Just recently, it became time for me to register my car tabs. In this county, we have to get emissions checks occasionally, and this was the year for my car.
It failed. Not really, but there's an automatic failure if the engine computer returns any code, and my car mentioned an issue with the A/C system. With this program, you have to go fix the issue or spend at least $150 trying to, then get a second (free) emissions test, and either pass, or get a waiver.
Off to the mechanics. The assessment alone cost $98. After that, they said fixing it would cost an additional $300! I got a limited warranty when I bought the car, so I had them check that. The warranty would cover the cost of the repairs, after a $150 deductible. So, I'm still responsible for about $250.
Recently, that would have ruined me, and I would have had to charge it on a card. This time, I didn't even have to dip into my emergency fund. I took some money from an old bank account I was planning to close, and paid the bill on the spot. 2 days later, new car tabs. The stupid engine light is still on, but at least that issue is over.
Financial peace of mind is worth more than all the frivolous spending in the world.
Tuesday, January 29, 2008
Friday, January 25, 2008
The times, they are a changing
So, that rate cut the federal reserve has, of course, changed things. I was hoping that the rate would at least stay static, or possibly increase, but that seems not to be the case. As such, I must readjust.
The rates of CDs have dropped immensely. I'm abandoning my CD ladder plan for now. I'll get better rates just having the money in my savings account, which brings me to the second expected change.
Any day now, my high yield savings account will be dropping their rates. I'm not going to do anything about it, but I am aware that it will happen. I'll readjust as it happens. On the bright side, I'll be able to get better rates on my debts, and refinancing my auto will result in a better deal. That's very good.
The rates of CDs have dropped immensely. I'm abandoning my CD ladder plan for now. I'll get better rates just having the money in my savings account, which brings me to the second expected change.
Any day now, my high yield savings account will be dropping their rates. I'm not going to do anything about it, but I am aware that it will happen. I'll readjust as it happens. On the bright side, I'll be able to get better rates on my debts, and refinancing my auto will result in a better deal. That's very good.
Sunday, January 20, 2008
That's better
I think it's finally time I stopped using my credit union. They were good at one point, but now they just weigh me down. I pay for my own checks, they require a minimum balance to get interest on your checking account, I haven't used my savings account since I opened one at HSBC, and they haven't kept up with the times.
Plus, they just switched their online banking system to a horrible one. I had to make them cancel overdraft fees after the new site failed to tell me they put a hold on a deposited check. Add no Microsoft Money access, and I'm done.
I opened an account as USAA. It bears interest (not a lot, but better than none), a rewards debit card, free checks, and best of all, I can deposit checks from home with my scanner. That. Is. Awesome.
Plus, they just switched their online banking system to a horrible one. I had to make them cancel overdraft fees after the new site failed to tell me they put a hold on a deposited check. Add no Microsoft Money access, and I'm done.
I opened an account as USAA. It bears interest (not a lot, but better than none), a rewards debit card, free checks, and best of all, I can deposit checks from home with my scanner. That. Is. Awesome.
IRA news
Okay, so here's how the IRAs will work. Instead of going with Fidelity, even though the Freedom Fund is great, I'm going with USAA. Why? I can open the account for free, and sign up for some good mutual funds for as little as $50 a month. I can swing that, while keeping any extra in the bank just in case, and make one big contribution later. In the future, I could always roll over, but USAA has been good to me, and I like them.
Thursday, January 17, 2008
Climbing the ladder
I just found out I get free financial planning advice from USAA, where I have my auto insurance. I spent a good amount of time on the phone with the planner today, running some ideas past him and getting a feel for what I should be doing. He agreed that my plan is a good one so far.
One other thing I ran past him was a plan to make my emergency fund work for me better. He was very critical, but at the end, agreed that it would work IF I made sure that there was an adequate amount for immediate access to emergency funds. Here's the plan.
In my savings account right now, I have $1,506.88. This is not counting the money I have aside for my IRA (more on that later), this is pure emergency fund money. I Assume the following things:
All of these are possible.
The plan is this. Starting this February, I deposit $1000 of the $2000 my wife will contribute into a 182 day CD from USAA, compounding monthly (current rate is 4.34%). There are better rates out there, but I like the fact that I can work with USAA's financial people to keep things on track.
The next month, I will deposit another $1000 into another 6 month CD. This will be either the other $1000 from my wife, which has been sitting in the savings account, or $1000 from my bonus. It doesn't matter.
The following two months, I deposit the other $2000 of bonus money, $1000 per month.
June, I will not do anything more than the $250.
Starting with July, I will deposit $1000 into a 6 month CD every time my savings account balance breaks $3000. The next time that happens will be December 2008, which means I will have a CD maturing once a month from that point on set up to roll into another CD. Once that happens, I will roll an extra $1000 into the CD that matures each month that breaks $3000, and reinvesting it (this is known as a ladder, giving me the chance to take advantage of new rates every month). I will be adding $1000 into the CD for the specific months of:
At no point will my liquid savings account dip below $2000, which should cover any immediate emergency. The rest of the money will be available, either by waiting, or by drawing the money out for a fee, in the case of extreme emergency. At the end of this 5 year period, I will have turned about $1,500 into about $26,000 for the cost of $250 a month, while still keeping it accessible in case of emergency.
This is just the emergency fund. This does not count IRA contributions, additional savings, or any other investments. I like the idea of that.
One other thing I ran past him was a plan to make my emergency fund work for me better. He was very critical, but at the end, agreed that it would work IF I made sure that there was an adequate amount for immediate access to emergency funds. Here's the plan.
In my savings account right now, I have $1,506.88. This is not counting the money I have aside for my IRA (more on that later), this is pure emergency fund money. I Assume the following things:
- In February, my wife will receive a bonus, $2000 of which she will contribute to our emergency fund.
- In March, I will receive a bonus, $2000 of which I will contribute to our emergency fund.
- Monthly, I will contribute $250 to the emergency fund, regardless of any other contributions.
All of these are possible.
The plan is this. Starting this February, I deposit $1000 of the $2000 my wife will contribute into a 182 day CD from USAA, compounding monthly (current rate is 4.34%). There are better rates out there, but I like the fact that I can work with USAA's financial people to keep things on track.
The next month, I will deposit another $1000 into another 6 month CD. This will be either the other $1000 from my wife, which has been sitting in the savings account, or $1000 from my bonus. It doesn't matter.
The following two months, I deposit the other $2000 of bonus money, $1000 per month.
June, I will not do anything more than the $250.
Starting with July, I will deposit $1000 into a 6 month CD every time my savings account balance breaks $3000. The next time that happens will be December 2008, which means I will have a CD maturing once a month from that point on set up to roll into another CD. Once that happens, I will roll an extra $1000 into the CD that matures each month that breaks $3000, and reinvesting it (this is known as a ladder, giving me the chance to take advantage of new rates every month). I will be adding $1000 into the CD for the specific months of:
- March 2009
- July 2009
- November 2009
- March 2010
- June 2010
- October 2010
- February 2011
- June 2011
- October 2011
- June 2012
At no point will my liquid savings account dip below $2000, which should cover any immediate emergency. The rest of the money will be available, either by waiting, or by drawing the money out for a fee, in the case of extreme emergency. At the end of this 5 year period, I will have turned about $1,500 into about $26,000 for the cost of $250 a month, while still keeping it accessible in case of emergency.
This is just the emergency fund. This does not count IRA contributions, additional savings, or any other investments. I like the idea of that.
That was one of the hardest things
If anybody knows me, they know that all I've been talking about car wise is the Smart Car. I saw them everywhere in Germany (their home town) and they work great, especially for what I would need a vehicle for. I really, really want one.
However, "buy new car" isn't on my list of goals. In fact, it's in direct opposition with one goal, to bring my auto debt down. It is possible to get one. What they would do is roll the current debt in with the new debt, and cut me a loan for that. The only problem there is that then, I owe far more than the car is worth: about $10,000 more. If the car gets totaled, the entire debt won't be forgiven, just the amount the vehicle is worth. I'm not comfortable with that.
So, I called Smart. They had a plan I bought into more than a year ago to reserve a Smart FourTwo. At that time, I had a car I owned outright, and less bills. Now, I have an auto loan, and more bills. So, I asked them to refund the money I put down (only $99), and I'll have to wait on the Smart car.
I'm bummed, but at least I know I'm avoiding a mistake.
However, "buy new car" isn't on my list of goals. In fact, it's in direct opposition with one goal, to bring my auto debt down. It is possible to get one. What they would do is roll the current debt in with the new debt, and cut me a loan for that. The only problem there is that then, I owe far more than the car is worth: about $10,000 more. If the car gets totaled, the entire debt won't be forgiven, just the amount the vehicle is worth. I'm not comfortable with that.
So, I called Smart. They had a plan I bought into more than a year ago to reserve a Smart FourTwo. At that time, I had a car I owned outright, and less bills. Now, I have an auto loan, and more bills. So, I asked them to refund the money I put down (only $99), and I'll have to wait on the Smart car.
I'm bummed, but at least I know I'm avoiding a mistake.
Thursday, January 10, 2008
January update
Goals Update
Review
Financial
Credit card debt totaling $1,414.60 (up $622.68) (goal $0)
Loan debt totaling $2,142.78 (down $101) (goal $250)
Car loan totaling $10,277.92 (down $207.49) (goal $5,485.41)
Emergency fund totaling $1,254.07 (up about $254.07) (goal $7,500)
Roth IRA contributions to date: Me: $208, Wife: $208 (in savings, up $418) (goal $5000)
Charitable
Total hours volunteered: 0
Financial
Use some of my wife's bonus to pay off credit card
Credit card debt has actually increased to buy another quarter's worth of textbooks for my wife. However, her grandparents have offered to reimburse her for her books, so they will send a check for the value (over $500! Textbooks are expensive!)
My wife has to take an Army Physical Fitness Test (APFT) to reenlist and receive her bonus. She is due to take the APFT next month.
Use some of my wife's bonus to pay off loan
After talking to the credit union, it was determined that we should pay off a big chunk, but don't close the loan just yet, as it will increase our debt/credit ratio, and hurt my credit score. I have renegotiated the loan, dropping the APY by 2%, and will pay off a large amount of the loan.
Also, my wife has determined that she would prefer to spend her bonus on some other items for herself. Of course, it's hers, and she's earned it, so I defer completely. She has agreed to use part to pay off the credit card, and to donate to savings, but she wants the remainder for her own use. Specifically, she wants a Wii.
Deposit $2000 of my wife's bonus to savings account
Waiting on the bonus
Deposit at least $250 to savings account from pay
Completed.
Deposit at least $418 to Roth IRA
Sort of done. Once a contribution is made, that's it. You can't take it out, except for certain reasons, and even then it's not easy. Instead, I'm setting up a sub savings account and put the money in there. That way, it's more liquid, but separate. Then, I can make the contribution in a lump sum. That way, I can still put the (rather large) amount to the side without getting in trouble later.
Contact credit union about car loan refinance
I have done this. The credit union will refinance for 8% (from 14%), but they will not cover the entire value. So, I will wait until my own bonus, and pay the difference as a down payment on the loan.
Educational/Professional
Submit AMT BOR packet
The packet is still missing. I have found another AMT member who will sign the application for me
Assemble and submit E-6 packet
Still needs to be done
Send off and follow up on life credit packet for BS
Still needs to be done.
Physical
Start training for marathon on January 15th
Charitable
Volunteer at least one day to a charitable cause.
I'm looking at some charities now. I need to find a charity I can really support, and who needs my volunteer work. Habitat for Humanity, and other charities like that are already quite popular, and have enough help. I want to go where I'm really needed.
Friday, January 4, 2008
You say you want a resolution baby...
Resolutions are tricky animals. Most people seem to make it too vague, something like: "I'll exercise more this year". It's pretty easy to get discouraged there. How much is more? If you don't have a set goal, then you'll get dismayed pretty quickly. This is why gyms fill up for 3 weeks in January, then settle back in.
I'm going to try something different, and not because of the resolution tradition, but mostly because my goals are chiefly financial, and it's a new tax year.
The rules of my yearly goals:
And now, my goals for 2008.
Educational/Professional
Physical
Charitable
Those are my goals for the year. Most of them are financial, trying to get into a more stable place, and the rest are personal development, trying to set goals that will improve me as a person, and as a professional.
I look forward to hearing your comments, and I hope you'll all wish me luck.
I'm going to try something different, and not because of the resolution tradition, but mostly because my goals are chiefly financial, and it's a new tax year.
The rules of my yearly goals:
- The goals must be specific: Quantitate whenever possible, and have a definitive goal for everything. That way, I can gauge my progress, and know when I'm done.
- The goals must be transparent: I'm going to lay everything out, and hold myself accountable in a public forum (here). That means reasons, motivations, and numbers.
- The goals must be checked up on: Monthly, I will review the past month, progress so far this year, and set sub-goals for the next month. That breaks things down to easily manageable month long packages. These will also be posted. I can also add month specific goals.
And now, my goals for 2008.
- FINANCIAL
- Accumulate and maintain at least 3x monthly expenses as an emergency fund.
- The recommended value of an emergency fund is supposed to be 3 months of bills and expenses. Our savings was drained by both the trip around Europe, and moving to the states (first and last months rent, covering us until I started working, etc). Bills and payments alone, I estimate cost me about $2000/month. That includes rent, car payments, debt payments, phone, internet, utilities, insurance, and other bills. Include food and gas, and we'll assume $2500 a month. That's $7500 dollars, not counting the drop in monthly bills I plan on enacting.
- I plan to do this by depositing $2000 from each of the bonuses my wife and I will receive from the military this year, and by depositing at least $250/month from my paycheck into my HSBC savings account, which already contains about $1000 I've saved. This will lead to a total of $8000 by years end. The money will be saved in an easily accessible, liquid savings account by HSBC, earning 4.25% APY interest.
- The recommended value of an emergency fund is supposed to be 3 months of bills and expenses. Our savings was drained by both the trip around Europe, and moving to the states (first and last months rent, covering us until I started working, etc). Bills and payments alone, I estimate cost me about $2000/month. That includes rent, car payments, debt payments, phone, internet, utilities, insurance, and other bills. Include food and gas, and we'll assume $2500 a month. That's $7500 dollars, not counting the drop in monthly bills I plan on enacting.
- Deposit at least ½ max contributions to both mine and my wife's Roth IRAs
- The earlier you prepare for retirement, the better. Even if we're not maxing out our IRAs, we can still deposit some. The maximum contribution for 2008 is $5000 dollars. My goal is to contribute at least $2500 each. This is a cost of $417 per month. For the first month or two, this may not be possible. Once some other items are paid off, it may become easier. This goal may not be met 100%, but any contribution will pay back in spades down the road.
- Eliminate my credit card debt
- I, for the first time, got a credit card, to help cover the costs of my wife's books and tuition. I get 0% interest for the first 6 months, and on any charges from the first 6 months. Although there is no interest, I want to eliminate that charge, and have the credit card maintained at $0 balance total per month. Once the card is empty, I will begin using it for specific purposes to improve my credit. I think I'll start out with using it to pay for gas, and pay it off in full at the end of each month.
- There is $791.92 debt on the card right now. Paying that off will be a matter of using one of our bonuses.
- I, for the first time, got a credit card, to help cover the costs of my wife's books and tuition. I get 0% interest for the first 6 months, and on any charges from the first 6 months. Although there is no interest, I want to eliminate that charge, and have the credit card maintained at $0 balance total per month. Once the card is empty, I will begin using it for specific purposes to improve my credit. I think I'll start out with using it to pay for gas, and pay it off in full at the end of each month.
- Eliminate my loan debt
- We had to take out a signature loan to pay for my wife's first quarter of school. Now that she's in the reserves, she'll get 100% tuition assistance. The loan was incredibly helpful, but I want to get rid of that $2,243.78 remaining, and the $211/month bill it carries.
- That too, will be paid off by using some bonus money (in case you were wondering how much bonus money we'll be getting to be able to pay off so much and still save, we're each getting $7500 to affiliate with the reserves for our IRR time)
- We had to take out a signature loan to pay for my wife's first quarter of school. Now that she's in the reserves, she'll get 100% tuition assistance. The loan was incredibly helpful, but I want to get rid of that $2,243.78 remaining, and the $211/month bill it carries.
- Refinance car for better rate, and reduce balance of loan by at least $5000
- The car we were borrowing broke down, and we had to get a car quickly. Although we got an ok deal, our lack of a significant down payment meant our loan had 14% interest rate! Once we have more money for a better down payment (probably from my bonus), we should refinance through my credit union for a more reasonable rate. The balance remaining is $10,485.41. I want to see that rate reduced, the monthly payments dropped, and the total balance dropped by at least $5000. Much of that will be the monthly payments, and the rest will be the down payment we'll use for the refinanced loan to get that better rate.
- Accumulate and maintain at least 3x monthly expenses as an emergency fund.
- Take and pass the AMT MT board certification exam
- I qualify now for the AMT, even though I haven't finished my bachelor's. I need to turn the application in (it's being signed by somebody else as a recommendation now) and study enough to pass. The bachelor's degree program should be enough studying.
- Complete my Bachelor's of Science
- I had to stop my bachelor's program because the lab in Wuerzburg didn't do enough to let me do clinical exams. Now that I'm back in the states, I need to finish it. I qualify for life experience, which needs to be certified by previous supervisors, and I need to do the clinicals I don't have enough experience for.
- Complete required courses to qualify for PA course
- The next step I want to take is the Army PA course. A bachelor's after 1 year of study, and a masters after 1 year of clinical experience, owing only reserve time in return. I plan to continue on to med school, but for now, I want to do that. I will take this year to take the prerequisite courses I need, and put together the application packet. This will happen after my bachelor's is finished
- Assemble and submit promotion packet for E-6
- If I plan to do the PA course, I will be getting paid as the rank I hold when I'm accepted. A promotion to E-6 could mean good money later on. Also, if I'm deployed, I'd rather go as that rank. Not only that, but since much of our senior NCOs will be going to Kosovo for a year, I need to step up and fill that space.
- Train for and complete a full marathon
- I've really been slacking off on exercise to get more situated with work. I need to set a goal. My wife is doing a full marathon, and has come up with a training plan. I want to train for, and complete that marathon with her.
- Volunteer at least 1 day/month to charitable causes, and exceed a total of 100 hours within the year.
- I need to get more involved in my community, and to get out. 1 day (8 hours) worth of volunteer work is not too much to ask per month. I need to discover volunteer opportunities, and take them.
Those are my goals for the year. Most of them are financial, trying to get into a more stable place, and the rest are personal development, trying to set goals that will improve me as a person, and as a professional.
I look forward to hearing your comments, and I hope you'll all wish me luck.
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