Debty Betty

I've moved!

noreply@blogger.com (Missy) — Sun, 06 Apr 2008 18:57:00 +0000

I've moved to a new site! Please update your bookmarks and please visit me at:

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http://finessingmyfinancials.com/

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Commuting Costs Savings Bonanza

noreply@blogger.com (Missy) — Fri, 04 Jan 2008 00:45:00 +0000

I'm so glad that I can walk to work now. DC's Metro system is upping their fares. For those of you who don't know, Metro's fares are based on your length of trip. So if you're only traveling one or two stops, your trip will be significantly cheaper than someone traveling from the suburbs who is on the metro for 10 stops.

When I first moved to DC, I spent $4.20 per day on the metro (seven stops), plus an additional $20 per month for a bus ticket to take me to the metro. All told, my commuting costs were about $110.

Then I moved to a new apartment, eliminating the need for a bus (savings of $20), and reducing my round trip metro fare from $4.20 per day to $3.00 per day (5 stops). Total monthly commuting costs were about $65.

Then my company relocated to a new office only a few blocks away (yes, when I moved, I knew where the company's new offices were going to be, so I planned accordingly). Now, my commuting costs are zilch, plus I get the added benefit of some mandatory exercise!

Given this metro fare hike, if I still lived in my original apartment, I'd be paying a roundtrip fare of $5.10, plus the bus fare! That would be almost $130 per month. If my office had not relocated, and I was commuting to my old offices, my fare would have increased from $3.00 round trip to $3.70, or an average monthly cost of $75.

Those "incremental" fare increases sure do add up!

Although my new apartment rent is $25 more per month than my old one (and I have to pay electric, which I did not in my first apartment, running about $30 per month), those costs are more than offset by my commuting savings.

What do you all pay to commute?

My first Roth!

noreply@blogger.com (Missy) — Tue, 11 Dec 2007 15:28:00 +0000

I opened a Roth IRA last month! After always reading about these on other blogs, I figured I should take the plunge. Retirement savings is about the only savings I'm truly responsible about, contributing 6% of my paycheck to my 401k, and getting the full 50% match (up to 3% of my income). My contributions actually used to be at 10%, but I've reduced it to beef up my take home pay and tackle my debt some more.

Well, I initially had a Roth IRA as a "savings goal," and was trying to save up $3000, which is about the minimum starting balance for a Roth IRA at most brokerages. Well, then I started reading that some brokerage firms waive that minimum starting investment if you agree to invest a minimum amount each month. Vanguard had a reasonable minimum monthly investment was $50, but that was only if you could purchase their STAR fund for a minimum of $1000. So I opted to go with T. Rowe Price. Their minimum investment per month is $50, and although they charge a $10 per year fee until your Roth IRA reaches $5000, to me it was the reasonable choice and truly did not require a minimum starting balance.

It was easy peasy! In fact, the most time consuming part was calling my parents to ask them for the SSN so that I could list them as my beneficiaries.

I'm 26, and I selected the Retirement 2040 fund. Since I don't have much (if any) knowledge about investing, this was a good enough choice for me. I just entered in my target retirement age and this Fund (hopefully) does all the work for me. Right now, more than 90% of the fund sits in stocks, since I am younger and can afford to take on more risk.

I know I probably won't be able to afford to max out my Roth IRA for at least the next few years, but I'm still glad that I'm socking some of it away.

desperate times call for desperate measures

noreply@blogger.com (Missy) — Tue, 27 Nov 2007 23:14:00 +0000

I cannot get my "dining out" spending down. Every month, I'm spending an average of $300 going out to eat, mostly lunchtime meals at work. This is in addition to a unreasonably high grocery budget for a single girl. How do I get burned on both my grocery AND dining out budget? Well, I decide that I'm going to cook food, so I buy the groceries, and maybe actually cook a meal or two and eat the leftovers for the week, but usually when I bring it as my lunch to work, I don't feel like eating it and just go grab a sandwich or some fast food at one of the MANY places around my office to eat. Bad for the wallet, bad for the waistline.

Well, this morning I was on my way out my apartment door to work, and I forgot my wallet, so I went back in to grab it. Then as I was walking to work (yes, work is about a 10-12 minute walk for me), I was thinking that I should have left my wallet at home! Let's think about it. What do I really need my wallet for? If there was ever an emergency while I was at work that required some money, all I'd need to do is run home and get my wallet. However, my apartment is just far enough away that I won't want to walk all the way home to get my wallet just so that I can go grab some tacos from Chipotle. I mean, if there was ever an emergency or instance that required me to have cash or a credit card in less than ten minutes, then I would probably have bigger concerns! Plus, if I ever had an unexpected work-related expense, like having to take a taxi to a last-minute meeting, I can just ask for some petty cash.

This wouldn't have to be a long-term solution, just long enough for me to break the habit. I have found that sometimes I go and get something to eat even when I'm not hungry, but just bored with what I'm doing at work. These are some of the conversations I've had with myself

Ugh, I can't even think straight I've been working on this for so long. I'm going to go grab some ice cream from Cold Stone ($6.00)
Man, I should've eaten some breakfast this morning. I'll go grab a bagel and hot chocolate from Panera ($4.50)
I'm not really in the mood for that chicken that I brought to work today, Quizno's sounds MUCH better ($7.00)
I have a sweet tooth, I'm going to go grab a cookie from Potbelly's ($1.05)

As you can see, this all adds up. It wreaks havoc on my budget, and I have the numbers to prove it to myself, yet I still can't break the habit. I think I might start leaving my wallet at home and just bringing my driver's license.

Thoughts?

some upcoming indulgences

noreply@blogger.com (Missy) — Tue, 20 Nov 2007 22:58:00 +0000

Well, it's Christmas time, and just like every time this year, I have a nice fat bonus burning a hole in my pocket ($2100, $3100, and $3600 in 2005, 2006, and 2007, respectively). I can never quite understand where all this money goes by January (well, about 40% goes to taxes), but this year it'll probably be all gone, but at least I know where it'll go, since this is the first year I've developed any sort of budget for myself.

First, I'm desperate for a new computer. I purchased my current one nearly five years ago, and there's only 2 gigs of space left on the hard drive. Heck, my iPod hard drive is bigger than my entire computer hard drive. I've resorted to external hard drives and online storage, but this can only go on for so long. Photographs from a weekend road trip can add up to 2 gigs for me! I need a new computer. And my decision has been to purchase a MacBook laptop. Do I know I can get a PC for probably $500 less? Yes. It's the perfect time to buy a new Mac Book since it was just updated November 1. Based on everything I've read, Macs fit my needs much more than a PC does, so I'm completely confident with my decision.

HOWEVER, I'm totally going to game the system on this one. Discover card is having a promotion that for every $200 you put on your discover card at participating malls, you get a $20 discover gift card. Well, guess where I'm going to buy my Mac? Yep, an Apple store at a participating mall! $1100 in receipts will give me $100 in discover gift cards. Hell yeah baby! (Don't worry, I'll pay my Discover bill the MOMENT I get home).

Next, I want a pair of Ugg boots. Now, this isn't totally unreasonable. It gets cold here in DC, and I now walk to work, and will probably have to trek through unshoveled sidewalks to get there in the upcoming months. My boots in the past haven't cut it when it was just a quick walk to the bus stop. Uggs are famous for keeping footsies nice and toasty and suggest not even wearing socks so that you get the full warming benefit of the sheepskin. So I'm thinking about buying a pair ... despite their $163 price tag. Oh fiscal irresponsibility, how I curse thee.

So where does this leave me? Well, I'll probably see $2000 or less of my $3600 bonus after taxes (grrrr). My current Christmas gift budget is $1093. Add to that about $1170 (after taxes) for a new MacBook. Well, that leaves me $263 in the hole after my bonus. Ugh, how do I always do this to myself?

Man, if I had saved every bonus I've ever received, I'd be approaching $10,000!

Saving Goals - October Update

noreply@blogger.com (Missy) — Tue, 20 Nov 2007 00:14:00 +0000

Okay, let's check in on how I did for Savings goals for October.

Savings was up 22% this month. Not too shabby. I collected a nice $49/day per diem from a recent three week-long business trip. Since I ate nowhere near $49 a day worth of food, I profited nicely.
I've pretty much completely reallocated most of my savings for a new computer. Mine is about dead, and I want to purchase a new MacBook next week. So long savings! Although my bonus should help with that.
I love photography, and I am resisting the urge to purchase a Digital SLR, so I'm just going to get an updated version of what I have. I currently own a Canon G5 (purchased in 2003), and it's outdated, and the battery is on the fritz and will only stay charged for a few hours. I want an updated version of this series, so I'm saving up for the Canon G9. As soon as it drops below $400 on Amazon, I'll get it
I'll actually be able to delete the Roth IRA savings goal for this month, because I opened one up at T Rowe Price with no minimum balance requirements (with an agreement to contribute at least $50 per month)
Nothing in the vacation contribution fund, since I only just went on vacation in September
Although my emergency savings is fully funded, I still have yet to contribute to my long term savings goal of $7000 (approximately three months net income). I really have to get cracking on this.

I have a LONG way to go!

an outlandish Christmas gift budget

noreply@blogger.com (Missy) — Thu, 15 Nov 2007 23:59:00 +0000

My Christmas budget this year seems brutal. Or maybe it's just the fact that it's the first year I've ever developed a list that actually includes prices! (Perish the Thought!)

I have a small family. My parents, an older sister who is married and has a little boy, and my grandma. We don't buy anything for aunts, uncles, or cousins, and I reserve gifts for only my two or three closest friends, plus some baked goodies for work. So please please, someone tell me how my Christmas gift list adds up to more than $1000! And that doesn't even include shopping for myself! $300 of this is my share for a new computer for my parents that my sister and I are splitting. However, I have been reconsidering this. I plan on getting a new computer soon, and I could do a reinstall and give them my old one, especially since they really only use it for the internet. So my sister and I could cut our budget there. Plus, I don't think I can get the hearing impaired doorbell for my grandma, these aren't as prevalent and easy as I anticipated they would be.

My spreadsheet also includes notes to maximize my credit card cash back awards (don't worry, I will be paying off these balances every week!)

Does anyone have any other ideas for cutting back the ol' Christmas budget?

**UPDATE. I forgot about adding Brother-in-Law to my budget. Grrr. Add about 30 bucks

Where to go for free legal advice?

noreply@blogger.com (Missy) — Wed, 14 Nov 2007 23:35:00 +0000

I moved into a new apartment in July, which I love. It's nicer than my old one, I can walk to work, and it is only steps off a Metro stop for those days I don't want to drive on the weekends. It's an old building, probably 1940-ish, with only nine units. Last week, there was a note on the building door from the landlord saying that he would be entering apartments to "flush the pipes" and turn on the radiator heat. Only one problem. My radiators never came on.

So I called him when I got home from work to let him know that my apartment was very cold, and he said he'd send someone out to look at it the next day. I wanted it fixed that night, but I was willing to concede. The next day, got home from work, and only the radiator in my bathroom was working. The one my living/sleeping area was still not turning on. I called him again, he didn't believe me, and said to give it some time, that it would probably work by later that night.

I spent a very cold night in my apartment and called him first thing in the morning to let him know it was 55 degrees in my apartment over night. He still didn't believe me, and at this point, I was becoming very irate, saying that it had been 36 hours since my first request to fix my heat, and my apartment was still as cold as can be. His response, "Well, if I don't get it working, I'll give you your security deposit back and you can find a new apartment."

WHAT??

I was furious, hung up the phone, and started looking up my legal rights as a tenant when the landlord won't fix the heat. I have a 12 month lease, and I did not want to find a new apartment and get my security deposit back, I just wanted heat in my apartment! I didn't think it was that outrageous of a request. According to my lease, which I read word-for-word, my landlord agreed to provide the heat. And according to the Virginia Residential Landlord Tenant Act, he has to fix broken heat, and if he doesn't, I have to submit my request in writing via certified letter, along with other steps. According to the Act, if he doesn't fix it within 21 days, I could move within 30 days and break my lease without legal penalty. But the issue is that I don't want to move, I just wanted my heat.

Now, I'm no legal professional, and clearly there was only so much I could discern from reading the VRLTA and my lease and some other advice articles, so where do you all go when you need some general legal advice like this? Do you have a friend who is an attorney, or do you have your own actual attorney? Apparently I could have contacted my county's code enforcement office for advice, and they would have contacted the landlord, but do I really want to cause so much trouble?

Well, my heat is working now, and the temperature is raised in my apartment (along with my blood pressure), but this landlord is a real prick, very unlike my old one. I hope nothing like this comes up in the future.

old person finances for a youngster

noreply@blogger.com (Missy) — Mon, 12 Nov 2007 23:27:00 +0000

My maternal grandparents come from the generation that distrusts banks and the stock market. This is especially interesting considering that my grandparents are fairly wealthy, a product of both frugality and inherited family wealth. So what happens when wealthy people don't trust banks or investments? They hide their money, in cash, everywhere they can think of. Every Christmas my grandmother gives me $500 cash, and they are all the "old" $20 and $50 bills. Who knows how long those have been sitting around her house.

Well, a few months ago, my grandfather passed away fairly suddenly. Although obviously not something anyone was thinking of at the time, my grandfather had his own "hiding places" for cash, different than my grandmother. And, for whatever reason, they never told each other where their hiding places were. So, after getting over the initial shock of his death, my grandmother has spent the last several months scouring the house for his hidden cash. I'm not sure how much he might have hidden, but I'm guessing it's considerable.

Although I feel terrible for thinking this, shouldn't my mom ask my grandmother where her hiding places are? My grandmother is in her upper 80s, and although in decent health, we should all be realistic and reasonable. No one should have the added worry of searching someone's house for cash after a family member passes away. My mom is an only child, so it's not like this would strain sibling relationships either. Long before my grandfather passed away, my mom used to say sometimes that if anything ever happened to my grandparents at the same time, like a car accident, we would have to tear their house apart. So why won't she take the added step of just asking about it and put everyone's mind at ease?

So this got me thinking that, in this day and age of online banking, passwords, and security questions, my money (and debt) is almost the equivalent of being hidden in unknown hiding spaces around the house. Although it's not pleasant to think about, if something happened to me, how would my parents know how to access my accounts? Frankly, I think the only money they wouldn't have trouble accessing is my 401k balance, because my mom and dad are listed as my beneficiaries of my 401k.

So, what should I do about that? I don't have a will, and I don't really think I need one since my net worth is currently at $-26,000, of that about $10,000 are assets. However, for those of you who do have wills, does it include information like that? Like account numbers, passwords, etc.? One thing I was thinking of though, was that I should open a safe deposit box. They're fairly inexpensive (about $15 per month) for a small one. I've been thinking about getting one anyway, to keep information in it like my renters insurance policy, birth certificate, and other important documents. However, one item I could include in the safety deposit box would be a thumb drive with a simple word document or excel spreadsheet, listing every online account that I have and its password and security questions. Then I could list my parents as a party authorized to access my safety deposit box.

Wow, this is a lot of morbidity for a Monday! I'm only in my mid 20's, but, like I said above, I should be realistic and reasonable. I wouldn't want my family to have the added worry of tracking down this type of stuff, just like I feel terrible for my grandmother trying to track down my grandpa's hidden cash.

Anyone have any thoughts?

it's annual bonus time

noreply@blogger.com (Missy) — Fri, 09 Nov 2007 23:14:00 +0000

It's annual review and bonus season at work, and I got some good news on Tuesday.

First, my annual bonus will be $3600. While that's a good amount that I'm very thankful for, I am slightly disappointed. My bonus last year was $3100, when I was at a lower position in the company. So I've spent the entire last year at my new, promoted position, billed a LOT more hours than I did the previous year, but my bonus only went up $500. I know it's all based on revenue and profits which obviously can change year-to-year, so I just have to roll with it, but I am a little disappointed.

Second, I've received a 9% pay increase from $45,000/year to $49,000/year. This, in addition to moving to a new apartment that has completely eliminated my $80/month commuting costs (I now walk to work), should give me a significant increase in my net paycheck. (The reason why my commuting costs affected my take home pay was because I used public transportation, the costs of which were deducted directly from my paycheck, tax free, much like a flexible spending account).

So all of this is good news. While I am tempted to move my 401k contributions from 6% to 10%, am going to keep it at 6% for the time being and use the extra net pay to pay down my credit card debt. My company matches 50% of my contributions, up to 3% of my income, so 6% is the minimum I have to contribute to get the full match. However, if I don't curb my spending habits, I will up those contributions in a heartbeat. If it's not in my paycheck, I can't spend it!

Any tips on how not to increase my expenditures with my new increase in income?

open enrollment and FSAs

noreply@blogger.com (Missy) — Wed, 07 Nov 2007 23:15:00 +0000

I've been reading a lot on other financial blogs about open enrollment season. I've never taken advantage of my company's Flexible Spending Account, but I am seriously considering doing it this year. Although I have few medical expenses, I figure the more tax breaks, the better! Based on 2007 expenses and insurance costs, here is the breakdown of my expenses, and I think an FSA will be worth it.

About $350 year on prescriptions

$80 for a three month supply of one regular, daily medication
$20 for an occasional generic antibiotic if I'm sick
$20 for an occasional Rx to calm me before long plane rides

About $50-$75 per year on doctor visit copays

$20 copay for my annual physical with my primary care physician, plus other visits if I'm sick
$30 copy for the lovely annual trip to the gynecologist (also $30 for other "specialists" visits, i.e., doctors who aren't my PCP)

About $50 in deductibles

$50 dental insurance deductible, then most of my other dental work like cleanings and fillings, are covered.

So my annual minimum health-related expenses are $420
$320 for my regular, everyday Rx
$20 PCP physical
$30 Gynecologist visit
$50 dental deductible.
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$420 minimum health related expenses

Now, it's been more than two years since my last eye exam and new glasses. I'm also running low on disposable contacts, which I wear when I go to the gym, or swimming on vacation, or to special events (I'm SO blind without glasses or contacts). While it is VERY tempting to contribute several thousand dollars to an FSA to pay for LASIK surgery, I figure I shouldn't be taking on any large expenses like that until I've paid down my debts considerably. But maybe next year! (*fingers crossed*)

Also, just as a note, for my daily, regular prescription, I use my the mail order pharmacy service offered by my insurance. Rather than it costing $40/month from the store pharmacy, I basically get one month free by ordering a three month supply at one time from the mail order pharmacy, paying only $80 for a three month supply, and actually saving me $160 per year)

For this upcoming year, I should definitely get an eye exam. The last time I went for an exam in 2005, it cost me $60, so let's say that it'll cost me $75 this year. My glasses, including lenses and frames, were $374. HOWEVER, I like my current frames so much, I might just see if they can give me new lenses and reuse the frames ... the frames were probably $175 of the total cost. Does anyone know if they'll do that? And I know contacts that wearing contacts exclusively is an option, and I did that from age 12-25, but they were really starting to irritate my eyes since I stare at a computer screen all day, which is why I switched to glasses about two years ago.

So what am I looking at for 2008 FSA contributions?
$350 - Average Rx expenses
$70 - Doctor visit copays
$50 - Dental deductible
$75 - Eye exam
$250 - Glasses and contacts (conservative estimate)
$400 - Glasses and contacts (liberal estimate)
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$795 total contributions (conservative)
$945 total contributions (liberal)

So does anyone have any thoughts on how I should work this? Should I err on the side of a liberal contribution or a conservative contribution? I know that if I don't use the money, I lose it, so I want to estimate this right. But again, I realize that if I did contribute too much, I can use the account to purchase over-the-counter medicines like advil and claritin. How do you guys handle your contributions?

Where has it all gone?

noreply@blogger.com (Missy) — Wed, 07 Nov 2007 01:57:00 +0000

Where did it all go?

I wish I knew. $15,000 of "bad" debt. Living paycheck to paycheck. And what do I have to show for it? Not much!

I live in a fairly crappy apartment, with cheap furniture, a lot of hand-me-down items from my family, and not an overly nice wardrobe. I don't have a shoe obsession or DVD collection, I don't have any kids, I have no expensive medical problems. All of this lends the question, WHERE DID MY MONEY GO!? Where is my $15,000 worth of STUFF?

Now, of course I know this money didn't just disappear. I have traveled extensively. During my semester abroad in college, I put nearly $3500 on my first ever credit card. But that's still a far cry from $15,000! Until recently, I still traveled without much thought, putting plane tickets, hotel costs, and car rental reservations on my credit cards without ever paying it off. But still ... $15,000? I guess it all adds up. Some groceries and gas when my checking account was empty, a plane ticket here, some Christmas presents there. Yep, it definitely all adds up.

I think one of my next projects will be to go through all my old credit card receipts and do a line-by-line analysis of wtf happened to my finances. Sounds like a blast.

But an interesting learning experience nonetheless. Has anyone else done something like this?

for prosper lenders

noreply@blogger.com (Missy) — Sun, 04 Nov 2007 17:11:00 +0000

Although I'm a Prosper Borrower, it was fun to read Lazy Man and Money's article about the recent changes for Prosper Lenders. One day (*sigh) when I'm all done paying off my debt, I'd like to become a lender at prosper, and it's nice to see how much they try to simplify things. I've browsed around the Prosper lending section and the Prosper lending messageboards out of curiosity, and it seems like if you do it right, you can get nice returns on your money.

October Results

noreply@blogger.com (Missy) — Fri, 02 Nov 2007 22:24:00 +0000

I've been keeping my "financial portrait" spreadsheet up-to-date since June. I use google docs spreadsheet, and I love it. Here's the October update. Assets up, debt up (ugh), and overall networth up. Oh, if only debt being "up" was a good thing like assets and net worth! Another addition to my spreadsheet this month was three new credit cards (rewards cards) to use when I have to travel for work. Also new is the addition of a "laundry quarters" row (ganked idea from Madame X's My Open Wallet net worth statements), since I moved into a new apartment and no longer have my own washer and dryer (but at least it's in the building).

More analysis (also using google spreadsheets) forthcoming, including 401k performance, savings goals, credit score updates, and budget results.

a balance transfer dilemma

noreply@blogger.com (Missy) — Thu, 01 Nov 2007 22:29:00 +0000

In my previous post I mentioned that I received a Discover card that has a balance transfer rate of 0% until August 2008. (I also have another card with a 0% balance transfer rate for 12 months). Both cards have $3000 limits. Since they are both rewards (cash back) cards, I want to reserve at least one of them for my expenses when I have to travel for my job, so I can reap some benefits from being away from home for sometimes a month at a time.

I currently have a credit card that has a $9887 balance at a 9.5% interest rate, and that is the only card carrying a balance.

Now for my dilemma.

I like only having to make one credit card payment per month. In addition to the interest rate reduction, that was a major reason for consolidating my other credit cards with a prosper.com loan. But I could transfer, say, $2500 of that $9887 to one of my 0% balance transfer offers. Of course that makes financial sense, but it doesn't make much sense to my morale.

But in the case of transferring $2500 to one of the cards, I'd have to make two separate payments, and look at two high balances on two separate cards. I know it may sound silly, but I prefer to see one balance of $9887 instead of one $7387 and one $2500. Plus, I'd be contributing LESS to the 9.5% interest card since I'd have to divert some of that payment to the $2500 balance on the 0% card. Am I making any sense?

So I decided to figure it out mathematically.

First, if I made no balance transfers, and continued to make $250 monthly payments to a card with a $9887 balance and 9.5% interest rate. Based on the calculations, I'd pay $850.91 in interest over the course of 12 months.

Next, if I made a $2500 balance transfer to a 0% rate card, and had to decrease my payment on my 9.5% interest card to $150/month, this is what it would look like. Basically I'd pay about $665.81 in interest over the course of 12 months.

In the end, over the course of 12 months, I'd save $185.10 in interest by transferring $2500 to a 0% card. Do you think it's worth it?

Now, if I did the made the choice that made true financial sense, and took advantage of BOTH balance transfer offers ($2500 each on two separate 0% cards), I'd save $407 over the course of a year. Again, do you think it's worth it? And, since they're both cash back cards, I'd have both of the cash back cards tied up and wouldn't be able to use them to get the cash back benefits when I have to travel for work. Not my goal at all! I'd also have to deal with making multiple payments to multiple credit card companies.

Right now, I'm leaning towards NOT taking advantage of the balance transfer offers. I think I'd rather pay down my interest-bearing card more, and then hope for a credit limit increase on one of my other cards with a 0% balance transfer offer (I'm so jealous of Tricia at Blogging Away Debt who now has ALL her debt at 0%) . Hopefully I can get such a good deal not too long from now!

off the credit card blacklist!

noreply@blogger.com (Missy) — Mon, 29 Oct 2007 22:45:00 +0000

I think I may have mentioned this in earlier posts, but I travel quite extensively for work, sometimes gone for two or three weeks at a time, sometimes just a day. Well, because I (for the most part) live paycheck to paycheck and all my credit cards were, until recently, nearly maxed out, I always had to request cash advances from work to cover my expenses. Now, while this is no big deal to request a cash advance from my company, I was always looked upon like some sort of pariah. Why?

POINTS AND MORE POINTS. CASH BACK AWARDS. AIRLINE MILES. OTHER AWARDS.

Everytime I would request a cash advance, or my team members would find about that I was requesting an advance (sometimes upward of $4000 for a long trip), their eyes would bug out and say, "WHAT? Just put it on your credit card to get points! If you get a cash advance, you won't get any points or rewards. Put it on your card and then pay it off after you get your expense check back!"

These people are blissfully unaware of my credit card and debt woes.

Well, the truth is I had tried on several occasions to apply for some sort of rewards credit card so that I could see some benefit to all my business expenses, but I was always rejected. The reason given was always "credit utilization too high."

So my credit score increased nearly 20 points after I consolidated two high interest credit cards with my prosper.com loan. I also moved into a new apartment, and didn't have to worry about the negative impact applying for new credit would have on my credit score, and potentially not pass a landlord's credit check.

I found out in August that I was going on a three week business trip between September-October, so I decided to apply for American Express Blue Cash (after hearing the great reviews at Free Money Finance, cardratings.com and other places) so I could get some rewards from my business expenses. Rejected. Nothing, nada. I was crushed.

Well, that same day I decided to apply for a different cash rewards card from a major bank. I didn't get approved at first, saying "extra verification was required" or something like that. A few weeks later I got a letter in the mail asking me for proof of my address, such as a copy of a utility bill. I assume that because I had just recently moved, my credit report addresses had not yet caught up with the address I provided on my application. I hurried and sent them a copy of my electric bill, but never got a response before my trip.

Fast forward three weeks. I'm on my business trip. No cash rewards card, no new credit card to collect points for. So I had to request another cash advance from my company. Then all of a sudden I get an e-mail from the credit monitoring service I use saying "credit report alert, new account." The rewards card that I had applied for had opened my new cash rewards credit card account! Of course I was disappointed because I wasn't able to use it on my long, nearly $5000 trip, I was happy just to finally get one!

Once I got back, I decided to apply for another one, in the hopes that I'd get a good 0% balance transfer rate on a card. My current credit card has a rate of 9.5%. And while that's not as high as the 31% and 19% credit cards I consolidated with my prosper loan, it's still 9.5% on a nearly $10,000 balance, so that's pretty substantial.

So I applied for another cash rewards card. Approved! 0% balance transfer rate (with a fee).

Feeling my confidence, I used the "credit analyzer" that's provided with the credit monitoring service I use, to see how my score would change if I applied for one more card. It said that my score would drop two points if I applied for a new card and opened an account with a $2000 limit. But if I applied for a new card and the application was rejected, my score would drop nine points!

Since I travel a certain airline a lot, I wanted to get one of their credit cards because it's a very simple redemption process, but I didn't like the idea of an annual fee. So I talked to the finance people at my company and they said that they would cover my annual fee as a business expense. When I was booking my airline ticket to visit my family over Christmas, I applied (and got a $20 credit for applying), and was approved! And in return, I got several bonus points (plenty for a free ticket).

So anyway, I'm pretty happy where I stand now. I won't be applying for any more credit for at least another year so it won't hurt my credit score even more. I now have two cash rewards cards to cover my work expenses (and one to potentially use for a low balance transfer rate), and another card to help me get free tickets, and don't have to pay the annual fee!

I'm off the credit card blacklist of continually getting rejected! I'll let you know how this all affects my credit score.

my prosper.com borrowing experience

noreply@blogger.com (Missy) — Sat, 29 Sep 2007 02:23:00 +0000

I mentioned in my previous post that back in July, I consolidated two of my high interest credit cards with a prosper.com loan. I had been wanting to take steps to consolidate some of my debt, but A) I’m repeatedly rejected when I apply for credit cards given my the fact that I was using nearly 100% of my available credit limit (as the credit bureaus put it so diplomatically), and B) I was hesitant to still try and apply for a credit card given the high chance that I would be rejected, since applying for new credit lowers your score. The primary reason I was hesitant to lower my score even more was because I was apartment hunting and I was afraid that I wouldn’t be able to get a new apartment because of my credit report.

Also, just to clarify, at the time, my credit score ranged from 660-680, depending on the reporting agency.

Break.

I got a new apartment (the landlord didn’t even run a credit check), and I figured I’d apply for a low-interest card again in hopes of consolidating my high interest debt. Then I remembered prosper.com

After I signed the lease to my new apartment and knew I could deal with having my credit score lowered due to new credit applications, I applied for a loan on prosper.com. It was fascinating! Within minutes I had three bids of $50 each on my $6001 loan request. I was asking for a 17% interest rate, and in the end, it ended up getting bid down to 13.2%. Although I’m not certain what the lenders thought when they saw my profile, my status as a potential borrower was somewhat attractive. My debt utilization rate was high (102% at the time), but my debt to income ratio was fairly low (16%), and I make 100% of my debt payments on time. So the lenders probably saw me as a fairly easy way to make a 17% return on their money, knowing that I always make my payments on time.

My loan was funded within 5 days (out of it’s seven day posting life). Therefore, over the next two days, lenders were able to “bid down” my interest rate. It was awesome to watch!

Anyway, I was somewhat concerned that there would be issues with the prosper.com identity verification process after my loan was funded, mainly because I was in the process of changing addresses, and I thought that might look sketchy to them. But they never even called to verify my identify (I’ve heard that they only do that with some of the applicants). Within a few days, I had $5900 or so in my bank account (prosper takes out a service fee) and I paid off my two high interest credit cards!

So now, my credit scores went up more than 20 points because my debt utilization rate is down! And I intend to keep it that way!

prosper rocks

i’m back

noreply@blogger.com (Missy) — Thu, 27 Sep 2007 00:30:00 +0000

I stopped writing for a good while because I became weary that someone I know might read my blog and may be able to discern my identity, something that does not appeal to me at all given that i’m pretty ashamed of my debt and financial situation. but i’ve realized that writing gives me accountability and a good benchmark of my progress. so here are some of the things that have happened over the last several months:

I consolidated my debt with a Prosper loan. It was fun, easy, and I’m at a considerably lower interest rate than I was before. I consolidated a 31.8% interest card and a ~19% interest card with a 13% loan. Not too shabby. Another post on my prosper experience later. I kept the debt that I had on another card for 8.5% interest
I’ve completely given up on “out of the box” financial management/tracking solutions like quicken, mvelopes, YNAB, Wesabe, etc. etc. Nothing is more configurable, flexible, and tells me everything I want to know than a good ‘ole spreadsheet. I’ve been keeping track of my finances using a spreadsheet that I built using Google Docs Spreadsheet! I’ve been working with it since June and I find that I need to tweak it every month to fit my needs (this month is no different), but it is SO nice to be able to configure something the way I want it, rather than having to adapt to something I don’t particularly care for. I’ll show some screenshots of my sheets in the future.
I still need to work on curbing my spending. Luckily I have not put much on my credit cards, but it is still too much if I actually want to get myself out of this hole any time soon.
I moved! My new apartment is $25 more per month than where I lived before, but I am saving $80 per month in commuting costs! Plus, since I moved from MD to VA, I get an additional $50 per month in take home pay thanks to lower state income taxes. Hooray!
My 401k contributions are holding steady at 6% (the amount needed to get my company’s 50% match of a maximum of 3% of my income). I’ve been severely tempted to cut back on my contributions to get more take home pay, but I’ve resisted the urge.
To the dismay, and I know disapproval of nearly everyone in the PF world, I started an investment account on Sharebuilder. But not to worry too much. I only put in a few dollars a month (had a coupon code for a free six month trial with no fees), and it’s more for the learning experience of wanting to know how investments work. Unfortunately I opened the account in mid-July, right at the stock market’s 14,000 peak, so the value went down considerably. However, it is beginning to recover. I guess that buy low, sell high adage won’t work the other way around

More later. I’m glad to be back!

overcoming a weakness

noreply@blogger.com (Missy) — Wed, 21 Mar 2007 01:30:00 +0000

One of my main weaknesses has always been using a credit card for things that a credit card has to be used for, or at least should be used for, and then not paying off that balance. For instance, most car rental places will only let you rent with a credit card instead of a debit. Most experts recommend that you purchase airline tickets with credit cards as well, in case the airline goes bankrupt, it is easier to get a refund from a credit card than a debit card (I learned this the hard way when a paid for a Southeast Airlines ticket using a debit card about two years ago. They went bankrupt before my trip, and it took two months to get a refund. My friend I was traveling with had used her credit card to purchase her ticket, and it was refunded in a week).

Anyway

After I buy a plane ticket using a credit card, or rent a car using a credit card (I have done both this month), I would always let that charge just sit there on my credit card, and never pay anything over my regular payment. It’s starting to become clear why my credit card principals never went down.

Last week I rented a car to drive to Philadelphia for a family get together. Yes, I have a car, but it’s an old clunker that I don’t like driving very far. To me, it’s well worth the $25+gas to rent a car. I also bought a $98 Southwest plane ticket to go home over Memorial Day for my nephew’s first birthday. I put both purchases on my credit card.

However, I am proud to say that immediately after putting those charges on my credit card, I went to the credit card’s website and PAID THE CHARGES IN FULL!!! I’m so proud of myself.

I couldn’t stand the thought of my credit card balances not going down as much as the should because I actually had to use them this month.

Do you all know of any other purchases that require a credit card, or that should be purchased using a credit card?

Income Tax Return “Bonus”

noreply@blogger.com (Missy) — Fri, 09 Mar 2007 03:26:00 +0000

Well, both my state and Federal income tax returns have been deposited into my checking account, totaling about $1200.

You know what? It’s not even burning a hole in my pocket.

In face, I’m actually EXCITED to put that towards my debt and savings. I’m going to put $550 on my bank credit card (to finally get it under its limit of $10,000), and an extra $100 on my total rip off card (so that it doesn’t keep going back over its $3000 limit after monthly finance charges). This is going to be a HUGE help in getting rid of my over limit fees. And just to clarify, these payments are going to be in addition to my usual monthly payments.

The rest I’m going to put in my high yield savings account.

I know that some people may say that I should put ALL of that money towards my debt, but I have two goals here. One to pay down my debt while also increasing my savings. I’ve heard it all before, that the interest I get in savings is not nearly worth what I would be saving by lowering my credit balances and hence finance charges. However, it’s not about getting interest on my savings. It’s about simply HAVING a savings balance to fall back on in case of an emergency.

What is everyone else doing with their income tax returns?

February Budget Results

noreply@blogger.com (Missy) — Fri, 02 Mar 2007 18:58:00 +0000

I wanted to post my February budget results (using Pearbudget) before I leave for vacation this afternoon. Once again, it’s bad. However, I am very proud that I made ALL my “overpayments” on my credit cards for this month, totaling more than $555. And, I didn’t charge ANYTHING to any of my credit cards! woohoo. I didn’t get any manicures or go on shopping sprees at sephora or MAC, and didn’t buy any clothes this month.

However, the budget results speak for themselves. I still need to exercise more self control. I eat out SO much, but I don’t really get all that much satisfaction from it. Sure I enjoy eating out with my friends, but I can just order soup when I’m out and save a lot of money. I spent $339 eating out this month. I’d much rather have $339 in clothes if I’m going to spend that much! Another thing I realized is that, although I like to blame a lot of my eating out habits on my friends always inviting me to dinner, that really isn’t where I spend the bulk of my money. The bulk of my money is spent on eating out at lunch at work. I’m usually bored with what I bring to work to eat (like a frozen dinner … and I always buy them on sale) and just end up going out instead. This month, I’m really going to focus my efforts on my “eating out” budget. Maybe I should spend more on groceries and make better meals to take with me to work, that way I’m not always so tempted to eat out at lunch.

Alas, the results:

Entertainment for the month was high, because I stupidly bought $55 tickets to go see a Norah Jones concert (which I talked about in this post) and also spent $24 to go see a not-so-great aquarium in Baltimore (which I talked about in the same post). Misc costs were high, because I used TurboTax to file both my Federal and State income tax returns (about $45 for both), and had to pay $53 (charged every 6 months) to renew my PO Box, which I never included as an irregular expense in Pearbudget (I use a PO Box because I live in a section of someone’s house, and I don’t want my mail to get “lost.” I’d rather spend the money on a PO Box than risk getting a missed bill or my identity stolen.) I also don’t want to add that as an irregular expense now, because I anticipate moving soon, and I probably won’t have to renew my PO Box again, as long as I move into an apartment by myself.

Family vacay coming up

noreply@blogger.com (Missy) — Sun, 25 Feb 2007 20:55:00 +0000

On Friday I leave for a five day family vacation to Disneyland. The upside of going on a family vacation is that is has mostly been paid for by my family … including the airfare and the disney tickets, and probably meals and such. I’m not anticipating that this will be an ultra-expensive vacation since I don’t like to buy things from gift shops or anything like that.

However, I’m a nervous flyer, so I always end up spending an ungodly amount of money at the airport bars to help me relax (I tried an anxiety medicine prescribed by my doctor, but it was no help at all … cheaper, but no help) . A lot of times I’ll get suckered into buying magazines too, even though I probably brought books and other magazines along with me. I’ll be very cognizant of that this time around.

On another note, February budget results from my Pearbudget are forthcoming. Dining out was still bad, but not nearly as bad as January. Also, I’ve only spent about $30 this month on cosmetics and it was all stuff I actually needed! (i.e., products that I use on a daily basis and ran out of). I did not buy one new cosmetic this month. Although it was VERY tempting after I found out that MAC released a new line this month.

In March, I really want to work on cutting down on eating out. It’s a total drain on my budget.

my moving dilemma

noreply@blogger.com (Missy) — Thu, 22 Feb 2007 03:52:00 +0000

So I’m looking to move to a new apartment. The company that I work for is relocating this summer, and if I stayed in my current apartment it would be about a 80 minute commute each way.

Not fun.

There are a host of other reasons why I should move anyway which I won’t go into here, but include convenience as well as some spiders and little furry creatures that also like to call my cozy little apartment home.

My rent right now is $849 and includes ALL utilities (including internet). However, I spend $100 per month on commuting costs ($20 for a monthly bus pass and $80 for the metro — the metro fare is actually tax-free though and deducted directly from my paycheck).

I found a one bedroom apartment that is $875 per month plus utilities and a studio apartment that is $795 plus utilities. Both are right off the metro and is more centrally located to the city than what I am right now (and incidentally are within walking distance of where my office will be relocating to this summer).

Here’s the dilemma: I want the space of a one bedroom apartment, but I’m not sure if that’s the fiscally responsible choice. I’d save $80 per month living in the studio but arguably I’d pay the same in utilities whether I lived in a one bedroom or a studio, lessening that difference even more. I won’t have to use my car as much since it’s within walking distance of the metro so that’ll save me gas. I’ll also save on metro fare and I won’t have to buy a monthly bus pass anymore.

I’m afraid that paying more on rent than what I do right now will really affect my budget and how much I can pay on my debts. On the other hand, it might not affect it as much as I think, considering how much I’ll save on commuting costs and gas. Plus, I’m so tired of living in a small apartment. It feels so cluttered and stressful, I’d really like to move up to a one-bedroom.

Anyway, I’m looking to move as soon as possible, so I’ll be sure to keep you posted on my decisions.

i need to stop suggesting ideas

noreply@blogger.com (Missy) — Fri, 16 Feb 2007 05:29:00 +0000

Two ideas that I suggested to friends within the last month came back to bite me in the behind.

1) About a month ago I saw that Norah Jones was coming to DC for a concert and I LOVE her music. So I suggested to some friends that we go see her. Well, today one of them e-mailed all of us and said, “hey, the tix go on sale today!” And rather than saying no, I agreed to go. Afterall, i was the one to suggest it. $55. I know I’ll enjoy it, but I really shouldn’t have. MUST … LEARN … TO SAY NO!

2) Then a few weeks back I also suggested to a friend that we should go to Baltimore for the day over President’s Day Weekend. So now we’re going, and he really wants to go to the Baltimore Aquarium, which has a $24 entrance fee. I searched online for coupons and couldn’t find anything. So he wants to do all this non-free stuff in Baltimore on Sunday, and I don’t want to say no, because … afterall, I was the one to suggest it!

I caught myself doing this again today, when I was about to suggest to some friends that we either go to Atlantic City or Niagara Falls in the spring.

Once again, no wonder I’m broke. I’m constantly suggesting (and doing) these types of things that I can’t afford! UGGHHH

2 steps forward, 1 step back

noreply@blogger.com (Missy) — Thu, 15 Feb 2007 03:14:00 +0000

Well, I guess that’s better than 3 steps backwards!

I missed my bus this evening on my way home, leaving me 30 minutes to stand out in the cold and wait for the next one. I decided to pass my time by picking up some dinner at the Chipotle near the bus stop. It was a completely mindless decision, I walked there completely unaware of my goal of spending less money and getting out of debt. I walked inside the Chipotle and it occurred to me, I shouldn’t be here, I shouldn’t spend money on dinner when I have food at home.

I continued to stand in line.

Then I got out of line!!! And walked to the bookstore to browse while I waited for the bus to come! I was so happy with my decision not to buy dinner. I love Chipotle, but my typical order is usually around $9.00 (chicken tacos, chips and guac, and a soda).

My other good decision today was to cancel my Netflix subscription. I had downgraded it to the one-at-a-time package for $9.99 a month, but then figured every little bit helps and canceled it altogether. So I have taken advantage of Netflix’s “Hold” option, which saves your account for 90 days, but does not charge you. I figure that if I reach my goal for the next three months of paying $555 per month on credit card debt, that I will reward myself by reinstating my Netflix subscription, or potentially exploring Blockbuster’s options to see if they have better deals.

On the downside, I did go for a quick trip to Caribou coffee for a Chai Tea Latte today. A coworker stopped by my desk and said “I’m going to Caribou, do you want to come?” And without even thinking, I jumped and grabbed my purse and said “Sure!”

Today’s lessons? I need to be much more conscious of my decisions. Spending money and eating out regularly have become such habits, that they need to be broken. Breaking habits is not easy. I know this because I used to be 40 pounds heavier and lost a lot of weight two years ago. It took time to adjust to my new weight-losing lifestyle, but I succeeded, just as I will succeed in paying off my debt!