My Net Worth-April

Thursday, 1 May 2008 at 9:00 am (My Net Worth) (, , , , , , , )

I’ve updated my Net Worth since it’s the first of the month.  For some reason, it won’t show up as a picture on my side bar, so I have a link to my page under the blogroll.  I may end up moving it to a more prominent spot.  Right now you can access it here.  My net worth has risen $1,978 in the last month to -$9,406.  This is for a few reasons:

1.  Last month I didn’t take into account my 401K from my current employer.  At this point, I’m only contributing 3% of my salary (they match 50% up to that point), so it’s less than $800, but it’s still something.

2.  I contributed $1000 to a traditional IRA and it’s already gained more than $20 in interest.

3.  I changed my car loan agreement with my dad, lowering my interest rate to 6% and extending the length of the loan.  My car loan total is a little misleading because I have down the entire balance plus the interest I’ll be paying, assuming I pay exactly $88.71/month (until November 2010), $5000 November 2008, and $500 November 2010.  So my balance is lower than indicated, but I don’t keep my amortization schedule sheet on hand to determine exactly what my balance is each month.  I might start doing that in November after I pay the big lump sum.  My student loan balance is calculated for me, so that is correct.

Soon I should be receiving my $600 tax rebate and my over $1600 tax refund, which will be nice.  I’ve thought about changing my withholding, but I haven’t yet worked a full January-December year yet, so I think that I’ll wait until next year to look at that.

This month I’m also going to track what I spend, which I’m looking forward to and dreading all at once.

Permalink No Comments

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 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