Debt $ense

As promised, I’ve added some links to the sidebar, though more will be going up during the next few days. Within all the PF blogs I read, there are a few I eagerly check for the next post because I enjoy them so much. In no particular order:

Debt Hater was one of the first I found, partially because of her blog’s name. Her posts always make me think, whether they apply to my situation or not, and she has a great attitude toward killing her debt that’s contagious.

Boston Gal’s Open Wallet is another regular stop. As a former Bay Stater, I’m always amazed at how people can not only afford to live there, but do reasonably well, especially when they’re young and single. Watching Jane Dough’s progress not only gives me great tips to use in my own life, it reminds me how much easier I have it down here without the housing madness in metro Boston. If she can do it, so can I!

The Family CEO doesn’t apply as much to my situation, since I’m single, but I enjoy reading it and she has some good tips even for those not heading a household.

Young and Broke does a great job of finding information that pertains to the situation of what Suze Orman calls the “Young, Fabulous and Broke,” then adding her own take on it so it’s more than just a link farm.

There are two carnivals I want to highlight, but I don’t have the links available, so I’ll have to come back and edit this entry once I get to the computer where those are bookmarked. One is the Carnival of Debt Reduction, which will post tomorrow. I took a leap and submitted one of my posts from earlier this week to this edition, and I hope it gets in. The other is the Carnival of Personal Finance. They’re great collections of PF posts that have helped me find blogs I otherwise wouldn’t have seen.

I spent sometime at the library today reading David Bach’s “Smart Women Finish Rich.” There were a few sections I only skimmed, but overall I really enjoyed it. I had a pretty good idea what his “Latte Factor” was just from reading other PF blog posts mentioning it, but reading his explanation did make me more determined to cut unnecessary spending from my life.

The part that worked better for me was his values ladder, which was a useful exercise. I realized seeing new places and learning new things is at the top of my ladder, which explains why I’ve been thinking so much about traveling with like-minded friends during the last few years. Knowing that will help with my “Latte Factor” because I can now think “would I rather buy this or be that much closer to the train trip?” I think more often than not, I’ll be putting stuff back on the shelves.

Another part that I liked was writing down extremely specific goals for my financial future. I have a list of six that I’m going to print and tape to my bathroom mirror. I’m also going to tape it to the inside of my money holder so when I’m tempted to spend, I can be reminded of my goals. Just thinking about what I wanted and when I wanted it by was a useful exercise.

I ended up pushing a few goals back a few years once I started writing them out and doing the math, but I will revist them in July after my annual review. At that point, some work-related items should have shaken out and I’ll have a better sense of what the opportunities are there, so I can adjust accordingly. I also added a few goals I had never really thought about besides the vague dreams. Now they will happen, instead of remaining wisps of ideas.

… on getting the magic FICO score.

Last week, I went to the library one morning and read Suze Orman’s YF&B. (Yes, in one sitting. I’m a freakishly fast reader.) I also copied down the access code for her YF&B Web site. I didn’t really think it would work, but it did!

I filled out her action planner. The first recommendation she had was to continue contributing enough to my 401(k) to get my full company match. That was a no-brainer. Once I clicked that to indicate I was done, her second step was to find out my FICO score and improve on it.

The only other time I got my FICO score was about a year ago when I met with a mortgage counsultant at my bank to see what kind of shape I was in. At the time, my score was about 675. Not bad, but well below the magic 720.

I briefly thought about setting up an appointment to see her so I could again get the scores for free, but decided against it. Instead, I went to MyFICO and bought all three of mine. It’s normally $45, but I googled for promotion codes and found one for 20 percent off. So I actually paid about $36. I figured it was worth using some of the $68 I just deposited to see where I was, especially since I’m planning to call my credit card company Monday morning and ask them to lower my rate.

All three of my scores are within six points of 720! The average of the three scores is 717, hence the post title. And since the biggest ding they mention is my high credit card debt, I should be able to get above 720 in the next few months. I didn’t think I was anywhere near that point. Talk about a positive motivator!

Not only that, I’m much more confident about my chances with the CC company tomorrow. I’m close enough to that top bracket, and I have such a good payment history, that I’m sure they’ll knock my rate (now 12.9 percent) down. I was hoping for 7.99 percent, but now I’m beginning to think I might be able to do better, especially after hearing about other PF bloggers who have gotten it down further, even as low as 0 percent.

Normally I don’t like spending money that could go toward my CC, but for a lot of reasons, I think that $36 was money well spent. (Especially since a lower CC rate would probably cover the cost in a month or two.)

As my friend Susan would say, “Go me!”

OK, so WordPress is not showing my links, even though I have everything set up correctly. For now, use the previous post, and hopefully I’ll have this figured out soon. My apologies.

As you’ve probably noticed, I don’t have any links to the wonderful PF blogs I’ve been reading during the last several weeks. Either Sunday or Monday I’ll be adding those, so if you’re not already a PF blog junkie, you’ll get ample exposure to some of regular stops. I’ll also probably post about the handful I particularly enjoy.
If you’re a PF blogger who wants to be added, drop me a line at colorguard AT mac DOT com with a link to your blog so I can check it out.

My local used book store doesn’t buy books, except for store credit, so I’m planning on sorting and boxing the best of the ones I want to get rid of, then take them up to the store in my hometown in August and sell them there. I figure I might get enough to offset the gas for the trip, which will be a nice plus.

I’m also tracking community yard sales in the area to find one with a good date. I’m sorting my stuff into keep, sell and donate piles so I’ll have boxes ready when I do find a good one. Since I can’t have a yard sale at my apartment, this is a good way for me to convert some of my clutter into cash to help pay off my CC. Getting a table spot costs $5-$15 depending on the group organizing it, and I should be able to clear more than that with all the stuff I have to get rid of.

The donate stuff will go to Goodwill, but I won’t bother getting a receipt. I don’t have enough deductions to itemize, so I can’t get any tax break for it.

Best of all, when I’m done, my apartment won’t seem nearly so crowded!

I deposited $67 in the bank today, but I’m not going to send off an extra CC payment just yet. I have a root canal scheduled for Monday and I don’t know what the payment schedule for that will be like, so I want a bit of a cushion above my pinch-point account, just to be on the safe side.

Also, I was scheduled to go on vacation later this month, but had forgotten about a prior commitment. I was going to go in late June - and still have those days scheduled for vacation at work - but instead of moving the reservation, I canceled it. That means I’ll get a $160 credit on my CC this week, since I wasn’t really thinking and used that instead of my debit card. I might decide to go in June, or I might wait until the fall when the leaves are turning. Either way, if I can’t pay from my checking account, I won’t go.

So that’s $227 “extra” this week toward my CC. I also have $20 stashed for running sneakers, and $5 for yarn for a project I want to work on later this year over and above that amount. It’s amazing how much money you can find when you start looking for it.

After my healthy eating class the other day, I sat down to plan out my shopping for this paycheck. One of the things they stressed was planning meals so you eat healthy foods rather than be so stressed you grab take-out. So we talked about picking two meals that could stretch multiple days, plus one or two meals a week that are completely different for variety.

As a single person, almost any recipe means I’ve got six or eight meals if I stick with correct portion sizes. So I looked at the sales flyers and my new healthy recipes and decided on chicken cacciatore; pasta with turkey sausage, peppers, mushrooms, spinach and tomatoes; and enough vegetables to mix with grilled chicken strips in whole wheat wraps for lunches.

As you can tell, chicken was on sale. I got the three-pound bags of frozen boneless, skinless tenderloins for $5.99, each with 11 servings of chicken. The cacciatore recipe serves six, but since it doesn’t include pasta as part of it, I’m dividing it into 12 servings. The pasta also will make the sausage dish stretch for 12 servings. And I have enough wrap fixings to last me two weeks. By the time I’m done cooking Monday, I’ll have two balanced meals a day for the next two weeks (and a very full freezer).

I also picked up a flavored pork tenderloin on sale for $6.99, which had an instant savings $2 coupon on the outside, knocking my cost down to $4.99. The canned tomatoes for the two dishes were in the dented bin, so I got the big can for 79 cents. Frozen spinach was part of Kroger’s 10 for $10 sale, so I got two pounds for $2. Same with cucumbers. Pre-sliced portobello mushrooms were on sale for $2.50 and peppers for $1.29.

Oh yes, and I got a loaf of 100 percent whole wheat bread for $2 and generic egg beaters for $1.50 per pack, with each pack equal to six eggs. Those are in the freezer because I have real eggs in the refrigerator.

My total cost for all that food? $45.45. In addition to being fairly healthy, it was pretty inexpensive when you figure I’ll get at least three weeks of good meals out of all that food, possibly more. Some of it, like the eggs and spinach, are just good staples I can keep on hand for future meals. That should mean savings continue down the line. And I already have some food at home (like bulk oatmeal for breakfast) that will take up some meals.

If I can continue this trend, that will cut my grocery budget in half for the rest of this year, plus improve my health because the food is better for me. Sounds like a win-win situation!

I’m still on the lookout for more ways to trim my budget. My next big expense is my auto/renter’s insurance payment in late July. I’m headed to my insurance agent Monday to ask them to increase my deductible to $1,000 for everything on the car. I had upped it to $500 last year, but at this point, any body damage less than $500 wouldn’t be worth fixing, so increasing to $1,000 makes more sense. It should also save me some money.I don’t know if they’ll refund any of the money on this policy, but at least it will be on record for next year’s policy.

I’m also going to call my credit card company and ask them to cut my interest rate. I’m almost at the point where I would only need one, maybe two balance transfers to get my debt paid off. But that’s a hassle, and prone to sneaky tricks. I would rather call the company I’ve had a card with since college and convince them to make me a deal.

Likewise, I’m going to call Adelphia and see if I can convince them to cut my internet rate down to something more manageable. I can think of better uses for $50 a month than internet, especially with the availability of free wi-fi in town. If they can make me a good deal, I’ll keep it, at least for now. If not, I’ll drop it.

My CC interest is running about $105 a month at 12.9 percent. If I can get it down under 8 percent, that should save me about $40 a month. I’m hoping to pick up either $25 a month on internet or $50 (from dropping it). That’s another $16-$23 a week toward my card.

I should also be able to add at least that much to my weekly payments in July after my raise, since I expect it will be comparable to the ones I’ve gotten the last few years. That will get my monthly payments up in the $700-$800 range. (For comparison, that’s about 45 percent of my take-home pay.) That’s $4,500 for the second half of the year. As you saw in my last post, that will make a substantial inroad into my CC debt.

That’s my April net worth. My assets include an average of $550 in checking throughout the month (according to my bank), $7,800 in my 401(k) and a car worth about $1,200.

My debts include about $7,300 in student loans and $8,312 in CC debt.

May goals: I want to knock the CC down to $7,600, and think the 401(k) will be up about $8,000 by the end of May. That, plus a student loan payment, should get my net worth close to -$5,000.

For comparison, when I put my information into NetworthIQ at the beginning of April, I was at about -$6,900. Some of the increase is because of my 401(k), but a lot is from paying down debt!