My Car Loan

Tuesday, 15 April 2008 at 9:17 am (How I Got Here, My Banking) (, , , , )

When I bought my 1999 Toyota 4Runner in 2006, the best interest rate I could have gotten with my credit score was 9%.  I didn’t have BAD credit, I just hadn’t had enough for a long enough time.  At the time, I didn’t realize that getting a car loan would have actually helped my credit score by having different types of credit; that’s why I took a loan from my parents at a great deal.

I borrowed $5000 at no interest to be paid in full November 2008, and $5500 at 7% interest for three years, to be completed in November 2009.  My monthly payment became $169.82, not including the $200/month or so that I *should* have been putting aside each month, specifically for the $5000 balloon payment.

I was putting money aside; in fact, I saved a LOT during that ten months as a teacher.  But when I was out of work for essentially six months, my savings dried up quickly.  I now don’t have enough for that November balloon payment and I have to work to get to that point.

I decided to refinance my loan with my lender, Dad.  Yesterday, we worked out a new schedule and a new interest rate.  I had 18 more payments left, so I increased it to 30, with a 31st balloon payment of $500.  The interest rate changed to 6%, which leaves me with a monthly payment of $88.71.  I already have over $3400 in my Vanguard Money Market account, with $200 automatically going in each month.  By November, I will have over $5000 ready to go if I also put in the $81.11 I’m saving each month.

The only problem with my Money Market account is that I have to keep at least $3000 in it, which I will be unable to do at that time.  When I get to November, I will close the account (sadly) and move my money into a high yield savings account like the ING Direct one everyone’s been talking about, until I have that $3000 again.  Since I’ll still be saving $281.11/month, hopefully it’ll take under a year.  Also, hopefully by that time I’ll already have received a raise that beats the rise in my cost of living, so that I’ll be able to save even more.

Permalink No Comments

My Rent

Friday, 4 April 2008 at 9:55 am (How I Got Here) (, , , )

When I was apartment searching last summer, there were some things that I swore I would not compromise on; I would not live in a first floor apartment, or in low-income housing, or anywhere that I didn’t feel safe.  I didn’t need lots of amenities or even a lot of space.  I did want a one-bedroom instead of a studio because I’m quite messy and needed a place to keep my mess.

I was trying to keep rent to about $1000/month.  So I started searching.  I started with a free Apartment Guide from the grocery store and marked everything in my price range.  Then I went online and looked up information.  By the time that I had crossed off all the low-income housing, I was freaking out; I had only a handful of options.  Even after expanding my search to apartments.com, rent.com, and Craig’s List, I was still down to almost nothing.  I also was running out of time to get a place before my current lease ended. 

After visiting a few places, I finally found something.  It seems like it’s 30 miles from everything in the world.  It’s definitely that far from my job.  I live in Loudoun County, in a third floor, 867 sq. ft. unit that I love.  Even though it is the largest one bedroom they have, it was the cheapest one available at that time.  The base rent is $930/month, but there are mandatory add-ons.  For $30/month I get valet trash pick up, and for $49/month I get cable, neither of which I need.  Last year I used an antenna for service and while it was touch and go, it got my roommate and me through.  So I’m paying about $1019/month when monthly fees are added in. 

I love living there because the town still has a slight small town feel to it, even though it’s expanding like crazy.  Nothing’s perfect, though; I have to take the Dulles Toll Road to work and home which costs me $2.50/day.  If I’m running late for work, I take the Dulles Greenway which costs $3.00 extra, so once every week or two, I waste $3.00 taking it to the Toll Road.  Now that gas has risen so high, I’m averaging more than $350/month in gas alone and when you add the tolls, it’s more than $400/month just for driving. 

 

My lease is ending in September and I’ll have to decide (in about June or July) whether it’s worth it to move closer to work and pay higher rent and moving fees, but less in travelling expenses?  Will it be any less, anyway, if the gas prices go higher?

Permalink No Comments

My Story

Thursday, 3 April 2008 at 11:03 am (How I Got Here) (, , )

Recently, I stumbled upon a string of financial blogs and found them quite interesting–interesting enough to lead me to beginning my own.  The problem that I saw was that these blogs didn’t apply to me very well.  Sure, many of them are also in debt, but they’re not in MY kind of debt.  They may have a substantial amount of debt, but their net worth is way above mine-it has to be because my net worth is in the red. I’ve always been smart about credit cards; I always pay them off at the end of the month to make sure that I don’t get caught in that horrible cycle of never having enough to pay it down.  My debt is all student loans and my car loan.  I took out loans for my three semesters of graduate school, which totaled about $18,500 (prior to part of it earning interest).  I graduated, got a job as a teacher (which is what my degree was in), and bought a used Toyota 4Runner.  My parents convinced me that I’d be able to make the payments and even offered to put down two-thirds of the money so that I could buy it outright and not have to finance it for a huge interest rate.  Instead, we agreed that I’d borrow $5000 interest free on the condition that I paid that lump sum back after two years.  I borrowed another $5500 at 7% interest to be paid monthly over a three year time period. 

This all seemed relatively fine; I got a used car in wonderful condition for a fairly good price and I knew that I could make the payments with my fancy new salary. Except that I hated teaching.  At the end of the year I resigned with no intention of ever returning.  Previously, I’d been smart enough to choose the 10-month payment plan (instead of the 12) to make sure the money grew interest in my account instead of Fairfax County’s, and I’d set aside that extra money in a separate account.  I foolishly decided to wait on finding a new job while I enjoyed the summer and recovered from a stressful year.  That led to me being out of a job until mid-December.  I had to live on my savings until that point and my expenses were increasing while I had barely any money coming in. 

That September I moved out of a 2-bedroom apartment I shared with a roommate into a one bedroom which cost a lot more; my roommate was getting married and I didn’t have anyone to live with to share expenses.  I realize I could have lived with a stranger, but in the past I had such a horrible living situation that I’d rather struggle financially for a while than struggle emotionally. 

So here I am in April, with more debt than assets.  My biggest trouble is sticking to a budget, so that is what I will start working on first.

 

Permalink 1 Comment