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The no-pants guide to spending, saving, and thriving in the real world.

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Net Worth, April 2016

Finance

Net Worth

Last year wasn’t a good year for my net worth.  It came with a $7000 drop.

Q1 2016, however, was a great quarter.

In December, we had $13,271 in credit card debt.   At the time I took this screenshot, it was down to $3836.43.    As of this moment, it’s down to $2640.91.   If things go as expected this week, I should wake up on Friday to a paid-off credit card.  I had to raid some of our savings accounts to make it happen, but it’s happening.    Some of it was a tax refund, some of it was the fact that my mortgage payment went away in December.

That’s seven years of hard work, almost to the day.   Seven years ago, I was researching bankruptcy, and stumbled across Dave Ramsey.    Seven years ago, we were drowning in debt.

Next week, we’re free.   No more debt, hanging over our heads.   We’re free to take vacations.   We’re free to finally save for college, when my son is 16, and stand a chance of being able to pay for it for him.   We’re free to do…whatever we want to do.   Our monthly nut after the debt is paid–only in fall/winter/spring when my wife is working–is roughly 1/3 of our take-home pay.

That’s how hard we’ve cut to make sure we can pay our bills and make debt die.  We do have some things that would be considered extravagant.   We’re not savages.   But my car is 10 years old.  My wife’s is 7.   My motorcycles are 35 and 30; one of them was purchased before we cared about our debt.

Back to the net worth….

The biggest change came from our property values, which sucks.  That was $36,000 of the difference, which comes with the painful tax bump to go with it.   A large chunk of the savings increase was the money we set aside every month to cover the property tax bill, and that will go away next month.

Still, $641,000 dollars is a long way from nothing.   I’m pretty happy.

6 Questions to Financially Get to Know Each Other

Finance

This topic has been blatantly stolen from Budgets are Sexy.

1) How do you spend: cash, debit or credit? I use cash almost exclusively.  I live in Minnesota and have two small children, so bundling the brats up to go inside the gas station to pay is nuts.  Gas stations get the debit card.   Online shopping, or automatic payments set up in the payee’s system are done on a credit card that gets paid off every month.

[ad name=”inlineright”]2) Do you bank online? How about use a financial aggregator (Mint, Wesabe, Yodlee, etc.)?  I bank online.  I use USBank for my daily cash flow, INGDirect for savings management and Wells Fargo for business.  I used Mint strictly as a net worth calculator and alerting system.  I use Quicken to manage my money and a spreadsheet for my budget, but I really like the quick, hands-off way that Mint gathers my account information and emails low balance alerts.

3) What recurring bills do you have set on autopay? Absolutely everything except daycare, 2 annual payments, and 1 quarterly payment.

4) How are your finances automated? I use USBank’s billpay system, instead of setting up autopayments at every possible payee.   This gives me instant total control and reminders before each payment.   The exceptions are  my mortgage, netflix, and Dish.  My mortgage company takes the money automatically from my checking.  The other two hit a credit card automatically.  Our paychecks are direct-deposited and automatically transferred to the different accounts and banks, as necessary.

5) Do you write checks? If so, how often? Once per week, for daycare.  Occasionally for school fundraisers.

6) Where do you stash your short-term savings? I have quite a few savings accounts with INGDirect to meet all of my savings goals.  For the truly short term, I add a line item in Quicken and just leave the money in my checking account.

Who’s next?

Saturday Roundup

Misc

Tron (film)
Image via Wikipedia

I wrote this yesterday.  According the forecast, when this post goes live, I’ll be moving 5-8 inches of snow off of my driveway.

That, or watching TV and thinking about moving snow.

Maybe I’ll just sleep in and wait for spring to melt the snow.

Don’t forget to enter my drawing for a $100 Amazon gift card!   Go here for details.  It ends on the 15th, so don’t wait too long.

Best Posts

Crazy-easy ice cream bread.  How could this possibly be bad?

Tron comes out in 2 weeks.  I’d love to show up on a custom street-legal Troncycle.

Arsenic-based lifeforms are shaking up the way we understand life to work.   I’m of the opinion that life will probably exist almost everywhere that isn’t a completely dead dry rock.  I say that as an expert in…well, nothing related to astrobiology.

Following Erica’s advice is currently making me a few hundred dollars per month, with every sign of growing as time goes on.  I hate to sound like a fanboy, but if she pimps a product, I’m at least going to give it some serious consideration.

Carnivals I’ve Rocked

10 Dumb Money Moves was featured in the Carnival of Debt Reduction.

Book Review: The Art of Non-Conformity was included in the Carnival of Personal Finance.

Things You Should Buy Online to Save Money was included in the Festival of Frugality.

Thank you! If I missed anyone, please let me know.

LRN Timewarp

This is a new feature to share the gift that is me with anyone new to LRN.   This week, I’m going to share some posts from my first week blogging here.

The $10 College Fund.  In the last year, not only have I not changed my mind about the $10 college fund, but I haven’t raised the amount.   The point is to just get started.   I’ve done that.  I’ll raise the amount when my debt is paid off.   We are now up to $166.09.  The numbers are off because I stuck a little bit extra in one month.

In the last year, our dreams haven’t changed.   We haven’t made any direct progress, but indirectly we are doing well.   First things first.  We need to pay the debt off before we look at a hobby farm.

My second day blogging, I wrote about why we handled money so poorly.

Saturday Roundup

Life

I’ve spend the last 10 days at home with my two youngest kids.   It’s been a lot of fun.   It’s amazing watching them interact with each other and seeing how their imaginations works.   It’s also been a helpful reminder that, if I don’t turn on the TV, they will happily find something else to do.

30 Day Project Update

This month, I am trying to establish the Slow Carb Diet as a habit.   At the end of the month, I’ll see what the results were and decide if it’s worth continuing.   For those who don’t know, the Slow Carb Diet involves cutting out potatoes, rice, flour, sugar, and dairy in all their forms.   My meals consist of 40% proteins, 30% vegetables, and 30% legumes(beans or lentils).    There is no calorie counting, just some specific rules, accompanied by a timed supplement regimen and some timed exercises to manipulate my metabolism.   The supplements are NOT effedrin-based diet pills, or, in fact, uppers of any kind.  There is also a weekly cheat day, to cut the impulse to cheat and to avoid letting my body go into famine mode.

I’m measuring two metrics, my weight and the total inches of my belly, waist, biceps, and thighs.   Between the two, I should have an accurate assessment of my progress.

Weight: I have lost 11 pounds since January 2nd.  This is crazy.  At least part of this has to be due to the natural swing of up to 5 pounds from day to day, and part of it is due to the fact that I was wearing jeans when I weighed in the first time and cotton pajamas this morning.  From now on, this is going to be the first thing I do on Saturday mornings, so everything is as consistent as possible.  Another factor is that I’ve cut most of the crap out of my diet for a week.  My body has been flushing garbage.  But dang!  11 pounds in a week.  I’m a bit excited.

Total Inches: I have lost 5.5 inches in the same time frame.  This is proof that it’s not just water that I lost, which is where first, dramatic losses usually originate in a diet.

The loss seems a little bit nuts.   Here’s hoping it stays consistent.

Best Posts

Your retirement account shouldn’t be an optional investment.   Do you know how to maximize retirement savings?

I’m a big fan of making extra money.   Money Crashers lists 6 sites to help you rake in the cash, without needing any special skills.

Unclutterer is giving away three Fujitsu Scansnaps.   I want one of these is a way that isn’t quite right.

I’ve been moving to LED lights instead of CFLs for a few years.  CFLs make lousy security lights in Minnesota in the winter.  They take 5 minutes to get to full brightness when it’s cold.  LEDs last forever.

LRN Timewarp

This is where I review the posts I wrote one year ago.

I posted about the difference between bribes and rewards and the problems inherent in trying to buy good behavior.

Lesson 2 of my budget series went live, detailing my monthly bills.

We made some changes to our budget plans that haven’t worked very well.   Over the course of the last year, every one of these ideas has either been partially or totally abandoned, but it’s working for us.

Carnivals I’ve Rocked

How to Complain – The Squeaky Wheel Gets the Grease was included in the Carnival of Personal Finance.

3 Things You Need to Know About Homeowner’s Insurance was included in the Festival of Frugality.

Thank you! If I missed anyone, please let me know.

Get More Out of Live Real, Now

There are so many ways you can read and interact with this site.

You can subscribe by RSS and get the posts in your favorite news reader.  I prefer Google Reader.

You can subscribe by email and get, not only the posts delivered to your inbox, but occasional giveaways and tidbits not available elsewhere.

You can ‘Like’ LRN on Facebook.   Facebook gets more use than Google.  It can’t hurt to see what you want where you want.

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That’s all for today.   Have a great weekend!

Welcome to Unemployment

Finance

Last week, I was let go from my job.  The reasons are unimportant.

http://gty.im/167334756

So now, I am unemployed right before Christmas.

And my renters are moving out at the end of the month.

Normally, this should be a time for panic, but strangely, it’s not.

It actually came with a feeling of relief.  Again, the reasons are unimportant.

But still, my predictable income has suddenly become unpredictable.

It is times like this that I’m glad I’ve spent the last 5 years crushing my debt.  I currently have about $1000 on a credit card from my monthly expenses and around $10,000 on my mortgage.

That’s it.  There’s no soul-destroying credit card debt.  No car payment.

Trimming down to the not-painful-but-not-barebones basics puts my monthly nut at $3300.  Leaving a bit of comfort and savings in place, that jumps to $4000.

Our income from my wife’s job and the renter in our home comes to about $1600 per month.   That’s $1700 per month that we’re off from the basics and $2400 we’re off from a comfortable level.

However, I expect to have our rental house rented by the end of the year.  There are some repairs we have to make after the current tenants leave.  That will bring in a minimum of $1200 per month, hopefully $1500.   That closes the gap to $500-1200.

Now, aside from the biggest benefit of killing out debt(no monthly payments!), we’ve also been saving about 20% of our income outside of our retirement accounts.   We have enough to bridge that gap for 25-60 months.   Unemployment will also provide enough to cover the difference for about 6 months.  That means without doing any side work…sitting on my butt playing video games…I could cover my bill comfortably for two and a half years.  If I cut down to bare minimum expenses, I can stretch that to nearly 7 years.

That’s why I don’t drive a new car or wear expensive clothes.   That’s why I don’t vacation on my credit cards.  That’s why my kids don’t have the latest, greatest video game systems and we don’t have a big screen TV.

It’s because we chose to prioritize our financial security over pure luxuries.  We chose to sacrifice optional things now so we wouldn’t have to sacrifice things like food if life took a surprise turn down a bad road.

Now, before anybody reads this and understands it as “Jason’s taking a decade off”, in the week I’ve been unemployed, I’ve had 2 phone interviews, and a request for another.  One of those has turned into a tentative job offer already.  I expect to remain unemployed for less than a month.

 

Consolidating Student Loans

Finance

This is a guest post.
If you owe on multiple student loans, you may have heard of or are considering consolidating your student loan debt. Whether you are fresh out of college or struggling with making multiple student loan payments, consolidating your debt can relieve you of that burden in exchange for one manageable monthly payment.

What is Student Loan Consolidation?

Student loan consolidation is one personal loan big enough to cover the amount owed on multiple student loans. The loan amount you receive is used to pay off the other student loans which leave you with a single monthly payment to make. You can consolidate all federal student loans with a debt consolidation program through the US Department of Education. Although FFELP, or Federal Family Education Loan Program, no longer offers debt consolidation, you can still be eligible through the US Department of Education. You may also still qualify for the federal student loan consolidation program even if your college does not participate in the Direct Loan Program. Many private lenders also offer student loan consolidation options as well.

Eligibility Requirements for Student Loans

You may be eligible to consolidate student loans if you are enrolled at part time status or less or if you are no longer in school. You would also be considered eligible by most lenders if you are within the loan’s grace period or are currently paying on your loans. You should also have your loans in good standing and have at least $5,000 owed in student loans. Each loan consolidation lender may have their own eligibility requirements, so it is best to check with the specific ones you are considering.

The Benefits of Loan Consolidation

There are numerous potential benefits to consolidating student loans including streamlining multiple payments into one affordable monthly payment. You may have multiple due dates on loans and you may be struggling to remember which one is due on which date. Streamlining your student loans is simpler and easier to remember, it also allows you better control over your budget.

Another benefit of choosing to consolidate student loans is extending the repayment terms. Many student consolidation loans can be obtained as long-term debt. Although it will require you to pay your loan for a longer time period, it does reduce the amount paid each month into a more affordable payment.

You will also pay a lower interest rate with a consolidated loan. The interest rate is determined by weighing all the interest on your loans and finding the average rate. You may have variable interest rates on your student loans and consolidating them can give you a fixed rate which is highly advisable given the uncertainty of the US economy.

A lowered interest rate and a longer repayment term mean a lower monthly payment than what you were currently paying on multiple loans. A smaller monthly payment leaves more money in your pocket at the end of the month and allows you to use that money elsewhere.

The Disadvantage of Debt Consolidation

It is important to be aware of all aspects of a student debt consolidation loan in order to make the best and most informed decision. There are some drawbacks to consolidating debt including having a higher repayment term which means you, in the end, will be paying more than if you paid it off sooner. You will also end up paying more in interest on a long-term loan than a short-term as less of the monthly payment is applied to the principle. You may also have to pay prepayment penalties depending on your original student loan terms. There are some student loans that prohibit paying them in one lump sum or ahead of the schedule without incurring a monetary penalty. You may also be required to repay any waived fees or rebates. Check your current student loan contracts to find out if you may be penalized for paying off the debt through a consolidation program.

Unfortunately, there are countless fraudulent and unscrupulous lenders trying to talk you into consolidating your student loans with enticing introductory rates or temptingly low monthly payments. However, it is essential to read all the small print before signing any contract in order to avoid the numerous scams out there. You should be wary of any lender that is promising really low interest rates. You can determine your potential interest rate by compiling all the student loans, adding their interest rate and determine the average. You may have to round up to the nearest one-eighth of a percentage. Beware a lender that promises an interest rate significantly lower than that interest rate.