A debt acquisition company sent me a letter in the mail last week. Basically I am entitled to over $2200 as part of the WARN Act settlement from the Purchasing Specialist position I held at the glass company before they files for Ch. 11. The question right now is basically when will I get my money. It could me 1 month or 12 months. No one is really sure.

I get this fancy letter talking bout how if I forfeit my rights they will mail me a check for about $1100 over the next 5 business days. It was tempting for a moment but I’ve already waited about 3 years for this to happen and who wants to lose 50% right off the bat just for being impatient. I certainly don’t, it’s giving away free money essentially.

I wonder how many desperate people fall for it, they just want the cash now. Who cares about the actual math… The fact they are willing to buy it also makes me think it will be sooner vs later. We shall see…

So as some of you will recall I bought a new car back in June 2014. The car is great on gas (31mpg), comfortable, looks nice, allows me to easily pack the bike in the trunk. I’ve had a couple of unexpected expenses come up but I really do enjoy driving it each and every day. I don’t plan to sell the car and take a financial hit. I expect the cost of ownership to be very low and the loan stays at 0% regardless of how long it takes me to pay it off.

It did add about $16,762 to my overall debt which was previously at 29,719.74. As of my last monthly update my total debt was just over $40k.

One of my goals continues to be to be completely debt-free. It won’t happen before the age of 33 but I still want to try like crazy to get the student loan paid off by then. It looks more and more likely like at age 35 I’ll be 100% debt free. I don’t plan to buy any real estate until these big debts are out of the way.

The money will remain in a separate account and I’m basically hoarding it until I am able to hit the payoff amount at that particular time. My estimates are a lump payment of 10k which god willing I can hit by August 2017 or 31 months from now. The money will also serve as a large emergency fund since I don’t have as much set aside as I really should.

Speaking of that, I’m doubling up on my emergency fund. The $1000 I keep tapping into so I plan to keep an additional $1k buffer in my checking account. Right now it’s been going to 0 almost every month and I have to transfer $250 from the money market. This will also help me stop using credit cards and help curb my overall spending.

If I were to lose my job tomorrow, I’d be royally f’ed over. Only about a month of expenses set aside when I should have 3-6. No one else is going to bail me out if things go astray. My folks don’t have the money liquid and I don’t expect anyone I’m in a relationship with to just suddenly give me that money. As much as I just want to put everything toward the debt, I don’t have a crystal ball.

I also will sleep easier at night knowing I’m not one accidental overpayment or or two weeks away from financial insolvency. The loan isn’t worth ignoring common sense.

So Terri of Chasing Dreams left a relatively simple comment the other day.

And congrats on paying off that credit card. My suggestion – unless it’s the only one you have, I would say to now cut it up!

So I began to think about why I’ve been using the cards so much. Well through one of the store I frequent I get an additional % off if I use my card. In some cases that can be as much as 20%. In addition I get an extra % off thanks for my employee discount. So suddenly that $1000 has dropped to $600 instead of $750. Aside from my extra payment debacle that’s a decent chunk of savings. Though you are right, I did spend a little more than I might have with just cash / a debit card.

The other part is my Chase Rewards card. That has been my go-to for almost every single purchase for the last 8 months or so. So let’s look at the numbers:

2014 Chase Reward Redemptions

$316.73 in bonuses for using my card. Sounds pretty good right? That could be a nice flight somewhere or about 18 full tanks of gas at current prices. I don’t have how much I actually had to spend to get that back, but an argument could be made that is was more than I might have with cash / debit. Currently I get about 5% back on grocery store purchases with card and 1% back on everything else. When I buy gas at costco I also get the cheapest gas in the area and a few % back.

It’s not “free” money because the merchants have to pay an additional  percentage which in turn drives up what consumers pay, but I still like getting a kickback for something I would have purchased anyway.

Credit cards also have served as a buffer for when my cash reserves were low at various times.That’s not the way it should be, but it sort of is the current reality. Until next month at least. 🙂 Thoughts?

When I started this blog I had $0 in retirement. My situation today:

$5812 – 401k (total vested amount)
618.83 – Discount Brokerage Roth IRA
595.93 – Betterment Roth IRA
Total: 7026.76

As much as I want to have the student loans paid off, I’m still not forgetting about this very important part of my life. In fact due to the power of compounding and long term effect on my quality of life this is almost as important as getting rid of Navient.

I used 4% because after taxes this is probably a more accurate estimate of how much I’ll have by the time I’m 65. The good thing is that next year assuming I stay at my current path my balance will essentially double. If I become more aggressive like I’m planning to after the student loan is out of the way I will be on target to have even more.

Retirement FV of money

My long term goal is to have $1,500,000 set aside by the time I am age 65. By the time I hit 40 I want an income goal of $100k gross (almost 80% more than I earn annually today). I also plan to put $20k aside each year toward that goal. This year I plan to read a lot more about entrepreneurship and business in general. Since getting my MBA in 2008 I’ve been more lax than I care to admit. I have a taste for being financially independent. It just needs to be on my terms and no one else’s.

Less talk more doing. That’s my new mantra. Only actions will take me closer to my goal. Talk is cheap. 🙂

Did three dumb things recently.

1. Scraped the rims on my car. The two front ones. Ordered a replacement on eBay for 209 (delivered) and on my way to pick it up I scraped one on the opposite side. Local place estimated $90-130 per rim to replace. So $418 on rims, then need to pay probably 50 or so each to install them. I hope to get around $300 total to recoup my expenditure. It bothers me that I have a car just about 6 months old and the rims all look janky. Maybe women feel like this about shoes and a new dress.

2. Double paid credit card balance. Somehow I made an extra $443 payment instead of the actual $99 balance I had. So in order to get my refund they have to mail me a check. Even though my payments are processed electronically. My fault but the site shouldn’t calculate a different balance when you have a pending payment.

3. Doctor visit. About $170 between the visit itself that I did at a local walk-in clinic and my prescription. Something I could’ve prevented had I known but doing much better now. Health matters can be super scary sometimes. You live and learn.

Did two not so dumb things recently.
1. Bought a warranty on my car. 96 months / 120k miles Nissan Gold Preferred Warranty. $1750, 10% is up front and the remainder split into 18 payments. Just need to get an inspection done and send the paperwork over. My parents have cars a few years old and didn’t have a warranty. Ended up having to cough up a good chunk of cash to get them fixed. I plan to avoid that and the warranty also encourages me to keep the car until it’s up. In this case about 7 1/2 years from now.

2. Paid my credit card down to 0. Dipped temporarily into emergency fund to do this. I was not happy carrying that much consumer debt into the new year. I didn’t buy anyone gifts, just focused on paying my bills off. The balance was $1156.

3. Eating in more. I like this one aspect of apartment living on my own. I spend 60-80 in groceries each week and the food basically lasts me most of a week. I get breakfast, lunch and dinner on that budget. When I go out for dates I tend to spend more.

Met a guy who I thought was pretty cool right before Christmas, then New Years Day he said he just wanted to be friends. He was kind enough to pay for both of us. Was kind of heart broken but talking to new people now. Better to find out early than let it linger for months and months. Life is a game of trial and error really though. Have a couple of good candidates and may meet new friends in the process too so I’m happy about that.

For work at least I started writing my daily goals down as soon as I get in. Each day even if half of them are carried over from the day before I start with a clean slate. I feel better about how things go as a result. Need to start doing this with my personal life too. As soon as I sit down and start letting technology take over my productivity goes from incredible to zilch. It’s about balance though like anything else.

February is going to be the month that I get back to the original plan. By then all my furniture will be paid for and hopefully no other major bills coming in other than my dog’s annual vet bill. I feel like so many things just kept coming up that were not typical. Big $183 electricity bill from townhouse, final $144 Verizon payment, $804 initial payment for moving in and then the $773 payment for the first full month, around $650 for Home Depot, paying the Allstate bill I put on my credit card in November. Between my loan interest, clothing donations and a new car purchase I should be getting a decent-sized tax refund toward the end of the month. It will go all toward Navient. I really want the loan down in the low 20s by Spring.

Despite weather in the 20°s I still have been going to the gym. Kicking and screaming but going. Want to maintain at least even if I’m not losing any weight.

Was chatting with an online friend on twitter earlier. He mentioned a book recommendation to me. Ramit Sethi’s I Will Teach You To Be Rich. Despite having read it years ago I hadn’t put together a mock annual budget. So I did that while watching Blacklist and with Suze Orman episodes playing in the background.

Some observations:

• I eat out way too damn much. At work I can get a hot meal by using a microwave. The same at home. With a place of my own I can get used to inviting friends over more without feeling any guilt. Over $5k on food alone over the course of a year. I could see that in NY or SF if I was earning a six figure income, but I’m in Texas and not…. Some people are able to feed a single person on $100 a month. I might need to adopt some of these principles into my own life. Live in the richest country in the world and I’m in financial deficit.
• That monthly budget is paying the minimum on my student loan which I am adamant about not doing. $800 – $1000 is my monthly goal. The townhouse equity payments are helping toward that. I pay an extra $100-125 a week without thinking twice about it.
• I’m smarter with how I spend my money than I give myself credit for. Since starting this blog I’ve made about $20k in student loan payments. Yes I drive a new car but it’s at 0% and the total amount is less than 30% of my gross.
• I’m impatient. Soon will be year 14 of owing student loans to Sallie Mae / Navient. Done with these fuckers. Should’ve paid them off years ago. My original goal was 2010 while still living with my parents. Quitting my job, getting a really shitty job and a slightly less shitty job, then moving to DFW and no job for 6 months before getting a shitty job that bounced my paycheck were a series of obstacles I had to face. It’s been a few years but during the middle of the process it was extremely painful and very much fresh in my mind. I don’t believe in job security anymore. In the grand scheme of life, only my individual skills will keep me employed. I see new grads from college landing jobs with starting pay higher than my own. My conclusion is working on my skills is an absolute must. Salary only increased 2% last year. Another 2% increase is nothing. Without letting greed or bitterness into the equation, it’s time to go hard. Learning from people who have already done it and getting ideas.

It’s 4AM and I need sleep. Thanks all for reading. I wish you a happy and safe 2015!

Merry Christmas / Happy Hanukkah / Happy Kwanza / Seasons Greetings:

Navient / Sallie Mae – Month 32 Update

Month 32 – Nissan Altima 2014 Payoff

Month 32. The last month hasn’t been particularly easy.I’ve been juggling the expenses associated with furnishing a new apartment. I spent approximately $1012 on furniture for the living room (consisting of a sofa, loveseat, ottoman) and that figure includes shipping and tax), $184 on a computer desk + chair and roughly $100 on a coffee table. I still would love to get some accent tables and a headboard but neither of those are essential right now. I’ve never spend this much money in my life and my credit card has been getting a ton of usage these last few weeks. The end is near though.

Ashley Furniture Commando – Sofa

Ashley Furniture Commando – Loveseat

It looks like I will get an additional $12,000 or so as a result of the refinancing the townhouse out of my name. To me that is a significant amount of money and I’m very cautious about how to best utilize it. Ex says I made out like a bandit. The obvious way would be to apply it directly toward my student loans as I receive each installment. As of this date December 9, 2014 the amount I will receive would represent close to 47% of my student loan. Between my tax return, expected bonuses, settlement money owed to me by the glass company I worked for and “cash flowing it”, I think I can hold true to the original purpose of this blog. To be free of my student loans a few months into the ripe old age of 32. I can see the car paid off by the time I’m 34. Then absolutely no debt, my retirement savings will be well underway.

I started reading Tony Robbins Book – Money Master the Game: 7 Simple Steps to Financial Freedom. It will help me answer the question about what I’m doing with my retirement accounts. Don’t want to get killed in fees. So ready to move out, 6 more days…

As of 12/9/2014:
$5334 in 401k, $4743.89 of that is Vested. – YtD Return of 6.42%
$402.47 in Betterment Roth IRA
635.39 in TDAmeritrade Roth IRA
Total Retirement: 6371.86

Currently, my contributions are increasing by 480 each month. At this rate assuming I lose none of my principal and earn 0% interest I will have over $50k by the time I turn 40. Torn right now between maxing out Roth IRA contributions for 2014 and getting out of debt .When I’m debt free I’ll definitely max out my Roth.

Current Roth IRA balance and expected future value at age 65 – 2048.

Maxed out Roth IRA Contribution from 2014 to 34 years the year 2048.

So wait what? I can have over 5x the balance / $32k by just contributing an extra $4462 one time?  These calculations don’t factor into the equation risk. The student loan payment will always be there unless I pay it off. The $450-1000 I save in not having a payment each month could easily be used to funnel money into a Roth or other investments. 13 years though of interest accumulating, feeling the weight of Sallie Mae / Navient over my shoulders. It’s almost half of my entire life I’ve owed this organization money… Think I’ve answered my question….

Month 31, had a lot of recent expenses lately.

Approximately:

$150 Electricity Deposit
$489.69 – 6 Months Uninsured Motorist Coverage (includes uninsured motorist coverage and a $1k deductible)
116 – Renters Insurance ($100k coverage)
$650 –  Cost of Washer & Dryer

Total : $1406 of unexpected expenses, basically my whole next paycheck is accounted for. Getting another $1000 advance from refinance of the house soon. That will basically solidify everything I need for the move.

Really looking forward to the idea of being on my own, almost a month away from now . Having a cold snap in Texas now, temps in the 30s. I was just getting used to having a cheap electricity bill too.

Reached irreconcilable differences with my now ex-partner. Planning to either sell the house or refinance and take my name off. Will split the accrued equity.

This almost happened about 3 times before, choosing not to air my dirty laundry on here. Long story short I think we will be happier being with other people.

Signed the lease on my very first apartment today. Monday I should have final approval.

My payment are as follows:

804.19 – Due 12/15 –  Pro-rated first month’s rent. 300 of that was pet deposit (150 refundable), 100 security deposit and 55 application fee.
823 – Due 1/1

Then basically 823 after that.. 763 rent plus 50 for washer / dryer and 10 pet rent.
Considering my take home pay of $3200 a month I certainly think this is doable. Utilities and water should each be close to 50% less than I pay now. No Housing Association dues will free up $100/mo.

I really think renting will be better for me than home ownership. I won’t have to worry about big items to repair such as the cracked driveway, eventual foundation work that will need to be done, cracks in the walls, plumbing work, etc. Nor will I have to pay property taxes to the tune of roughly $2k and annual interest on a 100k+ loan, PMI, etc.  I really feel that once the $7k-8k in money for basic stuff is factored in, for my current needs downsizing from a 3br to a 1br is better financial sense.

Will write more about this but I’m headed to a party now. 😀

Month 30, the time flies.

Month 30 Update – Debt Free 32

Got a couple hundred dollars from my partner that I used toward the student loan and toward an emergency fund.  I used that along with some bonus money to pay down over $1500 toward the loans. Including the $125 payment made a few minutes ago, and car payment I spent 1885.79 toward getting out of debt.

After a lot of deliberation I did make the decision to purchase a road bike and also join a local bike club. The membership was only $25 per year. The road bike after all tax was $531. Shipping was “free”. I originally ordered a model that was $130 cheaper but after my first road bike experience I didn’t want to cheap out and have a bad case of buyer’s remorse. I got the bike last week and rode an astonishingly high amount of 50+ miles in a week. Yesterday I did 20 miles alone.

The first road bike is on Craigslist. A few people haver asked about it, but no one has agreed to meet me in person. I’m asking for $120 with cyclocomputer (paid around 30-40 for that) included. Bike hasn’t been ridden much and I paid about $170 for it. I may just put the computer on my new bike and drop the price to $100. Only thing is the rear brakes need to be adjusted and I think that scares off some people.

My mountain bike is being repaired for free now as part of a repair contract I signed up for when I purchased it. I’m debating whether to keep it for inclement weather & trails or to sell it. Won’t be ready until the end of October though.

Why am I biking more:

• Travel more distance in less time vs walking
• Easier on joints with my 220+ weight
• Quicker recovery time vs walking (no shin pain)
• Able to keep up with community more (goes back to weight, I can’t keep up with a runner for more than a minute)
• One of my childhood passions growing up. Used to spend hours on the bike and not want to come back in the house.

Ordered this bike through Bikesdirect after carefully measuring myself. Did not want a repeat of the Amazon bike. I am happy to say the fit is perfect. Had a little issue with assembly though. Stripped where the pedal screws into. Was riding a mile from home and noticed how unusual the pedal felt. I jiggled it and the whole thing fell out. Freaked out about having to by a new crankshaft, only one I saw in black was from the UK for about $65 and would ship in about 2 weeks. Then I considered upgrading to the Shimano 105 but the price on that is over $115 and new pedals. Luckily I had a moment of clarity and went to the local bike shop. Pedal was fixable by screwing a larger part in the whole with recessed threads. Repair and a tune up ran me about $64.

Bike pedal issue:

I did aggressively compare the specifications on this model to what was offered by my local bike shop. The ones on this bike are superior and it’s built pretty well for China. Crossing my fingers that my problems with be minimal from now on.