Posts
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.
Tuesday, May 29, 2007
Thursday, May 24, 2007
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.
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.
Monday, May 21, 2007
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.
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.
Friday, May 18, 2007
7-Day Money Challenge…
Yahoo! Finance has an article today called the 7-Day Money Challenge .
Basically, the challenge calls for 3 steps:
- 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.
- Be honest and don’t overestimate to give yourself a big cushion.
- 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)!
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)!
Thursday, May 10, 2007
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. =)
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. =)
Wednesday, May 09, 2007
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.
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.
Monday, May 07, 2007
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.
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.
Wednesday, May 02, 2007
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… =)
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… =)
Thursday, April 19, 2007
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...
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...
Tuesday, April 17, 2007
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.
Monday, March 26, 2007
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. =)
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. =)
Thursday, March 15, 2007
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).
Monday, February 26, 2007
February Update…
Sorry for the lack of posts. I am feeling a little frustrated with my job search and finances so I didn’t even want to think about money or the current state of my ever declining net worth.
I still haven’t filed my taxes. So, I will do that some time in the next 2 weeks. I’ve been preparing my bar application and I still have to pay $750 for the exam and $2,500 for the prep program. I am hoping my tax return will cover the prep course.
Using Quicken is going well. I am a little frustrated that some of my credit cards don’t download my transactions daily but rather once a statement is posted. Oh well, I am at least glad that I don’t have to manually enter in my transactions.
I will be posting my monthly recap in the next few days. Just trying to tie up some loose ends. =)
I still haven’t filed my taxes. So, I will do that some time in the next 2 weeks. I’ve been preparing my bar application and I still have to pay $750 for the exam and $2,500 for the prep program. I am hoping my tax return will cover the prep course.
Using Quicken is going well. I am a little frustrated that some of my credit cards don’t download my transactions daily but rather once a statement is posted. Oh well, I am at least glad that I don’t have to manually enter in my transactions.
I will be posting my monthly recap in the next few days. Just trying to tie up some loose ends. =)
Monday, February 05, 2007
January 2007 Financial Recap…
- I paid my last tuition bill for law school to the tune of approximately $7300. Books cost $500.
- I transferred excess loan funds into my WaMu high yield savings account, which now serves as my emergency fund. (I just received my bonus and this figure now stands at $13k).
- I adjusted the amount for my pension as a result of another year of service. Going forward, I will adjust this figure monthly.
- My 401k performed well. It is a pretty balanced portfolio. (I should break this down one day)
- Debt kills…The giant $19k increase are my new student loan disbursements. $9k of which is in my savings account.
- Interest on my student loans continues to capitalize. Repayment on my federal loans begins in June and repayment on private loans begins in January 2008.
I paid off all my Christmas damage. - Net worth took a tumble but from here on out, there should be no major expenses of this magnitude going forward.
Expenses to come…
- Sister’s wedding to Cancun: Total cost for the trip will be $1700 for a week. I paid the $400 deposit on Friday. This is part my sister’s wedding (3 days) and part my celebration from graduating from law school and taking the bar exam (4 days).
- Bar Exam Fees: $4,300 for the actual exam and prep courses (Final amount due by April 15th).
- May trip to LA for a friend’s wedding: total cost $500. I will be saving this money each month.
Debt and Income to come…
- I am waiting for $1300 in tuition reimbursement for the Fall semester.
- 2006 tax return -- I am not sure how much this will be.
- In June, I should receive another $5800 in tuition reimbursement from my Spring semester.
- I will take out a $15,000 bar loan to pay for my bar exam fees and any additional bar expenses for the summer as I study. Excess funds will be funneled into my WaMu Savings account.
Thursday, February 01, 2007
Blog List Updated…
I updated my blog list. There were quite a few blogs that I used to read where the bloggers stopped posting for some reason. I read quite a few PFBlogs and may have missed one or two. If you have a blog that you want me to check out, please leave a comment and let me know.
Thanks for reading!!!
Thanks for reading!!!
Job Search Update and Networking…
As many of you know, I will be graduating from law school in May. Since I am a full-time employee and part-time student, I did not have the benefit of becoming a summer associate. Many top/large law firms hire from their summer programs and there may be opportunities for lateral candidates but the positions generally require a specific amount of direct legal experience.
Since last August, I have been interviewing and networking to find a law position for the Fall. I’ve met with Judges, partners at law firms and associates. I even spoke to other attorneys in non-traditional legal environments, such as investment banking firms. It’s been an amazing experience and I love the chance to meet new people and make lasting contacts.
It’s my hope that through networking, when a position becomes available, someone will keep me in mind and refer me for the position. While networking is time consuming, I can only appreciate these people for taking time out of their busy days to lend me a helping hand. Once I become an attorney and I get into a position where I can reach back and help other new attorneys, I will be delighted to help because I will remember the grind of these days for the rest of my life.
Nothing you want generally comes easy. You have to work hard and not be afraid to ask for help.
Since last August, I have been interviewing and networking to find a law position for the Fall. I’ve met with Judges, partners at law firms and associates. I even spoke to other attorneys in non-traditional legal environments, such as investment banking firms. It’s been an amazing experience and I love the chance to meet new people and make lasting contacts.
It’s my hope that through networking, when a position becomes available, someone will keep me in mind and refer me for the position. While networking is time consuming, I can only appreciate these people for taking time out of their busy days to lend me a helping hand. Once I become an attorney and I get into a position where I can reach back and help other new attorneys, I will be delighted to help because I will remember the grind of these days for the rest of my life.
Nothing you want generally comes easy. You have to work hard and not be afraid to ask for help.
Wednesday, January 31, 2007
Financial Ratios…
Money $mart Life has a terrific post called Stop Comparing Your Finances to Others. Five Ratios to Keep You on Track.
I know that I often read PF Blogs and compare myself to others. For a while, I just read PF Blogs because I was too afraid and ashamed to start my own. While my financial condition has deteriorated since starting my blog, I’ve learned a lot and I know that my financial condition is going to improve with focus and hard work. The following ratios are a good measure for determining if you are on track and living within your means and they will also highlight some room for improvement.
Here are the ratios and how I stack up:
Liquidity Ratio
Formula: Liquid Assets / Monthly Expenses
Target: 3-6 months
Me: $9,000 / $5,000 = 1.8 months (expense is based on emergency scenario)
Housing Payment Ratio
Formula: Monthly Housing Costs / Monthly Gross Income
Target: Less than 28%
Me: $1,100 / $4,500 = 24% (33% with utilities)
Solvency Ratio
Formula: Total Assets / Total Debt
Target: Greater than 1.0
Me: $208,980 / $301,330 = 0.69
Savings Ratio
Formula: Savings per Year / Annual Gross Income
Target: 8-25% depending on age
Me: $2,700 / $54,000 = 5% (10% with company match)
Debt to Income Ratio
Formula: Annual Debt Payment / Annual Gross Income
Target: Less than or equal to 30%
Me: $20,400 / $54,000 = 38% (Student Loans and CC/HELOC Refi)
*** Definitely some room for improvement. =)
Money $mart Life has a terrific post called Stop Comparing Your Finances to Others. Five Ratios to Keep You on Track.
I know that I often read PF Blogs and compare myself to others. For a while, I just read PF Blogs because I was too afraid and ashamed to start my own. While my financial condition has deteriorated since starting my blog, I’ve learned a lot and I know that my financial condition is going to improve with focus and hard work. The following ratios are a good measure for determining if you are on track and living within your means and they will also highlight some room for improvement.
Here are the ratios and how I stack up:
Liquidity Ratio
Formula: Liquid Assets / Monthly Expenses
Target: 3-6 months
Me: $9,000 / $5,000 = 1.8 months (expense is based on emergency scenario)
Housing Payment Ratio
Formula: Monthly Housing Costs / Monthly Gross Income
Target: Less than 28%
Me: $1,100 / $4,500 = 24% (33% with utilities)
Solvency Ratio
Formula: Total Assets / Total Debt
Target: Greater than 1.0
Me: $208,980 / $301,330 = 0.69
Savings Ratio
Formula: Savings per Year / Annual Gross Income
Target: 8-25% depending on age
Me: $2,700 / $54,000 = 5% (10% with company match)
Debt to Income Ratio
Formula: Annual Debt Payment / Annual Gross Income
Target: Less than or equal to 30%
Me: $20,400 / $54,000 = 38% (Student Loans and CC/HELOC Refi)
*** Definitely some room for improvement. =)
Steps Towards Financial Success…
These are the steps I need to take to reach financial freedom.
- Spend less than I earn.
- Establish an emergency fund -- 3 months = $15,000 (conservative)
- Put extra cash towards debt repayment - Total to repay $203,100.
- Increase retirement savings -- Currently 5%.
Financial Software…
Well, I’ve been working with my new Quicken software and I am getting the hang of it finally. It’s actually pretty time consuming and I have the bags under my eyes to prove it. Not really, but the darn thing is pretty addictive and can have you working with it hours at a time. I also downloaded the trial version of Microsoft Money. I am still working with it and will report on which software I think is better once I get a better feel for both programs.
In Quicken…
I finally got my ShareBuilder accounts downloaded. Yeah!!! I don’t have much invested but I am hoping this will change in the near future.
I still can’t download my Countrywide mortgage or 401K information but I can manually enter in the balances. I am going to tinker with it a bit more to see if I can set up an amortization for the mortgage. I am pretty sure that I can.
Overall, I can see how Quicken will probably be a good tool for budgeting and strategizing debt repayment once my student loans go into repayment. Also, the reminders and direct account link access will make bill payment a lot easier.
I just wish the screen didn’t flicker all the time. I guess that’s what people meant by bugs in the software.
In Quicken…
I finally got my ShareBuilder accounts downloaded. Yeah!!! I don’t have much invested but I am hoping this will change in the near future.
I still can’t download my Countrywide mortgage or 401K information but I can manually enter in the balances. I am going to tinker with it a bit more to see if I can set up an amortization for the mortgage. I am pretty sure that I can.
Overall, I can see how Quicken will probably be a good tool for budgeting and strategizing debt repayment once my student loans go into repayment. Also, the reminders and direct account link access will make bill payment a lot easier.
I just wish the screen didn’t flicker all the time. I guess that’s what people meant by bugs in the software.
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