Fantasy Debt Plans

Creating a debt plan is the most fun part about getting out of debt in my opinion.  I love exploring/learning different options.  The somewhat boring part is implementing the plan especially if my goal is more than six months away.  Right now I’m still the in the exciting stage of my get out of debt plan, but I’ve decided on a plan and I know in the next couple of months I’m going to get bored and want to back slide.  So, maybe a good way of not getting bored with the current plan is too look to the future and fantasize about the debt I want pay down or try to get rid of all together.  Here is my current fantasy:

I want to get rid of the PMI on my home mortgage.  I pay around $45/ month or $540/year for PMI.  Once I owe less than 80% of my home value then I can request that PMI payments stop.  Unfortunately, my home value has decreased $7,000 in the past month due to the subprime mortgage debacle.  So instead of being a couple thousand short of getting rid of PMI, I am much farther away.  So, I want to start aggressively paying off my mortgage so that I can get rid of the PMI and put that $45 a month towards something worthwhile.  I’m hoping that by the end of 2008, my home value would have rebounded, I would have paid more on the principle, and I should only be a couple of thousand (4 months) short of reaching that goal.

Then I would want to aggressively attack my student loan so that at least half of my required payment is applied towards the principle.  This goal may be based on emotion.  I don’t like the fact that I have pay so much towards interest and so little towards principle.  I accept that this for the house, but not the student loan.  But maybe I should do the math.  The interest is tax deductible and maybe, just maybe, paying this off would put me into another tax bracket.  I’m not at all familiar with tax brackets, so that is one thing I’ll have to research.

I'm Thankful for My Budget

Thanksgiving spending sent me way over budget.

I cooked a turkey so I had to buy cooking ware for the turkey since I’ve never cooked a turkey before $48.

-I was also responsible for cups, plates, napkins etc. I bought it at SAMS in bulk. $10 piece but it’ll last for Christmas and New Year’s Eve get together. I also bought Tissue, washing powder, and dishwasher liquid in bulk $78

-My ex came to visit and I took him out to eat, tsk tsk. He’s in college and has no money. $46. He ate a lot and ordered a $7 glass of wine. **rolls eyes** I can’t wait until he graduates, gets a job, and then buys me lobster.

A few PF bloggers don’t bother with a budget (Dough Roller and Single Ma). They simply put a certain amount towards retirement and savings, pay their bills, and spend the rest. But those PF bloggers do not have any bad debt. I think it’s important for any person who has bad debt to have a budget and try their best to stick with it. I may have gone over budget every single month since I’ve been doing this but if I didn’t have a budget I’d still be racking up the bad debt because I would not know where my limits were. For example, if I didn’t already know I was over budget, then I would have went out and gone shopping on Black Friday putting all of it on credit cards. Budgets suck but I’m thankful that I have one. Hopefully, in a couple years when my bad debt is eliminated and I have a positive net worth, I can do away with my restrictive budget and simply contribute to my 401K, Roth, 529, and a little bit to savings and spend the rest however I see fit.

Weekly Report

Last week I achieved 62% of my goals, the same as the week before last.  My goal was 70%, so I didn’t reach it.  Let’s see if I can do it this week. 

There is a week and half left in November and I am still under budget.  I have about fifty dollars left to spend.  Last month I was over budget by now.  So, I am very proud of myself. 

Thanks for the Check

I received a back child support check from Anthony’s father.  Actually DHS received the check six months from his and his wife’s taxes but DHS held it for six months waiting for his wife to object.  She never did.  I wonder if she even knows where the money went. 

I read somewhere from Field’s blog, an attorney, that White women go into court for the money and Black woman will give up a portion of the money just so the man would spend time with their kids.  He also stated that in addition to race, income level might have something to do with it.  If the woman was rich she would fight for more money and the poorer would settle for less. 

Interesting, Lord knows I’d do without the money so that my children could have a father in their life.    I would happily give up a portion of that child support check for the ability to drop my children off for the weekend to spend some quality time with their fathers. 

Ironically, I am the only one in my family to graduate high school, attend college, buy house etc, etc, but of my brothers and sisters I’m the only one who consistently have chosen men who do not choose to be involved in their children’s lives.  Hmmm, how ironic is that?  Maya’s father was in the Air Force and Anthony’s dad is an engineer.  These aren’t thug negro’s that I snubbed in high school.  My children’s fathers are smart, well off men.  Just goes to show you dead beat dads come in all shapes, sizes, colors, income and education levels.  I wonder if I would have been better off with a thug.  But anyways, I’m a couple of thousand dollars closer to obtaining a positive networth, so thanks for the check.

The following is conversation between my nephew, Dante, who is being raised by my brother and me and my kids:

Dante: Maya, where your Daddy?

Me: Dante, why are you worrying about Maya’s daddy?

Dante: because I never seen her daddy.  I want to see what he looks like.

Me: don’t worry about her daddy

Anthony (my three year old son): I don’t have a daddy neither

Silence… I didn’t know what else to say about that.  I kinda hoped he didn’t notice that he didn’t have a daddy.  He didn’t say it sad, it was almost like he was taking up for his sister.  I think it made Maya feel less alone in her daddylessness.

What Should I Do With My Raise and Other Rants

Dreaming about what I’m going to do with my raise once I pass my PE helps me study.  I’ll receive $550 more per month once I pass it.  Assuming 25% will be taken out for taxes, leaves $416.  What should I do with it?  Increase my daughter’s 529 plan from $25/month to $209; an increase of $183, which leaves $233.  Then increase my Roth from $225 to $333, which is an increase of 108, which leaves $125, and don’t forget increasing tithes by $55, So I’m left with $75.

Or should I leave the Roth and 529 plan alone and point the whole amount towards the $10,000 HELOC which has a 10% interest rate but the interest is tax deductible, but so are contributions up to $2,500 for the 529.  Logic dictates pay off the HELOC and maxing out the Roth and 529 can come afterwards.  But the sooner I start with these the better off I’ll be in the long run.  I’m conflicted.  I think maybe I’m basing this on emotion and I need to take emotion out of the equation.  Yeah, it’ll be nice to be like everyone else and max out my Roth and 529 accounts but the HELOC is a debt.  Pay the debt off first.  So I’ll go ahead and throw most of the money at the HELOC and reevaluate my goals at the end of 2008 and see what my goals should be for 2009. I’ll definitively make maxing out those two accounts a priority.  This is a new way of looking at it that I did not consider when I originally planned my goals for 2008. 

I was really looking forward to having a nice Roth and 529 plan by the end of 2008, but again that’s putting emotion into the equation when I shouldn’t. 

 

So here is the amended financial plan for 2008

 

CC payoff	$6,000
Roth	$2,500 $300
Mortgage will decrease by	$1,200
Student Loan will decrease by	$1,500
HELOC will decrease by	$3,000 $5,200
Will increase 401 (k)	$1,021
Savings increases by 529	$1,500 $300
Total NetWorth Increase	$17,021

 

 

 

Because I’m stubborn I’m gong to contribute $25 a month to Roth and 529 and throw everything else at HELOC.  I Hope to God I pas that test then I may be able to pay that bad boy off completely!  (I feel so mature)

Here’s some back ground on the $10,000 HELOC.  I took it out to get a rental property and my mom splits the rent with two other people.  So, I used to HELOC to acquire an asset that I hope to pass on to my kids. 

To Do Lists

I am notorious for not completing my to do lists, which leads to stress, which leads to longer to do lists, which leads to more stress.  So, I’m always coming up with some new plan or idea to improve my productivity.  Ironically, my to do lists are mostly outside of work.  My job is pretty relaxed, it’s my life that’s hectic.  I want to be a writer.  Yet, I barely make anytime to write.  I want to lose weight.  I want, I plan, and sometimes I forget.  So I’ve come up with a spreadsheet of things that I need to do on a daily/weekly basis.  I give myself a point for every activity/goal I achieved for that day, then I total them up at the end of the week.  Last week I achieved 62% of my goals, which included: Tai Chi or Yoga 3 days per week, cardio 3 days per week, weight lifting: 2 days per week,  Bogging 5 days per week, cleaning and writing 6 days per week, etc, etc.      

So here comes the challenging part:  How much can I improve?  I’m setting a goal to achieve 70% of my list for this week.  I hope to eventually get to 100%.  For me that is pretty ambitious if not impossible.  Wish me luck!

Student Loans

So after nine years of procrastination, I finally started my daughter’s college fund.  It’s a paltry amount that I was hoping to increase once I passed my PE exam and received my raise.  But it occurred to me that I will be paying for my daughter‘s education at the same time as I’m paying for my own.  That is, she will start college in nine years and I will still have another nine years to pay for my own college degree.  That sucks.  So maybe I should pay off my student loans before I start contributing heavily to Maya’s college fund.  But no. that’s selfish.  I think I’ll do what I’ve heard Asians do.  The parents pay for the oldest to attend college and then once the oldest graduates the son or daughter help pay for the siblings college costs.  Yeah, I’ll make Maya help pay for her brother, which should work out nicely because by the time she graduates she’ll have threes years before he goes to college.  I’ve also told her she’ll have to go to a community college for a couple of years before she enters a big university. That’s what I did and I loved it.  Community colleges typically have smaller classes and she’ll be able to live at home instead of in an expensive dorm room. 

 

According to a few calculators it will cost roughly $25,000 per year for my daughter to go to college, which includes room and board.  Now days it takes five or six years to graduate.   Yep, I’m definitely sticking with a community college.

 

http://www.finaid.org/calculators/scripts/costprojector.cgi

 

http://www.fool.com/college/college02.htm

 

http://www.fool.com/college/compare.htm

 

New Job?

Today, a head hunter called me out of the blue and offered me a job.  Sadly, I told him I could not take it.  I like it where I am.  It would have been cool though, I think.

Christmas Part II

Phase 1 of Christmas shopping is over.

1. Smartcycle:  ~$85 after tax
2. Eyeclopse: 39.99

Additional Items:

1. Disgusting Science: $7.97 for Maya.  I wanted a Chemistry set but this was cheaper and the Amazon reviews were pretty good.
2. Smartcycle game cartridge: 19.99, this will probably be one of the cheap Black Friday items but standing in line for one item won’t be worth it.

Total: $153

Financing: $75 from Amazon, $95 insurance and delivery refund = $170.  I did not cash out MyPoints Rewards because I didn’t know what I wanted to get with it.

WooHoo! Not bad.

 

Now, that my immediate family’s gifts are out of the way, I gotta start thinking about other members of my family.  I have five brothers and sisters.  We were po’ and still are Black.  We never get each other anything for Christmas.  We don’t buy birthday presents for each others kids.  I’ve just recently started getting a few my nieces and nephews things at Christmas. It’s hard enough buying for your own kids, right? But what to do? What to do? It doesn’t take much to please a child but I have almost fifteen nieces and nephews.  Whooo!  Then there is my mom.  This will take much planning.  I’ll keep you posted.

 

2008 Goals Update

I’ve started on my goals for 2008 pretty early but I still need to find a mutual fund for my Roth.   My house value has decreased by $2,600 but I’ve added other assets like my car and certain furniture so it added $7,000 to my networth, which more than evens out the decrease in my home’s value.  Hopefully, by the end of next year the housing market will be stable.    

Also, buying the second house put my credit score at 630.  The finance company pulled my credit three times.  I’m adding the goal of bumping my credit score to 700 by the end of the year. 

Life isn’t all about money, so I’m putting down a goal to lose ten pounds and have successfully managed it for at least six months by the end of 2008. 

I’ll definitely increase my money earning potential if I pass my Professional Engineering Exam in 2008.  I’ll have two chances, one in April and again in October.  I’m planning on passing it in April but I have to be prepared if I don’t.    

Christmas Part 1

Christmas is coming up and I am not going to go crazy this year.  NO, I’m not.  I told my daughter that we are on a budget so we only get one item a piece for Christmas.  Her one item is a eyeclops for $39 @ amazon, my three year old’s one item will by the smart cycle ~89 at amazon $77 Aldi (price matched at Walmart), and I get a Zune for $89.99 @ Buy.com.  Totaling $206.

My goal will be to pay for these items through passive income.  I currently have no passive income so that will be a challenge but I currently have a lot of rewards.  I have the Amazon Chase card.  I should exchange this for a chase freedom card but the Amazon has a lower interest rate and because I’m currently carrying a balance, prefer it.  My rewards balance for the Amazon card is $75.  I also have 3,780 point through My Points which I can cash in for $25 (email me if you want a referral).  So that’s $100 of passive income I can use.  Now I got to come up with some more dough.  I’m thinking of selling plasma, i.e., that thing that crack addicts do to get some crack money.  Is that bad?

 

 

 

 

Self Defeatism

I’ve been thinking of some of my defeatist attitudes.

1. I worked hard and lost six pounds a little while ago.  I purposefully gained it back plus a pound just to see how long it would take to gain it back and lose it again (I’m still trying to lose it). Why would I do that when I know it takes a lot longer to lose it than to gain it?
2. I was virtually out of credit card debt eight months ago and then I dropped the ball and I’m right back in it.  It’s not as bad as it was but it’s still there and it shouldn’t be. 

Are these self defeatist attitudes there because I can’t see behind them?  Is it just easier to keep making and overcoming the same challenges over and over again?  I like challenges but I need to stop backsliding and look beyond the same old challenges I set for myself.  I want a million dollar networth not just a positive networh, I want a toned, healthy body not just an okay body.  Hopefully, looking beyond the ordinary will help me maintain once I pass the little goals, that are big to me right now but in the long run these goals will just be a drop in the bucket!

Things I Need

I got paid over the weekend and Lordy, Lordy I sure did want to spend that cash.  I practiced so much restraint I had to blog about it.  I did buy kids two pair of nice boots but since it was in budget I was guilt free.  Next month mommy will buy her boots.  Here is something that makes me feel better about not spending so much over the weekend. 

 

Things I want:

Ann Taylor skirt suit I saw--$175

Computer to TV cable to watch downloaded movies on TV instead of my computer monitor.  --~$20

 

 

Things I somewhat need:

Vacuum cleaner --$150-300

Kitchen blinds: --$60-200

DVD player: $40

 

Things I need:

Nothing

 

This month I will not go over budget!  I will resist temptation

Happy NaNoWriMo

NaNoWriMo has begun!

 

So I have to keep editing Coal while working on my nano titled When Women Get Together.  It’s going to be hard because I love writing, I hate editing.

I’ll also have to keep two different worlds separate from each other.  Coal is a Young Adult Fantasy, My nano will be a contemporary –action--chick lit- novel.

Hmmpph.  I was almost tempted not to do the nano and just edit Coal but that wouldn’t be any fun. 

Happy NaNoWriMo

NaNoWriMo has begun!

 

So I have to keep editing Coal while working on my nano titled When Women Get Together.  It’s going to be hard because I love writing, I hate editing.

I’ll also have to keep two different worlds separate from each other.  Coal is a Young Adult Fantasy, My nano will be a contemporary –action--chick lit- novel.

Hmmpph.  I was almost tempted not to do the nano and just edit Coal but that wouldn’t be any fun. 

The Trap of Coupons

Every month I try to buy my kids clothes so that I don’t have to play catch up every few months.  Shamefully (not really), I have passed the $800 mark on my Banana Republic card for the year so, they upgraded me to the Luxe Card. *(I pay the card off every month). The card is accepted at Gap, BR, and Old Navy; all of my favorite stores.  When they sent me my pretty, new brown card I also received four coupons that had to be used before the month was up.  The coupons were all buy $50 worth of crap get $10 off.  Ooh, I wanted to use those suckers so bad.  I did good. I have not used them and the coupons are now expired.  They are no longer sitting in my purse tempting me. 

That is a prime example of why a budget is so important.  If it had been four months ago, I would have used all four coupons and charged it to the card and I know I would have not been able to pay if it off because it would have exceeded my clothing allowance for atleast three months.   Hahaha! I did not fall for their trap!