $2,000 emergency fund, if you run into one emergency, you still have some funds leftover to handle the next one while you try to build the account back up to $2,000.

For now, I have a $1,000 e-fund but I am trying to build it back to $2,000.

Quote…

"Failure is simply the opportunity to begin again, this time more intelligently."

-- Henry Ford

Crazy Weather…

The weather here in Chicago has been absolutely crazy going from freezing and snowing to 60 degrees. Somehow I managed to come down with the flu last Thursday which turned into the worst chest cold that’s still hanging around. I am looking forward to a little R&R this weekend. For me, it will be a nice 3-day weekend because I am off tomorrow. Thank goodness.

I also have a 4-day weekend scheduled for next week when the bank closes in observance of MLK Day. Working in the banking industry does have its perks including observance of most federal holidays. Just one more reason why getting a legal position at the bank would be ideal.

January 2008 Goals…

Goals

• Move to all cash/debit system
• Set up automatic payments for my student loans
• Get job offer to join the Legal Department
• Put $1,000 towards Emergency Fund
• Pay off December/Christmas Damage: ~ $3,770

Emergency Fund: $1,000 in E-Fund

Establish $1,000 in an e-fund with the goal of it reaching $2,000 by year end. While I would like to have a $2,000 e-fund now, I am going to start with $1,000. I would like to put as much as possible towards my debt with any extra money going towards reaching the $2,000 mark.

Pay off my December/Christmas Damage: $3,770

One mistake I made was being too aggressive and putting too much towards my HELOC/CC debt in December ($900). The main expenses were the treadmill and clothes for work. My mom said she would help me out with the treadmill purchase but I am not sure that I want her to. Since it’s been delivered on Friday, I have been on it 3 consecutive days and I am already feeling better. I would have gotten on it sooner but I came down with the flu on Thursday.

The balance on my credit card is ridiculous. It will be paid off primarily with my bonus which was supposed to pay down my HELOC/CC. My family decided to do Christmas gifts at the last minute so those purchases are also reflected on my CC. For the first time, I was pretty frugal so the amount is the lowest Christmas spending since college 8 years ago. I also have a $50 and $25 Visa gift card that I didn’t give out and I will keep those for any upcoming birthdays, etc. where I will need a gift.

The CC balance includes some of my regular bills ($420) like utilities, gas, and charity which are charged to my credit card every month and paid for in full.

CC Breakdown:

• $1,002 – Clothing
• $705 – Treadmill
• $678 – Gifts
• $357 – Dining
• $297 – Utilities
• $166 – Entertainment
• $132 – Personal Care
• $129 - Groceries
• $121 – Business
• $88 – Gas
• $58 – Home
• $35 – Charity

Financial Advisor Called…

My Ameriprise financial advisor called me yesterday at home and left a message. He wanted to know if I wanted to set up an appointment to review my financial situation. Well, as you can tell…I haven’t been to my financial advisor in over 4 years. I went to him right before I purchased my home when I was doing good and still had a positive net worth. Now, I think he would fall out of his chair and have a heart attack. I cannot do that to the poor man.

I am going to wait until I get the legal position and higher salary and then I will seek some guidance and help to get myself back on the right track.

All Cash/Debit and Emergency Fund…

As of Sunday, I moved to an all cash/debit system where I will no longer use my credit card for any personal spending. I will use my Bank of America Keep the Change checking account for my day to day spending activity.

As I look at my 2008 annual goals, I have decided to fully restore the $2k balance in my E-fund before paying off my cc/heloc in full. By the end of January, all of my December damage will be paid off in full and by the end of February (maybe January), I will have fully funded my E-fund again.

If all goes well, there will be a slight improvement in my net worth at the end of January and every month from here on out. Plus, I can check off two of my 2008 annual goals: all cash/debit and reestablish my E-fund. =)

2008 Goals…

I didn’t really set any financial goals for 2007 because everything was in limbo with me finishing law school and taking the bar. Now that I am a licensed attorney, 2008 is my year to get my life in order personally, professionally and financially.

Annual goals should be S.M.A.R.T.

S - specific
M - measurable
A - achievable
R - realistic
T - time based

Here are my 2008 Goals:

 Secure law position and $30k-40k salary increase (Current Salary $55,000)
 Increase 401k contributions to 10% (Currently 5%)
 Pay off credit card debt (Current balance is $7,700)
 Improve net worth by $10k - $20k (Current Balance -$93k)
 Move to all cash/debt system
 Reestablish $2,000 E-Fund (Current Balance $0)
 Minimum of $500 in charitable giving (Current contribution $35/month)
 Save $7k towards $15k unemployment fund (Current Balance $0)
 Reduce student loan debt by at least $10,000 (Current Balance $210k)

I am setting very aggressive goals for 2008 but they are all contingent upon securing a law position with a much higher salary. I am working on it now. I am hoping to transition in to the Legal Department by the end of February.

No matter what, my Goals for 2008 will still include:

 Pay off credit card debt (Current balance is $7,700)
 Improve net worth by $10k (Current Balance -$93k)
 Move to all cash/debt system
 Reestablish $2,000 E-Fund (Current Balance $0)
 Minimum of $500 in charitable giving (Current contribution $35/month)

December 2007 Recap…

Not much to report. There was a slight dip in my net worth by $758. Student loan interest continues to capitalize each month. Repayment on a portion of my student loans began January 1 and will go into full effect 4/2008 and 6/2008. I took some of my liquidity and paid off $900 on my HELOC/CC. I am still deciding whether I am going to start attacking my private student loans which are at 9%+ or repay my credit card by 4/2008 which is at 3.99% fixed for the life of the loan. Part of me just wants to be credit card free. Plus, the minimum payment on my credit card is $155 with ~ $25 in interest per month.

December’s credit check was good and clean. My credit scores are as follows:
Transunion: 750 (750 in November)
Experian: 777 (775 in November)
Equifax: 733 (729 in November)

January’s recap will look a little funny because I will be depleting my WaMu E-Fund and paying off my December spending in full.

A Fresh Start...

Wishing you and your family a very Happy New Year!!!!