Things are looking pretty good, especially since summer is often when my budget gets shot to pieces.
I lowered my overall debt by $1075.14--it would have been $50 more if I hadn't incurred a $50 balance transfer fee when I moved one of my credit cards to a "zero interest for nine months" card. Other than that, I did not increase any other balances.
My 401(k) funds are headed up, and now stand at $142,108--still not at the $174,000+ they were in October, 2007, but increasing nicely and at least they are NOT at the $89,654 they fell to in March, 2009.
I have until August 18th to come up with the car repair monies for Firestone--it looks more or less feasible at this point, so I've got my fingers crossed.
Friday, July 31, 2009
Tuesday, July 28, 2009
About That Emergency Fund
When I whined about my $500+ car repair a few posts back, Living Almost Large left a comment, asking: "Don't you have any taxable investment savings? Even in stocks? Is it all in retirement account?"
Good question.
Not-so-good answer.
No, I don't have any taxable investment savings. I don't have any savings at all, except for the ever-changing but never-quite-$1000 emergency fund that Dave Ramsey says we all should have.
While people like Jennifer at "Finding Financial Peace" are well on their way to accumulating three to six months of expenses, others of us are still struggling with Murphy-visitations every time we get near to our first $1000.
JD at "Get Rich Slowly" explores with his readers the issue of what happens after you use your emergency savings. Check out the comments to his post because that's where all the action is. Some readers have three to six months stored away; others are more like Grace.
And just why does Grace have no savings?
16% of my pre-tax income goes into my retirement accounts. When one comes late to the retirement party, cash and time are of the essence. But then there are debts that need to be paid off, and daily life to be lived. When all of those are factored in, not much is left for non-retirement savings.
Right now, I am determined to pay off the car repairs prior to incurring any interest charges (I put the expense onto my dormant Firestone account). I may succeed in doing that during August, but it will mean that my emergency savings must wait another few months before it gets back up to $1000. And that is only if Murphy stays the heck away from my budget!
Good question.
Not-so-good answer.
No, I don't have any taxable investment savings. I don't have any savings at all, except for the ever-changing but never-quite-$1000 emergency fund that Dave Ramsey says we all should have.
While people like Jennifer at "Finding Financial Peace" are well on their way to accumulating three to six months of expenses, others of us are still struggling with Murphy-visitations every time we get near to our first $1000.
JD at "Get Rich Slowly" explores with his readers the issue of what happens after you use your emergency savings. Check out the comments to his post because that's where all the action is. Some readers have three to six months stored away; others are more like Grace.
And just why does Grace have no savings?
16% of my pre-tax income goes into my retirement accounts. When one comes late to the retirement party, cash and time are of the essence. But then there are debts that need to be paid off, and daily life to be lived. When all of those are factored in, not much is left for non-retirement savings.
Right now, I am determined to pay off the car repairs prior to incurring any interest charges (I put the expense onto my dormant Firestone account). I may succeed in doing that during August, but it will mean that my emergency savings must wait another few months before it gets back up to $1000. And that is only if Murphy stays the heck away from my budget!
Monday, July 27, 2009
Getting A Grip on Retirement Planning
You KNOW I'm gonna sympathize with Rose Bloom who was profiled recently by the Los Angeles Times.
Rose is 53 years old, a single parent to two adult children, who is just now realizing that she has to save more than the $12,000+ she currently has in retirement accounts. She plans to work forever, but she has diabetes and heart issues. (Now do you see why Grace can relate?)
The good news is that she has a decent salary (almost $95,000 a year). Even better, she will have a pension plus Social Security when she retires. But the bad news is that she lives in California. That means her job may be in jeopardy, she can't afford a home, and the cost of living is high.
Rose is just three years older than I was when I finally buckled down to saving for retirement. I'm a bit blown away by the financial planner's numbers--somehow I just don't see her saving $500,000 over the next ten to fifteen years nor am I sure that her savings will earn a 7.5% average.
BUT, that pension is going to make up for a whole lot of savings mistakes.
Rose is 53 years old, a single parent to two adult children, who is just now realizing that she has to save more than the $12,000+ she currently has in retirement accounts. She plans to work forever, but she has diabetes and heart issues. (Now do you see why Grace can relate?)
The good news is that she has a decent salary (almost $95,000 a year). Even better, she will have a pension plus Social Security when she retires. But the bad news is that she lives in California. That means her job may be in jeopardy, she can't afford a home, and the cost of living is high.
Rose is just three years older than I was when I finally buckled down to saving for retirement. I'm a bit blown away by the financial planner's numbers--somehow I just don't see her saving $500,000 over the next ten to fifteen years nor am I sure that her savings will earn a 7.5% average.
BUT, that pension is going to make up for a whole lot of savings mistakes.
Tuesday, July 21, 2009
Earlier Than You Think
Emily Brandon, at US News & World Report's Planning To Retire has a scary post about 'earlier than planned' retirements.
My goal has always been to retire on my 69th birthday. The view from here makes my plan look feasible, but, according to Brandon, almost half of workers wind up retiring earlier than they planned to. All but 10% do so involuntarily.
Job loss, age discrimination, family duties (such as caring for a spouse or one's parents) or a personal health crisis make a mockery of well-laid plans. Only 3% of potential retirees INTEND to retire in their fifties, yet 18% do so. 21% want to work into their seventies, but only 5% will still be employed when they reach their seventh decade.
I, of course, fall into the group of seniors who haven't saved enough to have the retirement they want (modest though that might be) if they retire earlier (or even "on time" at age 65), so continued employment is a must.
It gives me pause to contemplate all the things that can go wrong between now and age 69.
My goal has always been to retire on my 69th birthday. The view from here makes my plan look feasible, but, according to Brandon, almost half of workers wind up retiring earlier than they planned to. All but 10% do so involuntarily.
Job loss, age discrimination, family duties (such as caring for a spouse or one's parents) or a personal health crisis make a mockery of well-laid plans. Only 3% of potential retirees INTEND to retire in their fifties, yet 18% do so. 21% want to work into their seventies, but only 5% will still be employed when they reach their seventh decade.
I, of course, fall into the group of seniors who haven't saved enough to have the retirement they want (modest though that might be) if they retire earlier (or even "on time" at age 65), so continued employment is a must.
It gives me pause to contemplate all the things that can go wrong between now and age 69.
Monday, July 20, 2009
Grace v. B of A--This Time, Grace Wins One
As I've pointed out in earlier posts, I've had a Bank of America checking account since the late sixties when I headed off to college. (Actually, I had an account with a different bank--several different banks, come to think of it--but ultimately, as one bank absorbed another, I found myself with Bank of America.)
My current account is called Senior Advantage and comes with free checks, no monthly service costs and no minimum balances.
On Saturday, I get a letter from Bank of America assuring me that my account will be better than ever, and oh, by the way, they were now going to assess a $15 a month charge unless I kept at least $1000 as a minimum balance.
Excuuuuse me?
If I had an extra $1000 laying around, it would be in my emergency fund, NOT my checking account! But it's a moot point since I do NOT have $1000 to put in.
I called B of A, enraged at their action, and even more enraged that they would be directing these charges at their senior citizen clients. But before I could even get out an angry sputter, the extremely nice lady at customer service agreed with me that it was outrageous and said she could solve the problem.
Did I have paychecks? Umm--Yes!
Could I do a direct deposit? Umm--I already DO have my payroll checks deposited directly into my checking account.
"Well, then," said the extremely nice lady, "We'll just sign you up for an Access Account,--same bank account number, same checks, same everything--and you'll be on your way."
Which I was, within five minutes of calling customer service.
Now, why the bank couldn't have just done this on their own, since I've had my checks deposited directly for the past nineteen years, I don't know. Why they couldn't have put these options in their letter, I don't know. Why they want or need to start charging for the senior accounts, I don't know.
Then again, why I'm still with Bank of America? I don't know.
Maybe because of the extremely nice lady at customer service.
My current account is called Senior Advantage and comes with free checks, no monthly service costs and no minimum balances.
On Saturday, I get a letter from Bank of America assuring me that my account will be better than ever, and oh, by the way, they were now going to assess a $15 a month charge unless I kept at least $1000 as a minimum balance.
Excuuuuse me?
If I had an extra $1000 laying around, it would be in my emergency fund, NOT my checking account! But it's a moot point since I do NOT have $1000 to put in.
I called B of A, enraged at their action, and even more enraged that they would be directing these charges at their senior citizen clients. But before I could even get out an angry sputter, the extremely nice lady at customer service agreed with me that it was outrageous and said she could solve the problem.
Did I have paychecks? Umm--Yes!
Could I do a direct deposit? Umm--I already DO have my payroll checks deposited directly into my checking account.
"Well, then," said the extremely nice lady, "We'll just sign you up for an Access Account,--same bank account number, same checks, same everything--and you'll be on your way."
Which I was, within five minutes of calling customer service.
Now, why the bank couldn't have just done this on their own, since I've had my checks deposited directly for the past nineteen years, I don't know. Why they couldn't have put these options in their letter, I don't know. Why they want or need to start charging for the senior accounts, I don't know.
Then again, why I'm still with Bank of America? I don't know.
Maybe because of the extremely nice lady at customer service.
Thursday, July 16, 2009
Grace vs. Car (And the Car Wins!)
The problem with living close to the financial edge is that it doesn't take much to push one right over the financial cliff!
OK, so it's not like I have a pending foreclosure or I've lost my job or anything truly horrible.
It's my 1999 Dodge Caravan with a mere 162,000 + miles under its belt. Or, to be more specific, it's the minivan's water pump which leaks and must be replaced. Don't ask me--all I know is that the temperature gauge whammed up to HOT, stayed there, and caused the alarm to keep buzzing. Not daring to look under the hood, I immediately took it to the mechanics.
The mechanics assure me that it is nothing that $512 can't fix.
I do have to have a vehicle. And I can't purchase anything else in adequate condition for the $512 it will take to make the repairs.
BUT--according to Kelly Blue Book, the whole dang car is only worth $1650! Can I just have a moment to rant about how much I DO NOT want to pay $512 for a car that is already worth so little?
Then there's the issue of my currently non-existant emergency fund. IF I had that $1000 that both Dave Ramsey and I believe I should have, no problem. Unfortunately, said emergency has been depleted by EMERGENCIES over the past couple of months and has exactly $137 in it!
SO, onto my Firestone Card goes the charge--I'll apply the emergency fund to the balance and hope to pay off the card in full by the payment due date.
But I will NOT be happy about it!
OK, so it's not like I have a pending foreclosure or I've lost my job or anything truly horrible.
It's my 1999 Dodge Caravan with a mere 162,000 + miles under its belt. Or, to be more specific, it's the minivan's water pump which leaks and must be replaced. Don't ask me--all I know is that the temperature gauge whammed up to HOT, stayed there, and caused the alarm to keep buzzing. Not daring to look under the hood, I immediately took it to the mechanics.
The mechanics assure me that it is nothing that $512 can't fix.
I do have to have a vehicle. And I can't purchase anything else in adequate condition for the $512 it will take to make the repairs.
BUT--according to Kelly Blue Book, the whole dang car is only worth $1650! Can I just have a moment to rant about how much I DO NOT want to pay $512 for a car that is already worth so little?
Then there's the issue of my currently non-existant emergency fund. IF I had that $1000 that both Dave Ramsey and I believe I should have, no problem. Unfortunately, said emergency has been depleted by EMERGENCIES over the past couple of months and has exactly $137 in it!
SO, onto my Firestone Card goes the charge--I'll apply the emergency fund to the balance and hope to pay off the card in full by the payment due date.
But I will NOT be happy about it!
Monday, July 13, 2009
Carnival of Personal Finance Link
My last post on the credit card shuffle is included in The 213th Carnival of Persona Finance hosted by Man vs. Debt .
Lots of interesting posts, not to mention some nice shots of New Zealand.
Lots of interesting posts, not to mention some nice shots of New Zealand.
Sunday, July 12, 2009
Shuffling the Cards
I have a brand new credit card.
It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.
I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.
I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!
The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.
I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.
Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.
The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.
Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.
My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.
I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.
What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!
It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.
I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.
I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!
The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.
I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.
Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.
The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.
Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.
My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.
I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.
What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!
Sunday, July 5, 2009
Gone the Way of the Dodo?
On Friday, having gotten the day off for the July 4th weekend, I hauled four boxes of books to my local bookstore, intent upon creating a sizeable snowflake for my credit card debt.
I did generate $54, so that was good.
But Goodwill wound up with a full box of donations because the bookstore wasn't interested in a lot of the books I thought would sell well. For the record, historical non-fiction and craft books were immediately taken. The Patricia Cornwall and John Sandford hardcover mysteries? Not so much.
When I asked why, I was told that these are considered 'leisure reading.'
Apparently, there's not a strong market for 'leisure reading' in hardcover.
Really? People don't want their fun reading in anything but paperback? I get that paperbacks lighter and easier to carry. And cheaper to buy in the first place.
But personally, only a hardcover feels like a real book to me.
I say this in spite of the fact that I hang out with science fiction writers who often find their work appearing in paperback originals. I say this in spite of the fact that I now read some books on my Kindle, so they "exist" only in electronic form.
Funny that I brought up science fiction. I read it, I write it, and I seldom see books or mention of books in it--in future worlds, books are on computers or directly inserted into the brain or injected by weird-looking devices. But whatever their form, they aren't the good old hardcover books that I know and love.
I dunno.
Paperbacks may be cheap. And electronic books cheaper still.
But I like hardcovers. If, one day, they disappear in favor of books in alternate forms, I'm gonna miss 'em.
I did generate $54, so that was good.
But Goodwill wound up with a full box of donations because the bookstore wasn't interested in a lot of the books I thought would sell well. For the record, historical non-fiction and craft books were immediately taken. The Patricia Cornwall and John Sandford hardcover mysteries? Not so much.
When I asked why, I was told that these are considered 'leisure reading.'
Apparently, there's not a strong market for 'leisure reading' in hardcover.
Really? People don't want their fun reading in anything but paperback? I get that paperbacks lighter and easier to carry. And cheaper to buy in the first place.
But personally, only a hardcover feels like a real book to me.
I say this in spite of the fact that I hang out with science fiction writers who often find their work appearing in paperback originals. I say this in spite of the fact that I now read some books on my Kindle, so they "exist" only in electronic form.
Funny that I brought up science fiction. I read it, I write it, and I seldom see books or mention of books in it--in future worlds, books are on computers or directly inserted into the brain or injected by weird-looking devices. But whatever their form, they aren't the good old hardcover books that I know and love.
I dunno.
Paperbacks may be cheap. And electronic books cheaper still.
But I like hardcovers. If, one day, they disappear in favor of books in alternate forms, I'm gonna miss 'em.
Subscribe to:
Posts (Atom)
