Wednesday, December 30, 2009

New Milestone with the Chase Card Dec. '09 Updates!

Chase Card #1 - $123.00 paid. Remaining balance = $6,057.00

Chase Card #2 - I was able to use the first 4 Snowflakes to reduce this balance $135.93 during December. Remaining balance = $3,342.27

But the best part of this update is that it brings total debt reduction since starting the blog past the $50K mark!! Granted, $45,739.46 was from my Mother-in-law's estate. I'm just so glad we didn't squander it away, but significantly reduced the debt load and my stress levels.

Bank VISA Update - Dec. '09

More nominal progress on this balance. I'm only paying the minimum payment each month, but the balance is steadily decreasing. $85.25 paid in December which leaves the balance at $3,307.74.

HELOC Update - Dec. '09

Since I refinanced the HELOC at the end of November, there is a month's delay before I'll be billed for the new payment. I did throw an extra $17 toward the principal though, so the HELOC balance is down to $73,166.93.

Thank You Thank You Borrower!!

Now I just have to remember what I did!

Tuesday, December 29, 2009

My Financial Goal for 2010

If you've read my profile over there on the sidebar, you see that I started this blog because I was fed up with the fact that these debts are keeping me from being able to build wealth for the future.

In my former life (a/k/a Before Kids), I was an avid saver. I remember the pain of cutting back my 401K contributions and my stock investments to pay for diapers and daycare. I will never never ever regret the tradeoff because there are just too many things money cannot buy. Those little hugs I get at bedtime and sweet conversations we have during the day are all worth the stagnant net worth I've dealt with the past few years.

But, at the moment, the debts are manageable, and I'm ready to start thinking again about making some headway on that net worth number. Of course, the market conditions of the stock exchanges and real estate affect net worth. However, they are beyond my control. I am fairly comfortable with how my investments are allocated, and I just have to ride out the ebbs and flows of the markets. What I choose to save or invest from current cash flow IS in my control, and that is what I'll be tracking.

My goal for 2010 is to increase the dollar amount that I am actively adding to that net worth each month. That can be by paying down debt or by adding dollars from current income into financial assets. If I reinvest my stock dividends to purchase additional shares that is adding to the asset side. If I increase my emergency fund, that adds to the asset side. If I pay off a chunk of debt, it decreases the liabilities but increases net worth.

My goal for 2010 is to make sure that $15,000 of current annual cash flow goes directly to net worth. I am only including money that I have (or could have) direct access to. For example, mutual fund dividends inside an IRA that are reinvested will not count since I cannot access those earnings without triggering a taxable distribution. But I will include the stock dividends since I could easily opt out of the dividend reinvestment plans and receive checks each quarter.

I'm hoping I'll learn how to embed an Excel spreadsheet in my post someday. In the meantime, here are the categories I'll use to track this monthly:

Emergency Fund interest reinvested
Cash Additions to Emergency Fund
Rental E-fund interest reinvested
Cash Added to Rental E-fund
Less: Rental E-fund withdrawals
Stock dividends reinvested
Additions to stock purchase plans
Additions to IRAs/Roth IRAs

Principal paid-Primary Mtg.
Principal paid-HELOC
Principal paid-Chase Card #1
Principal paid-Chase Card #2
Principal paid-Bank VISA
Principal paid-Kroger card
Principal paid-Capital one card
Principal paid-Money Mkt. Loan


Here's to hoping that this time next year that last number will be $15,000!!!

Saturday, December 26, 2009

A Mental Bucket problem

I'm the first to admit that I have issues with my financial "buckets" or compartments. In my mind, there are many different buckets. I've already told you about the bucket of money given to me by my Dad.

Defining these buckets is not always a bad thing. When I've gotten distributions from employer pension plans, I've never had a problem rolling over 100% to an IRA because in my mind it was pension money. Therefore, my brain thinks it should always and forever remain pension money.

The problem I'm having now has resulted from a comment SS4BC made on this post. Mathematically, I know she's right about not paying extra on the Rental HELOC (4.99% for 15 years) while I still have credit card interest at much higher rates (ranging from 4.99% to 11.99%). Why does my mind make me want to use the rental income only for expenses that relate directly to the rental property?

I have an extra $205 in the rental "account" this month that I'll be sending to a savings account that was set up solely as an Emergency Fund for that property. My goal is to fully fund that account with 6 months of rental property expenses (including annual property taxes) plus the tenant deposit that I might have to return at the end of the lease. Right now, I'm about $1,500 shy of the goal so the $205 will help with that shortfall. But I'm already tormenting myself with the decision I'll have to make if that Emergency Fund ever reaches fully funded status.

Will I be able to actually use any extra rental income to pay off the credit card bills? I'm not sure, but I'd love to know if anyone else struggles with decisions that aren't mathematically correct but give you peace of mind.

Operation Restore Order & Kroger Credit Card update -Dec. '09

Once all the sleepyheads get up and mom has enough coffee in her bloodstream, Operation Restore Order (ORO) will commence. Meanwhile, part of ORO is running the final tallies on the Christmas budget. My prediction is that we spent every dime of our $1,260 budget. In spite of spending less on gifts, we overspent on the extras....postage for shipping, wrapping, and blowing our food budget for the time savings of take-out and pizza delivery. I don't think we'll see an increase in our credit card balances, but the jury is still out. I really want to get the final numbers crunched ASAP.

I did realize that I neglected to post the last update on the Kroger credit card. This is the one I'm continuing to use to pay for our groceries and gas. I'm still paying off the charges within a day or two of purchase so that by the end of the billing cycle, I've charged and paid at least the balance shown on the last statement. By doing this, I've avoided being charged any interest on the balance for a few months now. I was able to add $14.17 to our payments to bring the new balance down to $663.93.

Activity on the last statement:

Previous Balance $678.10
Payments/Credits -$1,117.88
Transactions $1,103.71
New Balance $663.93

Slowly, but surely, this balance is going down. And slow is just fine with me as long as I'm avoiding interest charges!

Wednesday, December 23, 2009

Primary Mortgage Update - Dec. '09

Not much time to post these days, but I can let you know that another $344.77 has been shaved off this loan. New balance is $253,613.51.

Saturday, December 19, 2009

Capital One Update - Dec. '09

More slow and steady progress on this small balance. I'm just so not inclined to pay extra on this one since it has that fixed 4.99% rate. $11.55 paid. New balance = $1,083.66.

Wednesday, December 16, 2009

This is when it gets scary!

Based on my past experience, the stars are lining up for me to blow the budget this month. There is so much to do in the next 8 days! There are teacher gifts to have ready in the next two days, other gifts to finish, a disaster of a house to clean before my parents arrive next Tuesday, wrapping, last bit of shopping, cards to write out and packages to get in the mail. And oh yeah...I have to work too!

This is where I am inclined to order pizza, pick up take-out, send my husband to the grocery store (that's always a big mistake!)... anything to save me a few minutes of time.

I did check accounts online this morning and there is still cash in the bank and I haven't missed any payments. That's all I can hope for today!

I'm just praying I come out on the other side relatively unscathed from the holiday hustle and bustle.

Monday, December 14, 2009

What I Want for My Birthday! is my birthday which would/could be easily forgotten, except for my kids. THEY are the ones that make a big deal out of it! And so I relish it. Actually, it is better than the alternative of NOT having a birthday!

But, it does get a middle-age mom to thinking especially when the years seem to fly by faster and faster. It makes you realize just how few years are left to get debts paid off and build up that retirement savings. Since I have such small children, you might be surprised to learn that this is #47 for me. Yes, I was a late bloomer in the becoming-a-mom department having my first at age 39 and the other at 42.

Anyway, I've decided that for the next BIG one (50), I'd really like to have those credit cards balances demolished. This seems so daunting. I really don't have the current cash flow to do it in three years. In my job, I could work massive amounts of overtime. However, my maternal instincts tell me that's not the best idea. I didn't have kids for them to have a mom who works all the time! But maybe I don't pay extra on the rental mortgage and send that extra $200 a month to the credit cards. Or maybe we sell the rental unit and pay the credit cards off with that equity. Or I might just hold out hope for massive amounts of extra snowflakes.

So I'm putting this out there. I might or might not make the goal. But wouldn't it be a wonderful birthday gift to start off my 50's with no debt except the mortgages! I've heard you have a better chance of reaching a goal if you put it in writing, so here it is! Check back in 3 years...and we'll see where it stands.

Trying to Win!

Dave Ramsey has been having some awesome giveaways this month! Today's (Day 15) giveaway is $5,000 cash!! I've already entered, but I'm guessing if you read this blog you could find a worthy place for an extra $5K! Go enter today, then check his site again tomorrow and the next day and every day until it's over!

Hmmm...which part of my past would I knock out with an extra $5,000? Definitely Chase Card #2. It's carrying the highest interest rate, and they've reduced my rewards program. This is certainly the highest target on my list.

Saturday, December 12, 2009

Do you have a Debt Free Goal?

When AJ at I Owe so Much posted about his debt free goal, it got me thinking. I know...that thinking thing is dangerous. But just what would I do with our budget if we didn't have those credit card payments?

Well, part of what is now allocated to debt would be directed to savings -- either IRAs or into stocks or even boosting the emergency fund.

But today I'm thinking how wonderful it would be to take some of that money to hire someone to clean my house twice a month. Working full-time and having two small children doesn't leave a whole lot of extra time to keep up with all the least not to the standards I aspire to. Being able to afford to pay someone to take these chores off my hands would give me more time to spend quality time with my family, pursue some hobbies of my own, and maybe even sleep. Wouldn't that be wonderful?

Sunday, December 6, 2009

Christmas Budget Update

There are 18 shopping days left, and I'm well on my way to being finished. This is very unusual for me, but I am reaping the benefits of shopping early.

I refuse to shop on Black Friday, but I've shopped before Thanksgiving and during the week after. I was able to go back and get price adjustments on a couple of things bought at ToysRUs which went on sale just days after I purchased them.

Kroger is running a special through the 13th on certain gift $100 worth, get $10 off your purchase. I also had a coupon for $5 off the purchase of 2 gift cards if you used your Kroger Mastercard. So this afternoon, during my grocery run, I picked up 2 $50 gift cards for Sears and Best Buy (for my father and husband, respectively) and they cost me $85. This is probably what I would have bought for them anyway! And I saved gas by not making another trip to the mall.

I also ran across a deal at for $60 of gift cards for $50. And I traded in $15.00 of E-rewards for Borders bucks. There was another $25 savings.

According to my spreadsheet, I've spent 55% of my Christmas budget. But I know I'm at least 75-80% done with the shopping. Now, if I can just keep the cost of those last minute stocking stuffers down and get all the handmade items on my list finished.

Items I still need to make:

Pajamas for both kids
a Password Journal for dd
a few sets of note cards for teachers, bus driver, etc.
some decorated candles (like these)
and some gift card holders like these

I've already decided that with the amount that I come in under budget, 50% is going to the debt and the 50% will be used at the After-Christmas sales for some updated Christmas decorations. We really need to replace some of the ratty-tatty things we've been using for years. Usually I work the day after Christmas, but with it falling on Saturday I should be able to find time to scoop up some bargains over the weekend.

Saturday, December 5, 2009

Rental Property Refinanced!

Remember when I talked about combining the loans on the rental property into one?

With the offer from my HELOC lender, I was able to accomplish the very same result without all the hassle of going through a refi.

I didn't have to worry about the stricter lending guidelines for investment property. I didn't have to prove that the property is producing monthly income. I didn't have to accept a higher interest rate that most investment properties come with. And the setup fee for the loan conversion was only $100 instead of $2-3K that would have been inevitable with a traditional refinance.

The major bulk of my mother-in-law's estate was distributed in mid-November. My husband and I agreed that we would use $38,739.46 of his distribution to pay down on the rental property loans.

So we used the $38,739.46 by sending $26,133.27 to pay off the First Mortgage and sent $12,606.19 to the HELOC.

Let me tell you, when I call Bank of America to check the balance, that was the sweetest automated message I ever heard when the computer said, "Your loan has been paid in full." Look at this pretty ticker now! *BIG SMILE*

And here is what the HELOC looks like after adding the $100 fee:

Then I had the HELOC lender convert $73,000 of the balance to a 4.99% fixed rate amortized over 180 months. The monthly payment will be approximately $577.00. The other option was to set it up on a 10 yr. loan with a payment of $773.92. My intention is to make monthly payments of $774 based on the 10-year amortization. The property will cash flow with the $774 payment assuming the only other expenses I have each month are association dues, insurance and real estate taxes. But I like the flexibility of having a lower payment if there are months that I am between tenants, have major repairs, etc.

I'm still not sure what direction we'll go in with this property. Depending on what our current tenants decide to do at the end of their lease and depending on real estate market recovery, we might decide to put it back up for sale. If we do, we haven't invested much into getting these new loan terms put in place.

If we keep it and are able to pay it off in 10 years, it would be a nice little source of college funding when my 2nd grader is looking at college tuition in the year 2020.

Either way, I am so happy with this loan. If I have to be in debt, at least I now know that the interest rate is fixed and the payment is affordable. Oh! and don't forget the $500 Visa gift card reward the HELOC lender is giving me in a month or two!

Wednesday, December 2, 2009

A few quick updates

Seems like life is running at warp speed, so I'm combining a few updates into one post. Nothing major here, just slow (but steady) progress towards these stinkin' balances!

$126 paid on Chase Card #1 - new balance $6,180.00

$87.22 paid on Bank Visa - new balance $3,392.99

$5.23 paid back to the Money Market Loan - new balance $4,647.98

I'm having a little happy dance, since this brings the credit card totals under $15,000 and over $1,000 less than when I started this journey!

Tuesday, December 1, 2009

The Forecast calls for Snowflakes!

Snowflakes in the PF world are those little bits of extra money you receive, then, purposely and deliberately, apply toward your debt. It's easy to fritter these away if you don't give them a name and a new home as soon as they are received. Here's an excellent primer if this is a new term to you.

Dave Ramsey also has a theory that when you start paying attention to your finances, you will be blessed with more to work with. I'm sure it has to do with the New Testament parable of the talents. Let's just say whether it's due to Biblical philosophy or whether I've just had a string of good luck, I'm expecting a BLIZZARD!! Either way, I'm genuinely thankful to God.

I've tried to make notes on my list of follow-up items a la David Allen's Getting Things Done, but I'm posting them here so you can see just what this forecast looks like. Some of it will probably not arrive for 45-60 days, so you have to keep me accountable to actually snowflake these to my debt and not let them melt away without making any real impact.

1. Door prize from a vendor at a professional conference I attended a couple of weeks ago - $50 American Express gift card -Received today 12/1/09.

2. Requested check on 11/30/09 from Opinion Outpost - $6.10

3. Rebate for using Paypal on a purchase from Best Buy in mid November - $20.00 into my Paypal account

4. Rewards earned on Chase Card #2 (need to redeem) - $59.51

5. Bonus from ING Direct for opening Electric Orange checking account on Black Friday - $121.00

6. Reward for converting HELOC into a fixed rate loan - $500.00 VISA gift card

If you've been adding in your head, this is $756.61 !!!

If I use my blizzard wisely, I can reduce the credit card debt by over 5%! I am SOOOO excited. Gotta run and dig out the snowboots and long johns!