Thursday, August 31, 2006

a most welcome email...

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Actually doing a balance transfer

So things are set for me to do this 0% balance transfer thing - I just Really, Really Hate writing a check for SEVEN THOUSAND DOLLARS. See, it feels to me like I'm not actually getting anywhere with this debt, but I know that I am. This is partially because I paid off one of my school loans with a 3.9% check - and that was about $2200, on top of the $5100 or so I had on there already. This was only in May so I have only paid down about $500 since then. But I do seem to be making headway in interest charges - the student loan charged about $40 monthly in interest which is more than I pay in interest all month for the $7k credit card debt.

I am however cringing a little at the thought of paying $75 (the balance transfer fee) to put this debt on the 0% deal - which will only last till July 2007. But I'm doing it because at $25 a month in interest, that means that it'll be financially equivalent to leaving it on there and paying interest for three more months, and then for the next eight months or so I won't be paying any interest, saving about $200. Which is $200 more that is applied to principal, since I won't change the payment amount (actually I will be paying more on it.)

This is another one of those instances where people tend to get a little bit flippant about amounts of money that they would pull over to scoop up off the interstate. $200 is a LOT of money when it's in my checking account, but somehow it doesn't seem like very much money spread out over eleven months, and even less so when it's just money I'm NOT being charged, instead of money I'm being given. But it works out the same to be given money as to not have money taken away, I guess. It just feels better to get stuff.

So I bit the bullet and am doing the necessary shuffling (making sure the card is completely paid off before doing the transfer, raising my limit, etc) in order to do this balance transfer, and when July approaches next year, I will do the necessary steps to transfer it back to the other card (hopefully also with a 0% deal.) Or, if necessary, even to open a new card that will give me a 0% deal. Although I have three cards, so eventually somebody's got to send me another deal - they do about every two months.

My actual net worth won't be changing as a result of this (other than the $75 fee) but hopefully the debt will be paid down $200 faster over the course of this year. If I stay on track with the $250 per month payment, I should be transferring back about half of what I transferred in. Maybe less if I throw more money at it. We'll see how things go - I think this is good progress.

Wednesday, August 30, 2006

What's in Carleton Sheets' No Down Payment Real Estate Program kit?

I ordered this trial from DealBarbie and was morbidly curious to see what's inside. The kit is actually quite pretty, with three shiny black boxes (steps 1, 2, and 3) with metallic bands. The first "step" box has some DVDs I didn't watch, and a guide that presumably goes along with the DVD, which is actually not bad. It's basically a long list of all the things you should do when you are establishing credit, looking for properties, buying properties, various kinds of lease arrangements, landlord tips, selling properties, like-kind exchanges, etc etc. One loooong checklist, but I think a lot of this stuff is probably new to a lot of people for whom this is their first exposure to buying or owning real estate. So it's a pretty good little guide. This box also has a Helpline brochure with a rather scary smiling man on it.. makes me a little nervous. Step 1's title is The First 30 Days, but presumably one is not expected to do all of these steps in the booklet in 30 days. You could probably do a lot of it, though, especially if your credit is already good and you already have money.

Box 2 is the main program, and it comes with a fat pack of audio cd's - there is a little label on the front that says "easy listening". So presumably Sheets does not berate you. He seems like a friendly enough man, although it is a little odd that the same picture of him is used over and over. It also has three manuals included.

The first seems to be primarily to teach you to think like an investor - and to see real estate as the best investment there is. It talks about setting goals, time management, creativity - and also more mundane things like your credit (again) and how to work with other people in the real estate world. It's not any worse than any other self-help book, but I can't help thinking that people who are really great at setting goals, have good time management, and are very creative and driven probably already have a business of their own. I don't think being creative is something you can nurture, unless you have been unnaturally stifled. Some people are just boring.

Manual 2 covers a lot of mundane stuff - I bet many people who bought this kit hoping to get rich quickly are going to be very disappointed that one of the important skills you need in getting rich quickly is good telephone note-taking skills. It also covers valuation, getting financing (creative financing, that is), lease options, negotiation, and legalese you need to know. This manual seems a lot more useful for people who already feel comfortable in real estate - presumably you spent your first 30 days doing this.

Manual 3 is pretty technical. It starts out by telling you how to buy "distressed properties", but is somewhat light on how to find these. There is information other places though. A small piece on like-kind exchanges, then how to actually manage the property (presumably if you are holding it long-term), buying trailers (or "mobile homes"), working out a partnership, and a big section entitled "Harnessing The Power of the Internet" which seems to me like it could have its own manual. Seriously, who's going to write the next book on how to get rich quick on real estate you've never seen? That seems like the next step. The back has a continuing education quiz, which you can send in to Sheets' Professional Education Institute, whose CE credits may or may not matter to anybody at all. I wonder if he will come and take away your title of "real estate investor" if you don't do enough continuing ed?

Last is Box 3 - which I get to keep even after the 30 day trial, as Sheets' special gift to me. This box is a combination of useful and annoying. Useful includes: a neat mortgage amortization and payment estimation slidey-chart thing and a bunch of standard real-estate forms. Annoying includes two DVDs about distressed properties and getting cash out at closing (which is usually a terrible idea for long-term holders) as well as a CD from one of his students who made a bunch of money, and some more shiny promotional stuff.

All in all, I think that this kit (at least the first two boxes) is at least as useful, or perhaps more useful than buying a book on real estate investing, but this kit comes at it from the perspective of a completely new investor, which many of the books don't. However, I'm not sure what else they can really offer you beyond this point that simply having someone in your life to bounce ideas off of wouldn't. The helpline seems like you're basically paying to rent a friend who's knowledgeable in real estate - they can't go with you to see a property, or sympathize with you when a tenant trashes your house, but I guess they could help you on some matters. (Although probably not complicated legal ones, which is where a lot of people will get tangled.) The program does encourage you to check in with bank personnel, inspectors, brokers, anybody with experience, to help you out.

I'd say that the trial kit is worth the $10, but I doubt that's how much it would actually cost to KEEP this kit. So it'll be going back - I'm not that desperate for a paid-for telephone friend. (Actually, when I cancelled, the guy was really pretty nice and very cheerful..)

Monday, August 28, 2006

Question of the Day up at Money and Values

Another Honor Roll blogger hosts today's Question - Money and Values. She asks: Do you involve your values in your money decisions? If so, what are some examples? If not, why not?

Anybody taken H&R Block's tax course?

I was thinking about taking H&R Block's income tax course (so I can do my own as they get more complicated, and possibly do seasonal work for them) but I wanted to know if you had taken one or worked for them. I think it sounds interesting, as I'm the sort of person who jumps at the chance to do their taxes, but I wanted to know what other people's experiences were.

Sunday, August 27, 2006

My retirement number.. wanna see?

I bet you do. It's a whopper. Of course, everybody's is a whopper. And it's really important to factor in what assumptions you make about the world. My extremely conservative (financial, not lifestyle) assumption is that I will not get married but will have at least one child. (Because you can't always count on somebody else's income.)

Desired income in 2006 dollars: $50,000 tax-free
Desired income in 2041, 38 years from now (when I will be 60): $150,000
This assumes about 3% inflation, which may or may not happen.
Assumed income from Social Security: $0
It seems to me to be cutting it too close to the wire to have to assume that you will get $8k or $10k a year in today's money from Social Security. I don't think that it will be totally kaput, but the amount is so small that I would rather assume that it will just be extra.
Amount that I will need if I intend to retire at 60 without touching principal (probably not, but I'd like to have the option): $3 million
Amount that I actually intend to shoot for (because I don't intend to leave anybody a huge amount): $2.5 million

How I plan to get there:

I am going to try like hell to keep as much money as I can in Roth IRAs. Now hopefully someday I will make enough money to be disqualified for these (ha! haha!) but I'll probably always be able to contribute. So taxes should not be a huge issue for me in retirement. I don't know what my situation will be 401(k)-wise in the future, but I will make funding a Roth each year a priority as much as possible.

I have no idea what's going to happen in my life in the next years. In my plans, I'm basically making the years between now and 30 a big black box. I am just getting started in my career, haven't settled on a place to live, bought a house, gotten married, had any children, or any of those big milestones. I don't make much now, but I hope that I will make more in the future, and so my financial goal for between now and then is basically "save as much damn money as possible". So I actually have two "retirement numbers" - one to get to by retirement itself, and one to get to by 30 to assure that I will have a much better shot at making the real number. Thus, my goal to have in retirement-only money by 30: $75,000

Why $75,000? Well, I've played with a LOT of calculators, and I've determined that if I have at least $75,000 by 30, and growth in my accounts is at least 8%, I can reduce retirement contributions to about $5,000 per year (which hopefully will all be in a Roth) and I will land pretty close to my goal. If my return is not doing so hot, I'll be able to bump it up and get closer to the goal. But the important thing is that if I DON'T take advantage of the time that I have, and contribute serious amounts of money before I get much older, I will NOT be able to simply add a few dollars when I get older and still reach my goal. If I DON'T start now, I will need to contribute some very serious amounts of cash in order to reach even a modest income in retirement. And I'd like to have a decent income - hopefully I'll still be hale and hearty, and most importantly I'll be able to retire at a young enough age that I can still go out and enjoy the money that I worked so much to save, instead of staying home and eating stew with my dentures.

But, you say, you have no money now! You're at your first job, making the least you (hopefully) will ever make, and yet you are saving like mad! Why not wait until you are older and have more money? Well, more money does overcome inflation and (with enough) even the potential returns I might make. But the thing is, right now I also have the lowest EXPENSES I will ever have. As said above, I don't have any children, a mortgage, or even a car. In the future, I will need that higher income to pay for all these things, and it's going to be a pinch if I'm trying to save money for retirement while trying to pay for all of the necessities of an ever-expanding life. By scrimping now, I'm freeing up money in the budget of my future self - so that having an extra child or a bigger house or a second car will be something that I can financially take in stride. I'm a big planner and I try to avoid as many expensive things as possible, financially speaking - and so if none of these expensive things happen, then I can save the money and have an even nicer retirement. But if expensive things do happen, I can cover my ass now and also cover my ass in retirement. No cat food needed.

Saturday, August 26, 2006

Getting a puppy = upgrading your lifestyle?

(A rerun of an article I wrote as a guest columnist at Five Cent Nickel a few months ago.)

My coworker brought in her brand new puppy for Monday and Tuesday, since temporarily there was no one at home to watch her, and I instantly had adorable-thing jealousy. She was a really sweet puppy, and when she went home Monday I was quite anxious for her to return on Tuesday. Getting to play with this tiny creature instantly reignited the I Want A Dog desire which had been relatively dormant since I left for college.

Right now I live in a two bedroom apartment with my boyfriend, two guinea pigs, and a cat. While we do have our own front door, we don't have a backyard or a deck or anything. When we were looking for a place to live, I really really really Really wanted something with a backyard, so that having a dog would be a possibility. (I'm more of a larger-dog person - so a shih tzu wouldn't really be up my alley.) We looked at a duplex with a wonderful fenced backyard, which was directly next to a large field, and I almost went for it because of the backyard. Never mind that the street was Very Scary - everyone else had pit bulls and long-unmowed lawns and I think there were rats in the field. Also, directly across the street was a teen-runaway center. The Craigslist ad had said it was in a "rapidly improving area." As we drove away, we passed a man painting the outside of his (concrete) building with a roller brush... Boyfriend commented, "See, it's rapidly improving!"

Nothing else with a backyard was in our price range, however... so the dream of having a dog had to die. But if I was really dedicated to getting a dog, what would it have cost me?

Well, I suppose we could keep a dog in our apartment. No one in our complex has one, but some people in the all 1 bedroom apartment complex kitty corner to ours have small dogs. But having a dog is in a small way like having a child - it's not the cost of actually feeding them, but the incremental costs of providing enough space for them. So realistically we would have had to get a bigger place, and in a high demand area like ours, that would have come at a price. Probably at least $200 more per month (right now we pay $695, which includes $10 a month for the cat.) And then the cost of the dog itself, which from the shelter would be about $75, and then its initial shots, probably another $75. Food and toys every month, let's say $25.

I think we could definitely swing the monthly cost of the food and toys, and vet bills, and the initial cost of the dog, And I'd need to build up the emergency fund since there is now another member of the family who may have an emergency. But what would really kill my budget would be the extra cost of the apartment. Because not only would Boyfriend and I be paying $900 a month for the place, but we'd have higher electricity and gas to heat and cool it (extra $50 a month, perhaps), and probably need to fight for a place to park, which Boyfriend would hate intensely. (Free off street parking is relatively rare in our area.) To get a place with a large enough backyard that was still in our price range, we'd definitely have to compromise on the distance to work - and right now, since I walk to work, I'd have to buy a car and drive to work. So another $300 a month there (conservatively.) Plus a parking pass for once I get to work, another $40 a month. I'd probably be taxed more since we might have to live outside the city, in one of the higher-tax-levels suburbs.

So all told, the direct cost of the dog over a year would be about $450. Indirect cost? More than $7,000. If I had an especially large dog that needed a larger backyard, even more. Looking into the future, I'd have to continue paying these higher expenses for the life of the dog - and if I decide to move to DC or San Francisco or something like that, probably more than $100k over the life of the dog since it would cost an arm and a leg to rent a place with a big backyard near the city. So if I had a large dog, I might not be able to accept future job offers in expensive cities, and thus limit the arc of my career. And you can't forget the opportunity cost of all this. Having to spend the money now means I won't save it - therefore I can't stick it in my IRA or spend it on a house. And having to wait five extra years to buy a house, or a significantly lower balance in my retirement accounts, is a huge drag on achieving my financial goals.

Keeping our living situation simple (and backyard-free) until I can afford to buy a house anyway is probably the best bet, I think. Maybe I'll just borrow my coworker's puppy....

(P.S. As I am writing this, because I generally compose entries and save them as Gmail email drafts, the ads on the side are for cute puppies for sale... Damn you AdSense, you tempting harlot!)

Friday, August 25, 2006

Lowering my monthly expenses, or, I cancelled my Lingo account

As part of my overall attempt to get some structure into my spending, I went looking for ways to reduce my set monthly bills. I decided that I should cancel our Lingo account because both Boyfriend and I have cell phones with free long distance. We had originally gotten the Lingo account because I wanted to have a home phone (since I had friends who were cell phone only and it was terrible getting a hold of them when their phone was dead or under the couch...) but there was never an issue with getting a hold of Boyfriend and I during the whole last year. So I honestly couldn't tell you if the service was any good because we didn't use it more than two or three times.

So I pulled up my account page and called them. I got transferred to a rep in India (with terrible phone quality, which isn't a good thing for a phone company to cut costs on...) who didn't seem particularly motivated to keep me. Which is good, because I wasn't particularly motivated to keep paying them $10 per month for a service I don't use. I wonder if she handled only cancellations, as she sounded kind of like a tired parent arguing with a not-tired toddler about why he should go to bed, offering half-hearted attempts. I kind of felt bad for her. But it was cancelled nonetheless, and I got my last month's (prorated) charge on my card yesterday. And apparently my timing was good; because I was a customer for more than a year (13 months) I don't have to pay a cancellation charge or send back the equipment.

So that's one bill out of the way. I think I'm also going to pre-pay my newspaper subscription ($10 every 10 weeks for Sunday only) through March 2007, which is the farthest out I can pre-pay, so that will also be one less thing to worry about. I'm not going to change the amount of money I send to the bills account, though.. it'll leave a little buffer room.

Check it out! The Festival of Under 30 Finances at Pragmatic Finance

This week's edition of the Festival of Under 30 Finances is hosted by Pragmatic Finance. There were a lot of great submissions, go look at it! Now! Now!

And don't forget to submit an article for the next edition, hosted by NinjaPigeon.

Thursday, August 24, 2006

Today's Question up at Chipping Away

Chipping Away asks, what would you do if you suddenly found yourself unemployed? What would your plan be? I've written before about how a coworker's sudden job termination made me rethink my emergency fund, but what if it happens to you?

My guinea pig is OK!

I got a call from the vet yesterday with the histopathology results - the big bump was an apocrine cyst, which won't reoccur.. unfortunately the little bumps are papillomas, tiny benign tumors which may get larger and get uncomfortable in the future. So those might have to come off, but that's not a big deal and they won't spread beyond her skin. She also had a small bump removed from her eyelid but the cells were not malformed in any way, so she probably got something in her eye at some point and it caused a little callousing.

Yay! She will be OK.. she might just look a little bumpier in the future but it isn't pathologic. Which is good. More yay!

Wednesday, August 23, 2006

Today's Question of the Day up at Mapgirl's Fiscal Challenge

Mapgirl asks today, How much of a balance do you leave on your checking account(s)? I get paid once a month so basically everything in my financial life goes by the month too. I am also incapable of leaving anything more in the account than is there to spend - so I only leave in what I can spend for the month. I envy those people with enough restraint to leave $500 or however much in there all the time.

The Festival of Under 30 Finances is coming up on Friday!

This Friday's Festival is hosted by Pragmatic Finance. Go here to submit your article! He asks what advice you'd give a younger self - in a way, that's the sort of insight we hope to gain by having over-30 bloggers contribute to our Festival.

3 common holes-in-logic surrounding lease vs. buy

Leasing is big business these days - partially due to the "monthly mentality" that a lot of bloggers, and Laura Rowley, have been talking about. Yes, the monthly payments are lower, but like an option ARM, it's just looking for a different kind of trouble to get yourself into.

1. If you lease, you have to go out and get ANOTHER car at the end of the term.

Continual leasing basically means you are going to be paying for one car or another for the rest of your driving days. You never get to stop making payments. However, if you buy a car and hold onto it for even six years, two years more than a lease, that's two years you DON'T have to make payments. Yes, the payments are lower, but you make them forever.

2. When you buy a car, the car is still worth money after it's paid off.

Let's use a brand new Saturn Ion as an example. The version I'd want costs about $17,500. Over the course of four years, you pay about $12,800 if you lease it. You pay about $19,000 to finance it at 2.9% (their current deal) over 4 years. So if you buy, you have paid out about $6,200 MORE over the 4 years for this car than if you leased. But the crucial thing that most people forget when they do these calculations is that you could SELL the car at the end and still come out ahead. Looking at, it seems that you could get at least $10,000 for a 2003 Saturn Ion with similar details. So even if you bought the car and paid these higher payments for four years, you would be $3,800 richer after selling it at the end than if you had leased it.

3. I won't have to pay for maintenance on a leased car.

This is a good gig for the company you bought the car from because new cars don't usually get the expensive problems in the first four years, which is when you have it. If the car is a complete failure, they usually have to replace it anyway under many states' lemon laws. And lots of companies are coming out with good warranties on new bought cars, or will sell you one for an amount small enough that you would still come out ahead buying.

But consider also what a car company is willing to fix for free in a leased car. Or rather, what they won't. Lease contracts usually stipulate that they are only going to pay for things that go wrong in normal use. So you can't go offroading in your Saturn Ion, tear out the undercarriage, and have it towed in to be fixed for free. Also, if you do damage to the car, such as dings or paint scrapes, they will charge you an arm and a leg when you bring the car back in. Same if you go over your mileage or otherwise rough up the car. The dealer wants to recapture that $3,800 by selling the car used, so they don't want to have to fix it up too much to look good. If they do need to do work on it, they are going to be mad, and they will take out their anger on you by billing you a crapload of money for tiny dents. Even for normal repairs, the dealership will frequently try to make as much of it your fault and not "normal wear and tear" as much as possible at the end of the lease.

Tuesday, August 22, 2006

Free phone number (to give to telemarketer types...)

Here's a site that will give you a free phone number that goes to a voicemail box. Good for doing DealBarbie type offers where you are going to get telemarketed a lot, or if you need to gracefully stand up some guy at a bar. Either way, a useful thing. Check out

I have joined the crock pot club

Well, I finally did it. I bought a crock pot. I do like my food wet and mushy. It seems that a crock pot is involved in a lot of cheap recipes these days, and I want to keep cooking at home as much as possible. It seems that a crock pot is an essential frugal cooking device.

Actually, the whole thing was precipitated by me wanting some bbq pork. Boyfriend and I had been to Uno's Chicago Grill a few weeks ago and I had their pork sticks, which are pork shanks that have been stripped to look like Flintstone-esque drumsticks, and I assume they used a pressure cooker or something. So I had a hankering for these things, but I really didn't want to spend the money since with all the expenses (and new bank accounts) this month I had about $100 in checking. I think to myself, I should try to make these things at home! It can't be that damn hard. We go to Target and I check out the crockpots. I was going to cheap out and get the $20 one, but then it occurred to me that I am going to have this crockpot for a long time and I'd better not get one that will crap out after a few uses or something. So I ended up with a $35 one, which is more than I wanted to spend but less than I could have, and still about the price of dinner for two at Uno's Chicago Grill. I bought $5 of meat and used about $5 of ingredients in the sauce, and ended up with four very nicely squishy and bbq-ey country cut pork ribs, which I naturally separated into four small containers and stacked in the fridge. Man, that stuff is good. I just ate the second rib. Bones came out using TONGS. (And by the look of one bone, that pig had some deformities. But he was tasty.)

The next thing on my list to make is going to be some spaghetti sauce, which Boyfriend noted is very good made in a crockpot. (Boyfriend makes 4 quarts at a time and it takes several hours of stirring. So it should at least be easier in a crockpot.) He also wanted to make some chili. I found a recipe for a crock pot dish that seems very similar to a favorite dish at a restaurant at home, so I might try that next.. but I don't think you should crock pot tofu.

Hopefully this will save me some money by helping me cook stuff that we might otherwise go to a restaurant for! That would be nice as our dining out bill really should be lower.

Monday, August 21, 2006

"Holy crap! It's my actual dad!"

As you may have noticed in your blog reading, sometimes anonymous commenters can be weird. And not just the I-want-to-sell-you-land-in-Venezuela weird. Sometimes, I'm just not sure who the hell these people are or why they are interested in my blog. So last night, I'm reading my email and I get a comment notification. I look at the comment and the first thing that pops out at the is the name:

Dad said...
Don't let the EXCELLENT be the enemy of the GOOD. Your goals are clear... the path to them is unknown to everyone.

And I get a little weirded out. Is there a new commenter going around the PF blogs assigning themselves the name of Dad, in the manner of Uncle Bill or Single Ma? Is there a new family member in the pantheon?

And then I mouse over the word 'Dad' and my ACTUAL DAD'S webpage pops up (! Holy crap! I yell to Boyfriend who is in the other room. It's my actual dad! Yes ladies and gentlemen, my parents read my blog. And my mom thinks it's funny so she sent it (and the link to my podcast, and several of my articles) out to friends and relatives. So much for keeping it quiet =)

(Oh, and he also has another website at if you're interested in business and career related events in Pittsburgh, PA instead of Columbus, OH)

Sunday, August 20, 2006

these people have problems...

Dear pennyfoolish,

MadCash4U just sent you money with PayPal.

MadCash4U is a Verified buyer.

Payment Details
Amount: $79.73 USD
Transaction ID: 3GX07270TE0036142
Subject: MadCash4U July Payment Sent
Note: Dear MadCash4U user, We are happy to send you your July payment. Now that you know MadCash4U is a legitimate GPT site please tell everyone you know and post this proof in our forums. Earn extra cash by referring your friends to MadCash4U. Please remember to take a screenshot of this payment and post it in our forums. Thank you.

I don't have a problem with the site admins wanting the users to post proof.. but it just sets off the suspicion-meter even MORE when they post in several areas on the site that "we are a legitimate site!" and when they constantly misspell things, and don't seem to care about their users. I did several offers there and the site is fine but the more they try to convince you they are legitimate, the less legit it feels...

Sometimes I'm too caught up in what I don't have...

...and forgetting to realize what I do have.

I have a lot of financial goals for myself. If you are a regular reader you will know that lately I have been thinking about trying to buy a house in the next few years, and am trying to save up money while paying down debt to do this. I also want to build up my emergency fund to at least $2,000. And I'm really concerned about my retirement savings, too; I'd like to have at least $75,000 strictly in retirement money by the time I'm 30 (in 7.5 years) to get a good head start.

So I'm getting stressed out from all these Tickle reversals (the rounds of denials seem to be over; I'm down at least $1000 by now) and getting depressed about how much money I won't be getting because of this stupid thing. Right now it looks like I'll be able to pay off my small credit card, but since I put a lot of charges on it in the last several days ($225 guinea pig bill, $125 in wedding weekend costs, etc) there isn't going to be enough left over to get my emergency fund up to $2,000 like I thought there would be. It'll basically just cover paying off the card. And I'm frustrated because I thought that I would be making some quick progress on this fund that I've been plugging away at these last few months.

As far as the house downpayment goes, this is a big setback because the sooner I get that emergency fund saved, the sooner I can divert the money to the house fund and to paying down the big credit card. So I probably won't be able to start on the house fund for another three months at least. At this point I'm considering stopping my Roth IRA contributions and putting that into the house fund instead, since I'll know if we're moving before April 2007, and if we don't buy a house I can just write a big check and redistribute. But what if something happens and I end up using some of the IRA money, which wouldn't have happened if it were safely away from me?

Yeah, so I think about all these things and I get more and more stressed out, because I've set all these goals for myself, and I always want to do things NOW NOW NOW, so I want to start putting money towards all these goals right now, and I had really hoped I could finish off the emergency fund and the small credit card with this money so I could get on to bigger things..

But I really need to stop and take a freaking breath. I get way too caught up in thinking how things are good, but they could be better.

I am already pretty well ahead of where most people my age are. (I know that we are in general terrible savers and this isn't a good comparison, but I am ahead.) I've at least got my $875 in the emergency fund, and I'm sending more money to it every month. I've got $8700 in my retirement fund right now, and if I really wanted to, I could pull out the $1,000 I have in the Roth to use for a downpayment if it's that important to me in the future.

But even more importantly, all of this saving is really pretty optional in my budget. And we still have lots of nice things even with all the saving and debt repayment - despite sending at least $500 a month to debt and savings, I can buy pretty much whatever the hell I want to, and a $225 guinea pig vet bill doesn't force me to raid my emergency stash, or heaven forbid, simply not treat my guinea pig.

I have a nice apartment, which could be bigger, but also could be a lot smaller. My guinea pig seems fine and isn't in any pain, the cat is fine, Boyfriend is fine, I am fine, we have plenty of food in the fridge and at least a month's worth of meat in the freezer. I even have clean clothes. The apartment could be cleaner but we don't have any ants or roaches or mice or anything like that. Things could be better, but I need to remember sometimes that things could also be a lot worse, and that I am lucky to have everything that I have - and the luxury of worrying about those extras that I don't, instead of worrying about how I'm going to get what I need to live.

Friday, August 18, 2006

My shot at the Question of the Day!

Here's my question to you all.

What are your vices?

What do you spend money on that isn't a need - something that just makes you happy?

My big vice is eating out at restaurants. I will eat literally almost anything and I thrive on trying new things, so Boyfriend and I hit a lot of restaurants. It's a bigger portion of my budget than I would like to admit, and I'm trying to cut back, but damn, it's just fun!

Thursday, August 17, 2006

Today's Question of the Day at Journey to Financial Freedom

Check out today's Question of the Day at Journey to Financial Freedom -

Do you have any side income other than your paychecks? If No, how you going to generate it in future? If yes, how you generate it?

What do you think about this fortune cookie wisdom?

About a week ago Boyfriend and I were sharing some artery-clogging Chinese takeout and he got an interesting fortune. And of course, here I am blogging about it! But I think it's an interesting question. The wise cookie says:

All progress is based upon a universal desire to live beyond one's income.

I think in the most general sense this is true - hunters and gatherers weren't satisfied with the meager "income" of food they got from an unstable supply, so they started farming to get more food... And teenagers want to make money so they can buy all the things their parents won't let them buy. But for individuals, if you really love what you do, you might do it anyway, even if you weren't being paid more to do it than something else.

If you didn't need any money, and no matter what job you held you could always have anything you wanted, do you think you'd work hard and make progress in your life even without the rewards of what money buys?

For my part, I say, hell no! I am a work-to-live person - although I feel like I SHOULD be working more than I do, that's more linked to my personal desires to get things done than to wanting to "get ahead" in the world. I don't really care if I'm ever the head of a corporation - I'd rather just get my work done and leave it behind at 5PM. And I'm OK with having lower pay because I don't want to exchange my life for my job. But if I could have whatever I wanted without doing so much at my job (like if I won the lottery or something) I would probably drop to half time at my job, enough to keep me occupied, and go do something else the rest of the day. (Probably eating more artery-clogging Chinese takeout.)

Weird email

amy grace remollata to pennyfoolish
Aug 16 (23 hours ago)

I’ve been poking around your site and thought you might be interested in checking out a company that I’ve been doing some consulting for… Prosper (, which is a people-to-people lending marketplace.
Prosper is kind of like an eBay for money except transactions aren't necessarily one-on-one…Lenders can diversify by bidding in $50+ increments across many loans with different quantitative characteristics (e.g. credit score based grades, debt to income ratios, etc.) as well as qualitative ones (e.g. personal stories and/or "group" affiliations). Here are some listing examples:
While many people are lending on Prosper because they see it as a whole new asset class… you have your stocks, bonds, savings, and now a “Prosper portfolio”… others are really into the idea of helping out others while making a solid return. In case you’re curious, this link shows average funded borrowing rates, which roughly translate into corresponding rates of return for people who lend on Prosper:
If you have questions about Prosper or want to talk to talk to someone there, please let me know… I’d be happy to help connect you.

Amy Grace Remollata

pennyfoolish to amy
Aug 16 (23 hours ago)

Yes, I've heard of Prosper, and I did set up an account but never got the bank-confirm deposits. I recently set up a different bank account though. Is there any particular reason that you are interested in my participation in Prosper?


amy grace remollata to me
Aug 16 (23 hours ago)

Hi Kira!

Thanks for the reply...Actually we are looking for potential investors for but it seems that you are already a lender. Anyway thanks again for setting up an account...

All the best,


OK, so now I'm thoroughly confused.. she wanted to tell me about it and tell me how great it was to lend on there, and then when I said I was already a lender, she was actually looking for investors? Why can't I be an investor as well as a participant? More importantly, if they are looking for investors, why don't they send out a fat PDF and post a link on the site like normal companies do? Sometimes I just don't understand I guess.

Oh and I did some Googling on this woman and she works for a web design company which apparently has been hired by Prosper, and there are Prosper posts with her name on it all over the web. So I guess she wasn't just looking out for my best interest...

Wednesday, August 16, 2006

My plan to make myself mortgage-worthy

As I wrote about previously, there's a possibility I'll be in my city for another five or so years, depending upon the events of the next year, and if that is how things are to be, I'd like to buy a house. I realize this is a fairly ambitious goal for somebody a year out of college, but house prices in the Midwest are not too bad, and since I don't have children and don't plan to have school-age children while I'm in this potential house, I can live in the less-pricey areas just fine. (They're not scary areas, actually they're just fine, but the schools are city schools.) My income is not likely to rise substantially so I know I'm limited both in how much mortgage I can qualify for, and in how much money I can save or use to pay down debt.

My plan as outlined previously was to try to do a little of both. Since I'll be using DealBarbie money to pay down the small credit card that I had been aggressively paying off, I'm re-allocating the money I was spending on that card partially to paying down the larger card, and partially to increase my savings. My savings will go from $71 per month to $168, and my payments on the big card will go from $150 to $250. I've additionally increased my Roth contributions to $125 from $100 per month. I will also throw any extra money I have lying around at the big card instead of into savings as I had been doing.

If I decide to buy a house, I'll probably start looking in about 18 months or so. (Since I have flexibility on my side, there's no need for me to buy in the warmer months - the peak selling season.) I also expect a 3.5% raise in October, which I will put towards savings. I want to maintain at least $2,000 outside of my house fund, and get together at least $3,000 in the house fund in order to get at least a 97% LTV loan. (Getting a 95% LTV loan would be even better - that would be $5,000 saved.)

So if I save $168 per month with August and September's paychecks, $228 (which includes the raise) from October 2006 to September 2007, and $300 from October 2007 through December 2007, I will have saved about $3972. I'd make about $300 in interest. Hopefully I can scrape up another $700 from various places to make $5,000 - and then I've got 5%. If I don't quite make the goal (which I might not, since I need at least another thousand to make my emergency fund) I'll at least be able to do the 97% LTV loan, which is lots cheaper than a 100%.

Simply having a plan makes me feel all warm and fuzzy. I like to make concrete steps towards defined goals, so I feel like I'm really getting somewhere, and that I can do it on those terms. Which is why I like to run numbers so much - it reassures me that this is doable, and what it's going to look like when I finally get there.

Question of the Day is at Mighty Bargain Hunter!

Check out today's question over at Mighty Bargain Hunter - what's the best deal you've ever gotten?

Tuesday, August 15, 2006


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Oh man that's funny..

I laughed out loud several times while reading the Festival of Frugality up at Punny Money. Oh, Mel Gibson, you and your wild, chair-wielding ways!

Listen to my dulcet tones...

...over at the Money Blogger Podcast. I think my interview went awesome and you should all listen to me cause I'm really funny. Really! Well, you might have to make up your own mind on that point. Check it out here. No iPod required! You can also listen to the interviews of Honor Roll members Money and Values, A Penny Saved, Young and Broke, City Girl's Financial Blog, Tired but Happy, and Cause collectively, we're even cooler.

Monday, August 14, 2006

Case of the "I wants"

So I was browsing my favorite cheap jewelry store,, looking to see if they had a ring like one I had previously, whose stones fell out (what do you want for $7?) and as I'm looking through the rings, I see one that catches my eye.. and what do I do? I look down at my hand, at the green ring that it would be replacing, and start thinking, "you know, this one is a little dull, and I like the square shape better than this dumb oval, and it's not even that big.." Then suddenly I realize: What am I DOING? I didn't want to replace the green ring before I saw that other ring. In fact, the ring that I am trying to replace specifically complemented the green ring! There is nothing wrong with my green ring and I do not need to replace it!


I think I had an attack of the adult version of the "gimmes", the "I wanna buy that". This is why I don't go into stores that I don't need to, because it's just gonna happen that I'll see something that I didn't need before I saw it.

To squash this instinct I have begun shopping for presents for other people, especially online. I really love buying presents, so my wish list contains something for somebody at nearly every store I visit online. It's a good way to redirect the "I wants" impulse.

Walk on by the pretty purple ring, just keep on walking...

Cause I'm just that awesome

Check out my interview at - he's doing a neat series where each of us is asked the same questions so you can see how we're different! And I'm number one! Woo!

Maybe it's just cause I'm the fastest replyer, but I like to think it's cause I'm awesome. ;)

I Have Been Told That Many People Have Opinions About What Other People Should Do With Their Money

So there's all sorts of debates about whether you should save for an emergency fund or pay down debt first. Some say, hey, if you pay down those debts, you'll just charge them back up again, you need real money in the bank! And some say, if you don't have debt service, your monthly payments are gone, so your emergency fund can be smaller! Yet others say, to hell with it! Where are the chocolate-covered bananas?

Obviously everyone is entitled to their own opinion, but it interests me to see how much attention is paid to the logical, numbers-crunching side of the game, and how little to the emotional side. This is the direction that Money and Values is heading in, but I think it's worth it for the rest of us to examine why we do what we do with our money too.

Money is fraught with emotions, and depending on what emotions you've fraught it with, you'll have different responses to this debate. My personal feelings about money have to do with safety. Money is there to help me if something goes wrong or something expensive and unanticipated happens (thanks, pig.) Only in the most immediate sense do I have money to buy stuff. Yes, that's what you end up doing with your emergency fund if you lose your job - you buy food, electricity, gas, clothing - but for me the emergency fund is there to buy me safety. It means that I am always at least $2,000 worth of needing stuff away from going into debt.

Question of the Day today at Money Dummy

Check out today's Question of the Day up at One Money Dummy Getting Smarter. She wants to know what your weirdest money-related memory is. Hm...

Friday, August 11, 2006

Opposing Counsel (About Getting A Mortgage)

The comments I get are always very interesting. (Except the ones that say "Here are some links that I believe will be interested".) On my recent post about whether I should save up for a down payment, or pay down debt, I got two somewhat opposing views about what I should do about my future in real estate.

Here is the first, from the owner of No Limits Ladies, a women's investment blog:

I know you want to be debt free, and I admire that. I know everyone's risk tolerance is different. (Plus your a numbers girl!lol) Consider this- your credit score is fabulous. I bet you could get a 100% loan if you shop around. Find a house that is undervalued, buy it no money down, and then immediately do a heloc and pull out the equity that is there. You can use it to pay down you other debts, or use it to hold the property so you can pay down your other debts. A house is a great way to make your money work for you, and help you get where you want to go a little faster.

Then here's the second, from Jessica at Debt Has Made Me Its Bitch:

be careful of this if you decide for no down payment...

Private Mortgage Insurance (PMI)

If your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender. This will enable you to obtain a mortgage with a lower down payment because your lender is now protected against any default on the loan.

PMI charges vary depending on the size of the down payment and the loan, but they typically amount to about one-half of one percent of the loan, according to the Mortgage Bankers Association of America. Mortgage insurance premiums are not tax deductible.

Let's say you put down 10 percent or $10,000 on a $100,000 house. The lender multiplies the 90 percent loan, or $90,000, by .005 percent. The result is an annual PMI of $450, which is divided into monthly payments of $37.50.

Most homebuyers need PMI because 20 percent of the sale price on a home is a lot of money; for instance, that's $20,000 on a $100,000 home. Homebuyers must maintain the PMI premiums until they cross that one-fifth-of-principal threshold, a process that can take years in longer-term mortgages.

Good luck!

My comments to the commenters:

Commenter 1: My debt is all at below-HELOC interest rates, and I might be moving in a year. I don't think it makes much sense for me. I don't really want to get into investing in real estate (considering that I won't think of the place I live as part of my portfolio) mostly because it seems like a huge pain in the ass. I'd rather just invest in mutual funds. For my part, I'm definitely the sort of person who wants to go to work, come home at 5, and have my "work" be over. Real estate investing is work that follows you everywhere and must be tended to at all times. But what this commenter is primarily trying to do is to encourage me to try to make money.

Commenter 2: I originally said that I was willing to accept paying PMI because it would take a lot longer to save up the 20%, than it would to pay down the mortgage enough to get rid of it, since I could be putting both my current rent money and the money I'm currently saving for the downpayment towards the mortgage, whereas if I wait and save up 20% I still have to pay rent. But Jessica is in a similar situation to me (lots o' debt, trying to get established) and her primary goal is to save me some money.

This is also kind of how I view the divide between the personal finance bloggers and the real estate bloggers. I'm not hugely interested in starting a side real estate investment business because I, like most personal finance bloggers, just want to do better with what I have, instead of spending my free time out getting more. We're "savers" versus "makers" of money.

And last, a commenter called padraic says:

Since you're planing on making a purchase sooner rather than later, I would recommend against paying down your credit card while saving as much cash as you possibly can. Obviously don't increase your debt. Cash is King and lending institutions like to see lots of cash, rather than less debt. Once you've closed on the house, if you have extra cash you'll have a lot more options.

To avoid PMI you may wish to consider a home equity line of credit. The HELOC will have a higher interest rate, but is deductible and you're building equity rather than paying insurance premiums.

padraic is more along the lines of an "investor" type blogger - he's looking beyond just keeping more of the money I make, to try and take advantage of the game. This actually is a route I may end up taking, depending on where interest rates are, and whether my income has risen any and allowed me to save more money. Ultimately what I'm doing is to do a little of both - try to get together as much money as possible while paying down the debt as much as possible too. I may adjust this strategy over time, especially if I do a 0% balance transfer, but his advice is kind of in the middle.

The third Festival of Under 30 Finances!

Check out our third Festival of Under 30 Finances over at Beachgirl's Budget Blog. She did a great job laying it out and there's some neat articles! Don't pass it up!

The next edition will be on August 25th, hosted by Pragmatic Finance - you can go here to submit your article and answer to next edition's question.

Wednesday, August 09, 2006

The irony is, she's not stressed at all...

My guinea pig, that is. She has to get checked out because she's got a little lump on her back, probably a cyst, but it needs to get looked at because she doesn't like it to be touched so it must hurt. And the nice vet that I liked a lot left the practice that we took our animals too. (The receptionist there said that all the remaining vets could see guinea pigs, but I just liked that one more.) The vet hospital doesn't have an exotics vet anymore, but they recommended someone, and I'm waiting for a call back from that office about whether they can see her or not.

Of course, last night as I was discussing this with my boyfriend, I said, "well, there goes my emergency fund.." But that's what it's for, isn't it? I try to absorb most unexpected costs into my regular budget, but we just took the cat to the vet, and if she needs surgery it'll be at least a couple hundred for all the care. So here goes nothing, I guess.

Question of the Day - Day 7 at Young and Broke

Check out today's question at Young and Broke - If you had $10,000, one day, and one store to spend it in, what store would you choose?

I'd hit up a place that sold a lot of gift certificates, and buy restaurant gift certificates so we could eat out whenever we pleased.. that would be awesome.

Tuesday, August 08, 2006

Day 6 of the Question of the Day Marathon!

Hop on over to Single Ma's Fabulous Financials and check out today's question. She's anxious to know how anxious YOU are about your savings! Today's question is:

In terms of your annual gross salary, what percentage do you save? Are you happy with that amount or do you think you could do better?

Oh boy oh boy oh boy Coupon Rebate!

I clipped out a form from last Sunday's coupons for a $10 rebate when you buy 10 of the Kellogg's products that they list. This is very exciting because a) we already buy most of this stuff and b) it was in an insert with coupons for all of those products! I know that they kind of look at these things as a loss leader because most people won't actually bother to collect all the store receipts and proof of purchase things, but I figure it's an easy way to make ten bucks on stuff we're already buying. And coupons to boot! Coupons for $1 off two! I went ahead and jumped the gun and used the coupons - and then when I got home, I got the flier saying that they would be doing the doubling-the-$1 coupons thing again this week. Oh well. We bought three boxes of Pop Tarts and four boxes of cereal, and we'll buy some more cereal later. (I really like cereal.) I am a lot more excited about this than I should be, I think.

Submit your article for the Festival of Under 30 Finances this Friday!

Just a quick reminder that the Festival of Under 30 Finances will be up at Beachgirl's Budget Blog this Friday. The deadline is Wednesday at midnight, so don't miss it! Go here to submit an article:

It can be on any money-related topic you want, as long as it's something that you think other people under 30 would find useful.

Here's her question for this edition:

If you had to choose, would you rather have a job that pays well but little/no benefits, or have a job that might not pay great but has great benefits? Why?

Submit your article and your answer for this Friday's edition!

What interesting spam you have

Collaborator Needed
Group Finance Director
Halifax Bank of Scotland
Edinburgh EH3 9PE
Tel:+44 704 0117071
Fax:+44 870 4902369


I am Dr. Phil
Hodkinson, Group Finance Director (H.B.O.S) I have urgent and very
confidential business proposition for you. I understand that through
Internet is not the best way to link up with you because of the
confidentiality which the transaction demands. However, I have lready
sent you this same letter by post one month ago, but I am not sure if
it did get to you since I
have not heard from you, hence my resending
it again.

I discovered a dormant account in my office, as Group
finance director with Halifax Bank of Scotland. It will be in my
interest to transfer this fund worth 15,000,000 million pounds in an
account offshore. If you can be a collaborator to this please indicate
interest immediately for us to proceed.

Regards and respect,


Phil Hodkinson

1. I don't recall receiving anything from Scotland, but I could be mistaken as to the good doctor's origin since his email ends in it (Italy).

2. 15,000,000 milliion pounds? So 15 million million? Are we using the British or American system of calculating billions here? Cause either way, that's probably more than any Scottish bank holds. And they might notice 15 million million pounds missing.

3. If you resend something again, you have sent it for the third time. Damn, maybe he also sent me a letter from Italy! I could be collecting foreign stamps!

Monday, August 07, 2006

Is it better to pay down debt or save for a down payment?

In my case, since I have a gross income of $2500 a month, this is a pertinent question even more than it is for people with higher incomes. The debt service can significantly cut into how much house you can be approved for, because a regular payment of debt service is a lot bigger chunk of $2500 than of $5,000 or $10,000.

At my income, with no debt service and no down payment, on a 7% 30 year mortgage with $1000 homeowner's insurance (I have no idea how much these things cost) and $1500 property taxes (about right for the size of house I would buy), Bankrate says I can qualify for about $103,000. That seems pretty good to me!

My question here is, should I bother saving for a down payment, or is it more important to eliminate my $6800 in credit card debt? I don't think I could do both in a short period of time unless my income rose substantially, and hell, if my income rose that much I could qualify for whatever I wanted anyway. So let's assume that I can either pay down the debt, or save up $6,000 (on account of having to pay minimums on the credit card while saving.)

My minimum payment right now is $140. So if I had an extra $140 debt service, with no down payment, I could qualify for only $62,000. If I had the $6,000, I could qualify for only $6,000 more, or $68,000.

However, if I went into my mortgage with no down payment at all, but also no credit card debt, showing only my student loans, I could qualify for $83,000.

This exercise is pretty clear to me. Paying off my debt and reducing the monthly amount of expenses significantly increases the amount that I can borrow, because I'm paying the debt service into the mortgage instead of the card.

What about my student loans? How much more house could I get if I reduced the payments as much as possible? All of my loans are consolidated with Sallie Mae, so they have a number of payment plans. The Grad Choice plan appears to lower the payment substantially for two years (presumably while you are in graduate school) - for me that would be $51 a month. I could qualify for $96,000 with that loan - but the payments would rise to $151 permanently after two years, which wouldn't be so bad since I'm already paying $150 on them now. You have loan options with the reduced payment from 2 to 5 years - the 5-year-reduced option is $62 a month for five years and $184 a month after that - ouch. In order to get the most mortgage, the best plan would probably be to take the 2-year reduced, just to get through the mortgage-acquiring process, and then switch back as soon as possible. While that would certainly get me a larger mortgage, I don't think I'd want both a larger mortgage payment and a rising student loan payment at the same time. But it might be an option to try to get a better rate and allow at least a little flexibility above what I might otherwise qualify for.

This is also a really good example of why I absoLUTELY cannot buy a car with a loan, if I want to think about buying a house. Even a tiny loan payment would really knock down the amount I could qualify for on my own. So in this case, if we move into a house that's far enough from work that I need to drive, it would make a lot more sense to buy a car in cash than to use that cash for a down payment. But what effect would having even a small downpayment make on what rates I could get?

I checked with my credit union's online calculator, and I can get a 100% LTV at 7.375% from them, although I would get a slightly better rate (7.125%) if I had $3,000 for a 97%, or $5,000 down for a 7/1 ARM at 6.5%. (Anything that is not one of those 30 year plans has to have at least 5% down.) A 20-year loan would get me 6.5%. But in order to actually get the $5,000, that might require not paying down the debt as aggressively... Ah, to have enough money to do both. =) As with everything, I think the answer is going to be, do both! So I'm going to try to get the $5,000 together, while lowering the debt as much as possible. I think in the long run I'll save more money and get a better loan if I can qualify for a regular loan, if I have 5%, than if I have no debt and also no money.

Around here, I could actually get a nice little house for $83k (because I don't intend to have children and send them to school in that area) and the mortgage payment would be only $550, which is a lot less than our current rent of $695. I'm thinking about houses because depending on how Boyfriend's career situation goes, we might be staying here for several years, in which case I'd like to buy a house, and he has agreed that it would be best if I bought it and he paid me rent, to avoid possible troubles if we break up (and also because he won't be paid much during those years anyway.) So it's something to think about for the future.

Question of the Day part 5 - at Free Money Finance

Take a look at today's question, hosted by Free Money Finance:

Which is more important to financial success: saving money (spending less than you earn through cost cutting) or making your income as high as possible (earning more money)?

FMF writes regularly on topics emphasizing both aspects, but let's see what his final answer is...

Saturday, August 05, 2006

MBNA loves me when I run up the bills, evidently

So I'm logging into my various online accounts to add my new credit union bank account to the billpay sections, and as I log in to MBNA I notice that my available credit (which is what they display on the front page instead of your balance) has suddenly shot up a LOT.. to more than my credit limit.. and I think, hey! Did somebody pay all my bills for me? Then I go into the account summary and lo, MBNA has raised my credit limit $2,000 to $5,800. I guess I won't have to ask for much of an increase in order to fit the balance transfer on there. (Note that they never raised my balance while I was paying it down...)

I am a very impatient girl!

So after writing the post about how time is money and usually a lot of money, etc etc, I felt kind of guilty for not doing anything about my big credit card. I mean, three hundred bucks! That's a lot of money! And the faster I pay down the debt, the smaller the minimum payment becomes, so if I had a real emergency it wouldn't be a huge burden.

It occurred to me that, hey, I have three credit cards! And they're all always sending me crap in the mail to get me to transfer my balances! So I checked my other Chase card (the one that doesn't have the balance) and lo and behold, they have FIVE different balance transfer options, all at very nice rates (7.99 with no fees, to 0.99 until 2/07) and all done automatically online. Unfortunately I don't think they'd let me transfer one Chase balance onto another.

So I check my MBNA card. This has some charges on it, but I expect to fully pay it off with the DealBarbie & Co. money that I'll get in about three weeks. Holy crap! They have a 0% offer until JUNE 2007. And that's all without having to apply for any new cards or anything like that. And, of course, when that offer expires, I can just transfer it back to the Chase card at a very nice rate! I'll have to get a limit raise on the MBNA card, and check out what the fees are, but this could be super easy.

Of course, now I really want to do it RIGHT NOW. Unfortunately, I know that a) if I ask to have my limit raised now, I'd have to ask for a whole lot extra since I still have charges on there. Which would reduce the likelihood that they'd say yes to the higher limit. And b) you always pay off the lower-rate balance first, so it would be royally stupid to transfer a big balance on at 0% while I still have a smaller one at 9.9%, because then the small one would never get paid off and would accrue interest even faster than the big balance did at 3.9%. So I need to wait until I can pay off the whole card, and THEN ask for the limit raise, and THEN transfer the balance over.

But I wanna do it now! Now now now! I am very impatient. Having thought of such a good idea, I want to put it into practice as soon as possible.

Friday, August 04, 2006

A little bit of time creates a lot of money

It occurred to me that after selling my 8.3345 shares, I guess I can take $15 of capital loss on my taxes. I thought to myself, dang, that's not much money. But then I thought about it again and realized that that means $15 less that I have to pay taxes on - so essentially a free $3 or $4. And I spend a lot more time than that doing PineCone surveys for $5.

This is part of the reason why people often dawdle about opening 401(k)s - most of the time, we just think about how we don't want to use that 20 minutes of our life on something that boring. But if you think about how much you'd reap from using that 20 minutes for something productive, the return on your time is pretty awesome.

This even works on doing things you shouldn't be doing - if you take the time to do it in a slightly less bad way, you benefit a lot. For example, lots of people cash out their 401(k)s to buy a house. But if you roll that 401(k) into an IRA, you can take out $10,000 of it without paying the 10 percent penalty. How much time does it actually take you to do all of that crap? Probably a couple of hours, if you tally up all the individual ten-minute sessions you spend on it. So it seems like a huge hassle because you have to keep spending these ten minute chunks on it. But if you consider that you're saving $1,000 for your four hours of time, each of those ten minute chunks is worth about forty bucks. If somebody came up to you and offered you forty bucks to sit in a corner and shuffle papers for ten minutes, you'd probably do it. Why does it seem less valuable when you have to do it for your own money?

I think part of it is the issue of scale. When you're looking at cashing tens of thousands of dollars out, a thousand dollars just doesn't look as big. But you'd definitely stop and pick up a five dollar bill on the sidewalk because that's a gain of five bucks for free, whereas saving $1000 is just a potential not-loss. You figure you're already losing so much money, what does another thousand matter? Same deal with mortgages and car loans and anything else big - a few dollars just doesn't seem to matter enough to take the time to work things out, considering how much money you're dealing with in whole. Most people wouldn't bother to haggle with the car salesman over reducing the price of the car fifty dollars, but they'd probably get in a shouting match if that salesman worked at a coffee shop and wouldn't give them the rest of the change from their five. You're still losing money, but in one situation you're much more likely to fight for what you believe you deserve than in the other.

I am way guilty of this syndrome when it comes to my big credit card. I have about $6800 on it, at a nice 3.9% courtesy of some checks from Chase, but I guess I could move it to a 0% card. It accrues about $22 in interest each month, so I'd save about $300 over the life of the payoff (according to Bankrate) if I switched. Oh, but it's such a hassle, I complain to myself! I'd have to actually apply for the card (Ten minutes.) I'd have to link my new bank account to the new card. (I'm going to have to do that anyway since I switched banks. Five minutes.) I'd have to find a new card when the time was up. (Another fifteen minutes.) Oh, I'm so lazy. That's like an hour to save over $300. Very lazy. I'll write tomorrow about what I'm actually going to do (and it's even lazier, but at least it works.)

Checking account tango, or, The peace of mind from always knowing your balance

So I applied for a KeyBank checking account in order to get the free iPod nano, and was thinking of what I should use the account for, or whether it would be better just to wait and close it after enough time had passed. My first idea was to put $200 or so in it, and just leave it there, for "uber-emergency" money - ie if I needed money NOW and couldn't wait for it to be transferred from ING. I had a $200 savings account cushion at Fifth Third, but at the credit union you only have to keep $25 in your savings account (it's your "share" account, ie your membership stake.) So I'd want to have a little money there too. Not that I foresee having that many emergencies, but hey, no emergency is foreseen.

The other idea I had was to use the account for revolving bills that are generally billed to my credit card. I know that these expenses come (the cell phone bill, Netflix, and Lingo accounts) but I still get a little upset when there are charges to my card that I didn't precisely make. (Well, I ran up the charge, but it's not like I handed my credit card to T-Mobile.) So I might feel a little better if I had a direct deposit going to that account that would cover those charges, so I wouldn't have to pay the credit card every month. I don't want to have them auto-charged to my regular checking account because that would drive me nuts in a very short period of time, when $60 goes missing and it takes me a while to remember where it went. (Also, sometimes it gets down that low, especially when we are close to the end of the month and we just went on a big food shopping trip or something, I don't bother transferring in any money since we're not likely to need to spend any more before I get paid again.)

I have a great online direct deposit system where I can divert my pay (by percentages, not fixed amounts unfortunately) into any account I want. I don't think that they even have a maximum, because at one point I had money going in four different directions at once. (My obsession with multiple accounts at ING.) I think it would make me a lot calmer and happier to not have charges appearing on my credit card, and to have a checking account dedicated to this purpose. Also, over time extra will build up (because I can't allocate in my direct deposit the precise amount that will be needed) and that will be a nice cushion if I need it.

So here's what I'm going to do. I'm actually going to go all the way and have ALL of the money that I need for bills, other than rent, deposited into the Key account and all of the bills will be paid out of there. They have a great online system (I used to have an account before I moved) so it should be pretty easy. My regular checking account (at the credit union) will contain just rent money and the spending money for the month. Boyfriend writes me a check for his half of the rent plus parking pass and half the cell phone bill, but during the regular school year, since he gets paid the same day I do, the check doesn't actually make it to the bank for a day or two. So I need to be able to cover the whole rent out of my regular checking and still have some money left over.

Here's my fixed expenses:

Netflix - $13
Phone bill - $57
Newspaper - $5
Lingo - $10
Student loan - $150
Credit card - $250
Electric bill - $75
Gas - $15
Roth IRA - $125
Total: $700

Obviously in the winter I will have to raise the allocation a little for the gas bill going up.

So here's where the money will go. I have to divvy things up by percentages since that's how my direct deposit works, and 1% is about equal to $18.

KeyBank - $702 or 39%
ING: $162 or 9%
Normal checking: $936 or 52%

Our rent is $695, so that will leave me a comfortable margin of about $240 in the account between when I write the rent check and when Boyfriend's check clears in my account. Then I will have about $660 to spend for the month on all non-bill items, which I think is a good amount. I was budgeting $500 before and always ended up a little over. (Since I make more than Boyfriend, I buy all the groceries.) I spent a while playing around with the percentages, as I decided how much should go to savings and how much to the Roth and how much to the credit card. I had originally set the savings at $198, but decided to up the debt payment instead. Which actually worked out quite nicely because now the actual needed amount for the Key account is $700, and what will actually get deposited is about $702, so the extra $15 can go into savings instead.

I am extremely pleased with myself! I bet you can tell. With this system, I won't have to worry about anything clearing. All of the bills will just zip out of the Key checking account. And I'm also bumping up my savings and debt payments - my minimums are actually $137 for the student loan and $140 for the credit card. I really want to get my emergency fund up to a good size, so once I do, then I'll probably cut down the ING contribution and put it towards debt. But it just makes me really happy to know that I won't have to put anything on my credit cards anymore, won't have to pay them off even for the automatic things anymore.. it'll be great.

Question of the Day 4 - Up at Experiments in Finance

Today's question comes from Experiments in Finance, who asks: How many credit cards do you have and what's their combined limit? Let's see what the brightest financial minds in the blogosphere have to say...

Thursday, August 03, 2006

People have waaaaaaay too much free time

A little off topic but this was so strange I just had to share it. Click on over to Amazon and read what some people think about a gallon of Tuscan brand milk.

Throwing in the towel

Well, I finally sold my shares of stock in ShareBuilder. I had 8.3 shares of ViaCell, which I bought into at about $4.50 a share. The thing I didn't realize about ShareBuilder is that you can buy in for $4, but you can't get back OUT for less than $16. Which I guess isn't so bad if you have 400 shares to sell all at once. However, I also got a free trade and decided that it was probably worth it to use it. (Otherwise, I'd get like $10 back. A great example of how fees eat up all your damn returns and more.) So I'll be getting $31.08 back. I decided to do it now rather than wait because since I'm in the process of switching banks, I didn't want to have to re-register a new bank account with Sharebuilder.

Maybe I'll register a new account with a promotion code and see if they send me another free trade...

Bought my credit report

So I've been feeling a little paranoid about my credit report. A while back, I got a 60-day-late on one of my student loans because they had been sending the payment notices to my parents' house. I just graduated, so this loan was just starting repayment. I paid off the loan with a balance transfer at 4% cause the loan was at 8%, but was worried that it was going to ding my credit. (Since I'm young and have short-lived accounts, it doesn't take much.)

Well, I guess my worry was overstated - I got a credit report and score from Equifax and at least by their records, that loan isn't even on my credit report. So, no ding. Hooray! Nothing suspicious on my report, either, which is good. It shows my collection of consolidated loans (so I have one big one, and several with $0 balances) as all paid as current, for some reason.

And my score is... 735! Yaaaay!

Well, I guess it's not record-worthy, but it'd get me the best mortgage rates. I think people get a leeeetle too caught up in having a high score - but your credit score is only good for something if you need some credit. So if it's a little low, unless you're going to apply for a card or a loan, it's not a big deal right then. But it's nice to know that just by default, by not doing anything wrong but at the same time not doing any of the right things (like having long-held accounts or all below-30% utilizations) you can get a perfectly acceptable credit score. I think it's actually higher than a year ago when our brokerage company pulled Boyfriend's and my credit reports for our apartment application.

Equifax says this about my account:

Positive factors - no late payments, no recent attempts to obtain credit
Negative factors - age of accounts is low, most recently obtained credit is 8 months old

I guess I can't really do anything about those. As with many things, time cures all credit reports. =)

You can also check your credit reports at

Question of the Day Marathon - Question 3 up at The Investimist

Click on over to the Investimist and leave your answer to today's question:

What was the last thing that you splurged on that you didn’t really need?

Among us PF bloggers and readers, this might be pretty interesting.. =)

Wednesday, August 02, 2006

100 things about me

1. I was born on December 8th.
2. I am a brunette.
3. I am short.
4. I wear a digital watch all the time.
5. I have two guinea pigs.
6. My guinea pigs are named Adrian and Wedge Antilles.
7. Both of my guinea pigs are named after movie characters.
8. I hate grapefruit juice.
9. I like ranch dressing on my French fries.
10. I went to college in Cleveland, Ohio.
11. I am a science dork.
12. Specifically, I am a biology dork.
13. I own at least 30 books about genetics.
14. I hate shopping for clothes.
15. I love shopping for food.
16. My favorite color is red.
17. My favorite stores are IKEA and the grocery store.
18. I love fruit.
19. I have bought only 1 music CD in the last five years.
20. I have more than 11 gigabytes of music.
21. I use Excel to organize just about everything.
22. My cat is named after an ancestor of Aragorn.
23. I have a bamboo plant in my office.
24. There are earthworms living in my bamboo plant's pot.
25. Both of these earthworms are named Rupert.
26. I enjoy high-quality scissors.
27. I am trying to grow out my hair - below the shoulders is short.
28. I wear glasses.
29. I got glasses in tenth grade, but am only on my second pair.
30. I used to collect cut gemstomes.
31. I also used to collect blue glass bottles.
32. Now I collect Shaun the Sheep items.
33. I have art posters all over my office to cover the damage from the previous occupant.
34. I am extremely organized.
35. But, I am very messy at the same time.
36. I have been using computers since I had sufficient manual dexterity.
37. My home computer is blue with a light inside.
38. My previous computer case had a hole cut out of the top with tin snips.
39. I eat dry Mini Wheats and Cup A Soup as snacks at work.
40. I can't cook independently, but I can follow a recipe.
41. My favorite ice cream is mint chocolate chip.
42. I hate mint in all other forms, including gum and toothpaste.
43. I hardly ever write checks or use cash.
44. I have never actually used up a book of checks before I switched banks.
45. I was an early adopter of Paypal in about 1998 - they gave me $20 to sign up.
46. I was also an early adopter of eBay.
47. In high school, I used to buy what can nicely be described as drag queen shoes on eBay to wear to school.
48. These were the "scare the freshmen" shoes.
49. I want a dog.
50. I didn't get a cell phone until junior year of college.
51. I really get a kick out of getting those $10 checks from the credit card company to sign up for crap I don't need.
52. I love editorial cartoons.
53. My favorite TV show is Animal Patrol on Animal Planet.
54. I also like Project Runway on Bravo.
55. For these reasons we are not getting rid of our cable even though it is expensive.
56. I held 11 different jobs during college.
57. By the time I graduated college, I was working four different jobs at the same time.
58. I got fired from two of those jobs.
59. But I didn't like them anyway, so pooh to them.
60. My favorite candy is Zero bars.
61. Actually, I just love candy.
62. Fortunately, I have had only one real cavity, and that was in a molar that fell out.
63. I had braces, but only for about a year and a half.
64. Which was fortunate because I did so much damage to them that it probably cost twice as much as it should have.
65. I have one sister, who is older than me.
66. She had to have braces a lot longer than I did. Ha ha.
67. I have a bicycle with a detachable basket.
68. I do not like to vacuum.
69. I do like to load and unload the dishwasher.
70. I lasted only three weeks in my new apartment before breaking down and buying the dishwasher. (I was going to wait for my second paycheck before buying it.)
71. I am not much of a doodler.
72. I like to have separate bank accounts for different goals, even if all but one don't have anything in them right now.
73. I read very quickly and devour content.
74. I like Asian food, particularly Thai and Japanese.
75. I will eat just about anything with Korean barbecue sauce on it.
76. My favorite vegetable is red peppers.
77. I have absolutely no tolerance for spicy stuff.
78. I almost always order eggplant parmesan at Italian restaurants.
79. I have an ancient laptop with stickers all over the lid (it's about seven years old now.)
80. It took me less than six weeks after graduation before I started my first job.
81. This was the fourth job I interviewed for.
82. I really enjoy saving up coins.
83. I have two piggy banks, one for silver change and one for pennies.
84. Unfortunately, I hardly ever get any change because cash runs through my hands like water, so I try not to carry any.
85. I have a weird farmer's tan from going to a baseball game more than a month ago.
86. I like to eat frozen fruit.
87. In the summers, when I lived in un-air-conditioned places, I used to keep a store of blue cool-packs in the fridge to wear on my head. It really works.
88. I also had a special ice-tube-maker-tray for making tubular ice that I would put in my guinea pig's water bottle when it was really hot.
89. I really like egg salad, potato salad, macaroni salad.. all of those salads that are in fact really bad for you.
90. I drink Crystal Light all day at work cause I am too cheap to buy more Powerade. I just reuse the bottle over and over.
91. I was a vegetarian from ages 12 through 21.
92. I still buy most of my meat from Whole Foods. I used to buy it from a co-op.
93. My cell phone plays "Call Me" by Blondie when my parents call.
94. It plays "So Long And Thanks For All The Fish" when my boyfriend calls.
95. At any given moment there are usually four pairs of shoes in my office - one pair is on my feet.
96. I like the premium Kraft better than the regular old mac 'n cheese, but I don't like Velveeta.
97. My favorite cheese is Havarti.
98. As a kid, I used to eat raw hot dogs pretty much all the time.
99. At one point, I had five sets of earring holes. I let the top ones close and now I don't wear any earrings. I kept losing them.
100. I love books and have bought more than 40 in the past year.

Day 2 of Question of the Day Marathon up at Caustic Musings

Today's question of the day comes from Caustic Musings: What is the weekly average cost per person for food in your household, including groceries, snacks, and dining out? Click over and leave your answer!

Tuesday, August 01, 2006

Question Of The Day - Day 1 at AllFinancialMatters

Today is the first day of the Question of the Day marathon, where each blogger on the list will ask a question of their readers. Today's host is All Financial Matters, and you can check out the answers to his question here. He asks what you would give up in a time of severe budget crunch. Click over and add your answer!

Sad over coupons expiring

I've read previously about getting great coupons off wine bottles and alcohol of various kinds and I was REALLY excited to get some about a month ago. Ecco Domani wine had a $1 off pasta coupon, no purchase of Ecco Domani required. I was all excited about this, and took three of them. Well, it seems that the end of the month is already here, and I haven't used these coupons.


Oh well. I guess now we just have to pay full price for the fancy tortellini in the little bags. =)