Got two bits of bad financial news this week. Nothing too crushing, but:
1. I put $1000 extra into NT's account (besides what I put in to cover bills), expecting it to go toward cutting his overdraft in half. Instead, his rental income check came in 250 British pounds ($500) lighter because of a twice-a-year association fee. So half of my $1000 is merely going to cover minimum payments on bills, setting me back on my goal of having that overdraft paid off by early October.
2. AS's paycheck is going down by about $112 per pay period, or $224 per month. (Taxes due to getting so much free tuition this year.) This is much bigger, as it will pretty much wipe out any wiggle room in our budget. But I'm looking at ways to alleviate that, at least temporarily. One bit of good news is we get a "freebie" check in November, since she gets paid biweekly and we get two more paychecks than I account for. I hadn't prespent the freebie in my mind, so that will go toward keeping us on track.
More later, probably, when I get my head around it a little more!
Archive for September, 2007
Got two bits of bad financial news this week. Nothing too crushing, but:
I keep all my financial information in my e-mail account. I wanted a way that I could balance my numbers at work or at home, whenever I got time or felt like it. So I started e-mails that I never intended to send, and I keep them in my Drafts folder. When I have new information, I go in and change them and then resave the draft.
It's a good system; there have been a few cases where there was a saving glitch and I lost one of the e-mails, but it's not like I can't recreate the information; it's just a pain.
Since I discovered this "pages" setting in my blog, I'm thinking I could keep my information here (or maybe keep it in both places, so I have a backup).
Another advantage, besides having it saved, is that this blog has become a nice, convenient way to communicate with my family about our finances. They read it periodically and so they have an idea where we are without my having to schedule family meetings about it.
They've really taken to the idea of our new budgeted life; they're always regaling our nonthrifty friends with tales of our latest budgetary exploits. :-)
Last night we tried to figure out our net worth. All our assets are retirement funds and real estate, so we can only estimate, as those things go up and down (and half are in British pounds).
But it wasn't terrible. Here's what we came up with (not counting nonvested amounts, and very conservative house valuations):
NT's pensions: 7,250 pounds ($14,500)
10,725 pounds ($21,450)
AS's 403(b): $1,400
CJ's 401(k): $25,200
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $185,000
Total Assets: $507,550
Total Debt: $452,647
Estimated Net Worth: $54,903
Not too much divided between three of us, but considering I estimated our value to be in the $40s only a couple months ago, it sounds really good to me! And by virtue of paying off over $2500 of debt a month, and contributing a few hundred to our retirement plans a month, that number will go up quickly.
It's nice to write something that's actually positive about our finances, not just me being optimistic and keeping my chin up! :-)
Maybe I'll make this a regular blog feature, every month or so.
Maybe it's planning for our Halloween party that's gotten me feeling silly and spooooky, but I've decided to start a new page on my blog to record my debts as I kill them off, one by one. I'm only counting the ones since I started the blog, and I'll record the balance they had when I first got on here.
I only have one on there so far, but I hope to have a second one shortly after Halloween!
OK, on to the next step in my Ad Hoc Plan. Now that NT's full-time job kicked in, I wanted to make our repayment a little more aggressive, though the bulk of this new money will go toward spending money and saving up for travel, home improvement, etc. $2500 seemed like a good goal, and $2525 was catchy, so I decided to make that our new monthly goal.
I updated our overall goal, and realized that means I'm aiming to pay off almost $20K by the end of March, before our trip! Sounds crazy until I realize that in August and September, we paid $5,008, more than a quarter of that.
If we were able to keep at this pace, we'd be able to pay off all our debt, including our mortgages, in 15 years. (That means if I manage to snowball payments once I start eliminating debts, it could be faster than that.) Another exciting thought: We could be free of consumer/credit debt in less than three years. I've had credit card debts since I was about 24, so that would be an amazing feeling.
It's all about positive visualization!
As I've probably mentioned, I find the UK side of our finances confusing. :-) So I just figured out how to check another credit card balance online, and turns out a payment had posted since the last time I got the balance in the mail. Its balance was 141 pounds (about $282) lower than last time, so that means we've reached our monthly goal!
Goal: pay off $2185
Results: Paid off $2427!
I can only check one of NT's UK credit cards online; the others I have to wait for the print statements to come. Annoying! I've gotten so spoiled by online access.
Anyway, the one I can check posted a small reduction in principal--3 pounds, or about 6 bucks. That brings us a tiny step closer to making our goal: $2145 down, $40 to go.
Today my personal loan payment posted. I managed to put a few extra hundred toward it, so I paid off $760 in principal! So $2139 down, only $46 to go in September. Hopefully I'll manage that somehow, but even if I don't, I got closer to my goal than expected.
I love doing taxes and will help out any friend as long as theirs aren't too complicated. This year I did taxes for a friend who has several different kinds of investments--that was different! Most of the ones I do are fairly straightforward, but I do love a challenge. The Tax Code is like a choose-your-own-adventure book in my geeky world.
But the other night I had to do British taxes! NT has never really had to do taxes; in the UK, the government will figure them out for you in most cases. But since he still has his flat in England and rents it out, that portion had to be figured out. I have the best financial head in the household, so it was my job.
At least we didn't have to calculate the tax, just send them figures related to the rental property. But still, it was so crazy to do, after being so comfortable with the IRS's way of wording things and organizing forms.
Turns out there was a loss of about 600 pounds ($1200) for the year ended April 4, 2007, due to maintenance that had to be done in order to rent the flat. I think that's good news, though; can't imagine the UK government will be able to tax us since we had no income, and we can carry that loss over to future years, so hopefully we won't have to pay any British taxes until we're in a better place to do so.
I'm also hoping that having no UK income will simplify my and NT's 2007 U.S. taxes. I ended up doing Married Filing Separately for 2006, since he had UK income and no U.S. income. I missed out on a little bit of deductions as a result, but I was afraid of all the extra forms that would come with reporting his international income!
I still may end up hiring someone this year just to make sure I'm not missing any important legal requirements. Sad since I'm H&R Block-certified, but I didn't get into learning anything very complicated when I worked for them.
AS's student loan payment posted today, paying off $55 in principal instead of the expected $48. Hooray! So that's $1,379 paid, $806 to go on my September challenge.
I sold 2 books on half.com and cleared $45, and we should be able to sell an unused TiVo box, which we got for $40, for $75. So I'm putting an extra $120 toward my personal loan payment going out on Friday. That will get me much closer to hitting my goal, even if I don't quite make it. I'll have to watch closely and make sure they put the extra toward principal, as this will be the first time I pay extra on this new loan.
Paid $296 toward principal. So $1324 down, $861 to go on my September goal.
It's frustrating having such large amounts of debt, because no matter how much I'm able to throw at it, it always feels like a drop in the bucket. These monthly goals really help me feel like I'm accomplishing something so I don't lose focus.
Another short-term thing that helps is tackling some smaller, high-interest debt. The low-hanging fruit, so to speak. I got rid of my own reserve line balance on my checking account first; now my sights are set on NT's overdraft balance on his UK account. I think I'll be able to pay more than half of it off in October and knock the rest out in early November. Then he's got a small credit card balance that I think I'll be able to pay off in December. So I'm hoping I'll be able to say I've paid off two more debts by the end of the year.
That'd make 2007 quite memorable, since I also paid off my student loan in May and my reserve line just recently. Four debts gone in one year would be exhilerating!
My mortgage payment and NT's UK mortgage payments posted, so I've finally chipped away some more of my September challenge. I estimate we paid off $436 in principal total. So that's $1028 paid, $1157 to go.
I think we'll fall a little short this month, but we'll come pretty close.
Well, it's not nearly that exciting; it's our own money. NT's job finally got straightened out, so we have a little more money in play than we did before. Some of it will be going to a more aggressive debt-repayment plan (which I will launch in October, after I get some other things straightened out). And some will be going toward a bigger cable package and DVR, which we've been dying to get. Some will go into a short-term savings account, where we'll save up money for various things like travel and home improvement. But there will still be some money left over. (This may change next year when some student loans come due and our ARM goes up, but not for awhile.)
So, since everyone in my family has been looking for motivation to work out, I've started an exercise incentive plan. There is now a reward of $5 extra spending money every time one of us works out for half an hour. If we don't work out enough to earn all the money I'm setting aside, it will go toward debt principal or into savings, wherever I need it.
To make it even more fun, I took out the first batch of workout money in $2 bills and the new dollar coins! They're really neat-looking. I had to special-order them from the bank because they didn't have any there.
So far it's working! We went for an hour-long brisk walk together around town on Sunday, "earning" $10 each, and each of us managed another half hour of exercise on Monday, so we each get another $5.
I could be putting this toward debt, but if I can get us healthier, that's just as big an investment in our future.