Posts Tagged ‘financial situations’

The slowest purchase ever

Saturday, August 15th, 2009

Want to know what we’re doing so much better this time around than last time? Buying a car.

Justin’s car broke down about a month ago.  It was sometime between July 6th and 10th, but I can’t remember exactly when because I was on “vacation” and not going anywhere so why did I care what day of the week it was?  But we got a mechanic to look at it and he declared it dead and we’ve been working around it ever since.  While I was on furlough, Justin just took my car to work.  And after I needed it back so I could get back to work again, he’s been catching a ride with a coworker or working from home.  Despite all my efforts to reach out to people at my office, I haven’t found anyone willing to help me carpool.  It’s really stupid.

Anyway, we’ve been trying to figure out what we’re going to do about it.  And, because we CAN be taught!, we’re being much smarter about it than we were when my car died last year.  I don’t really want to talk about that experience, so let’s just say we made some not very wise decisions at that time.

So this time we’re doing better.  This time we’re doing research.  This time we’re being more forceful.  This time we’re actually being SMART.

And we’ve so far gone to one dealership twice and another dealership once and we still have NO car.  Because the first time, we wanted to check out what we would get if we didn’t have to worry about money and then look at what that would look like to our finances.  Here’s a hint:  It didn’t look good.  We decided not to do that.  (See?!  Smart!!)

Today, we went to another dealership, a small, used-car lot, one recommended by a friend from church, and we did some recon.  What we learned:  We could buy one of those cars with money we had in our accounts, but we’d prefer to do a little research into the car before driving off with it.  And that the guy we worked with could help us with our problem.

And then we went back to the dealer where we went in the first place, a name-brand dealer, and asked what the best deal they could give us was.  And it was pretty sad.  The guy we spoke with did as best as he could to try to get us into a car, but we were solid on the amount that we were willing to go into debt with and we did not budge from that number.

So we’re back at home, still with no car, but with more and more knowledge.  Justin’s going to look into the type of car we looked at today, but more likely, we’re going to call up the small-dealership guy we spoke with today and work something out.  If it works, I’ll tell you about it later.  Mostly, this is just to tell you what we did NOT do.

We did not go onto the lot and fall in love with a car and buy it at what they offered because it’s beautiful and we MUST HAVE IT.

We did not let ourselves get suckered into a price range where we were not comfortable.

We did not let our niceness turn us into doormats for the nice men we worked with.

We did not walk in without researching what we could afford.

We did not let the salespeople intimidate us.

We did not walk off with a car because we could afford it because we prefer to do research before jumping into the pool.

We did not lie.

We did not let our anxieties about money, debt, and car-less-ness drive us into a decision.

We did not go into the situation without very clearly communicating with each other what our expectations and priorities were.

We did not try to read each others minds but instead asked for a little bit of time alone to talk about what we thought about what was going on.

I guess what it all boils down to so far is a handful of key things:

  • We didn’t buy a car we couldn’t afford just because it was beautiful
  • We didn’t buy a car we could afford just because it was there
  • We didn’t let salespeople influence our decisions
  • We communicated clearly between each other and stuck together as a team

And, yeah, it means that Justin will still have to catch a ride with his coworker on Monday.  But we haven’t dug ourselves further into debt.  We haven’t driven home a car we weren’t totally sure about.  And we’re learning more and more how to communicate with each other about important, difficult things and presenting a unified front.

And all those things are so much better than having another car sitting in front of our house.

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The post in which I talk about money a lot.

Wednesday, August 12th, 2009

Money is this weirdly taboo topic in most circles. Personal finances, I mean. Money that other people have or companies or the government have are free game, conversationally. But when it comes to personal finances, it’s a different a whole different arena. The thing is, though, I’m pretty sure that most people are thinking about money a lot more frequently than they are about other conversation topics. We just don’t feel comfortable talking about it.

Well, personal finances and small business planning are the two topics that have been big and heavy on my mind lately. So, taboo or not, I’m going to talk about money.

I used to think it was sinful to want to have more money. “The love of money” and all that. I thought that being poor and not worrying about money, just ignoring it, basically, was the appropriate, Christian thing to do. That was why I didn’t really think about it much when I was living in northeast Georgia, making $1000 a month, half of which went into rent. I thought it was appropriate, that I shouldn’t want more, that I should be content with my situation.

It wasn’t until I got employment in Savannah that I realized how much money I could have been making and how little I had been getting paid and started to think about the whole situation. And I still felt like thinking about money was sinful and that I shouldn’t work too hard to make more money, that I should work hard to be a good employee and do good service for my employer and take whatever they gave me.

Hello, my name is Kylene and I am a financial doormat.

And it wasn’t that I handled my money poorly. I’d balance my checkbook regularly, I’d track my spending, I knew how to handle the necessary expenses and balance the unnecessary splurges. But I wasn’t planning. I reacted retroactively. I took what I was given and spent what was necessary, spent the rest on other things if I wanted to, stuck some into savings, and that was it. There really wasn’t any thought about the future 5-years down the road or more.

I wish I could remember when I started to think that maybe there was a different way to look at the whole thing. It might have been after Justin and I consolidated our finances and I started looking at how we each handle everything in that.  But it might have been right after we bought my car. Yeah, not the best time to have the whole revolutionary thinking thing, but considering my history, it makes sense. I’d been handling my school loans for a while and dealing with them just fine. I was used to them and they weren’t very scary anymore. Adding another loan didn’t necessarily mean that I’d think about my debt level any differently. But it did. Suddenly we had this enormous debt and it made me pause and think about money. I wished I understood it better. I wished I’d known how to handle buying a car more effectively. I wished I knew how to make that debt go away as quickly as possible because it was kind of freaking me out.

And I started thinking about other money things. My credit card debt. My savings account. My current pay level through the temp agency. Investing. Retiring. There were so many aspects about the money in my life that I didn’t understand and didn’t have good control over. I wanted that to change.

And part of my brain still kept saying that it was sinful. “Cannot serve both God and money” and all that. And to be perfectly honest, it’s still something I’m struggling with. But I know deep in my core that I don’t have to live in a trailer park and make minimum wage until the day I die. He doesn’t want us to be miserable. It’s okay for me to want to have a good situation, be able to retire eventually, be able to have children and care for them. As long as I’m serving the Lord and not the dollar, then I can think about money and investing and all those things and not be sinning.

So, all that said, I’ve been working on having a well-rounded view of finances. I still balance my checkbook and track spending. I have a plan in place to decrease our debt load. And while I’m working on those retroactive situations, I’ve also been working on setting up a Roth IRA and learning about my 401(k). I actually have a 401(k) now that I’m employed directly at my company instead of through a temp agency, which also gives me loads of other benefits. And at the beginning of next year, I’m going to negotiate very hard to get an increase in pay appropriate to the amount of work I’ve been doing for the company.

Here are a handful of things that I’ve learned lately, many of which are from Suze Orman’s Money Book for the Young, Fabulous, and Broke.

Increase your credit card score. This mystical number is crazy important and if you don’t know what it is, you’ll want to find out and then see if you can get it up higher. People who are going to give you money or big item purchases or interest rates are going to know it and so should you. And did you know that there are three different companies tracking this and that you should look at all three? I didn’t know that; I thought there was only one. And I’ll be honest, I still don’t know what my scores are because I haven’t wanted to pay for it or put the mark on it that I’ve looked just before we went to get a car for Justin. But I did get a copy of our credit reports—lists that you can get for free once a year and lists lots of interesting information, like payments that you should be making and whether you were late on any of those. Being late will make your score go down, just in case you didn’t know that. I want to know our score, but I know enough to know that it’s not very good right now and that we should just be working on getting it higher in any way we can. Like being prompt on payments and getting our credit card debt down to a lower level.

Credit card debt is a ratio thing. Your score is going to look at how much you can have in debt compared to how much you actually have in debt. So if you only have one card, but you’ve maxed it out, that’s bad. But if you’ve got several cards and they’re all pretty empty, that’s good. Keeping several cards is actually good, especially if you have a long history on them, so don’t pay it off and then close the account. Pay it off and then keep it so that ratio of how much you can have and how much you do have in debt is a much prettier number. And the companies can look at how long you’ve had a history, which also helps your case.

Pay off credit card debt first before anything else. In my situation, I should pay off my credit card debt before I even start putting money into savings. Once we’re out of debt, we’ll work on savings, but until we’re above ground, money is much better spent being put into paying things off than sitting static in a savings account. Just compare the interest rates if you don’t believe me.

Before Justin’s car died, I was planning to take almost all the money we had in savings and almost completely pay off our cards. Because we need that money now to put a down on a car, I’m glad that we have it, but getting that debt down would have been helpful in getting a better interest rate and dealing with our debt situation.

Instead, what I’m doing is this. We have 3 cards. I paid off one a few months ago and started putting the amount that I had been paying toward that one toward one of the other cards, so suddenly I’m paying almost double what I had been paying. The balance on that card has gotten small enough now that I’m going to call and talk to my 3rd card about transferring the balance over to that card because it has the lowest interest rate. Oh! That’s another thing—pay off the card with the highest interest rate first. So, after I check into how much I’m looking at for fees to transfer and make sure that my interest rate won’t go up, and actually ask if they’ll make my interest rate even lower because I’m bringing in this balance, I will, hopefully, only have one card left to pay off. And I’ll be putting into that card each month the money that I had been paying toward the 1st and 2nd cards.

Once I’ve gotten those all paid off, I’m keeping the cards and I’m using them occasionally, but I’m paying off the balance at the end of each month so I never have a balance that carries over. That’s the goal anyway. And because all these cards are in my name, Justin is going to open a card in his name so he can establish a credit card score, too.

And then we’ll put the money that we’d been paying toward the credit card debt into the car loan debt. Our school loans are smaller, so it seemed like we should take care of those and just get rid of them as quickly as we could, but nope. There’s a tax break on interest applied on school loans. There’s no such thing for car loans. So keep the tax break going and pay off the other debt first. And because we’re putting in the normal payment plus the payments that had been going toward the credit cards, it’ll go down pretty quickly.

So that’s what we’re doing about debt. On to the other half of things. When I was at my job in northeast Georgia, I had a 401(b) that I had no idea what to do with. It collected a little bit of money while I was there, and when I left, it just sat there. Because it was less than $500, every quarter or half-year or something, it took a hit because it didn’t meet requirements. I’m currently in the process of moving it to another company and making it into a regular IRA. Once I get it moved, I’m going to roll it over into a Roth IRA. And then I’m going to start putting $50 a month or so into it, until we get out of debt at which time I can start putting more money this direction.

I’ve also got a 401(k) through my company and they do a percentage match, 100% to a certain level and then 50% from that level to the next level. I am contributing up to that highest level so I get the 100% match for the first percentage and then the 50% match for the second percentage.

What I’m getting at is this: I have two different kinds of retirement plans going on right now, or at least in progress. This is a Good Thing. Diversity is the name of the game when planning for retirement. Also, time is on my side right now. Interest on the dollar, I think was the phrase. I have at least 30 years before I’m going to retire, probably, so I’ve got at least 30 years to put money away and for that to mature. The crazy difference that a few years can make when looking at interest is staggering. If you haven’t started putting money away, and I’m not talking savings accounts but actual investing, you should start RIGHT NOW. I wish I had started 10 years ago.

So #1—Be investing already. #2—If your employer has a match for your retirement plans, match them. It’s free money, people. Take what they’re handing out by matching it. For too long I was sitting at the lower level of the match, where they met 100%. Now I’m at the full 100% plus 50% and the difference in how fast that is going to increase my 401(k) is surprising. And looking at that over the length of the time that I’m employed here is staggering. And that’s at a fairly low pay grade compared to other people at the company. So match whatever the company is offering.

Now, I’m still learning, but from what I understand a 401(k) is money taken pre-taxes. So when you retire, and there are so many rules about this that I haven’t even touched because I’m so far away from needing to know, you’re going to have to pay taxes on that money. It’s tax-free right now, but it’s not tax-free forever. You pay the tax on the other end. But not all retirement plans are this way. Traditional IRAs are, but Roth IRAs are not. With a Roth, you pay the tax now and don’t have to pay it when you take it out later on. Again, diversity is the name of the game. This applies to what your money is being invested in under these plans, but also in the types of plans. So right now I’ve got a plan that’s taxed when I take the money out, and I’m working on setting up an account that I’ll pay taxes on as I put the money in.

Now, because it’s a 401(b) moving into a traditional IRA and then rolling over into a Roth IRA, I’m going to have to pay taxes on it when it rolls over. But because there’s only like $300 in there right now, it’s not going to take a big hit. But if it had been something larger, I probably would have just left it as a traditional IRA.

And good gosh I’ve written a lot on this topic and I should stop before you all fall over from boredom. But if you find this as interesting as I do, please let me know your thoughts or if you have any questions.

Cheers!

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Covering old news with much more detail.

Tuesday, August 11th, 2009

Okay, so Amy said she was actually interested in hearing more about the stuff I was touching on briefly in the post I put up the other day (Too much to sort through!).  So I thought I’d go back and address some of those things.

…I could talk about work and how we’re going to attempt an “affinity diagram” tomorrow and I have never done it before and I really hope it works out well.

Well, the affinity diagram didn’t go so well.  It was part of my first meeting for the Lean Project I’m heading up in order to get my Lean Specialist certification.  As far as first meetings go, it was apparently pretty good.  As well as projects go, it needs a lot of work.  The activities that we worked through managed to show just how enormous the scope of the project was, as it stood at that time.  So we had a meeting with me, my Champion, and the Lean guy for our area, and we’re going to look into scaling it down a little into something actually manageable in 4 months.  And for a first-time Specialist in-training.  We have a lot of work to do.  My next meeting is this afternoon and hopefully we’ll actually start to get somewhere.

I could talk about how we’re flying to Burlington, Vermont, again because we’re going for a wedding.  And I keep freaking out because Justin’s jacket is wrinkled and we haven’t gotten it dry cleaned yet.  And we don’t have a rental car yet, and since we’re staying at Justin’s folks’ place, we need a car to get from there to the wedding and all that.  And all these things about weddings keep stressing me the heck out so much that I haven’t even started thinking about freaking out about the traveling part of the whole deal.

I already covered the trip to Vermont, but I did manage to keep the freakage down to a minimal level.  We got Justin’s jacket cleaned in Burlington.  We picked it up the morning of the wedding and that was freaking me out a little.  But we got it on time and it looked really beautiful.  And the rental car worked out great and ended up being less expensive than I feared.

I could talk about these books I’m reading about managing money and not undervaluing your worth and taking control of your finances and all the fun and exciting things I’m learning . . . that no one else thinks are fun and exciting at all.  And I’m reading books about marketing and writing business plans and don’t those sound fascinating, too?  No?  They do to me!

Books I’m reading.  Oh, gosh.  I have Family CFO which is talking about taking family finances and running it like a business.  It’s interesting and they have some interesting points, but I’m not buying in to the whole thing.  I’ll probably end up taking a couple of their recommendations, but ignoring the rest.

I still have The Money Book for the Young, Fabulous, and Broke.  I asked Justin to read the section about buying a car because I thought it had some really good information.  He did and he agreed that it was a good read.  He’s going to read the rest of the book before we take it back.  Or, since we’re on the final renewal for that book, I might finally drag him to the library and get him his own card so he can check it out again under his own name.

I have the Complete Book of Business Plans.  It’s not terribly fascinating to read, but it’s a good resource because I’m trying to write up my business plan.  It’s a complicated pain in the butt and having something to look at for inspiration has been helpful.

The Everything Home-Based Business Book falls into that same category.  It’s not a terribly interesting read, but it’s awfully helpful as I’m trying to write up my business plan and figure out different aspects of working up my business.  I haven’t had time to dig into this one much, but I’m looking forward to seeing what’s in there.

I have the Ultimate Small Business Marketing Guide, another great resource that’s basically a brainstorm caught on paper.  It’s idea after idea that could be used to drum up business.  Some of it doesn’t work for my situation, but some of it is really fun and could be very helpful.  I’m reading this one with sticky notes so I can jot things down for reference later.  Like in my business plan, since apparently there’s a Marketing Strategy section of that beast and I’ll have to put something down there.  So, keen!  I have something to put in there.

I have the Ultimate Small Business Advisor, which I haven’t read at all yet, so I haven’t got a clue about it.  But it looked interesting, looked like it might be another good resource, and I’m looking forward to reading it.

And I have Home Staging because I think having that as an option along with helping people pack up their stuff could be a really great service to offer.  I don’t quite have the eye for it, but I know I could learn how to do it.  I haven’t read this one yet, either, but I’ll get there before I have to take the book back, I’m sure.

For leisure I just finished reading Summer Knight of the Dresdon Files series by Jim Butcher.  I’ve got the next one, Blood Rites, tucked into my purse.  They’re fun, easy fantasy books, slightly on the noir side.  Justin and I are devouring those books as fast as we can afford to buy them.

And I have a PDF copy of Suze Orman’s Women & Money.  I’m about halfway into this one.  It’s talking about how women see money and themselves and how sometimes those don’t end up being a harmonious match.  We don’t value ourselves and the money we bring in, we don’t take the time to consider the whole of finance and how it affects us, stuff like that.  It’s interesting.

I could write about how well we ended up with our finances last month–with Justin making more money than expected and us handling budgeting and saving really well and ending up so far into the black that it’s astonishing how much we could potentially put away if we spent every month not going out to dinner or spending money on fun things and sitting at home sitting on our thumbs.  Which we’re not going to do but we might spend more time looking at the possibilities there.

Finances.  I was really concerned when I found out that I would be furloughed and getting unemployment for four weeks in July.  We’d have to survive on Justin’s paycheck and the small amount I’d get from the government.  That put us at a lower total income than I was comfortable considering and it made me freak out a little bit.  I mean, the unemployment checks were about half what I was making normally.  Could we survive on half my income plus Justin’s income?  Answer?  Yes, we can.  Especially if he has a really busy month and manages to bring in a steady amount for the whole time.  And if we cut down on expenses and spend carefully and really hunker down and take things easy.  We even picked up something that we normally wouldn’t have bought but had the opportunity to get on a considerable discount.  The airplane tickets and car rental went onto the credit card.  But we didn’t have to touch the savings account at all.  And I’m pretty sure that I can go in and pay off the plane tickets just from the checking account, leaving all of savings alone.  Which means that we can take that money and use it as a down on a used car for Justin.

Which would bring me into talking about our current situation with Justin’s car.

A friend of mine called me on Thursday and said that her husband knows a good Christian man who owns a car dealership not far from here.  We’re going to get his information and go talk with him about what we can do.  We were hoping to take advantage of the clunker bill, but with the money flowing out of that thing so quickly and our unlikely chance of getting a good loan from the bank right now, we’re looking into cheap, used options.  I’m not really sure what the plan is for Justin’s old car, whether we’re going to try to trade it in or just take it to a place like we took my Buick—a place that takes dead cars for parts and pays for that.  I’m really not sure.

But we’re going to run the numbers this week, check how much of a hit we took with our trip up north, and look at what sort of payments we could really afford.  We can’t buy a car outright right now—our savings aren’t that lush.  But with the down that we can pull from there, we should be able to manage a pretty good deal.  I hope.  We’ll find out soon enough.

And dang it!  I haven’t bought gifts for Erica or Dad, who both have birthdays in the next 10 days, or for the bride and groom on Saturday.

We did pick up a gift for the bride and groom, although what we really did was look at their registry and then go buy them something similar through Pampered Chef.  They’ll get it in a few days.  Last night, I went onto Amazon and hunted around until I found something that seemed like a good gift for Erica and Dad.  The order went in last night; they should ship out in a couple days.  They’re being shipped directly to their new owners, so they won’t be wrapped, but you should get your gifts in a couple of days.

So there you go!  Any questions?

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Too much to sort through!

Monday, August 3rd, 2009

So I’m having this issue where I want to write and I have no idea what to write about.  There are so many possibilities!

I could write about my weekend, which was mostly fantastically dull and involved watching movies and sleeping and talking with wonderful people on the phone.

Or I could talk about work and how we’re going to attempt an “affinity diagram” tomorrow and I have never done it before and I really hope it works out well.

I could talk about how we’re flying to Burlington, Vermont, again because we’re going for a wedding.  And I keep freaking out because Justin’s jacket is wrinkled and we haven’t gotten it dry cleaned yet.  And we don’t have a rental car yet, and since we’re staying at Justin’s folks’ place, we need a car to get from there to the wedding and all that.  And all these things about weddings keep stressing me the heck out so much that I haven’t even started thinking about freaking out about the traveling part of the whole deal.

I could talk about these books I’m reading about managing money and not undervaluing your worth and taking control of your finances and all the fun and exciting things I’m learning . . . that no one else thinks are fun and exciting at all.  And I’m reading books about marketing and writing business plans and don’t those sound fascinating, too?  No?  They do to me!

I could write about how well we ended up with our finances last month–with Justin making more money than expected and us handling budgeting and saving really well and ending up so far into the black that it’s astonishing how much we could potentially put away if we spent every month not going out to dinner or spending money on fun things and sitting at home sitting on our thumbs.  Which we’re not going to do but we might spend more time looking at the possiblities there.

Which would bring me into talking about our current situation with Justin’s car.

And dang it!  I haven’t bought gifts for Erica or Dad, who both have birthdays in the next 10 days, or for the bride and groom on Saturday.

So what I’m getting at here is that I really have so much going on in my head right now that it’s completely overwhelming and while I’m really having fun with most of it (car stuff = not so much fun, and what the heck is up with my wedding anxiety when I’m not even involved!), I have no idea where to start with the discussing of it all.

But I hope that you’re all doing very well and having a better start to your week than I did (there were ants in my cereal!) and I will babble nonsense at you all again soon.

Cheers!

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Last day of my “vacation”

Friday, July 24th, 2009

Okay, quick update because I’ve been lax lately.  Working backwards!

Today:
I got up and went babysitting earlier than I expected, but it was only for an 11-month old and he slept the entire time I was there.

Yesterday:
I worked with the children’s pastor on the store room at the church office and made it go from total chaotic eyesore to a shining example of organization.  Everyone is very pleased.

And then after grilling dinner and chatting with friends online, we drove Justin’s car to the mechanic’s while no one else was on the road.

Wednesday:
Relaxed, did some projects, made lots of phone calls about business license information and finding a mechanic.  Babysat in the evening for a few hours for a house of sleeping children.

Tuesday:
Drove to Macon with my small group leader/friend with her 11-month old, 3-year old, and 9-year old to drop the oldest off with her grandparents and then drove home again.

Monday:
Babysat for several hours for those same kids (I’ve seen a lot of them this week).  I swear I did something else on Monday but I have no idea what it was.

So, my last week of my vacation has been insane.  I made a chunk of change (gifted, if the unemployment office asks) to help with possible fixes for Justin’s car.

He’s been driving my car most of this month because I have a/c and get better mileage.  But also, for the last week and a half, because his brakes went out.  The mechanic looked at it today and didn’t have good news for us.  We’re going to chat about it tonight and go see the mechanic tomorrow morning.

And I didn’t do everything I’d hoped to do while I was off work, but I did have fun doing what I did and it doesn’t matter that I didn’t cross everything off my list.

Bills are coming due in the next couple weeks and if we managed to make it through this whole month without pulling from savings for anything other than paying for our plane tickets for next month’s wedding, then I’m a tickled lady.  We’ll know for sure in two more weeks.

I’ve made some good progress on my small business, learned a lot about the paperwork and how much more I really need to learn.

I learned a lot about IRAs and different money and retirement things.

I’ve slept in later most mornings that I should have but I don’t regret it one bit.

It’s been a nice break, but I’m ready to get back to work again.

After the weekend.

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