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financial wisdom

Do You Budget?

By financial wisdom No Comments


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Lots of people find starting a new year is just the motivation they need to adopt some new habits. Along with my new year’s resolutions, I usually try to set some financial goals for myself each year, and then I create a budget to tweak my spending/saving habits in order to reach them.

Do you have a budget? If you do, good for you! If you don’t, then have you ever thought about making one?

Before I made my first budget, I was little confused about what a budget actually was. I now know that for the most part, a budget is simply a list of your monthly income and expenses that allows you to plan accordingly. It’s a tool to help you manage your finances. Either your budget is balanced, and you’re able to save money every month, or your budget is a mess, which means you need to cut some expenses to enable you to save money every month.

Personally, I use my budget as more of a general guideline than anything else. Seeing my money mapped out for the year allows me to make feasible saving goals, and it also gives me a place to refer back to over the year to see whether or not I’m on track.

I think making a budget is a lot easier than it seems. If you’ve never made one, here’s what I do:

Simply open up Excel and make a list in the first column of all of your monthly income (salary, etc.). In the second column, enter the amounts of your income after taxes. Add up the numbers to get your total monthly income.

Now, begin making a list of all your monthly expenses (rent, mortgage, car payment, cell phone bill, internet, anything you pay for on an ongoing basis) and the amounts that you owe for each bill. You may also want to estimate how much you stash away in your savings account or how much you need for spending money each month. Add up your monthly expenses, and subtract the total from your income. If the number is positive, you’re in good shape! If it’s negative, then you probably need to make some adjustments to your spending (or find a way to earn more income).

Once you’ve done this you have a foundation upon which to create a plan. If you need to cut out some expenses, you’ll at least know where to start. If you are having some financial difficulty, the best thing to do is start tracking all of your spending for the next month or so to see where you can cut down on your spending — you might be surprised at how much you’re eating out or spending on clothes. Also, see where you can reduce some monthly recurring expenses – perhaps you’re not using all those cell phone minutes you’re paying for.

To take this a step further, I normally use multiple columns across a spreadsheet (one for each month). I enter my income and expenses in each column and total each at the bottom — this allows me to plan for vacations, holidays, etc. Then I can see approximately how much I should be saving each month to reach my annual goal.

Obviously, I’m not a financial expert. But a lot of my friends have complimented me on how I seem to manage my money, so I thought I’d share some of my habits with you.

How about you? Do you have any budgeting tips? Will you be making a budget for 2013?

P.S. Did you know that the word “budget” comes from the French word bougette for “purse”? =)

12 Things I Secretly Love About Being (Legally) Single at 31

By boys, financial wisdom, lifestyle, lists, ruling at life 6 Comments

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{the ring I bought myself in St. Maarten when I just the teeniest bit jealous of all my engaged friends}

In honor of today’s date (12/12/12), my friend Nicole asked me (and every other blogger on the planet) to write a 12-themed post for her link-up party. I knew I wanted to write a list, but I’ve been struggling to come up with an original topic all week. I was even on the fence about this one until I checked in with the boyfriend to make sure he wouldn’t be offended.

I say “legally” single because I’ve been dating my boyfriend for almost five years, so I’m not really that single; I’m just not married. Also, this is not meant to be an anti-marriage post or offend any of my married friends. Being married has its pros and cons, and so does being unmarried. You’re only getting one side of one story here — 12 of my personal favorite things about being (legally) single.

When I was in college, all I wanted to do was graduate and get married. When I think about it now, I’m nothing but grateful for the last 10 years and the fact that I haven’t gotten married yet. Here’s why.

1. I’m the only one with access to my bank accounts. For the last six years, I’ve been exceptionally proud of my money management skills. I’ve got several retirement accounts, an HSA, two savings accounts, both a personal and a business checking account, and a few credit cards. I balance my accounts every two weeks after I get paid, and I know exactly what my financial situation is at all times. While I’m responsible for exercising some self-discipline in order to maintain financial order in my life, I also don’t have to justify my spending to anyone else. I can spend or save my hard-earned money however I choose, and I take great pride in knowing that as of this moment, I can support myself financially pretty much indefinitely. It also makes it easy to do my own taxes every year.

2. I still have my own room. You know how some people go back to their parents’ house and get to sleep in their old bedrooms? I don’t really experience that anymore, partly because my parents have moved a few times since I left, but mainly because, while it’s been relocated a few times and evolved into a more grown-up version, I still have my old room, and yes, it is still decorated in Hawaiian print. Also, there are no one else’s clothes in my closet — just mine. It’s all mine. =)

3. I spend plenty of time alone. Anyone who knew me ten years ago can attest to the fact that I hated being alone. I pretty much attribute every anxiety attack I had between the ages of 10 and 23 to being alone. And I don’t mean being single. I just mean being literally alone, by myself, with no one to talk to. Luckily, over the years, I’ve learned to really enjoy spending time alone — so much so, that I spend at least a few nights a week at my own house, doing my own thing, sleeping alone in my own bed. I value time with myself just as much as the time I spend with anyone else, and I’m glad I’ve had the chance to figure that out.

4. I can still plan my future wedding in my head. I don’t do it obsessively like some girls, but I’ve been known to occasionally save a photo of a pretty dress or party favor. I’ve been saving a magazine with a picture of a cake in it since, I don’t know, like 2002. The fact that I’d choose the same cake now as I would have 10 years ago is actually kind of awesome.

5. I’m free to do pretty much whatever I want without asking permission or checking in. If a few of my co-workers ask me if I want to have dinner or go to a movie after work, and I don’t already have plans, the answer is yes. I don’t need to ask anyone else. Being married (or even just living with your significant other) means you’re expected to be there, so checking in or asking first is  a considerate thing to do. Since J and I don’t live together, I never have to do that unless I’m making a change to plans we already have. Most of the time, we do let each other know what we’re up to, but it’s never expected, and it’s always appreciated.

6. My friends and family rarely pressure me about having babies…mainly because they’re still busy trying to figure out when I’m going to actually get married. (Except for Kristy. She doesn’t care. She just wants me to have babies.)

7. Some of my best friends over the last 10 years have been guys. Granted, I don’t have many close guy friends in my life anymore — most of them moved away, some got married, etc. — but I’m thankful for the time we were friends and that I had the chance to meet them. If I had gotten married years ago, that probably wouldn’t have happened.

8. Some of my best friends over the last 10 years have been roommates. Again, some are still close friends, and some aren’t, but the fact of the matter is that I probably wouldn’t have even met any of those roommates if it weren’t for the fact that I wasn’t married and I did need someone to live with. I still have a roommate now, and J and I both consider him a close friend. =)

9. No one else is depending on me financially. Technically, I could quit my job and go wait tables without even asking anyone’s opinion. I’m 99.99 percent certain I’m not going to do that, but some days it’s just nice to know I could. 😉

10. My boyfriend and I are still “dating.” You know what that means? We regularly go out to nice dinners, movies, etc. It’s never assumed that we’re going to just hang out at one of our houses and do nothing all the time, and we never get sick of spending time together — probably because we spend plenty of time apart, too. That’s not to say we’re not serious about each other. We live within walking distance of each other; we have a dog; and we share a Costco membership.

11. I’m not obligated to spend time with anyone’s family but my own. That’s not to say I don’t love hanging out with J’s family — I certainly do! But I hang out with them because I want to, and no one ever makes me feel guilty if I have other plans. Neither one of us has to worry about how to split our time for the holidays because it’s pretty much a given that I’m going to go see my family for Christmas, and J is going to stay here with his. We’ve been rotating Thanksgivings, but again…that’s because we both want to, and not because either one of us feels like we have to.

12. It’s a total coincidence that my boyfriend and I have matching cookware. It has nothing to do with a wedding registry, and we don’t live together. We’ve just happened to have matching cookware since before we met. I feel like I just kind of have a strange appreciation for that fact that I wouldn’t have under other circumstances.

Thoughts? J seemed to think this post would be controversial. Like I said, these are just my own personal favorite things about not being married. That doesn’t mean I don’t plan to get married some day or that there aren’t things I dislike about not being married. It just means I’m completely happy with my life the way it is now, and I’m in no rush to make any major changes.

I’d love to know…are you single? Married? What are your favorite things about whichever one applies to you?

Dear Dad

By financial wisdom, holiday fun One Comment

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This is my dad. Very often, when it comes to holidays, he says, “Don’t spend any money. Make me something instead.”

Over the years, I’ve framed photos, made CDs, and pretty much just bought presents anyway. And until now, I’ve never actually been able to make anything without spending at least a little bit of money on supplies. (Even paste, macaroni and construction paper cost money, you know.) But this time, I’ve finally figured out something to make that’s completely free. This blog post. And since I’m the perfect daughter…I didn’t even send a card. =)

Happy Father’s Day, Dad!

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This crazy trip has got me feelin’: accomplished
And I’m singin’ along to: Back in Time – Huey Lewis & The News

Stop Trying to “Help” Me

By conversations, financial wisdom, hazards to my well-being, political views, top notch communication blunders, you might learn something One Comment

This is another example of really dumb laws that need to exist because people do not understand how their health insurance works.

Today, I had a prescription refilled at Target, and when I arrived to pick it up, they informed me it was the generic.

“I don’t want the generic,” I said. “I want the brand name.”

“Well, your insurance doesn’t cover the brand name, so it’s expensive,” the pharmacist said.

“My insurance doesn’t cover prescriptions because I have a high deductible plan, so I pay full price, and my drugs count towards my deductible. I’ve been taking the brand name for two years. That’s what I want,” I said.

“Well, we can’t give you the brand name unless your doctor specifies it or you request it,” she said.

“Okay. I request it.”

“Okay. Well, I’m not sure if we have any, so let me check. I can probably have that ready for you in about 40 minutes,” she told me.

“Forty minutes?” I asked. “I called this afternoon, and you said it would be ready in 10 minutes. It’s 7:30.”

“Yes, but state law requires us to fill with the generic unless you request the brand name. It’s to protect you and help save you money,” she said. “The brand name is $84.”

“Right. And the generic is $57, and I have a coupon for the brand name that makes it $25, so that law doesn’t help me at all, now does it?”

“Um…”

“In fact, I think if I didn’t know any better,” I continued, “it would have cost me $30, and either way, it’s going to cost me 40 minutes, which is ridiculous.”

She just stared at me. I think I hurt her feelings. It’s not easy being right all the time.

This crazy trip has got me feelin’: knowledgeable
And I’m singin’ along to: I Think Ur A Contra – Vampire Weekend

LBPS Strikes a New Low

By condo, conversations, drama, financial wisdom, hazards to my well-being, mortgage, not ruling at life, top notch communication blunders, you might learn something 8 Comments

Today, my mortgage company (IBM LBPS) really blew themselves out of the water. As you may know, a few months ago, I was working with them to try and negotiate a short refinance. To make a long story short, that was an epic failure. After four months of LBPS giving me the run-around and other lenders telling me they could approve me but not give me the proper documentation to show it, I’ve pretty much given up hope on the short refinance. I think what sealed the deal was this chat conversation that I had with Quicken Loans (LBPS’ recommended refinance experts!) last week:

Thank you for inquiring with Quicken Loans, we’re America’s #1 online lender and do business in all 50 states! Please hold while we connect you with the best suited Mortgage Expert.
You have been connected to James Springer.
James S.: Hello Lisa. How can I help you today?
Lisa: Hi, James. I have a current mortgage with IBM LBPS, and they recommended me to Quicken Loans. I am trying to work out a refinance with an FHA Short Refinance loan — do you have any loan officers that specialize in these short refis?
James S.: What do you mean by ‘short’ refinance?
Lisa: Have you ever heard of this program? https://www.quickenloans.com/mortgage-news/mortgage-program-underwater-fha-short-refinance
James S.: Ok. I need your full name, address, date of birth and social security number.
Lisa: I’m not giving you my social security number through a chat window.

Really? Really.

So, on to my next few options. I did some research on more of Fannie Mae’s options for upside-down borrowers, and I actually found a pretty attraction program called Home Affordable Foreclosure Alternatives (HAFA). HAFA is an extension of the Making Home Affordable options (HAMP and HARP), neither of which will work for my co-borrower and I. HAMP is the Home Affordable Modification Program, which modifies eligible borrowers’ loans to make monthly payments more affordable. HARP is the Home Affordable Refinance Program, which enables eligible borrowers to refinance up to 125 percent of their property’s current value at a lower interest rate. Unfortunately, borrowers with private mortgage insurance (PMI) on their loans only qualify to refinance 95 percent of their home’s value under HARP.

HAFA offers three additional options – a short sale, a deed-in-lieu or a deed-for-lease. All three of these options are potential contenders because all three will get the loan out of my co-borrower’s name. Although, they’ll all get the loan out of my name, too, so it looks like I may be moving soon. (Closer to the beach, of course.)

From what I can tell, the HAFA options are a little more borrower-friendly than their traditional counterparts. Normally, short sales can be tricky and involve lots of delays and last-minute negotiating once an offer is made on the property. For instance, a lender won’t even really review/approve a traditional short sale until the property is listed and the seller receives an offer. In the meantime, the lender can begin foreclosure proceedings if the homeowner isn’t staying current with their payments. Plus, in states like Virginia, the lender may pursue a deficiency judgment for the difference between what is owed on the home and what the home sells for. Same thing with a foreclosure or a deed-in-lieu. That makes these options much less attractive in my state than they may be in other states.

HAFA takes a little more time up front, but the end result seems a little more defined. In order to qualify, the borrower must be reviewed and either approved or denied for HAMP. That can take 30 to 45 days, but once approval or denial is granted, the borrower can request to go the HAFA route for a short sale, deed-in-lieu or deed-for lease. It sounds like lenders will have a borrower at least list the home and try to sell it before allowing a deed-in-lieu, but if the homeowner wants to stay in the home, they’ll offer a deed-for lease. A deed-for-lease means that the borrower signs over the deed to the lender and then rents the property for the going market rate from the lender for a set amount of time. That sounds kind of interesting, huh?

The biggest difference I can see (and keep in mind, I’m not an expert on these things — this is just my full-time hobby) between traditional short sale/deed-in-lieu transactions and HAFA options is that a lot of the terms seem to be negotiated up front for HAFA. Like there’s no deficiency judgments — the lender can’t pursue any money or promissory notes after the closing. Also, the probability of the sale actually closing is much higher, and the seller even leaves the transaction with up to $3,000 in relocation assistance at the end of the deal. This Bank of America PDF about the program actually has a really comprehensive comparison chart on page 9 if you want to check out the differences side by side.

So, you can imagine my astonishment when I called LBPS over the weekend and inquired (of one of their short sale specialists) what the difference was between HAFA and a traditional short sale, and she had the audacity to tell me, “Nothing, really.” Oh, really? Okay.

You can also imagine how appalled I was when I called LBPS twice today and was told, “We don’t do HAFA short sales here.”

“You don’t?”

“No, ma’am. I just asked my supervisor. We don’t do those.”

“Well, that’s interesting. Do you have Internet access?”

“Yup.”

“Okay, why don’t you pull up this website: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/svc1007.pdf. Do you know what this is? This is a letter from Fannie Mae to every single one of their servicers. It says you were required to implement this program by August 1, 2010.”

“Oh.”

“I dare you to tell me again that you don’t do these. Now transfer me to someone who knows what the f— is going on in the freaking mortgage industry these days.”

So, yeah. Story of my life.

This crazy trip has got me feelin’: frustrated
And I’m singin’ along to: Be My Escape – Relient K