A while ago I mention that I was going to refinance my home. We had a 4.675% fixed for 30 yrs. Good rate. A month ago the rates dropped again and we decided to refi. Why? Because it was a no cost refi, meaning we don't pay a dime. So now our rate is 4.125% fixed for 30yrs. It's only a .5% drop, but it's still worth it. $100 a month in the bank is better than 0.
Now we are looking to refinance our investment property. We get some money back from loans we loaned out, so we paid down the investment until it was 70% of the assessment. Now we can look at lowering the 6.5% to maybe under 4.5%. Hopefully, we'll have a net 0 from that property instead of negative cash flow. In time, it'll be positive, but for now net 0 is good.
Showing posts with label personal finance. Show all posts
Showing posts with label personal finance. Show all posts
Thursday, October 13, 2011
Wednesday, October 5, 2011
October Check up
There is huge gain this month, again. I had "loaned" some money to family and now some of the money is being returned. Yay for returns!
Here we go:
Liabilities: $719,804
loan from mom - $20,000 (nothing has changed, I know I really should pay that off and soon)
House Mortgage - $335,732 (mortgage has not come out of account as of yet)
Rental #1 Mortgage - $138,328
Rental #2 Mortgage - $225,744 (mortgage has not come out of account as of yet)
Assets: $1,245,100
Liquid assets - $36,500
House value - $590,000
Rental 1 value - $250,000
Rental 2 value - $315,000
Investment - $53,600
Net worth: $525296 +5.77%
Here we go:
Liabilities: $719,804
loan from mom - $20,000 (nothing has changed, I know I really should pay that off and soon)
House Mortgage - $335,732 (mortgage has not come out of account as of yet)
Rental #1 Mortgage - $138,328
Rental #2 Mortgage - $225,744 (mortgage has not come out of account as of yet)
Assets: $1,245,100
Liquid assets - $36,500
House value - $590,000
Rental 1 value - $250,000
Rental 2 value - $315,000
Investment - $53,600
Net worth: $525296 +5.77%
Monday, October 3, 2011
5 important HR things when you start your career
I am so happy and excited for my sister. She's starting her first teaching job next Monday. It's been a nervous summer beginning of school year. Now, she's got a job and all the benefits to go with it. She asked me to sit with her to go over hrr benefits(actually, I asked to sit with her first when I hear she got an offer).
Here are a few HR things that I think are very important when you start your first job:
Here are a few HR things that I think are very important when you start your first job:
- health insurance - this includes all the prescription drugs, vision, dental, and medical health insurance that are provided. Get at least the basic ones. It's a no brainer, I just had to explain the difference between HMO and POS Al of that only cost her about $700 a year.
- retirement plan - for this, she is offer 2 employer sponsered. I asked her to put close to the max for each(15k each, max is 16.5k each). I know she only makes a small amount right now($46k), but since she live at home and has no loans to pay off (good girl, sort of, because my 'rents paid for her school). I also told her this is only for the first year, and she can change that any time she wants. Also, I wanted her to not have too much money on hand all of a sudden so she'll learn to manage her money and think about what she wants to do with it. (I wish I had $30k to put away).
- life insurance - she as a little confuse about life insurnace. Since my parents had bought a policy for her, she wanted to know if she can still get one. Even though, she doesn't have a lot of asset or debt to cover, the basic is soooooooo cheap, that I made her get it. CHEAP meaning it is $0.02 per thousand of her income per paycheck and the paid out is 2x her income.
- budgetting - so I went over with her how much money she can put away for retirement by looking at her spending: I asked her what she spend her money on and so far it's only food and cell phone bill and she paid off her credit card bill every month which is around $250. Let's double that which comes to $500 x12 months = $6k(this is mostly just spending money). She wants to get new clothes for work, and she thinks it's $1000 (either that's some expensive stuff, or it's a lot of stuff, but ok whatevs). Also, she wants to help my parents out by giving them $300 every month (good, since she lives with them). So her expected expenses are $6k + $1k + $3.6k = $10300, plus the benefits she pays for $11000. I said if she put $30k of her salary($46k) in the retirement accounts, she'll be paying taxes on $16k. Her taxes will be $3110 (15% fed, $90 + 4.75% of anything over $3000). So she'll have $12890 left, minus her expected expenses, she'll have $1890. Which I suggested a Roth IRA, but we'll discuss that later.
- spending tracking - I asked her to make a speardsheet on her spendings to see what she spend her money on. I didn't ask her to do much of trimming or budgetting because she has an good idea what she want to buy. However, I wanted her to see for herself of her spending is good or not.
Monday, September 26, 2011
tracking your mortgage
J$ has posted about paying off his mortgage with a plan. He used a calculator for looking at how much he can save interest by putting extra month every month. I am much more of a spreadsheet addict. I track my mortgage payment with the mortgage amortization spreadsheet. This way, I can look at how much extra i put in and when.
At the top is your basic numbers from the loan. However, some the spreadsheet is protected. I would unlock it and put in extra cells, one for the amount of interest I would pay if I don't pay extra principle, and one for the interest I am saving with early payments. I do this with my investment mortgages as well. When I refinance a loan, I would copy the old spreadsheet and change the numbers in the new one, so I have a record of what interest I paid already on one house. Seeing the numbers is a encouraging way for me to put in the extra payment.
At the top is your basic numbers from the loan. However, some the spreadsheet is protected. I would unlock it and put in extra cells, one for the amount of interest I would pay if I don't pay extra principle, and one for the interest I am saving with early payments. I do this with my investment mortgages as well. When I refinance a loan, I would copy the old spreadsheet and change the numbers in the new one, so I have a record of what interest I paid already on one house. Seeing the numbers is a encouraging way for me to put in the extra payment.
Wednesday, September 21, 2011
cost of extras
Remember when life was simple? There was once upon a time, not long ago, when life was not run so much on electricity. There were very few television stations, so TV watching was limited to a couple hours, same with music. There were not personal music players, no cell phones, no GPS, no laptop, no game systems.
I really think living in that environment would be a lot better for the mind and the pocket. Think about how much money we spend on these "extra" thing. They are extra because we can live without the, but have to learn to accept it as must haves. Things like cellphone, Internet access, entertainment, and etc.
The Cost per year:
This is the basics if you don't include all the accessories and peripherals.
cable TV: $1000
Internet access: $400
cellphone plan: $500
cost of phone: $100 (because these phone are slow and obsolete in a bout 2 years, and a 2 year contract will get you the next one)
TV: $100 (because we are expecting the TV to last about 5-10 years, so cost/years is about this)
game systems: $50 (again how long before the new one comes out and make this one obsolete)
computer system/laptop: $300 (same principle above
Total: $2450
Now add on to that the additional cost of games, apps, accessories, and not to mention the electricity bill. The cost of these extra things in modern life is about at least $3000/year.
I not am saying that we should ditch all of these, but $3000/year is a nice chunk of change in my pocket. I know, I know, I gotta live a little. But do I really need all of these?
I really think living in that environment would be a lot better for the mind and the pocket. Think about how much money we spend on these "extra" thing. They are extra because we can live without the, but have to learn to accept it as must haves. Things like cellphone, Internet access, entertainment, and etc.
The Cost per year:
This is the basics if you don't include all the accessories and peripherals.
cable TV: $1000
Internet access: $400
cellphone plan: $500
cost of phone: $100 (because these phone are slow and obsolete in a bout 2 years, and a 2 year contract will get you the next one)
TV: $100 (because we are expecting the TV to last about 5-10 years, so cost/years is about this)
game systems: $50 (again how long before the new one comes out and make this one obsolete)
computer system/laptop: $300 (same principle above
Total: $2450
Now add on to that the additional cost of games, apps, accessories, and not to mention the electricity bill. The cost of these extra things in modern life is about at least $3000/year.
I not am saying that we should ditch all of these, but $3000/year is a nice chunk of change in my pocket. I know, I know, I gotta live a little. But do I really need all of these?
Monday, September 19, 2011
expect the unexpected
For the past year, I have been looking at my expenses. For the alst 3 months I have been tracking them on a spreadsheet. Every month, I notice that there is a one-off expense. By these one-off expenses, I mean appliance replacement holiday shopping, house maintenance, or refinancing costs. Most of these are not recurring every month or year. However, they seem to occur more often that I expected.
Before I tracked them on a budget spreadsheet, I used to tell myself that my expenses will reduce next month because I don't have this one-off expense. However, every month, I see the same high expenses and wondered where my money was going. So I put them on a spreadsheet. These one off purchases are $300-$1200. While the $300 purchase is not a huge deal, the $1200 is, but both are necessary.
I was pretty shocked at how often they come up, and it seems like every 2 months on average. Now, I don't go and buy new appliance unless one is on the brink of breaking. It seems about every 15 years, the house needs some major maintanence, and it's well pass that time. So fro then next 2 years, I will be budgetting an extra $400 a month for maintenance. If it doesn't get used, it goes to the savings.
Before I tracked them on a budget spreadsheet, I used to tell myself that my expenses will reduce next month because I don't have this one-off expense. However, every month, I see the same high expenses and wondered where my money was going. So I put them on a spreadsheet. These one off purchases are $300-$1200. While the $300 purchase is not a huge deal, the $1200 is, but both are necessary.
I was pretty shocked at how often they come up, and it seems like every 2 months on average. Now, I don't go and buy new appliance unless one is on the brink of breaking. It seems about every 15 years, the house needs some major maintanence, and it's well pass that time. So fro then next 2 years, I will be budgetting an extra $400 a month for maintenance. If it doesn't get used, it goes to the savings.
Thursday, September 8, 2011
what's wrong with this picture?
Last week, I was reading some financial news and came across an article for Tiffany's quarterly earnings report. It was up 25%+ every quarter the last 3 quarters, domestically and worldwide. With the domestic and world economies in near crisis every other week, how is that possible?
There are only a couple of possible explanations
1) the truly rich people are unaffected by these economic problems, and are spending as they like
2) the not so rich are aspiring to live like the rich, in which case is just sad that they think this is truly how the rich lives.
Seriously, one would think that luxury brands like Coach or Movado will not be raking it in because of the poor economic growth, but they are. J$'s guest's post points out that aspirational spending, and I agree that the practice is just asinine. Are people still chasing that luxury life style that brought the housing market and large financial institutions to their knees? Did they not learn? Apparently not as much I think they would.
There are only a couple of possible explanations
1) the truly rich people are unaffected by these economic problems, and are spending as they like
2) the not so rich are aspiring to live like the rich, in which case is just sad that they think this is truly how the rich lives.
Seriously, one would think that luxury brands like Coach or Movado will not be raking it in because of the poor economic growth, but they are. J$'s guest's post points out that aspirational spending, and I agree that the practice is just asinine. Are people still chasing that luxury life style that brought the housing market and large financial institutions to their knees? Did they not learn? Apparently not as much I think they would.
Tuesday, September 6, 2011
balance
Recently, the mortgage interest rates have been very very low. We decided to refinance out home loan, because the broker we know can get us a deal for no cost. Awesome!!
There were 2 options
1) 15 yrs fixed @ 3.75%
2) 30 yrs fixed @4.125%
The total interest for the 15 years loan would be less than $100k, while the interest of the 30 yrs will be $200k+. However, the month payment of the 15 yrs is twice the amount of the 30 yrs, which reduces the "left over" money to about $1000. By "left over" money, I mean after all expenses, and which we put into savings. We don't usually have a savings budget because we didn't need to budget that in.
Other family members feel that we should get the 15 yrs loan and pay off the mortgage ASAP. However, with only $1000 in savings every month, money can start to get tight if we need to use it for emergencies.
Along with possible pay and benefit cuts for Mr. LLF, and no promotion/pay increase for myself (because of congress, not me), inflation, rapid rise of cost of living, and possible consideration of private schooling, the $1000 left over could dwindle fast.
Another note that Mr. LLF made was "we gotta live too!" Mr. LLF made note that while he is fine with not traveling, dinning out, or spending money on entertainment, I will want those things even if I can hold off for a couple of years. 15 years is too long to go without those things. I know they are luxuries, but they are important to me. I would be unhappy and burnt out on saving if that's the case.
So in the end, we opted for the 30 yrs loan for some peace of mind and a better balanced life. In the event that we want to travel, we can afford to, though we don't do it very often. At the same time, I could take a big chunk of "left overs" and put it in the mortgage if we're so inclined.
There were 2 options
1) 15 yrs fixed @ 3.75%
2) 30 yrs fixed @4.125%
The total interest for the 15 years loan would be less than $100k, while the interest of the 30 yrs will be $200k+. However, the month payment of the 15 yrs is twice the amount of the 30 yrs, which reduces the "left over" money to about $1000. By "left over" money, I mean after all expenses, and which we put into savings. We don't usually have a savings budget because we didn't need to budget that in.
Other family members feel that we should get the 15 yrs loan and pay off the mortgage ASAP. However, with only $1000 in savings every month, money can start to get tight if we need to use it for emergencies.
Along with possible pay and benefit cuts for Mr. LLF, and no promotion/pay increase for myself (because of congress, not me), inflation, rapid rise of cost of living, and possible consideration of private schooling, the $1000 left over could dwindle fast.
Another note that Mr. LLF made was "we gotta live too!" Mr. LLF made note that while he is fine with not traveling, dinning out, or spending money on entertainment, I will want those things even if I can hold off for a couple of years. 15 years is too long to go without those things. I know they are luxuries, but they are important to me. I would be unhappy and burnt out on saving if that's the case.
So in the end, we opted for the 30 yrs loan for some peace of mind and a better balanced life. In the event that we want to travel, we can afford to, though we don't do it very often. At the same time, I could take a big chunk of "left overs" and put it in the mortgage if we're so inclined.
Friday, September 2, 2011
September Check up
There is huge gain this month. I had "loaned" some money to family and now some of the money is being returned. Yay for returns!
Here we go:
Liabilities:
loan from mom - $20,000 (nothing has changed, I know I really should pay that off and soon)
House Mortgage - $336,182 (mortgage has not come out of account as of yet)
Rental #1 Mortgage - $138,727
Rental #2 Mortgage - $298,930 (mortgage has not come out of account as of yet)
Assets:
Liquid assets - $82,000
House value - $590,000
Rental 1 value - $250,000
Rental 2 value - $315,000
Investment - $53,457 - this is only person's 401k
Net worth: $496,618 +12.57%
Here we go:
Liabilities:
loan from mom - $20,000 (nothing has changed, I know I really should pay that off and soon)
House Mortgage - $336,182 (mortgage has not come out of account as of yet)
Rental #1 Mortgage - $138,727
Rental #2 Mortgage - $298,930 (mortgage has not come out of account as of yet)
Assets:
Liquid assets - $82,000
House value - $590,000
Rental 1 value - $250,000
Rental 2 value - $315,000
Investment - $53,457 - this is only person's 401k
Net worth: $496,618 +12.57%
Tuesday, August 9, 2011
alternative living - part 4
Previously I posted about retirement planning and lowering cost of living options. Here is a further look into another one of the alternative living arrangements to lower the cost of living: reverse mortgages.
Here are the pros and cons to reverse mortgages:
Pros:
-you can still live in the home that you have bought
-you still own the home
-you have a set amount of income every month in addition to your other retirement benefits
-you can mortgage part or all of the equity of your home
Cons:
- the bank owns a part of your home because they are paying you for it
- depending on what portion and how you mortgage, it may run out
- depending on your mortgage and home equity, you may not leave much or anything to your heirs
- you still have to pay property tax, and other home owners expenses
- there are quite a few restrictions on setting it up, like if you get one through HUD, you have to be 62 or older and not have defaulted on any loans
-your house has to be paid off or very low balance
The drawbacks of reverse mortgage are many. For one, you may not have much to leave your heirs. Since this is relatively new product that got a bad rep due to sleazy sales people taking advantage of the elderly, many people distrust reverse mortgages. Rightly so, since there is little regulation of this. Banks are also stopping the offer of these while home values are sliding lower still.
However, for those who Social Security, an other retirement funds are not enough to live on, and they cannot live with the alternative means that i have mention in my previous posts, reverse mortgage could be a great way to supplement retirement income. The catch is to be diligent in reading all contracts and understanding the fees and loan structure before signing anything.
Here are the pros and cons to reverse mortgages:
Pros:
-you can still live in the home that you have bought
-you still own the home
-you have a set amount of income every month in addition to your other retirement benefits
-you can mortgage part or all of the equity of your home
Cons:
- the bank owns a part of your home because they are paying you for it
- depending on what portion and how you mortgage, it may run out
- depending on your mortgage and home equity, you may not leave much or anything to your heirs
- you still have to pay property tax, and other home owners expenses
- there are quite a few restrictions on setting it up, like if you get one through HUD, you have to be 62 or older and not have defaulted on any loans
-your house has to be paid off or very low balance
The drawbacks of reverse mortgage are many. For one, you may not have much to leave your heirs. Since this is relatively new product that got a bad rep due to sleazy sales people taking advantage of the elderly, many people distrust reverse mortgages. Rightly so, since there is little regulation of this. Banks are also stopping the offer of these while home values are sliding lower still.
However, for those who Social Security, an other retirement funds are not enough to live on, and they cannot live with the alternative means that i have mention in my previous posts, reverse mortgage could be a great way to supplement retirement income. The catch is to be diligent in reading all contracts and understanding the fees and loan structure before signing anything.
Thursday, August 4, 2011
August Finance Check up
This time, the numbers are closer to what they really should be. It looks like a big gain, but it's really not since my tax assessment came back higher than what I estimated. Here we go:
Liabilities:
loan from mom - 20000 ( forgot this one last month, this was from few months ago for help with buying our house because we came up short on the closing cost)
House Mortgage - 336,181.66
Rental #1 Mortgage - 139081.06
Rental #2 Mortgage - 298930.37
Assets:
Liquid assets - 30000
House value - 590000
Rental 1 value - 250000 - tax assessment came
Rental 2 value - 315000 - tax assessment came
Investment - 50350 - this is only person's 401k
Net worth: $441156.91 +6.1059%
Liabilities:
loan from mom - 20000 ( forgot this one last month, this was from few months ago for help with buying our house because we came up short on the closing cost)
House Mortgage - 336,181.66
Rental #1 Mortgage - 139081.06
Rental #2 Mortgage - 298930.37
Assets:
Liquid assets - 30000
House value - 590000
Rental 1 value - 250000 - tax assessment came
Rental 2 value - 315000 - tax assessment came
Investment - 50350 - this is only person's 401k
Net worth: $441156.91 +6.1059%
Monday, July 18, 2011
cellphone plans are ridiculous
Recently, I took a look at my cellphone bill. What a shocker. I was on a very old plan that I shared with my mom. The cost of the plan is a little ridiculous consider in that neither of us has a smart phone and I only recently started to use texting - yes, I lived under a rock for several years. This plan wasn't the most expensive, but with all the surcharge BS, it's expensive for the amount of talk you can do without overage charges. These giant telecom companies are just legalized robbers, IMO.
I poked around a bit and discovered that some of the pay-in-advance or pay-as-you-go plans are much much cheaper than signing the 2 yr contracts, even if you have to buy your own phone. I guess these no contract plans don't have the latest and the greatest phones, but does anyone need the latest and the greatest? I am guessing that most PF focused people with think not.
But what about the coverage? Most of the no-contract cellphone companies are own by one of the big telecom networks. So the coverage of the no-contracts use the network of the biggies.
The only down side I can see is that most no-contracts' unlimited plans are just as expensive as the contract plans, and the minutes plans don't have free nights and weekends or free mobile to mobile - every minute counts. My answer to that: Google Voice! I love this little free call forwarding service. I am contemplating on porting my current number to Google Voice, which is $20. After that I can just make sure to set up my forwarding, with the time and phone # presets. Also, this way I can use any cellphone company and not have to worry about a new number.
PS. I think Google maybe become SkyNet when it becomes self aware. =)
I poked around a bit and discovered that some of the pay-in-advance or pay-as-you-go plans are much much cheaper than signing the 2 yr contracts, even if you have to buy your own phone. I guess these no contract plans don't have the latest and the greatest phones, but does anyone need the latest and the greatest? I am guessing that most PF focused people with think not.
But what about the coverage? Most of the no-contract cellphone companies are own by one of the big telecom networks. So the coverage of the no-contracts use the network of the biggies.
The only down side I can see is that most no-contracts' unlimited plans are just as expensive as the contract plans, and the minutes plans don't have free nights and weekends or free mobile to mobile - every minute counts. My answer to that: Google Voice! I love this little free call forwarding service. I am contemplating on porting my current number to Google Voice, which is $20. After that I can just make sure to set up my forwarding, with the time and phone # presets. Also, this way I can use any cellphone company and not have to worry about a new number.
PS. I think Google maybe become SkyNet when it becomes self aware. =)
Thursday, July 7, 2011
to insure or not to insure
I am talking about life insurance. It's kinda of a morbid game insurance companies play with you. They bet that you won't die, you bet that you will. If you die, your beneficiaries win. If you don't the insurance companies win. Very depressing, but kinda necessary.
The basic term life coverage is pretty low cost, and only goes up drastically as you reach 60+. With that, you get a very small amount that just pretty much covers the expense of you funeral. This is worth the small payments so your loved ones don't have to dig into their emergency savings.
However, if you have debt that your estate can not pay, your loved ones will be inheriting that elephant. So getting a little more than basic would be good. Right? How much? Do get coverage equal to your salary of 1 year, 2 years, or a set amount, like equal to your mortgage? These extras will start pushing the premiums up. So at what point do you say I have enough coverage? Or do you say I can afford this much $$ per month so I'll get as much I can for that?
The basic term life coverage is pretty low cost, and only goes up drastically as you reach 60+. With that, you get a very small amount that just pretty much covers the expense of you funeral. This is worth the small payments so your loved ones don't have to dig into their emergency savings.
However, if you have debt that your estate can not pay, your loved ones will be inheriting that elephant. So getting a little more than basic would be good. Right? How much? Do get coverage equal to your salary of 1 year, 2 years, or a set amount, like equal to your mortgage? These extras will start pushing the premiums up. So at what point do you say I have enough coverage? Or do you say I can afford this much $$ per month so I'll get as much I can for that?
Tuesday, July 5, 2011
something worth celebrating
This is my first ever financial check up, and it's a rough estimate. I like to keep it at a conservative rough estimate because I don't like to depend too much on the house equity to blow up my number. Here we go:
Liabilities:
House Mortgage - 336,629.45
Rental #1 Mortgage - 140,000
Rental #2 Mortgage - 300,000
Assets:
Liquid assets - 22400
House value - 590000
Rental 1 value - 220000
Rental 2 value - 310000
Investment - 50000
Net worth - 415770.55
Hopefully, the rental values will not plummet further in the next year.
Liabilities:
House Mortgage - 336,629.45
Rental #1 Mortgage - 140,000
Rental #2 Mortgage - 300,000
Assets:
Liquid assets - 22400
House value - 590000
Rental 1 value - 220000
Rental 2 value - 310000
Investment - 50000
Net worth - 415770.55
Hopefully, the rental values will not plummet further in the next year.
Friday, July 1, 2011
budgetting for leeches
This is a continuation of the previous post regarding the friend, the friend's significant other, and the friend's SO's financial habits.
The friend's SO had children from a previous marriage that will hit up the SO for money. Large sums of money for things they can't afford, but want or feel like they need. When these children's demands come around, they really throw a wrench in the new and responsible financial plans that the SO is trying to follow. My friend was fuming at the fact the SO cannot change his way of saying yes too often to these children, or teach them to be more responsible.
So I suggested to her that maybe he should budget for their leeching. They both know that these children will come around from time to time. They also know that the SO has a hard time saying no to the kids. Well, why not set aside some money for them? This way, the SO can say yes to them, but does not ruin the personal plan for other things. When these accounts run dry, the SO can tell them so. Maybe over time, the SO can learn to say no or at lease prioritize the yeses.
The friend's SO had children from a previous marriage that will hit up the SO for money. Large sums of money for things they can't afford, but want or feel like they need. When these children's demands come around, they really throw a wrench in the new and responsible financial plans that the SO is trying to follow. My friend was fuming at the fact the SO cannot change his way of saying yes too often to these children, or teach them to be more responsible.
So I suggested to her that maybe he should budget for their leeching. They both know that these children will come around from time to time. They also know that the SO has a hard time saying no to the kids. Well, why not set aside some money for them? This way, the SO can say yes to them, but does not ruin the personal plan for other things. When these accounts run dry, the SO can tell them so. Maybe over time, the SO can learn to say no or at lease prioritize the yeses.
Friday, May 27, 2011
credit cards are my BFF
I don't know why everyone is always giving credit cards a bad rep these day. Credit cards a great. In fact I charge everything I can on a credit card. I even wish I can pay my mortgage or car payment on it. Why because I can get cash back. In fact, I love credit cards so much, I don't even care what the rates they are charging.
"That's INSANE!!" you say, "What about the interest?"
Well, I don't worry about the interest. I never even look at what they are charging for their rate. Why? I pay my credit card in full every month. I never pay any interest on my CC bill. EVER.
Credit cards did not doom America to have bad finances. America doomed America to have bad finances. Most people tend have the thinking of buy it now, pay for it later. OK LATER is fine, but how much and when? The practice of not thinking about how much you can afford at-the-moment leads to thinking you can afford it in the long term. If you can't buy it now with cash, why would you buy it at all? Credit cards get a bad rep because most people do not consider paying for it later in installments means paying more, even if you got it on sale.
I hear people say they have high credit card debt for years. Why years? I understand that if you had some really bad situation and had to rack up a lot of debt. When you can rebuild, pay that debt off should be a priority. If you think of it as a utility bill, it works the same way. You make sure that you don't own the utility company money because they will cut off your utilities, so you make sure they get paid. Put the same reasoning in CC bills and you are sure to not rack up debt waist deep.
In college, I did something stupid. No, not rack up CC debt. In fact, it was the opposite. I called the CC company to lower my limit to the bottom ($200) every time they raised it. This is to ensured my spending didn't go that high, although it was probably not good for my credit score at the time. However, over the next 2 years, I have learned to think about what I spend my money on. Since I didn't like to pay for over charge fees, I was careful about I was buying. If I didn't have the cash for it, I didn't buy it.
Now it's the same. If I can't pay for it, I don't buy it. I don't charge it. If I do buy, I better be damn well willing to write that check and pay for it in full when the CC bill came.
"That's INSANE!!" you say, "What about the interest?"
Well, I don't worry about the interest. I never even look at what they are charging for their rate. Why? I pay my credit card in full every month. I never pay any interest on my CC bill. EVER.
Credit cards did not doom America to have bad finances. America doomed America to have bad finances. Most people tend have the thinking of buy it now, pay for it later. OK LATER is fine, but how much and when? The practice of not thinking about how much you can afford at-the-moment leads to thinking you can afford it in the long term. If you can't buy it now with cash, why would you buy it at all? Credit cards get a bad rep because most people do not consider paying for it later in installments means paying more, even if you got it on sale.
I hear people say they have high credit card debt for years. Why years? I understand that if you had some really bad situation and had to rack up a lot of debt. When you can rebuild, pay that debt off should be a priority. If you think of it as a utility bill, it works the same way. You make sure that you don't own the utility company money because they will cut off your utilities, so you make sure they get paid. Put the same reasoning in CC bills and you are sure to not rack up debt waist deep.
In college, I did something stupid. No, not rack up CC debt. In fact, it was the opposite. I called the CC company to lower my limit to the bottom ($200) every time they raised it. This is to ensured my spending didn't go that high, although it was probably not good for my credit score at the time. However, over the next 2 years, I have learned to think about what I spend my money on. Since I didn't like to pay for over charge fees, I was careful about I was buying. If I didn't have the cash for it, I didn't buy it.
Now it's the same. If I can't pay for it, I don't buy it. I don't charge it. If I do buy, I better be damn well willing to write that check and pay for it in full when the CC bill came.
Thursday, May 26, 2011
money drains & alternatives
Recently I have considered canning my cable, but Mr. LLF wants to keep it. Since we don't spend a whole lot on entertainment, I am keeping it, for now. I am looking into alternatives to cable TV with netflix, hulu, and amazon prime. Then I wanted to look into other money draining expenses and their alternatives.
- New kids toys - I am not saying all new toys are bad, but I have found decent and gently used kids toys at garage sales and craigslist. The only toy I haven't found used is LEGOs.
- Fancy hotels - it seems that the pricier their get, the more the charge for the extras, like internet. Plus, I am only really just sleeping and keeping my stuff there.
ALT: hostels and budget inns, they often have free internet and breakfast. - In car DVD players/GPS - one more thing to break and cost a lot to fix.
ALT: portable DVD players, you can take it with you anywhere other than the car - Unitasker gadgets - they just take up space in your drawers, unless you use it more than once a week for that purpose or no other what of getting around it
ALT: multitasking gadgets - Bank and credit card fees - unless they give me a reward greater than the fee, then maybe (like earn in 5% cash back on everything, and fee was $50 annually)
- Trash bags - do we really need to pay so much for re enforced bags, plus these are awful for the environment.
ALT: we get more than enough bags from grocery shopping, or composting and recycling will reduce 90% of trash. - wrapping paper -
ALT - gift wrap bags - Books & magazine - I am all for reading, but I don't want to keep all this stuff that I will never again
ALT: use a book swap, the library. If you really want to support the writers, send them a check. - Big weddings - it's nice to celebrate people getting married, but there's a lot of fluff in weddings that no one but the bride cares about: flowers, brides maid dresses, the cake, fancy invitations, table dressings, favors
ALT: a small and simple wedding and a kick ass bash afterward - that's what most guests would remember anyways: the food and drinks, the band/DJ, and the fun they had or not.
Wednesday, May 25, 2011
Dinning out on a dime.
OK not really a dime. But dinning out can be inexpensive if you look for happy hour specials. Recently, I went to dinner with a friend. She is in the process of buying a home, and I thought maybe she'll appreciate the fact of not spending too much if we go out.
I found this site for great happy hour list near me. So we picked a place that had $0.25 mojitos and decided to meet there. One mojito and we can look for a different place to eat right? No one said you had to buy more.
Unfortunately, the place was no longer there. It was another restaurant,(I really wish people would update that site). So we decide to try the place anyways after looking at their happy hour menu. It turned out to be a gem. We got plenty of really good food (sliders made from beef aged in a Himalayan salt lined cellar, mini lump crab cakes, etc)and drinks. The bill was $26 total, without the tip. $13/person is not bad with alcohol included.
I was so happy about happy hour that I went back to the site and added to the list. I hope they update the thing. If only there were other sites that lists food specials.
I found this site for great happy hour list near me. So we picked a place that had $0.25 mojitos and decided to meet there. One mojito and we can look for a different place to eat right? No one said you had to buy more.
Unfortunately, the place was no longer there. It was another restaurant,(I really wish people would update that site). So we decide to try the place anyways after looking at their happy hour menu. It turned out to be a gem. We got plenty of really good food (sliders made from beef aged in a Himalayan salt lined cellar, mini lump crab cakes, etc)and drinks. The bill was $26 total, without the tip. $13/person is not bad with alcohol included.
I was so happy about happy hour that I went back to the site and added to the list. I hope they update the thing. If only there were other sites that lists food specials.
Tuesday, May 24, 2011
Bigger is better?
I thought about what it really meant for people to live comfortably. I think the American philosophy "bigger/more is better" and suburbia has really gotten us in trouble over the last few years.
Before the recession, houses were getting bigger, cars were getting bigger, waistlines, mortgages, bulk food packages, Is bigger really better? I think getting back to the basics will make us appreciate thing we have more. Sure I would like a nice size house with bedrooms for the kiddies, but the formal living room where no one can use, and the formal dinning room that gets used 2x a year seems kind of wasteful. Do we really need to drive a XL SUV to get the kids and groceries? Other than toilet paper, hulk size things like food just scares the crap out of me. I see people at warehouse stores with cart loads of food, and I wonder how much that will actually be eaten before it goes bad? Then I think "they must be having a party, there must a lot of parties going on because there are a lot of people with cart loads of stuff". I find that with living in the suburbs, we tend to want to have all our creature comforts in the house, instead of just the few things we true need. I think our mind set has "become let's get that because we can afford it", instead of is that what I need?
When the recession started, people started to think about what they spend their money on. People started to want better gas mileages, more efficient appliances, even extreme couponing to save money. I am so happy that the government is ever more interested in green energy now (should have done that years ago). But has the philosophy changed? I don't think it really has. Costco earnings were up in 2010. I love the place for selling hulk items that are good quality, but seriously, hulk CAKE, bulk SPINACH DIP?
Now that the recession is maybe over, the "bigger is better" behaviors are slowly creeping back. Now even lattes are getting bigger. Are we getting back to the behavior that got us in trouble again? have we not learned? I think the only thing I don't have a problem with getting ever bigger is my bank account.
Before the recession, houses were getting bigger, cars were getting bigger, waistlines, mortgages, bulk food packages, Is bigger really better? I think getting back to the basics will make us appreciate thing we have more. Sure I would like a nice size house with bedrooms for the kiddies, but the formal living room where no one can use, and the formal dinning room that gets used 2x a year seems kind of wasteful. Do we really need to drive a XL SUV to get the kids and groceries? Other than toilet paper, hulk size things like food just scares the crap out of me. I see people at warehouse stores with cart loads of food, and I wonder how much that will actually be eaten before it goes bad? Then I think "they must be having a party, there must a lot of parties going on because there are a lot of people with cart loads of stuff". I find that with living in the suburbs, we tend to want to have all our creature comforts in the house, instead of just the few things we true need. I think our mind set has "become let's get that because we can afford it", instead of is that what I need?
When the recession started, people started to think about what they spend their money on. People started to want better gas mileages, more efficient appliances, even extreme couponing to save money. I am so happy that the government is ever more interested in green energy now (should have done that years ago). But has the philosophy changed? I don't think it really has. Costco earnings were up in 2010. I love the place for selling hulk items that are good quality, but seriously, hulk CAKE, bulk SPINACH DIP?
Now that the recession is maybe over, the "bigger is better" behaviors are slowly creeping back. Now even lattes are getting bigger. Are we getting back to the behavior that got us in trouble again? have we not learned? I think the only thing I don't have a problem with getting ever bigger is my bank account.
Monday, May 23, 2011
I heart the library
A year ago, I was very excited about the new Sookie Stackhouse novel that was release. I put my name on the library's waiting list and when I got the email notice 4 months later, I picked up and read it in 3 days. Since I had 3 weeks of time on the book, I lend it to a co-worker chose share the same enthusiasm for the series. After she took it home over the weekend to read it, she told me the next Monday that her friends were a bit shock that she had a library book. "Who goes to the library anymore?" they asked her. Well, hello! Me, pick me! I <3 the library!
That got me questioning "Why not the library?" Is it a faux pas? It's free, it's convenient, and it keeps clutter down in my house. Have people really forgotten about the library or are the old images of the card catalogue still stuck in there mind? It is not fashionable to carry around a book with the little date sticker in the back with the due date stamped on it? Most libraries have online catalogues that you can search. Then you can place holds and tell them which branch you want to pick up at. You get email notifications when it gets there. There's self check out. So you are in and out of there in 5mins. Some even have ebooks you can check out. And if they don't have it in the system, you can request it from another system or they'll buy it.
I don't see why people are spending a butt load on stuff they don't reread often. Even if it's ebooks, buy books after books adds up especially if you only read them once. I know, I know. What about the writers/authors. How will they make money? I personally am all for supporting them if you love their work. In that case, yes buy their ebooks(paper just takes too much space). Why not just send them a check directly?
I wonder what other "free" resources people are not using, like parks, community centers, county events. I put free in quotes because we pay taxes for these things. If we don't use them then we are just throwing away money. The simple dollar has a good list of things to start with.
That got me questioning "Why not the library?" Is it a faux pas? It's free, it's convenient, and it keeps clutter down in my house. Have people really forgotten about the library or are the old images of the card catalogue still stuck in there mind? It is not fashionable to carry around a book with the little date sticker in the back with the due date stamped on it? Most libraries have online catalogues that you can search. Then you can place holds and tell them which branch you want to pick up at. You get email notifications when it gets there. There's self check out. So you are in and out of there in 5mins. Some even have ebooks you can check out. And if they don't have it in the system, you can request it from another system or they'll buy it.
I don't see why people are spending a butt load on stuff they don't reread often. Even if it's ebooks, buy books after books adds up especially if you only read them once. I know, I know. What about the writers/authors. How will they make money? I personally am all for supporting them if you love their work. In that case, yes buy their ebooks(paper just takes too much space). Why not just send them a check directly?
I wonder what other "free" resources people are not using, like parks, community centers, county events. I put free in quotes because we pay taxes for these things. If we don't use them then we are just throwing away money. The simple dollar has a good list of things to start with.
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