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[monthly must-reads] july 2012

Posted March 3rd, 2018 by lisa | Comments Off on [monthly must-reads] july 2012

I’ve been incredibly busy this past month! I feel like I’ve been abandoning my blog a little bit  🙁 Sorry, guys! But man, I definitely have a big monthly update post coming up for you all!

One quick personal update – I’ve finally upgraded to a smartphone! This new purchase has given me the ability to use my commute time as reading time. Here are some articles that I’ve found interesting this past month.

10 Commandments For Mobile Manners – [The Kim Komando Show]
Not only does this article touch on truly being present and respectful to those around you, it also touches on general mobile etiquette such as turning your phone off in church, talking on the phone while on public transportation, etc.

5 Ways Bad Credit Keeps You From Big Goals – [Quizzle Wire]
This past weekend, I did a session at my young adult ministry’s retreat for college freshman/sophomores about personal finance and this topic came up. For those of you who don’t think keeping up your credit score is important, think again.

Are You Able to be Happy for Friends and Family That are Wildly Successful? – [Darwin’s Money]
Great read. Jealousy is never good. Get to a place where you can be happy for others and yourself.

Can’t Get a Job? Get a Microjob! – [Get Rich Slowly]
This article does a great job of explaining what a microjob is as well as going over some pros and cons. Basically, if you have any sort of skill set and want to earn a little bit of side income, take a look at this article.

How Parents Influence Their Child’s Future Income – [Mint Life]
Your attitude towards money is closely linked with your parents’ attitude towards money, not necessarily their income.

How to Get Guaranteed Results in Anything – [Life Hacker]
Every choice has a risk, a consequence attached. Is it scary? Absolutely. But you’ll never know what can be done until it is actually done.

How to Stop Planning and Start Doing: 3 Easy Steps – [The Christian Dollar]
Planning can only get you so far. Planning does not equal doing.

No more yes. It’s either HELL YEAH! or no. – [Derek Sivers]
I’m hoping to implement this idea into my life very soon – this idea of not saying yes to things that I’m not entirely passionate or excited about will hopefully help me re-prioritize my time.

Paying Off Student Loan Debt Early – [PT Money]
A short reflection on the benefits of paying off your student loans early.

Should I Pay Off Debt or Save Money First? – [Money Crashers]
Ultimately, the choice is up to you. Personally, I’ve chosen to do both.

Posted in category: Monthly Must-Reads | Tags: ,

[Frugal Fridays] Get Out of Debt!!

Posted March 3rd, 2018 by lisa | Comments Off on [Frugal Fridays] Get Out of Debt!!

This month’s Frugal Friday is a big one, but I promise you it’s worth the read! Considering that the total amount of US consumer debt in 2010 was nearly $2.4 trillion (source), I think it’s safe to say that we all have some debt that needs to be paid off.

So if you have thousands in credit card debt, even more in student loans, or you just want to get rid of that personal/car/home loan once and for all, follow these steps to get started on getting rid of that debt!

Step 0 – Create a budget

Sounds boring, I know. But this pre-step is absolutely necessary for you to get on track with your finances! You need to know exactly how much income you’re receiving every month as well as what your mandatory expenses are – that way, you will know exactly how much you can contribute to paying off this debt.

I did a Budgeting 101 post as one of my first posts here, but there are several ways you can actually execute this. I personally use Mint.com to track all my credit cards and accounts and I’ve also created an Excel sheet that helps me track my money on a daily basis.

Once you’ve set up your budget, you can start the first step to your debt repayment!!

Step 1 – Make a list of all of your debts

If you did step 0, then this step shouldn’t be so bad. If you’re using Excel, you should create a separate tab for this and create 4 columns:

  1. Account name (i.e., Mortgage, Macy’s Credit Card, Car Loan #2)
  2. Minimum monthly payment
  3. Current balance owed
  4. Interest Rate

Items 2-4 should easily be found in your monthly statements. For an example of what this tab should look like in Excel, here’s a fictional debt list of Jane Doe that is very similar to how I’ve set up my own debt tab:

Now, add up all of your minimum payments. In the above example, Jane Doe’s monthly minimum spending on this debt is $2,445.

Step 2 – Pick a repayment plan

Hopefully the amount you can throw at your debt monthly is greater than the monthly minimum payments. If not, then you’ve got to go back to step zero and do some extreme budget cuts, but I won’t go into that right now.

Now, there are two popular ways you can pay off your debt: one way is the avalanche and the other is the snowball.

A debt avalanche is when you pay the minimums on all of your debt and throw any extra available money toward the debt with the highest interest rate. To visualize this, you can do a simple sort of your list in Excel, as I’ve done below for Jane Doe’s debt:

For example, if Jane Doe were to have a total of $2,500 available to pay off her debt, she would pay the minimums on everything (which totals $2,445) and she would throw the extra $55 toward Credit Card #1 every month. Once Credit Card #1 is paid off, she would continue to pay the minimums on everything and she would move all the money that she was previously throwing towards Credit Card #1 to Credit Card #3, since that is now the debt with the highest interest rate. This would continue until the last debt is gone.

A debt snowball is when you pay the minimums on all of your debt and throw any extra available money toward the debt with the smallest balance. Here is what Jane Doe’s list of debt looks like when it is sorted by balance:

[Frugal Fridays] Get Out of Debt!!

This month’s Frugal Friday is a big one, but I promise you it’s worth the read! Considering that the total amount of US consumer debt in 2010 was nearly $2.4 trillion (source), I think it’s safe to say that we all have some debt that needs to be paid off.

So if you have thousands in credit card debt, even more in student loans, or you just want to get rid of that personal/car/home loan once and for all, follow these steps to get started on getting rid of that debt!

Step 0 – Create a budget

Sounds boring, I know. But this pre-step is absolutely necessary for you to get on track with your finances! You need to know exactly how much income you’re receiving every month as well as what your mandatory expenses are – that way, you will know exactly how much you can contribute to paying off this debt.

I did a Budgeting 101 post as one of my first posts here, but there are several ways you can actually execute this. I personally use Mint.com to track all my credit cards and accounts and I’ve also created an Excel sheet that helps me track my money on a daily basis.

Once you’ve set up your budget, you can start the first step to your debt repayment!!

Step 1 – Make a list of all of your debts

If you did step 0, then this step shouldn’t be so bad. If you’re using Excel, you should create a separate tab for this and create 4 columns:

  1. Account name (i.e., Mortgage, Macy’s Credit Card, Car Loan #2)
  2. Minimum monthly payment
  3. Current balance owed
  4. Interest Rate

Items 2-4 should easily be found in your monthly statements. For an example of what this tab should look like in Excel, here’s a fictional debt list of Jane Doe that is very similar to how I’ve set up my own debt tab:

These numbers are fictional yet loosely based on national averages.

These numbers are fictional yet loosely based on national averages.

Now, add up all of your minimum payments. In the above example, Jane Doe’s monthly minimum spending on this debt is $2,445.

Step 2 – Pick a repayment plan

Hopefully the amount you can throw at your debt monthly is greater than the monthly minimum payments. If not, then you’ve got to go back to step zero and do some extreme budget cuts, but I won’t go into that right now.

Now, there are two popular ways you can pay off your debt: one way is the avalanche and the other is the snowball.

A debt avalanche is when you pay the minimums on all of your debt and throw any extra available money toward the debt with the highest interest rate. To visualize this, you can do a simple sort of your list in Excel, as I’ve done below for Jane Doe’s debt:

Here are Jane Doe's debts sorted from highest to lowest interest rate.

Here are Jane Doe’s debts sorted from highest to lowest interest rate.

For example, if Jane Doe were to have a total of $2,500 available to pay off her debt, she would pay the minimums on everything (which totals $2,445) and she would throw the extra $55 toward Credit Card #1 every month. Once Credit Card #1 is paid off, she would continue to pay the minimums on everything and she would move all the money that she was previously throwing towards Credit Card #1 to Credit Card #3, since that is now the debt with the highest interest rate. This would continue until the last debt is gone.

A debt snowball is when you pay the minimums on all of your debt and throw any extra available money toward the debt with the smallest balance. Here is what Jane Doe’s list of debt looks like when it is sorted by balance:

Here are Jane Doe's debts sorted from the lowest balance to the biggest.

Here are Jane Doe’s debts sorted from the smallest balance to the biggest.

Assuming she has $2,500 available (just like the previous example), she would pay the minimums on everything and she would throw the extra money left over toward Car Loan #1, since that debt has the smallest balance. Once Car Loan #1 is eliminated, she would continue to pay the minimums on everything and she would move all of the money she was throwing toward Car Loan #1 and start throwing it toward Credit Card #2, since it is the next debt with the smallest balance.

So which method should you choose?

If you want to pay off your debt with the least amount of interest possible, you should choose the avalanche (in most cases). However, you might not see your first debt paid off until months or even years down the road, which can be very discouraging.
If you want the satisfaction of paying off your first debt as soon as possible, then you should choose the snowball. The snowball is set up for you to have smaller victories sooner, which is meant to be psychologically satisfying and it encourages you to continue!

[Quick note: A great website that can help you calculate just how much interest you would be paying as well as how much time it would take using either the avalanche or snowball method is unbury.me. I hope to do a full review on this website soon.]

Step 3 – Make your payments on time

About 35% of your FICO score is based on your payment history (source). So consistently making your payments in on time (even a few days earlier) would definitely boost your credit score. I’ll go into the importance of a good credit score some other time, but I’m including it as one of my steps to debt repayment for a reason.

Once your FICO score improves in range, you have more leverage in negotiating your current interest rates. If you can decrease your interest rates on one, or even all, of your debts, the amount of interest you pay will greatly decrease and you might even be able to finish your avalanche/snowball sooner than expected!

Step 4 – Snowflake when you can

Financial snowflaking is the idea of throwing any extra savings toward your financial goals – in this case, it would be your debt repayment. For example, if you save $50 on this month’s grocery expenses, that $50 is now a snowflake that you add to your avalanche/snowball.

You can be creative with this – if you’ve budgeted money for going out, challenge yourself to go out only once a week or *gasp* once a month and use those savings toward your avalanche/snowball! Find small ways where you can save and let those snowflakes build up!

Be careful though, some companies charge for early repayment, so be sure to look out for that. To be safe, hold on to your snowflakes until you send in your regular payment to avoid early payment fees.

Step 5 – Be patient!!!

Financial freedom does not happen overnight! This path may take months, or (for most) even years to complete! Don’t get discouraged!!

*whew* Well, there it is – my step-by-step guide to debt repayment!! I know it’s a long journey (believe me, I’ve been there), but I’m right there next to you!! If you have any questions, please feel free to comment and I’ll do my best to help you!

AMDG,
Lisa

 

why i’m doing this (part two)

Posted March 3rd, 2018 by lisa | Comments Off on why i’m doing this (part two)
University of San Francisco

(Disclaimer: I don’t mean to knock anyone who didn’t go to a private school. I’m just sharing my experience at a private Jesuit university.)

If you were to ask me why I even decided to go to an expensive private college in the first place, I’d have to take you all the way back to my senior year in high school (ages ago, I know ;P). Long story short, it was almost time to turn in an intent to register and I was set on going to a public university. But my mom sat me down and convinced me that we can work it out, and that the tuition would be worth it. I hastily agreed with no real thought into it, but it ended up being one of the best decisions I’ve made.

That’s right!

I began my college career at a place that I didn’t really want to go to. But by the grace of God, I slowly began to realize how perfectly I fit into the USF community. My professors (well, most of them) truly cared about me; and not just how my assignments were going, but also about my well-being. While old high school classmates were struggling to get into the classes they needed at state universities, my school made sure I was on track to graduate on time (even a little early). A majority of the students at USF were also receiving financial aid, so I didn’t feel out of place. I made some lifetime friends working at the school’s cafe as well as in my business classes. Juggling classes and work challenged me in ways I could have never imagined and I gained life experiences that I don’t think I’d have at a place that didn’t challenge me.

But the number one reason why I love USF is in their (former) mission statement. When I was a student, it was “Educating hearts and minds to change the world.” At my graduation, we had a speaker talking about how we didn’t just get these business degrees to get rich. This speaker went on the tell us of the sad stories of poverty in Africa and that we are responsible for them – with great power (education) comes great responsibility. I heard many of my fellow graduates murmuring things like, “Why is he talking about depressing stuff? We’re at a graduation!”, but instead I was inspired. My education was meant to really change the world, not just change my bank account. Whether it was doing a semester long internship at an after school program, or writing a new business plan for a struggling Bay Area business – USF really helped me realize that we need to be the change we want to see in the world.

I’ve seen plenty of articles lately about college not being worth the money anymore. I’m not going to ignore the student loan debt crisis, but I think it depends. For some (like me), paying for these loans is like investing in myself, investing in something worthwhile. There are plenty of universities, both public and private, that are worth the money if you want to learn! On the other hand, if you don’t see the point in getting a degree and just want to go ahead and start working, then do that! It depends on what your goals are.

I didn’t know it at the time, but getting an education from a Jesuit university was definitely one of the best decisions I’ve ever made for myself and the loans I’m paying off right now are worth every single penny. You can’t convince me otherwise.

AMDG – Ad Majorem Dei Gloriam (It’s a Jesuit thang :)),
Lisa

july 2012 update

Posted March 3rd, 2018 by lisa | Comments Off on july 2012 update

Happy Monday everyone!

So here’s my current situation with the loans:

If you read my last monthly update, you’ll recall that I thought I would be receiving an over $1000 windfall from my landlord which I was planning on using towards wiping out my non-direct loan completely.

Well, long story short – that didn’t happen. I’m getting some money back, but definitely not all. I don’t want to talk too much about it, but let’s just say that money changes people and some would do almost anything to keep yours, even if it means accusing you of doing something that you clearly are not capable of doing.

Anyways!!!

Now, I’ve got to be completely honest with you guys. I spent a lot of money in June :( I went out more than I should have, and I spent more of my “spending” money than I budgeted. I’m not perfect, and I think it’s important to know that just because you have a plan in place, things don’t always go as planned. Mistakes happen, as well as other events that might be out of your control.

But at the same time, I don’t regret overspending. Yeah, June was a little tight budget-wise, but I spent that money as I was spending time with some very important people in my life. It’s also important to just have fun once in a while! Now, if I were going out all the time and if I was reckless with my money, then that would be a problem. Don’t worry, I know how to control my spending at restaurants (and I hope to share some tips soon)!

Fortunately, I sent in my loan payments as soon as I had the money for it, so I’m not behind in my loan repayment schedule. I always make sure that once my paycheck comes in, my credit card/rent/loan payments go out right away. That way, I’m still on track with my financial goals and I’m forced to not spend that money on unnecessary things.

July is going to be a big month for me and my family. A few days ago, we received the keys to our new house (which is under my name)! Not only will this look good on my credit, but my family definitely needed to move into a new place. New house, new beginnings :) However, it feels as if the packing will just never end! I thought my apartment was bad – cleaning up the house I grew up in is 10x worse!

We plan on officially moving in sometime in the first two weeks of July. But until then, my weekends have been full of furniture shopping and packing!

We don’t need to start paying the mortgage until August, so you can say that we’re saving money in July. But really, we’re spending the same amount we would’ve spent on the mortgage on new furniture, paint, new fridge, etc. Moving is not cheap!

We plan on having a garage sale sometime this month once we get ourselves organized. Not only will this sale help us get rid of a bunch of stuff, but the earnings can help us with all the moving costs! Which is good because I have a lot of shoes to get rid of! ;)

My budget has changed a little, too. There have been lots of changes lately at work and I’ve been doing a lot of work on the finance side of the company. After thinking a lot about what I want to do for the rest of my career, I realized that finance is definitely more my style. I majored in accounting, but I have no real desire to continue along that path.

With that being said, the money I’ve been saving towards the CPA exams/reviews are now being allocated to my car fund! I hope to buy a car by the end of this year, so the extra money will definitely help me attain a bigger down payment. Bigger down payment = smaller monthly payment. Yay for that! :)

As far as these loans go, it was definitely exciting to throw $550 at them this past month instead of the minimum $200. It definitely made a dent; but at the same time, I still have about 94% of my original loan balances to pay off 🙁  Even though I’m accelerating the process, it’s still moving pretty slowly. Financial freedom doesn’t happen overnight! So I’m trying my hardest not to be discouraged and to keep on keepin’ on.

That’s all for now, folks. Have a wonderful Independence day!!!

AMDG,
Lisa

Posted in category: MONTHLY UPDATE | Tags: , , , ,

[Monthly Must-Reads] June 2012

Posted March 3rd, 2018 by lisa | Comments Off on [Monthly Must-Reads] June 2012

Happy Friday everyone!!!

I read a lot of articles. [Monthly Must-Reads] is a new monthly (duh) series featuring some of my favorite articles I’ve read for the past month.

12 Things You Probably Own Too Many Of – [Apartment Therapy]
I’ve packed and moved out of my apartment in SF this past month, and now I’m packing up my stuff from my current house so that we can move into our new house next month. This list is incredibly accurate and I’m just now seeing exactly how much space all of this stuff is taking up! Even if you’re not moving soon, it’s always good to regularly go through what you have and sell or donate all the things you don’t use anymore, and these items are a good place to look at first.

40 Ways to Relax in 5 Minutes or Less – [The Greatist]
Self-explanatory :) I love that one of their suggested ways to relax is to dance!

Get A New Job Every Two Years – [Thousandaire]
Don’t get stuck in a rut! Even if you really like your job, you should be pushing for something new every two years – whether it’s a whole new company or just a whole new job title.

Get Hired – [Lifehacker]
Love charts and pie graphs? Need help landing a job? Here’s a fun visual guide to the hiring process covering topics such as how to prepare for an interview, common interview questions, and even price ranges of what to order on a lunch interview.

The Great Student Loan Debate: Part 1 – [MintLife]
The fixed interest rate on federally subsidized loans is scheduled to increase from 3.4% to 6.8% on July 1st! Definitely not good news. Although I truly believe my education was worth it, I don’t want to pay hundreds more in interest than I was already planning on paying! That’s why I started this blog: to help keep me accountable on aggressively paying off these loans!

How Many Goals Are You Chasing Right Now (And Do You Have Too Many)? – [Pick The Brain]
I’ve been wrestling a lot with the notion of too many goals lately and this article came to me at the right time. Just because I can’t achieve something this year doesn’t mean I can’t do it next year. This article has helped me prioritize what I need to work on. More on this in my next monthly update :)

Insanity and Perseverance – [The Simple Dollar]
If you want to make a change in your life, then do it! But don’t expect it to be easy. It may not look or feel like much after a week or two, but you shouldn’t be looking for a quick fix anyway. Long term change isn’t made after one decision – it’s made after a decision that has to be made over and over again.

Make Your Bed! For Productivity, Profit, and Peace – [Apartment Therapy]
As a kid, I used to see no point in making my bed. However, in college, I began the habit of making my bed every morning. It doesn’t sound like it’ll make a huge difference, but it ended up being an essential part of my mornings. Making my bed every morning has lead to many productive days.

Personal Finance is Rarely Black and White – [The Simple Dollar]
Two people with the exact same financial situation can easily have two completely different ways to do their finances. Although it’s good to learn from others, you need to sit down, ask yourself what’s important to you, and then create your own financial plan. Don’t just follow what everyone else does, or whatever the rule is – learn about it, think about it, then make it your own.

Why Women Are Burning Out at the Office Before Age 30 – [LearnVest]
Burnout is spreading throughout Gen Y women like crazy (oh gosh, is that me?)! This is an interesting article that gives possible reasons as to why this is becoming a problem among my generation. There are also a number of ways to prevent burnout, as this article covers several of them, such as take your vacation days (how do I say no to that?) and develop your hobbies outside of work.

Posted in category: Monthly Must-Reads | Tags: , ,

[why not] hold off on savings?

Posted March 3rd, 2018 by lisa | Comments Off on [why not] hold off on savings?

[Why Not? is a new monthly series highlighting the decisions I’ve chosen not to make in my journey to student loan debt freedom. I will go over the pros and cons of the particular choice and I’ll also explain why I, personally, have chosen not to go this route.]

Currently, I’m saving almost 40% of my income for various financial goals. I’m maxing out my Roth IRA and I have separate savings accounts at ING Direct (not affiliated) for my various short-term savings goals: emergency fund, car fund, gifts fund, career fund, and a travel fund.

Now, if I really wanted to get rid of my student loan debt quickly, I could just allot all of my monthly savings to my loans. Let’s go over the pros and cons:

Pros:

+ Currently, I’m on track to pay off my loans by July 2015, according to unbury.me (I will do a review on this website soon). If I were to add the amount I’m saving to my current monthly debt avalanche payment of $550, I would have my loans paid off by July 2013 – about two and a half years after graduating and two years earlier than planned! New York 2013, anyone? :)

+ If I look at my loans as an investment in my personal education (which I do), skipping the savings accounts in favor of my loan repayments is a good investment strategy. Since my savings accounts are only earning 0.80% APR, throwing the money at my loans that range from 5%-6.8% would be a better use of my money.

Cons:

– My car purchase would definitely not happen this year (sad face).

– I would not be able to take the CPA exam. If you don’t know, it’s expensive to take this four part test ($100 initial registration, $743.20 total for all four parts of the test, and $3,245 for the review)! They are changing the requirements in California to sit for the exam in January 2014 (must have 150 units). I graduated a semester early with only 128 units, so I have until December 2013 to pass all four parts of the exam. So if I wait until July 2013 to start studying (since I can’t pay for the reviews until I’m done with paying my loans), I would have to be incredibly fast at passing all 4 parts of the exam – I’d have to finish in 5 months to be exact. In other words, I probably wouldn’t take the test at all.

– My retirement savings would starve and I would lose some benefits of compound interest. I could go on and on about how starting early on retirement savings is very beneficial, but here’s a great article from Get Rich Slowly that quickly highlights why compound interest favors the young.

My final decision was to keep saving.

Although some would argue that using all that money toward my loans would be better for me, I have short-term goals that I absolutely have to save for. Now that I’m living back home in Vallejo, I absolutely need a car to get around (no more MUNI for me). The CPA exam is something that needs to be finished by January 2014 or else I would no longer be qualified to sit for it. And retirement savings is a very high priority of mine.

I know my loans will be paid off by 2015, I’m still saving thousands in interest, and I have enough money for some short-term financial goals. I’ll stick to the plan

Posted in category: WHY NOT? | Tags: ,

[frugal fridays] the #1 personal finance rule

Posted March 3rd, 2018 by lisa | Comments Off on [frugal fridays] the #1 personal finance rule

Happy Friday everyone!

Today, I want to talk about the most important rule in personal finance.

There are tons of “rules” and methods when it comes to personal finance. In fact, many people continue to disagree on how to treat different aspects of personal finance – student loan debt, credit card debt, mortgage payments, etc. But the one universal rule that every personal finance writer/blogger/enthusiast agrees on is perfectly stated in five little words:

Spend less than you earn.

Common sense, right? It sounds so simple. Yet we, as a nation, are in an incredible amount of debt! In 2010, the total amount of consumer debt in the US was nearly $2.4 trillion (source)!! Why is that?

My theory is that we, as consumers, confuse the idea of available credit with the reality of how much money we actually have. So we spend and spend and spend until we realize that we actually have to pay for all of these things! And if you bought that Prada bag with your credit card, you’re going to be paying even more than the original price!! So, how does one get out of debt and out of this cycle? Follow this rule!

On one Friday of every month, I will be posting several tips on how you can implement this rule into your life.  Now, there are two parts to this rule – 1) spend less and 2) earn more. Not only will I discuss ways to decrease your spending, I will also suggest ways that you can increase your income! This monthly series will be known as Frugal Fridays (I’m hoping to eventually put up a Frugal Friday post once a week, but I’ll start with once a month for now)! Let me know if you guys have any questions or suggestions on topics that I should cover for this series!

 

Posted in category: FRUGAL FRIDAY | Tags: ,

why i’m doing this (part one)

Posted March 3rd, 2018 by lisa | Comments Off on why i’m doing this (part one)
New York, New York

When I was a senior in high school, I went to New York with my high school’s jazz choir to perform at Carnegie Hall. Talk about an experience of a lifetime – I went on top of the Empire State building on my 18th birthday, celebrated with some good ol’ New York cheesecake, saw Avenue Q on Broadway, and strolled around Time Square. Not to mention I was with some of my greatest friends at the time. There was one moment when I was walking around in the freezing cold (I HATE the cold, mind you) and I looked around and told myself, “I need to live here”.

Paying off my loans early will free up some income for my future travel expenses/rent/other living costs in New York. I used to want to move there immediately after graduating, but I decided against it. I don’t want to be broke in New York City! I want to be able to really experience what it’s like to live out there – not struggle with my bills and my student loans!

Moving back home for a little bit is also helping me with this goal. Some people have asked me, “isn’t moving back home slowing down your plans of moving to New York?” I guess in a way it is. But again, it’ll help me in the long run – the money I’m saving on rent will help with my loans, and once those are gone, I can save all of that extra money in my New York fund (yes, I have a savings account just for NY :) ) Plus, moving back home with my family will give me some extra time with them before I move away.

I don’t see myself living in New York forever. But while I’m relatively young, I want to experience what life is like in the city that never sleeps. As motivation, my desktop backgrounds at work and on my personal laptop are of Central Park. I don’t know exactly what I’ll be doing out there – working in the FiDi, going to grad school, etc. But I do know that San Francisco is a little too slow for me :) So I’m hoping that the fast-paced environment of the concrete jungle where dreams are made of (sorry, I had to!) will give me a nice challenge.

Posted in category: WHY I'M DOING THIS | Tags: , ,

june 2012 update

Posted March 3rd, 2018 by lisa | Comments Off on june 2012 update

Current situation:

I get paid twice a month (on the 15th and end of month). I’ll start throwing $550 at these loans after June 15th.

However, I might end up throwing a little bit more towards them this month. Our lease here in San Francisco ends on June 17th and our landlord is letting us pro-rate the price of rent for June instead of just charging us for one full month.

So:
$2,350 a month / 30 days in June ≅ $78.33 per day
$78.33 * 17 days ≅ $1,332 pro-rated rent due for June

Since I usually pay $825 out of the $2,350/month for rent, I calculated that I personally owe $467 for June. I’m saving $358 this month on rent!

But wait! There’s more!

I also (potentially) have $825 coming in from the security deposit we put down last year – granted we don’t leave the apartment in a mess! Including the $358 savings from rent, I will hopefully have a $1,183 windfall for June! The balance on my non-direct loan is just under that amount – I could completely wipe out my non-direct loan and put a small dent in one of my direct loans! That would make this repayment schedule move along even faster! Student loan debt free by 2013 instead of 2015? Hellooooo New York!

However, the selfish (or is it reasonable?) part of me is telling me to use that money for the new furniture I need for my new house. What do you guys think – get rid of the non-direct loan or use the money for a new bed? (I do have a bed at the apartment that I could use for the mean time if I decide to wait for one). OR put more money into my savings account for my car that I want to buy in December??

Gotta think this one over. Let me know what you guys think. Until next time…

Posted in category: MONTHLY UPDATE | Tags: , ,

let’s get down to business

Posted March 3rd, 2018 by lisa | Comments Off on let’s get down to business

Here is a graphic of my current budget from my last post:

Now, in order for me to be able to throw about $500 at my student loan debt, I need to shift some things around. I crunched a bunch of numbers, and this is what the new budget looks like:

New budget allocations:

Necessary Expenses – 29% (from 40%)
Currently, I’m living in a 3 bedroom flat with 2 roommates in San Francisco. I’m paying about $900/month ($825 rent, plus electricity, water, utilities) for a master bedroom with my own bathroom. As I mentioned in my previous post, I will be moving in with my mom, auntie, and brother in about a month and instead will be splitting the mortgage. My own contribution will be $600 flat (this will include electricity, phone, water) – savings of $300/month.

However, my monthly Clipper Card (SF/Bay Area travel costs) will be increasing from $62/month to about $150/month. Still, I’m saving more than $200 in this category.

I’ve also moved my monthly loan payments from this category to the next category.

Student Loan (SL) Snowball – 19%
[For those who don’t know what a snowball in personal finance is (or an avalanche, for that matter), I’ll be a doing a post on it sometime in the near future. Keep a look out!]

I’ve decided to throw about $500/month at my loans. At this rate, I’d have my loans paid off by December 2015 – exactly 5 years from my graduation date.

Savings – 37% (from 30%)
I know, why did I increase my savings from 30% to 37%?

Well for starters, I’m starting to save for my own car and I want to buy this car by December of this year. So the savings for that aspect went up from $50/month to about $300/month.

Also, I’ll be starting to study for the CPA (Certified Public Accountant) exam in about a month or two. Registering for the exam and reviewing for it is not cheap ($100 initial registration, $743.20 total for all four parts of the test, and $3,245 for the review). I’ll be taking out an interest-free loan (the best kind!) for the review, but I need to start saving up for this whole process. Increased career savings from $0/month to $200/month.

Spending – 7% (from 20%)
I currently take out $100 cash every Monday and that is the only cash I’m allowed to use for lunches, nights out, groceries, and gas (when I get rides from people). I’m decreasing my weekly spending from $100/week to $40/week. *gasp* I know, I might cry, too! Initially I was going to go down to $20/week, but I think that just might be impossible. Well, we’ll see how this one goes! This means bringing lunches every day to work, less happy hours (drinks are expensive!), no more hookah (it had to be done), and no more careless spending (bye bye expensive makeup).

Tithing – 8% (from 10%)
I knew for sure that I was not going to eliminate tithing from my budget. Although I spend a lot of time doing ministry work (I’m very involved in my parish’s Young Adult Ministry), I still think that I can donate money to my home parish. I decreased my monthly contribution from 10% to 8% – not a big change.

So there’s the plan. June begins this Friday (already? goodness…) and so will this new budget. Can’t wait to get this ball rollin’!

Happy Memorial Day, everyone! Let’s not forget what the troops have done for us.

AMDG,
Lisa

 

budgeting 101

Posted March 3rd, 2018 by lisa | Comments Off on budgeting 101

Everyone’s budget is different.

But if you don’t know where to start, many personal finance experts suggest you start off with a 50/30/20 budget – 50% of your post-tax income goes to necessary expenses (mortgage, rent, loans, etc.), 30% goes to your wants (nights out, movies, etc.), and 20% goes to savings (long-term, short-term) (see illustration below):

I used this budget model when I first started working, and whenever someone asks me what is the best way to budget, this is the model I point them to.

However, as I mentioned before, everyone’s budget is different. Once you get a hang of managing your budget, you begin to realize that these rules might not work for you and your goals. This model worked for me for a while, but my financial goals started changing, and the budget just didn’t fit me any more.

After about a year of using the 50-30-20 budget model, I adjusted my budget to a 40-30-20-10 model – 40% necessary expenses, 30% savings, 20% spending, and 10% tithing (see below):

I just want to highlight a few of the changes:

Decreased monthly necessary expenses from 50% to 40% – in about a month, I’ll be moving back in with my mom, brother, and auntie, saving a significant amount on rent. I’ve also just finished paying off my credit cards, so my necessary expenses have decreased on their own.

Increased monthly savings from 20% to 30% – I have a lot to save for – my retirement, my future car, my future career plans, and my future life in New York. 20% just wasn’t cutting it anymore.

Decreased monthly “wants” spending from 30% to 20% – When I began taking my lunch to work, I realized I saved a lot of money this way! Ever since then, I’ve been finding ways to cut my ‘wants’ budget and I’ll be sharing these insights with you all in the future.

Added a 10% tithing allocation – Tithing is something that I as a Catholic firmly hold myself to. I’ll be doing a full post on this later.

So there it is – if you want to get a hold of your finances you must, must, must create a budget!!!  Believe me, I tried managing my finances without a budget, and it only led to disaster (a.k.a. credit card debt)! I’ve provided you with two guidelines, so take one and adjust it according to your own personal finance goals.

In my next post, I’ll show you how I plan to further edit this budget in order for me to be able to throw about $500-600/month toward my student loans.

AMDG,
Lisa

Posted in category: BUDGETING | Tags: , , ,

And So It Begins…

Posted March 3rd, 2018 by lisa | Comments Off on And So It Begins…

I made a lot of stupid decisions in college.

One of those decisions was to apply for five credit cards in the span of one semester (seriously, what the hell was I thinking?! Shoes. Shoes was what I was thinking). I was terrible at handling my credit and by graduation, I had a lot of credit debt to pay off.

As soon as I graduated from the University of San Francisco in December 2010, I vowed to myself to pay off my credit. I landed a job in the financial district of SF and started a debt snowball on all five of my credit cards. I made plenty of mistakes along the way but in January 2012, I paid off my last credit card!!! I now have a pretty good idea of how to handle all my credit and now have a credit score in the top range!

That’s not all, folks! Paying off all that debt was such a rush that now – I’m addicted! I’ve decided that starting in June 2012, I will aggressively pay off my student loans! The goal is to have them all paid off by December 2015 – exactly 5 years from when I graduated from USF. Many payment plans nowadays allows students to pay off their loans in 10 years, even all the way up to 30 years, so this will definitely be a challenge.

I have my reasons for doing this, and I’ll post on those in the future. But for now, here’s a look at what I’m dealing with:

According to CNN, the student loan debt for the class of 2011 (the year I was supposed to graduate, but more on that later) topped $25,000. As you can see, I’m about $5,000 shy of the average. However, my financial aid package also included a work-study program, so I guess you could say that I was given about the average throughout my 3.5 years at USF.

Over the past year (I didn’t start paying these loans until May 2011), I’ve made a very modest dent at this debt: about $1,500. Yet, I’ve only knocked off $889.65 of the principal (damn you, interest!). Moving forward, I hope to throw about $6,000/year at these loans – about $500/month – a 300% increase in contribution. On top of that, I still plan on fully funding my Roth IRA and I’ll continue saving for emergencies, a car, and my future life in New York (but more on that later). And no, I’m not rich. Although I will not discuss my exact income, I will say that I make less than the median income in my counties (San Francisco and Solano)as of 2011 (source).

Anyways, the beginning is always the most exciting part! This blog was made mostly to keep myself accountable, but hopefully you can learn a thing or two by reading about my journey, and in turn you’ll be inspired to pay off your own debts!

[Bear with me, I’m not exactly the best writer, either :)]

Posted in category: Debt Repayment | Tags: , ,