Tag Archives: debt

So I have this friend…

Leave a reply

More like an acquaintance. A couple years younger than me, has an expensive habit. Automobiles are his addiction of choice.

  1. Dodge Magnum
  2. Nissan Altima
  3. Nissan Armada
  4. Jeep Cherokee SRT8
  5. Dodge Charger Super Bee

all within a 6 year period. I tried to get him to see how the impact of his decisions were affecting him financially but it fell on deaf ears.

He has a full-time job and also does car tinting jobs on the side. I joked with him last year that he’ll be selling his car again. He’s taken a number of financial hits just for the sake of this hobby of his. Both in terms of how the money could be applied to any consumer debt and used to purchase assets that appreciate in value. Last month he did as expected.

“I need to get some financial stuff in order and make some new priorities and have decided to look heavily into a 2014 jgc limited“. I’m not sure if getting a 2014 model year vehicle with an msrp starting at 35k is true to that vision. He put 17k worth of work into it and is looking to sell the car for 38,500.

He’s laid down massive amounts of cash on the current ride:

400 New lock pick with cables and two cameras
250 afe intake
1100 mmp s2 manifold shaved and painted
70 catch can
100 New 2012 front and rear badges
400 Predator and tune from johan
350 mangaflow mid pipes
800 slp lm1 with install
800 oem vented fenders
9000 repaint with all plastics smoothed and blacked out/color matched
1000 grip bumper on the way
1400 sniper hood in my shopping cart ready to go
900 new oem (not replicas) hid headlights
100 hid fogs
200 limo tint”

__

$16870 on a depreciating asset, not including the acquisition costs. Ouch!

To his credit, he is working 60 hours a week as manager for a popular retailer presumably earning more than I make now at 40-45 hours a week. Difference is much smaller once cost of living is factored in. I’m pretty much over working in a store or at a bank for a couple years. I’d do the corporate offices of a company with stores across the country, but working in the store each day is not my cup of tea. Unless they want to pay me a handsome increase in salary…

So more variables at play on the job front. Still no offer from the place I did over 5 interviews at 2 weeks ago. No update as people were on vacation. Another company my bf has been interviewing at in PA may possible want to fly me up there to interview for a separate position. My gut says PA isn’t the place to go though. Looking at lots of other states such as Colorado and NJ. As once said in the year 2000… Too soon to tell.

Need to have an intervention with my McDonalds friend with a Bachelors. One of these days… One of the challenges to making a switch when you’ve been in retail so long is companies are reluctant to hire for anything else. Get pigeon-holed into a corner and competing against more qualified candidates is damn near impossible. I still have hope though. $8-9/hr with student loans in deferment and thinking about going back to school is just getting him deeper in the hole.

For your entertainment here is the car being put up for sale. Low mileage and exclusive, but not a practical buy in the slightest. Last but not least thanks all who have been reading my blog and learning about my journey. Up to 6k visits so far since April 2012. Surprised there’s that level of interest to be totally honest.

Image

It’s Been a Freakin’ Year of Blogging

4 Replies

The Year In Review

April 7, 2012
I reached a breaking point in my life where I was no longer willing to live in a state of denial with my student loans. Looking back on it all, it doesn’t really feel like I’ve been hard at this for a year.

Back then, my debt load was a whopping 45159.35.
41,971.74 to Sallie Mae
3235.31 in Credit Card Debt.

Today April 8, 2013 I have $332 of credit card debt and that’s by choice. Looking at the abysmal return of using my debit card for every transaction (1% interest after 10 transactions in my checking account), I can have enough small transactions to continue earning that but on my larger purchases I can earn money through Citibank’s Thank You rewards program. Still the idea is to use credit sparingly and I’ve done a pretty good job of that.

As for student loans, I recently broke a significant financial hurdle. Down to 40,775.26. So at a quick glance I knocked $4384 off my debt on an adjusted gross income of just under $30k. So roughly 15% of what I earned for the year went to paying down the debt. On top of the $1500 down payment toward our home purchase (most of it got reimbursed as part of ourrelocation package).

Image

The older I get, the faster time seems to fly. 8 years ago I bought my first new-ish car, a 2003 Nissan Maxima. It was powerful, way classier than my Oldsmobile and also a bit of a money pit. I spent a big chunk of cash on 60k maintenance, tune-ups, getting brakes redone and the like. If I didn’t think the transmission would be going soon on it I might have kept it longer. The car I replaced it with also a Nissan has been fairly problem free in the next 5 years I’ve owned it.

Wouldn’t have thought in 2009 that I’d be living with a guy, much less all the way out in Texas. Definitely not my old stomping grounds on Long Island, but that isn’t entirely a bad thing. The people here are nice, overall it is a safer place to live, cost of living is half of what it was up north.

Today after much deliberation I decided to purchase a road bike. A 42cm frame, steel Takara Kabuto. The price was $199 plus taxes so about $215 total cost. I had looked at Craigslist and several retailers that weren’t Amazon and didn’t like what I found. Either too old, required too much maintenance or too expensive. The last thing I want is to purchase someone else’s headache. I’m typically a mountain bike guy but road bikes are better for distance and I’d like to do a little bit of sight seeing in Dallas. 🙂

Image

The real reason for the bike purchase is related to health though. Back in 2005 I would ride my bike several times a week and was about 35 pounds lighter than I am today. If I can get closer to that 185lb ideal vs 220, the cost is worth it.

Getting Out Of Debt – Automation

Leave a reply

One of the videos that really inspired me.  It’s kind of like massive weight loss, no one thinks you can do it until after you have done it.  I’m still wondering how the pieces are going to come together with my salary being what it is.  There are a lot of options here, but regardless I’m going to put a huge dent in this baby.

Breaking the math down without including interest…

250.00 a year x 52 weeks = 13000
My tax return has historically been above 1000/yr, so add another $20 each week to that.

14000*3=42000. That’s not including any bonuses I get or raises along the way.  A couple grand short of the goal, but surprisingly close.  It’s a high percentage of my income, which I may have to adjust at some point.  Going with it for now.  I’m running lean next few months, with a minimal emergency fund, student loan payments on-hold until my credit card is 0 again.  Also saving for this June townhouse downpayment ($400 of $2000 saved so far), $72 in my other bank accounts until I’m paid.  I have over $10k of available credit if I needed to access it, but to me that isn’t even an option.  It’s good to see there is light at the end of the tunnel.  I will post less over the next few days than I have been, but like anything else this is still shiny and new starting out.

4/8/12 Snapshot…

4/8/12 Snapshot of Sallie Mae Loan StatusImage

Paid down only about 4800 of this loan over a 4 year period.  Percentage-wise that’s a mere 10%.  This is a reminder for me that things need to change.  Paying the minimum isn’t working anymore.  At 300/month, the interest alone would take 6 months to pay off.  Then the remaining 1800 would go towards the principal.

I plugged the numbers into a loan payoff calculator.  The result is that at 300/mo it would take 193 months or 16 years to pay this off.  The loan payment after this year is supposed to shift to 121 payments at 453.51 starting 12/4/2012 and 9 at 296.23 starting 1/4/2023.   I will still qualify for income-based repayment based on my income for 2011 so it’s highly likely I won’t have to make any more payments for another year.  This is a unique opportunity to get my financial house in order and pay down as much of the principal as possible.  I don’t want to still be paying this off 5 years from now, much less 10, or pay $9000 in interest over that time.

Using The Inflation Calculator, What cost $9000 in 2000 would cost 11279.73 in 2010.  That’s approximately 25% more.  The math isn’t nearly as cut and dry with inflation, compounding, change in gas prices and all that jazz…but I honestly believe it makes more sense to make compromises now instead of down the road.  Especially when tax rates may change and the cost of living will inevitably be higher.

Ground Zero – My Challenge

4 Replies

Wild!

1095 days. 45,159.35 remaining.

I graduated from St. Joseph’s College of New York with an MBA at the age of 24 and 42k of debt in 2008.  This debt is the aggregate total of my loans from 2001 – 2008, including Community College and Undergraduate Education.  I am 28 now, pushing ever closer to 30 and realized I need to do something with my debt before it gets completely out of control.

While my story isn’t as exciting as Mr. No More Harvard Debt, it is my own and no one else’s.  Everyone has to start off from somewhere.  Today April 7, 2012 I owe $45159.35 in debt to various entities.  This number is the culmination of student loans and credit cards.

The breakdown is as follows:
41,971.74 to Sallie Mae at 4.25%, currently on Income-Based Repayment Plan.  Still unsure if my interest will be covered at all.
3187.61o on a Chase Slate Card at 0%, which I believe is good until the end of the year.
47.70 to Citibank.

In 2011 I earned ~14000, working for effectively half the year up until we moved.
2010 I earned ~$13000.  Also essentially working half of the year, since I spent a couple months doing per diem executive assistant type work.  Long story which I prefer to skip right now.
2009 $~25000.  This was the most money I made in a single year.  I also worked in an  environment of mind numbing repetition and dreaded coming in each day after months worth of drama.  I quit to explore my options and my finances tanked as a result.

I will not divulge my income or that of my partner (yeah I’m gay) in this blog, for obvious reasons but he makes considerably more than I do.  I plan to get this debt paid off in the next 36 months.  That’s April 7, 2015 y’all.  It’s doable.  I plan to automate as much as I can and get a raise / promotion in the next 12-16 months.

I’ve been hit with a wave of adversity the past 9 months since moving to Dallas from New York.  I don’t want to dwell on it, but sharing it will provide some background as to my thought processes.

  • Got laid off after working for a company 6 weeks after being out of work for 6 months.  This company also bounced my last paycheck and owed me money for the days accrued between my last check and the day they closed up.  It appears they have violated the Worker Adjustment and Retraining Notifcation (WARN) Act by filing for bankruptcy and not giving any employees adequate notice.  I have filed a claim and would really like to get my money.
  • I was on unemployment for 4 weeks while I went on a massive networking campaign and collected about $1000.
  • Got a ticket for $178 from a cop on my way to a job interview I was already 45 minutes to.  I couldn’t find the building and decided to circle around the neighborhood.  Needless to say a cop was hiding and clocked me for 49 in a 30.  Settled, paid the fine and it is off my record.
  • Got $500 from my folks to help with my bills after my layoffs.  I didn’t ask for it, but definitely benefitted from it.
  • Prior to finding the job at that company, I applied to over 120 positions and went on about 10 different interviews including one at a company offering to pay me $30/hr.  After my third interview with no clear answer as to when they could hire me, I made the decision to try something else.

My 2008 Nissan Altima is paid off and I expect to get at least another 4 good years out of it.  I could sell it today and get ~$15k .  I put about 4k into it between upgrading the sound system, installing dynomat and hushmat in key places, along with a strut bar / sway bar, tinted windows, rims / tires etc. and my warranty is good till 2015 so no new car for me.  Some might call it foolish, but I enjoy these things everyday and it isn’t breaking the bank right now.

I just started a new job March 2011 at a company I feel is financially stable and has a great team of smart people working there.  This is my first time working in this industry, so my experience can’t yet command a higher salary.  I’d like to be making $50k by the time I’m 32.  My credit score is presently a 781.

Breakdown of my expenses are as follows:

$101 – Cell Phone (AT&T Wireless on iPhone 4)
$145 – U-Verse (Triple package with 18Mbps internet)
$150 – Gas (commute to work is only 10mi roundtrip)
$34 – Life Insurance
$30 – Haircut
$80 – Car Insurance
$30 – Car Washes
$125 – Entertainment
$200 – Food
$32 – Gas Bill
$15 – Rdio Music Subscription
$50 – Random Miscellaneous
$35 – Washer / Dryer Rental
$800 – Toward Townhouse downpayment, Need 1500-2000 by June 10th.

1827 in monthly expenses short-term, according to my best estimate.  My partner has been paying the rent since we moved here and I’ve been helping out as much as I can with expenses outside of that.

I am paying this debt off as much on my own without help from any outside sources.  I am continuing to research ways of making money on the side and continually develop my skills to start marketable in this fast changing economy.  I get paid semi-monthly, so my updates will be targeted around that timeframe unless I feel a reason to post otherwise.

We are also saving for a downpayment on a townhouse we’re closing on in June ideally.  It’s an FHA loan, so 3.5% down instead of the typical 20, but PMI applies.  Our combined income could pay for off in 2 years, but that is not the goal.  I will go into more detail on that in my next post.