Monthly Archives: May 2008

Down to One Card!

Sent to Bank of America: $1080.74

Balance on Bank of America Credit Card: $0

Hooray! Take a look at the Debt Tab to your right. Look at that lovely little red number after “current credit card debt.” That’s right, I now only have $5900.54 in credit card debt on one credit card. That’s the card that gave me 0% on the $3,500 balance I transferred and 6.5% interest on all the rest. The balance will fluctuate a little with charges I’m making for the wedding, but I am well on my way to paying this debt off seven months early.

This morning my $600 economic stimulus check hit my checking account. I promptly sent it off, along with my $400 in May snowflakes, plus an extra $80 I “borrowed” from my Week Five fund. I’m going to try to scrimp by on $70 that week to make up for the pay-off today. I’m pretty sure that I can! If not, hopefully by then I will FINALLY have my reimbursement for that trip back in March. If so, I can pay myself back with that money.

Today, I’m going to post my original pay-off plan along with an updated plan. I’m pretty sure that I can wipe out this last $5900 by October 1. I’d really like to do it by September 1. I think that I might set October 1 as my new goal, but give myself a wardrobe bonus if I can pay it off early. Check back later to see what I come up with. Happy Friday everyone!

Weekly Accounting and Carnivals

Earned: $5,000   Spent: $128   Saved: $0

I know that originally I set out to report what I earned, spent, and saved each day. However, now that it’s summer and I’m staying home more, most days are a pretty boring $0, $0, $0. I think I’ll switch over to a weekly report, unless I have a particularly interesting day. Tomorrow should be one of those. . .the stimulus check is coming and debt on the Bank of America card is going!

This week, I bought stamps for the wedding invitations, groceries, and fresh asparagus from our local farm. So far, that’s all they have in their market. I asked about rhubarb. Apparently, the rhubarb crop this year was poor, so they may not have much in. I was a little disappointed because I make a mean batch of strawberry-rhubarb jam.  I’ll have to scout out some other sources.  I’ve been supplementing the asparagus with our home-grown lettuce and spinach. Next year, I plan to plant twice as much. Right now, I can pick a salad’s worth every few days. We could easily eat one every day. They’re so tasty!

On the earning front, I didn’t really earn $5,000 in personal income, but I found out today that we received a grant I applied for last month. I’m pleased because it is a case where my personal attention to finances is paying off at work. As a professor, I can’t receive raises any faster, but being the lead on a grant counts toward tenure. Also, I’ll make good contacts through the state network granting the funds, and grant-writing is one of the few portable skills I’ll have if I ever want to leave academe. I received the notice to apply for the grant right after I started my blog. It’s something I may have let slip by if I had been in a funk or ignoring money, but I was feeling all proactive and decided to go after it. The great thing about this grant is it provides the seed money for a project we want to start. Now, next year, I can start looking for bigger grants to support the project. Onward and upward!

I submitted to four great carnivals this week. As the week winds down, you’ll find some great reads here! I’ve highlighted a few of my favorite posts:

Festival of Frugality #125 is at Quest For Four Pillars. Be sure to check out all the great tips to save money on food costs. You’ll also find my post, “Confessions of a Frugal Bride” is featured. And, Being Frugal has more great tips for an inexpensive wedding.

The 4th Carnival of Snowflaking is at Dreaming of Ferraris. She did a great job with this growing carnival. You’ll find some interesting posts on financial snowflakes and trivia about the real snowflakes. I like My Small Cents’ post on an unexpected snowflake. It was the same amount as what I saved in my “Wedding Snowflake.” Interesting!!

Money Hacks Carnival #12 is at Can I Get Rich on a Salary. He takes us through the twelve labors of Heracles. Driving down debt certainly does feel like an epic labor some days! So does blog reading! Free From Broke provides excellent tips on how to keep up with personal finance blogs in this post. You’ll also find My Big Fat Mileage Mistake here.

Finally, I’m in the Carnival of Money Stories #59 at Money Walks. My successful May goals are included. I enjoyed BripBlap‘s story about his best financial decision in college.  BripBlap caught my eye this week with all his editor’s picks. I plan to read more regularly and encourage you to also!

Have a great day. I’m off to help the future husband with his car repairs, see about renting chairs for the wedding, and work on tracking down that reimbursement check at work.

A Wedding Snowflake

Invitation budget: $420 Spent: $260 Saved: $160
Wedding Snowflake: $30

As many of you know, I’m planning my wedding for July. Now that the semester is over, I’m working a little more on the wedding. This week’s big task is to mail out the invitations. My frugal inserts look great, but did take about five hours of my time. There is a trade-off between saving money and saving time in the world of weddings! Fortunately, right now I have more time than money.

As others of you know, I love the idea of snowflaking, where you earn or save small amounts of money to throw to your debt. I’ve found that the idea has now infiltrated my wedding planning. I’m hoping to snowflake money from each category, just to make sure that I have enough for the big reception expenses close to the wedding. I’m on a tight budget, $4050 for approximately 65 guests. So far, I’ve spent $890 for my dress, the ceremony/reception site, save-the-date cards, invitations, thank-you cards, and stamps. My best category has been the invitations. Now that I have them assembled, I’m $120 under budget. So, what’s the $30 snowflake?

Well, Monday and yesterday, I was working on the wedding website and the announcement card with the URL. I had signed up for a free website through the Wedding Channel, but hated it. The picture I loaded was all off-center, and I didn’t have control of the code (like you do on WordPress). At the bottom, there were two offers for wedding websites, each 50% off. I like the Flash opening on the one that was $30 and almost signed up on the spot. However, I decided to think it over while I went rollerblading. Here’s where my Snowflaking Voice kicked in:

Me: It’s so cute! The template perfectly fits our outdoor, woodsy theme.
Snowflaking Voice (SV): But, do you need to spend $30 on a website?
Me: I’m under budget! I totally have $30 for it!
SV: Couldn’t you do a free blog on WordPress?
Me: But it wouldn’t have the cute template or the Flash opening!
SV: Do you really need a Flash opening? Don’t you hate those on real websites?
Me: But, I’ve been so good. I DESERVE a beautiful wedding website.
SV: Oh, you DESERVE it! I’ll be quiet now and let you mull that over.

You see, over the last few months of snowflaking, I have learned that the “I DESERVE it” line was often my justification for foolish purchases that snowflaked into my big snowball of debt.
The Snowflaking Voice knew it had me. Sure enough, when I got home, I googled “free wedding website,” found a perfect match for my thank-you cards on Mywedding.com, and happily spent the next two hours filling it out.

Yes, I could have spent the $30. It wasn’t a big deal, but I know that most of my expenses are yet to come. The more carefully I spend money now, the less worried I’ll be in July. As usual, once I slowed down and thought things through, I found a great deal and a snowflake. It’ll be fun to see what all those snowflakes add up to in July! Perhaps I should work some snow into the decorations in honor of my good work. :)

Making the Switch

For the last few days, I’ve been impatiently waiting for a few checks to arrive. When I get my stimulus check and my travel reimbursement, I’ll be able to make a $1600 credit-card payment. That will also include my $400 in snowflakes. This payment will wipe out Card #1 and pay some on my last lump of debt, all rolled into that one low-interest card. I know that I can’t count my chickens before their hatched. Anything could happen between now and when my checks arrive, but it seems likely that I can mail off those payments.

It also seems very likely that I can pay everything off by October 1, seven months ahead of schedule. At that point, I plan on permanently making the switch from a “revolver” to a “convenience user.” The credit card industry divides people into these two categories. Convenience users, currently 39% of all cardholders, pay their charges off in full each month. Revolvers carry balances and contributed to the 34 billion dollars of profit credit card companies made last year. After all these years of paying interest, fretting about debt, and all the rest, it is going to be glorious to wash my hands of the whole mess and hop over to the “deadbeat” convenience-user category in the eyes of the banks.

While my new budget, snowflaking, and blogging are all helping me to pay off my cards early, there is another life change that is making a huge difference: my upcoming marriage. No, the future husband isn’t paying off my cards, but just being in a two-income household has increased my standard of living. It also means that I only pay $330 a month toward the cell phone and house costs. When I lived in Maryland, I paid $925 a month in rent alone. I had roughly the same salary that I have now, but my budget was much, much tighter.

I’ve been reading Credit Card Nation by Robert D. Manning. It was published in 2000, so his analysis focuses on the changes in credit from the 1960s through the 1990s. On a side note, it’s amazing what eight years will do. Looking back at life before 9/11, the Iraq War, sky-rocketing gas and food prices, I wonder what we all worried about! On the credit front, the past eight years have just amplified the trends Manning was identifying. One trend that has really got me thinking is the “moral divide.”

Manning describes how many stories in the media follow the personal narrative of a single debtor. So, we hear the individual story of one family who foolishly racked up $75,000 in debt. They are at fault for their consumption, have to repent, and redeem themselves through hard work, thrift, and savings. Even if it means well, this kind of narrative places the blame on the individual for his or her foolish choices.  Meanwhile, the vast majority of Americans have seen real wages stagnate and must cope with rising costs, so they use credit to mask their declining standard of living. In some ways, Manning identifies the old American drama.  Rather than examine the serious societal changes that are affecting someone, it is easier to find some personal flaw to explain his or her bad fortune.

Current definitions top the “middle class” at $60,000 per year per household and “the upper middle class” at $80,000 per year per household. Before my marriage, I was squarely in the middle class. On a middle-class salary, where I lived, I could not afford to buy a house, rent took nearly half my take-home income, and there wasn’t much money for extras. All my furniture was second-hand or a gift. Credit cards filled the gap when I needed extra groceries, gas, or any “treats.” Part of my debt comes from my own foolish choices, but part of that comes from forces beyond my control.

Whenever I pat myself on the back for my new-found thrift, hard work, and savings, I need to remember that it’s not all about me. We now live in a country where 60% of Americans are carrying revolving debt. When you add in the people who use payday lending loans and other, even more nefarious forms of credit, I’m sure the number rises. Most people rely on credit because their real wages have been steadily falling. As we all dig our way out of debt, I hope we remember that it is not just our own bad choices, but our country’s bad choices that have landed us in the mess we’re in.

Daily Accounting: Weekend Update

Earned: $0 Spent: $0 Saved: $0

I had a great spend-no-money weekend. Of course, it is much easier not to spend money with the future husband around. He bought a few groceries at Meijer’s and treated me to dinner out last night. He also bought a gift for one of his daugher’s friends. Still, between the two of us, we spent a lot less than we used to. We were running low on groceries, but I was proud that I managed to just use what was in the pantry. I didn’t have all the ingredients for one cake recipe, so I dug around and found another recipe. Before, I would have rushed out and bought whatever I needed; this time, I took a second look and made a delicious cake with what we had on hand.

I also made a very yummy “green” meal Saturday night. I had leftover roasted asparagus and asparagus soup. I also had enough lettuce and spinach growing for a pretty big salad. I added in some breaded fish fillets and opened a can of green beans in case the younger one didn’t like the asparagus soup. I put the soup out first in little ramekins. It was a very bright green, so I figured the younger one (who used to be pickier) would turn her nose up at it. Instead, she loved it and said the salad was her favorite part of the meal. I think she liked that I was out picking lettuce as they came home from playing basketball. When I first started cooking for the future husband’s family, she often requested peanut butter or mac and cheese. Now that she helps out in the kitchen for most meals, goes to the farm with me, and watches food growing in our backyard, she’s become quite an adventurous eater. It’s been fun to see that transformation! Now that she’s not as picky, I can rely on leftovers more and plan more frugal meals. So, the “green” meal was quite a success.

Today, I’ve got to start editing my conference paper, print out the wedding invitation inserts, and put the tomato plants in the ground. Have a good Monday!

Daily Accounting: Why Goals are Awesome

Earned: $172 Spent: $20 Saved: $0

On May 3rd, I posted my goals for May. Here it is May 10th, and I’m amazed to report that I’ve already acheived two of my goals! One milestone is all thanks to you; I’ve added fifteen new subscribers. Thanks so much everyone who subscribed! If you still haven’t, remember it’s easy, free, and I’ll love you forever! :)

The other goal achieved was my snowflaking target. I now have 408 extra dollars to throw at my debt this month! My mini-garage sale yesterday was a big success. I have to give a shout-out to Antishay (a constant source of great ideas). In her “snowflaking business” series, she gave examples of how she advertises on criagslist. I followed her lead and posted a friendly and very specific listing of all the IKEA furniture that I was selling. One woman e-mailed back and forth about it. Sure enough, she showed up at 7:00 am and spent $150 for all that stuff. The future husband thinks I could have gotten more money, but I didn’t pay much for it in the first place (someday I’ll tell you about the cool IKEA contest I won). She wanted it for her son’s room for his birthday this weekend. I loved that she was so determined and got a good deal, and I love that I can now park my car in the garage!

It was a cold, rainy Friday, so we didn’t have much foot traffic. However, we made almost $300, so I got to add $172 to my snowflaking fund and the future husband’s TV fund is now at $226. We’re going to have one more sale in June with the kids; I’m hoping to get another $100 or so then. As soon as my stimulus check hits my account, I get to sent $1,008 to my credit cards. My original goal was to pay them all off by May 2009. After June 1, I may revise that to August or September. It’s amazing how writing things down really does help me act differently.

Once again, let me cheer for blogging! If you’re worried about debt, I highly suggest journaling or starting a blog. The great thing about the blog is that it’s so public. At first, it’s scary to put yourself out there, but then you realize that you have all these wonderful readers helping you along. Also, the pressure of writing every day can keep you focused on your finiancial goals. I know that I wouldn’t have called my cards for a lower interest rate, started clipping coupons, or finally had a garage sale without this blog! Before I started writing, I’d spent sixteen months trying to pay off my credit cards. I sent in $1,000 payments, kept using the cards, and month by month the debt went up instead of down. Now, in the two months I’ve been blogging, I’ve paid close to $3,000 to my cards, saved a $750 baby emergency fund, and had a blast joining in the personal finance blogosphere.

Speaking of, I got another link on MSN Money’s “Smart Spending” blog. Donna Freedman included my budget busters in her roundup of Oh My Aching Debts’ meme. Be sure to check it out. I agree wholeheartedly with ChouChou at Debt Non Sequitur who said: “We all have stuff floating around in our heads, but when you write it down, take an honest look at it staring you in the face, it becomes reality and you have to make a choice about it. You can ignore it or do something about it.” Three cheers for writing things down!

My Big Fat Mileage Mistake

Yesterday, I called and closed my United Mileage Plus Visa card.  If you read my post “One Call — $1,000 Saved,” this was evil Card #3.  I called to lower the interest rate and got nowhere, so I transferred the $3598.20 balance to a 0% offer, paid my final $52.43 in interest, and closed the account yesterday.  Of course, yesterday’s supervisor was much nicer to me than the previous supervisor who had offered me a 0.75% reduction on the interest rate.  This one wanted to offer me several different deals, but she still couldn’t lower the interest rate.  So, I listened to her pitch and then happily closed the account.  Why did I open it in the first place?

Well, three years ago, I lived in Washington, D.C., flew more frequently, and had grand plans for this card.  I decided to charge everything on it, pay the balance in full each month, and rack up enough miles to never fly coach again.  While rewards cards may work for people who are responsible with credit, as we have seen, I am not one of those people!  I did redeem one flight in the first year.  What happened since then?

I saved my statements from July 2006 until April 2008.  For fun, I decided to tally up what I paid for the privilege of carrying around a United Mileage Plus card for those twenty-two months.  For the record, I currently have 24,483 miles.  By the time we book flights for our honeymoon, I’ll have 26,483.  I’m planning on buying the final 4,000 miles for $160 in order to get us first-class upgrades for the flight home.  But how much did I really pay for those upgrades?  Let’s take a look:

  • I never was responsible enough to use the card as I had intended.  Instead, I always carried a balance and used it for random purchases.  The lowest balance on the card was $2226.48.  The highest interest rate was 20.24%.
  • I spent $120 for in annual fees.
  • I spent $234 for one $39 late fee and FIVE $39 overlimit fees.  Oh, the shame!
  • I spent $1156.64 in interest fees, on average about $60 a month.
  • TOTAL:  $1510.64!!

That’s not for purchases; that is pure cash that I forked over to Chase bank for the right to have debt.  What would have happened if I had never opened that credit card and had instead saved $70 a month in a 4%-interest savings account for 22 months?

I would now have $1746 sitting in a savings account.  We’ll probably spend around $1500 for two coach tickets plus the extra for our upgrades.  Add that together and that’s pretty darn close to the $3600 needed to purchase two first-class, round-trip tickets for our honeymoon.  Remember, as it is, we’ll only be able to fly first-class for one leg of our return journey.

Amy’s Reward Account
Once I’m done with debt-reduction mode, I’m thinking about taking the $70 a month I used to spend on credit card interest and socking it away in my savings account.  I’ll call it Amy’s Reward Account.  Rather than getting sucked into another reward credit card, I’ll let it sit there, accruing interest for a couple of years, and then treat us to first-class flights for vacations or anything else I want.  The great thing is there will be no blackout dates, no expiration dates, and no extra fees.  Just our friend compounding interest, finally working for me rather than against me!!