Link love: PF blogs

If you’ve been reading my blog for a while, you probably have realized by now that I’m trying to make a big change in my financial health and get rid of my debt. I steal just about all of my ideas from the personal finance blogs in my Google Reader. Check ‘em out!

• Blogging Away Debt
• Bargaineering
• Boston Gal’s Open Wallet
• BrokeAss Gourmet
• Budgets Are Sexy
• Girls Just Wanna Have Funds
• Make Love, Not Debt
• Million Dollar Journey
• Mrs. Micah: Finance for a Freelance Life
• My Dollar Plan
• No Credit Needed
• The Simple Dollar

These are all great sites, and after reading most of them for a while, I feel like I really get to know the writers. It’s a nice feeling! Each deals with different topics about personal finance, so you can pick and choose what you like.

I tend to skip posts about investing, since I’m a ‘fraidy cat and want to focus more on debt reduction and saving than on building wealth.

While I’m on the topic, I should mention that I love using Mint for tracking my spending and calculating my net worth and such. I’ve linked up all my bank accounts, credit cards, and student loans to it so I can see where all my money goes. I’ve turned on a few friends to the site, and they’re loving it, too. I can’t recommend it enough– it might take a little while to get everything set up and running smoothly, but it’s worth it. Tip: write down your security questions for all your financial sites before trying to synch them up with Mint. It makes the process a lot easier.

PF Confessions

Bless me, personal finance bloggers, for I have sinned. This is my first time at confession.

I didn’t have an emergency fund before I got laid off, but I did have some savings set aside that I could dip into in case of an emergency. I had cashed in my savings bonds in December and put all the money into an ING Orange Savings account (let me know if you want a referral code!) where it could accrue some nice interest.

I was ok money-wise for about a month of my unemployment. I know what you’re thinking: but you’ve only been unemployed a month! Didn’t you get any severance pay? Yes, and yes, I answer you. I was only unemployed a month, and I did get some severance pay. But I still had bills to pay, groceries to buy, and a joint account to contribute to.

By the end of the month, I had to dip into said ING account. I needed $700+ to pay for taxes, and that wasn’t in my checking account. I needed $1000 to contribute to the joint account for rent and utility bills. Now my savings are seriously damaged.

I had to use my credit cards, too. Just before getting laid off, I paid $500 to each one, which I mentioned here, and was feeling pretty good. I regretted this decision when I realized another $1000 in my pocket would have been nice over the past month. I did my best to hold off, but as my checking account balance dwindled, and I still had things I had to buy (my train passes to get into work have been the biggest culprits, but wanting to do Easter baskets for mum, dad, and the BF didn’t help, either), so out came the card.

As penance, though, I have decided to freeze my spending as much as I can for the time being, at least until I get paid at the end of the month (just missed the payroll cutoff for this week) and put all of my unemployment money (if I ever get any *note to self: call the dang DUA*) back into my savings account to boost it back up.

I have also decided to change around my direct deposit allocations. $50 per month will go to a local savings bank, where I have a checking account, and pretty much just sit there as an emergency fund (since ING takes a few days). $100 will go to ING to my savings account. I plan to use this account for major purchases and/or events, which may include a new car, a wedding (not up to me on the timeline for that particular event), or a down payment on a house. This account might be split into three distinct areas for said major purchases/events, but that’s pending a discussion with the BF when both our finances rebound a bit. The rest of my check will go straight to my checking account for bill paying and discretionary cash.

And once I’ve evened out a bit more (read: after the end of this month, once all my bills are paid for the time being and I’m earning a steady paycheck again), I’ll get my debt snowball crackin’ in earnest. I still want both my credit cards paid off ASAP and would like to clear out some of my smaller student loans shortly thereafter.

Shiny new toys!

Almost sounds like the band called Shiny Toy Guns. Listen to “Le Disko” if you feel like strutting down a futuristic runway. That’s what I do.

Anyway, I am the new owner of three cool new things. One is not shiny but somewhat toy-like, another is very shiny and not toy-like at all, and the third is none of the above.

That’s right, if you hadn’t guessed already (and I’m fairly certain you didn’t), I am the new owner of a Garmin nuvi 260 GPS device, a 20-quart brew kettle, and a new-to-me/us cupboard! Be excited!

I got the Nuvi for my recent birthday, and have been playing with the voices and settings ever since. I don’t go places that require navigation on a too-regular basis, mostly since I don’t drive very often, but I’m excited. After a lot of discussion, I’ve decided on the British English female voice to guide me on my journeys. Her name is Serena according to the program, but the BF and I are calling her Victoria. Like Beckham and the Queen (not the current one, obvi). Sweeeeet!

Next up: the brew kettle. This means I can finally start brewing my beer with the kit the BF got me for Christmas! We’ve been saving all our bottles, and tonight will probably be the maiden night of brewing at our household. Let me know if you want to try a bottle when it’s done!

Lastly, my Mum gave the BF and I an old particleboard/laminate cupboard she had collecting dust and other assorted nastiness in the basement. The washer and dryer are finally out of our kitchen and in our shiny new bathroom (OMG YAAAAAY!! SO MUCH SPACE!!) so we decided to build some shelves to hold our food. We have  no cabinets, so storage has been a challenge until now. Mum came through and offered up the cabinet, which we will paint cool colors (yellow, teal, orange, and green) to match a sweeeet chip/dip set friends of ours gave us for housewarming (note: it’s WAY cuter in person than it is on the site. Ours has royal blue, not purple). Watch for pictures!

The new year

Oh, so it’s February 2, you say? Who cares? It’s never the wrong time to talk about your goals.

I have one New Year’s Resolution this year. One. It’s to take at least one cooking class. It doesn’t matter if it’s at the local community college, through the town’s recreational programs, or at Williams-Sonoma. As long as I take a cooking class, I’ve achieved my goal.

Some other goals, but not resolutions, include:

• Meet with a financial advisor to discuss paying off loans, saving for specific events/items, and planning for retirement.
• Set up a debt snowball and get paying it. (In progress)
• Pay off at least one of my credit cards, preferably both.
• Blog three times per week.

I have others, more than I likely should in order to track them, but this is the start. I’ll add more if/when I think of them.

What are your goals?

Big financial plans

All right, people. You know what season it is. Not winter, though I’d much rather talk about all the wonderfulness winter has to offer.

No, it’s “busy season,” that time of year when all of my accounting friends go AWOL for 4 months. They’re all spanking-new accountants, too, which means they’re really, seriously, missing. Taxes. ::shudder:: I’m glad I have plenty of non-accounting friends who’ll still be around.

I’m going to have to figure out how to send something fun to my roommate from college sometime in mid-to-late February. That should cheer her up, no?

Anyway, I started my taxes (barely) yesterday, and I took a big chunk out of them today. I don’t quite have all the forms I need yet, since they don’t have to be sent out until January 31, but I did what I could with what I had. So far, my refund looks like it’ll be almost $2,500! Considering I got a $5 MA refund last year, that’s some serious dough.

The big question is, what do I do with it? Right now, I’m thinking I’m going to put it away to the wedding-that’s-not-officially-happening-yet/house fund. Though I must say, having a zero balance on one of my credit cards looks pretty tempting, and I might just do it. Or I could split it and cut my total credit card debt in half (I have 2 cards that need paying off).

Related to this decision is my latest idea in helping reduce my debt: the debt snowball/ladder. I’ve heard it referred to a few different ways on the personal finance blogs I read (I’ll include the links in a blogroll eventually), but I’m going to call it a snowball. There are a couple of ways to do this, though they all start with the first step of recording all of your loans/debts, the amounts owed, the interest rates, and the monthly payments:

• Option 1: Arrange the loans/debts by amount, starting with the smallest first.
• Option 2: Arrange the loans/debts by interest rate, starting with the highest first.
• Option 3: Arrange the loans/debts by amount first, then find the midway point, draw a line, and arrange the loans/debts under that line by highest interest rate first.

From there, you start paying. Once you’ve paid off the first balance, you add that monthly payment to the next loan. You keep the amounts you pay each month consistent, but this way, you’re putting more toward the next loan/debt.

The big benefit of option 1 is that it really helps in the psychological battle of debt reduction. You see the debt go away quickly, and you’re inspired to keep going. The drawback is that it’s generally more expensive. The inverse is true for option 2: it’s less expensive, but you don’t have that psychological boost you need to keep going. I’ll likely use option 3, since it’s a good combination of the two. Since I’m just starting out in debt reduction, I think I’ll need some motivation to keep going.

I make a pretty heavy emphasis on the loan/debt thing, since most of the personal finance bloggers I’ve read deal mainly with credit card debt. That’s not the root of my problem: I have student loans coming out my ears and need to improve my credit. Hence the emphasis on the “loan” part.

What do you think? Which option would you use? Will you spend or save your tax refund?

Money talks

I have just self-imposed a spending freeze. I have gotten to the point that I realized I spend way too much money on stuff I don’t need, when I should be paying down my $75,000 or so in debt. Awesome.

I do this every month, though… Get paid, spend too much, freak out, stop spending, get paid, repeat. Time to start working on just not spending as much anymore.

I should be saving more. I already save all my $5 bills and change. Saw somewhere that $5s are the least commonly-circulated bills, but I swear they find me. I’m usually a debit card junkie, too, so it’s not like I use cash all that much. I started saving my change for  trip to the Broadmoor Hotel in Colorado Springs, CO, but I deposited it instead to help out with expenses.

Haven’t started my 401(k) yet. Just haven’t gotten the urge to further reduce the amount I bring home every paycheck. Plus, my company doesn’t match, so I feel like I’m getting gypped.

I found out a month or two ago that I have almost $5,000 in savings bonds that I never knew existed. It was like hitting the lottery! Now, however, I don’t know what to do with it. A friend gave me an ING savings referral link, so I was thinking about doing that, but the interest rate just plummeted. Like everything else.

That’s all for this post, I suppose. I want to keep writing about how I’m reducing my debt, so maybe that’ll be a regular feature here. Might not be too interesting to you, but I think it’ll help me a lot in the long run.

PS-Sallie Mae, I am aware that my grace periods are ending. I don’t need another reminder from you. Thanks.