Paychecks and Payments

This week I discussed trying to pay bills on time with one of my friends.  We were talking about getting paid twice per month and how it can be a challenge. We had slightly different reasons of why it's challenging but the one resounding reason is that it's hard to budget yourself and still have a spontaneous social life.

Over the years I've received my pay in several ways - Weekly, bi-weekly, semi-monthly, and monthly.  Of all of these types, I had the best experience with my budget, bills and on-time payments when I received my paycheck on a monthly basis in my last job in Nevada.  Why?  Because once I was paid for the month I'd sit down and write out all of my upcoming bills.  I'd pay my rent, do any car maintenance, pay my credit cards, etc.  Whatever was left was mine to manage for the next few weeks. It helped my credit score quite a bit because many of my bills were paid early and I always paid a little extra. Two great things to boost your FICO Score.

When I moved to Virginia, this semi-monthly pay was a hard pill to swallow. I had to think about how and when I would pay my bills. I had to maneuver varying "pay by dates", car insurance, credit card and rent payments.  Trying to figure out which pay period my payments would be taken from was trial and error - AND involved quite a few bouts of that horrendous feeling you get from seeing an insufficient funds notice from your bank! Aaack!!! That's not mentioning that I hadn't begun paying back my student loans - How would I manage a nearly $500 monthly student loan payment on top of a car payment that was just over $400? I have paid off my car since then, thankfully!

During the 6 years since I've started receiving my salary on a semi-monthly basis, it wasn't until this past year that I felt like I got it figured out. You really have to budget with more intention - It. Takes. Work.

What I had to do was look at my bills and see when the due dates were and balance them out as well as I could between pay periods. That required a couple of phone calls to companies to move some dates around.  Common sense, right? Now, if you've read my older entries, you know I've entered into a money management firm to deal with all of my creditors. Clearly what I was doing wasn't all that effective and I still ended up in trouble (Pay Day Loans anyone?). The experience of this all has lead me to having a better understanding of my money and myself.  Consequently, all those credit cards and lines of credit I once had have been closed. Not that I could have used them anyhow. They were all pretty much maxed out and even attempting to use them was a game in itself.

No one really teaches you how to be financially responsible. It's a skill most people learn through trial and error (and sometimes humongous errors). 

Which way do you receive your pay check? Do you have a specific plan to pay your bills on time?  If not, why don't you?

Continuing on my journey - and yes, it's the first of the month and I've already made my payments for this pay period. YAY!

Educated. Empower. Economize.

I came across this post tonight and it rings true for me.  Does it resonate with you?

Hmmm.. let's see.  I have done  one, two, four, five, six and seven.  I guess I can't say that this is TRULY me, right? Considering I didn't do the third sign, right?  Wrong!  You had to know that was going to be my response.  

Read through these 7 signs. Even if you've done one of these and you said you'd never do it again... your finances are probably out of order.  Don't try to convince yourself that you did number six to do/take care of/pay off  _______.  There's almost no real justification to what you've done.

This year I'm committing to putting money into my savings.  That will remove the fourth sign from my list. 

Think about what you can do differently so this year can be better than the last.

Educate. Empower. Economize.

7 Warning Signs Your Finances Are Out of Order

If you're missing bills payments and not saving, it's time for a financial check-up.

by U.S. News Jan 15th 2014 12:55PM

By Sabah Karimi

Nearly three-quarters of Americans are living paycheck to paycheck and don't have emergency savings, according to a bankrate.com survey last year.

But you don't have to become part of that statistic. If you want to stay on top of your finances this year, make a commitment to review your budget regularly and take an honest look at your financial standing -- otherwise you could dig yourself deep into financial problems that may not be easy to recover from.

Here are seven warning signs it's time for a financial check-up:

1. You keep missing bill due dates. Late payment fees for services like Internet or cable can seriously add up, and you could get in even deeper financial trouble if you don't pay off your credit card bill on time and in full each month. If you're consistently missing due dates on those credit card bills, utilities or even housing payments, it's time to restructure your budget. Take a closer look at your cash flow, and make sure you are accounting for all forms of revenue and expenses in your budget.

2. You're opening more lines of credit. If you're having a hard time breaking your credit card spending habit or find yourself depending on credit, it's time to focus on your financial health. Opening more lines of credit when you are already carrying a heavy debt load can hurt your credit score. If you find yourself exploring more credit offers or loan options just to get by, stop and re-evaluate your finances.

3. You're making credit card payments ... with other credit cards. While making credit card payments with another card is a convenient payment option, you will set yourself back financially by doing so. Paying off one debt by accumulating more debt -- even if it's lower-interest debt -- will keep you stuck in a vicious debt cycle. Instead, look for opportunities to cut your expenses and earn more money to help pay down your credit card debt.

4. You're not contributing to a savings account each month. Saving at least 10 percent of your monthly income is a healthy goal. However, that's not always possible when you haven't taken the reins on your cash flow or don't have an accurate idea of your monthly expenses. When there's just no room to save money each month, it may be time to review your budget and set some new goals. Even a modest contribution toward a savings account each month will help you develop the self-discipline to save on a regular basis.

5. You have no idea the state of your credit. Even if you don't plan on buying a home or car in the near future, you will want to make sure you have an accurate idea of your creditworthiness. Use annualcreditreport.com to order a free copy of your credit report you are entitled to at least once a year. Checking your credit report can also make it easier to catch signs of identity theft.

6. You have nothing in reserves. If you've been dipping into your savings regularly or have just stopped contributing to your savings and investment accounts, it's time to take a closer look at your spending habits and determine whether you are working with a realistic budget. Having no reserves could set you up for financial ruin in the event of a medical emergency, job loss or other financial crisis.

7. You're paying bills with your 401(k). If you find yourself dipping into your 401(k) just to take care of monthly expenses, it's like you're robbing from your future self -- plus you'll probably have to pay taxes and fees on early withdrawals. Instead of taking money from your retirement account, consider supplementing your income with a second job or scaling back expenses to better manage your money.

Sabah Karimi writes for the financial blog Wise Bread, where you can find resources on how to land more jobs by improving your online reputation.

Starting to See the Light

Dark Tunnel by Russell Bradshaw

A year ago this month I was in a dark tunnel.  No end to this tunnel in sight. I was lost and unsure what to do and thought that financially, I was at the point of no return.  Okay, that was a bit dramatic because there is ALWAYS a way out but I wasn't sure which was that route began.  This is when I wrote into the Suze Orman show.

That was a whirlwind.  I found myself physically on the show, talking to Suze on camera. It was completely nerve wracking and one of the best things I've done.  That episode aired on December 1, 2012 and garnered much attention from family and friends. Many of them saying how brave I was to tell my story on the show.

While on the show, Suze talked about being honest with people about who you are and what you can afford and can't afford. She also gave me some advice that I took.

Some of the advice was to:

• Stick with a budget
• Pay my student loan payment regularly
• Learn to say no to friends and family when it comes to spending money
• Take in a roommate
• Refinance my home
• Quit bowling and going out on the town
• Enroll in a debt management program

I am happy to report that I have done all of these things since my appearance on the show with the exception of quitting the bowling league. The final piece of the puzzle was the refinancing of my home.

Having debt and a bad FICO score didn't make it easy for me to get the refinancing.  I tried the traditional methods of attaining a loan and was always turned down because of my credit score. Note to my readers, if you don't take that score seriously  YOU SHOULD!

The refinancing of my home came out of the blue. My loan company sent me a overnight letter stating that I might be eligible for a streamlined refinancing program where the company would pay all fees associated with the refinance. Of course, I thought this was a hoax so I called the company to verify that they did send me this information. They did indeed send it and after answering a few questions I was eligible! Woo! Hoo!  The big question was, "How?".  The mortgage consultant stated that since I had a strong payment history with them that they wouldn't use my credit score to determine if I'd get the loan or not.  It pays to pay on time and regularly.

After nearly 3 weeks of back and forth with paperwork, I was ready to go to closing.  This was such a simple process. I met with my closing agent at Starbucks and brought with me a check for $980 to cover escrow payments for two months.  The total savings on my monthly mortgage payment is $212! I lowered my interest rate 2% over the life of the loan. I pay far less for this house than I could have ever imagined.  Honestly, I would not be able to find a studio apartment in the area for the amount I pay for this mortgage!

In the past year of following Suze Orman's advice, I've been able to reduce my debt, pay my bills in full and on time each month and no longer rely on having a roommate (currently I am without a roommate).  It feels AMAZING to have made it to this point.  Now I must stay on my plan to completely pay off my debt - but in the meantime I am enjoying the light that I am seeing at the end of this long tunnel.

One year down. Two or less years to go.

Educate. Empower. Economize.

Did You Know?

Target stores have been touting this whole "Save 5%" when you use your Target Red Card.  For months and months I have wondered what in the heck that really was.  Was it like the key fob you get from grocery stores? I didn't bother to ask about it until 3 or 4 months ago. I guess that's the "Y" Chromosome that prevented me from investigating this savings.

Once I finally broke down and got more curious, I learned that you had to fill out a paper application and send in a voided check.  Ain't nobody got time for that! I didn't want to fill out the form, void the check and address an envelope. That was so many steps, especially in this day and age of instant gratification!  I did finally filled out the form and sent it in.

I was excited to know that I'd be saving 5% on all of my purchases.  I shop at Target at least once every two weeks and always make an effort to look at the sales paper. Each day I looked into the mailbox for my new Target Red Card. Nearly three weeks pass before I opened the mailbox and saw something from Target. It was a letter saying that I didn't complete the form. Aaaaaaaack! 

Why can't they just simplify this process?  Well, my question was answered when I was standing in line last week and saw a woman apply for her Target Red Debit Card using her checkbook.  Well, why is it that they never told anyone this fabulous nugget of information?  Today I applied and received my temporary Target Red Debit Card in-store.  YES! A success.  Sorta.

The bigger question is this.  Why supply a gimmick to trick consumers in thinking they're truly saving money?  Why not just have prices set at 5% lower all of the time?  I guess it's perceived savings because you're "in the clique".  It gives you a sense of savings when in fact it's just getting it for the price it really should have been to begin with.  You real saving live in coupon clipping and we all know that takes a lot more effort than whipping out that Target Card and getting your 5% savings that you should have had to begin with.

When you think you're getting a deal, you're probably really not.  Unless it's on clearance and I scored a shirt at Target that was regularly priced at $24 and got it for $6.98.  Now that my friends is what I call a true money saving deal.

Educate. Empower. Economize.

Vegas on a Budget Challenge: The Results

So yeah,  I went to Vegas.  I spent a lot of money.  More than I cared to, however I was able to stay close to budget!  Are you surprised?  I know I am.

Here's how it all went down.

I vowed to only spend $20 per day.  What I should have said was only spend $20 per day on food.  I think that's what I really meant to say. hahaha

My total expenses for this trip to the conference was:

$199.99 for the hotel for 8 nights (Yeah, a TRUE STEAL!).
$230.52 for food over 9 days.  My goal being to only spend $20 each day. I spent on average, $25.62 per day.
$313.72 on miscellaneous ($90 of this was in airport fees! Damn checked bags). Remaining $223.72 involved a taxi cab when I returned to Washington, D.C. a few shopping moments that included alcohol ($100.87) and $122.85 in spending money (some of which included some unnecessary gambling).

Overall - I think I fared pretty well!   Especially on the food front. Had I not gambled I would have done even better.

Would you have guessed that I'd spend more money spending 8 days in Las Vegas?

Whew!  I survived and I still have money in my account!

Educate. Empower. Economize.