Watching My Debt

NEW YORK - MAY 20:  In this photo illustration...
Image by Getty Images via @daylife

I’m so excited.  Yesterday, I transferred the final payment for my personal line of credit.  This LOC was originally my overdraft protection LOC that had worked it’s way up to $6000 at 21%.    Today, it is non-existent.

We started to pay down debt on April 15th, 2009.   Since that time, we have paid off  $22, 370.70 of our debt.   That isn’t $22,370.00 in payments, that is a $22k reduction in our total debt!   By my calculations, we have made approximately $28,000 in payments to get that reduction.  Next week, we cross the line for 25% of debt eliminated.  This is a good day.

Over the last 14 months, we’ve settled into much more responsible spending and saving habits.   It no longer feels like we’re sacrificing our lifestyle.   We’ve built up a useful emergency fund and set aside money for some things that we know are coming, like braces for my son.   In 6 weeks, we are taking our first debt-less vacation.

Now, we start on the long slog to the end.   We have 3 debts left to pay:  Our last car loan(ever!),  one credit card which was an accumulation of pretending we were making progress on our debt by combining many debts onto one card, and finally, our mortgage.    The car will be paid by the end of the year.  When summer childcare expenses are over, we’ll be making triple payments until it is gone.    After that, we have a long, slow couple of years paying off the credit card.

It hasn’t always been easy, but right now, it feels good to look at the progress we’ve made.

Update:  This post has been included in the Carnival of Debt Reduction.

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Automatic Oopsie

When I found myself doing an abrupt unemployment tour this month,  the first thing I did was dig into my budget.  I did it so I could see how long it would be before our finances got scary and to see what could be eliminated.

English: A Netflix envelope picture taken by B...

English: A Netflix envelope picture taken by BlueMint. (Photo credit: Wikipedia)

Gah!  So much could be eliminated.

There were things that I’d set up on automatic payments, added to my budget, then ignored.

There were things that I’d signed up for and used, but didn’t get as much enjoyment out of any more.

Example Number 1:  Netflix

We love Netflix.  It gets used every single day.  But the DVDs often sit on the kitchen counter for a month before we get around to watching them.  We clearly don’t need the DVD plan any more.

Example Number 2: Software Subscription

I use some software to track the Google rank of several of my websites.  There is an addon that makes the software work much better.  The addon costs $20 per quarter.   The problem is that I’m not looking at the rankings of these sites any more.  Some of the sites have been shut down, or I’m no longer involved with the clients.  That makes the paid addon a total waste.  I canceled it and told the tracking software to run slower so it would give Google a fit.

Example Number 3: Extra Domains

Hello, my name is Jason and I’m a domain addict.  Seriously, for a while, I was buying domains every time I had a good idea for a website.  Some of them were developed, and some were sketched out and put on hold.   I also bought domains to help with the search engine rankings of the developed websites.   I topped out at about 120 domains.  All of them were on auto-renew.   I’ve been letting them expire, but some didn’t have the auto-renew settings changed, so they (surprise!) renewed automatically.

These are just three examples of several years of development, exploration, and automation of my complicated financial life, and they add up to more than $100 a month essentially wasted.

Here’s what I want you to do.

Right now.

Not “tomorrow”, not “when you get around to it”.

Now.

Pull up your bank statement, your Paypal account and your credit card statements.

Is there anything in there that’s happening every month that you forgot about, don’t need, or don’t even want?

Ax that crap.  Kill it with fire.  Nuke it from orbit. Stop wasting your money.

I’d be willing to bet 99% of everyone has something they are paying for every month that they don’t even want, but either forgot was happening or have just let inertia keep paying the bills.

Be the 1%.

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Single Income Family

Effective next week, we are officially a single-income family.

If you can count all of my side-hustles as “single income”.

This week, my wife did the paperwork for her final week of state-sponsored unemployment.  She also applied for the federal extension, but that’s not automatic.

In a nutshell, this reduces our monthly income by $1340.

What does that mean for us?

1.  Our truck, which I was hoping to have paid off by March(3 months ago), still has about 7 regular-sized payments left.  Instead of making double payments, we’re now making the schedule amount.  The reason for the payoff delay is another post entirely.  Savings: $400.  In a pinch, we could stop making payments for almost 3 years due to how much we’ve already paid.

2.  The riding lessons I use to spoil my girls are cut in half.  Instead of weekly lessons, we’re going bi-weekly.  Savings: $100.  In a pinch, this could go away completely.

3.  We had a conversation that included, “Honey, when I complain that you bought more than our weekly budget of food in one trip, I’m not being a dick.  Here’s how much money we have.”  That conversation appears to have been productive.

4.  No vacation this year.  We let our spending jump a couple of times this year, so last week, I dropped most of our vacation fund to make up for it.  The expense of being matron-of-honor at a wedding will be an upcoming post, too.

[Edit]

5.  My wife is working at our daycare provider 2 days per week in exchange for daycare discounts.    Financially, this isn’t perfect, but it cuts the cost and gets the girls out of the house.  I work from home and have a hard time keeping them out of the office.

6.  We are considering long-term stay-at-home status for my wife.

[End Edit]

Right now, our budget says we make $100 more than we spend.  That includes all of our savings goals, and setting aside money for some luxuries like our Halloween party.   We’re not hurting–which makes me happy–but we do have to watch our expenses in a way that has just become mandatory.

I can’t tell you how happy I am to have renters.  Between our roommate here and the renters in the house we fixed up last year, we’re adding about $1000 to our income.   Rent is keeping us cash-flow positive.

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Can I Sell My Lottery Payments for a Lump Sum?

I took this photograph of a lottery document I own

I took this photograph of a lottery document I own (Photo credit: Wikipedia)

This is a guest post.

Winning the lottery is everyone’s dream. You hit the lotto, cash in your ticket and kiss all your troubles goodbye, right? Actually, that might not be true. Just look at the number of lottery winners who’ve ended up worse off than they were before they hit it big. There are several problems here. One problem is that people often spend their money unwisely, without learning how to manage it properly. Lottery annuity payments were designed to help with this. However, those annuity payments might not actually be enough to make a significant difference in your life. If that’s the case, you might be wondering if you can sell your payments for a lump sum. The answer is, yes, you can. But there’s a catch. Actually, there are a couple of catches.

Buyers Matter

First, let’s talk about buyers. They’re the ones who’ll be paying you a lump sum for your lottery payments. Now, you can’t expect a buyer to offer the full amount you’re owed from the lottery, but you should be able to expect a significant percentage of the winnings. That’s not the case with many buyers. They recognize your desperation and have no qualms about taking advantage of your situation. That’s not true for all buyers, though. You need to recognize qualified buyers from those better left alone. Obviously, that’s tough to do on your own. Most people have never been in the position of having to sell lottery payments before, and it’s easy to get lost in a world with which you’re not familiar.

Sell Only Part of It

Another important consideration is whether you need to sell all of your lottery winnings or only a percentage of them. You can easily sell just a specific portion of your winnings, enough to cover your immediate needs, and retain the remainder as regular ongoing payments. This ensures that you have the money you need right now, as well as a financial cushion for the future.

Work with a Go-Between

The ideal solution to your quandary is to work with a firm that acts as a go-between. The company will vet and investigate buyers, ensuring that you only have the cream of the crop to choose from. Not only that, but working with a reputable firm will also ensure that you get the highest percentage possible of your winnings, rather than leaving you with a mere pittance.

Of course, not all such firms are the same, and you need to recognize a reputable company. Look for a firm that’s been in business for a number of years – one with an established reputation and a list of satisfied clients. Second, make sure the company doesn’t work for the buyers – the firm should work for you, the seller. This ensures there’s no conflict of interest. A company that works on behalf of the buyer has no incentive to go above and beyond to ensure you get a fair deal. One that works for you certainly does.

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