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Archive for February, 2008

Goals Review Ė February

February 29th, 2008 at 03:01 pm

When I first created my goals for the year, they seemed difficult. Since Iíll be starting my 5th monthly budget this weekend, these financial goals now seem easily attainable.

My goals for 2008 were:

1) Pay off $6,000 CC by May 1st
2) Pay down car 1 by Aug 1st
3) Invest $10,000 by year end
4) Invest $15,500 in 401(k)
5) Review and reallocate retirement funds by end of Q1
6) Will by end of Q1
7) Life Insurance by end of Q1

My new goals are:

1) Pay off debt (except mortgage) by October 1st
. a) Pay off CC by April 1st
. b) Pay off Car 1 by June 1st
. c) Pay off Car 2 by Aug 1st
. d) Pay off wifeís braces by June 1st
. e) Pay off sonís medical by October 1st
2) Invest $10,000 by year end
3) Invest $15,500 in 401(k)
4) Review and reallocate retirement funds by end of Q1
5) Will by end of Q2
6) Life Insurance by end of Q2

So, how are we doing with these new goals?

1) Pay off all debt but the mortgage by October 1st

$6,000 CC (0% until May 2008)
12/31/2007 - $6,000
01/31/2008 - $3,543 ($2,457 paid)
02/29/2008 - $1,388 ($2,155 paid)

Car 1 (4% interest rate)
12/31/2007 - $5,726
01/31/2008 - $5,317 ($409 paid)
02/29/2008 - $4,761 ($556 paid)

Car 2 (3.9% interest rate)
12/31/2007 - $17,064
01/31/2008 - $16,432 ($632 paid)
02/29/2008 - $15,800 ($632 paid)

Wife's braces (0% interest rate)
12/31/2007 - $2,652
01/31/2008 - $2,496 ($156 paid)
02/29/2008 - $2,340 ($156 paid)

Son's medical (0% interest rate)
12/31/2007 - $18,000
01/31/2008 - $17,500 ($500 paid)
02/29/2008 - $17,000 ($500 paid)

I am actually a few hundred dollars ahead of my targets.
One of the things I have not talked about was that I switched jobs and the firms took out double the FICA, so I will be getting $12k back from the government. I expect the check to either come in April or May. My CPA is currently finishing the forms.
So once this check hits, I plan on eliminating debt for car 1, my wifeís braces, and make a huge dent in car 2. So end of May, I plan on owing less then $1,000 on car 2 and my sonís medical will be the only outstanding debt (minus mortgage).

2) Invest $10,000 by yearend

After the debt is paid, we will start tackling this. On hold for a few more quarters.

3) Invest $15,500 in 401(k)

Invest $15,500 in 401(k)
01/31/2008 - $1,451 invested
02/29/2008 - $3,291 invested.

This is kind of where Dave Ramsey and I disagree. I can not bring myself to stop contributing to my 401(k) while I pay off debt.
So, I am about 21% done with this. This should be complete by November 1st. Then, Iíll use the extra money for holiday stuff. Wine for thanksgiving and Christmas, presents, tree, etc.

4) Review and reallocate retirement funds by end of Q1

I have everything set to go. I was just waiting for the market to become a little less volatile. I will probably due this towards the end of next week. I have a spreadsheet set up to show me the trades. I just need to update quantity and price, then execute the trades.

5) Will by end of Q1
6) Life Insurance by end of Q1

I wanted to talk to my CPA first and I did. I have interviewed a few lawyers and found an estate one I like. The next step is for me and my wife to really talk about what we want, then we will probably talk to the guardians for our children if we were to die, and then we will talk to the lawyer to draw up everything.

I am pretty happy so far. It hasnít been easy these last 3 months. We have really focused on where our money is being spent. I feel I am just starting to get some traction. I can see things starting to come together, but I am still a little apprehensive.
Time to keep the focus and give the troops a pep talk.

Just an update

February 13th, 2008 at 07:14 pm

I made it through my crunch time and I still have some money in the bank. Woo hoo!!! The first half of my month is paying the BIG bills. The second half of the month is to pay smaller bills (gas, electric, cell, cable, etc.), start saving for the BIG bills, and allocate the rest for debt reduction.

At this point of the month, I start doubting my debt payment plan. ďIt will never work, Iíll never be able to save up that money by the end of the month.Ē Those are my thoughts, but my plan says otherwise. My plan says to keep the focus and the numbers will work themselves out.

April pay the tax man, May the tax man pays you...

February 8th, 2008 at 05:44 pm

Tax rebate checks will begin going out in May, Treasury Secretary Henry Paulson said after the House's passage of a Senate-approved $167 billion economic stimulus package Thursday.

Senate Majority Leader Harry Reid: "This legislation is not everything that I wanted. But I am very happy."

The House of Representatives voted 380-34 to send the measure to the president a few hours after Democratic and Republican senators reached accord and ended a dayslong stalemate over the legislation.

Earlier, two White House officials said President Bush would support the package. The bill will be delivered Friday to the White House, with Bush's signing likely sometime next week, Democratic aides said.

The package, which passed the Senate 81-16, will send rebate checks to 130 million Americans in amounts of $300 to $600 for people who have an income between $3,000 and $75,000, plus $300 per child. Couples earning up to $150,000 would get $1,200.

The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time.

"My team will be sitting down with the IRS tomorrow, and the IRS, right in the middle of tax filing season ... will be working to get checks out," said Paulson, who helped broker the deal.

Paulson said the process of sending the checks would be completed by the end of summer.

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The leadership of both parties hailed the efforts that moved the package through Congress.

"You don't see anybody up here gloating about being a winner," Senate Minority Leader Mitch McConnell, R-Kentucky, said after the House vote.

"There were no winners or losers in this except the American people, who saw us rise above any differences we might have had and work to agreement on what is the No. 1 issue, and that is our slowing economy."

House Minority Leader John Boehner, R-Ohio, said, "The House gave a little, the Senate gave a little. I think that's what the American people expect of us -- to find some way to come together and deal with the problems the American people are facing."

Senate Majority Leader Harry Reid, D-Nevada, called the approval an "example of how government is supposed to work." Reid said, "Legislation is the art of compromise, and that compromise comes very hard sometimes. It came very hard this time."

After the House passed a stimulus package last week, Senate Democrats made a number of changes that Republicans would not accept, saying that they were too big and loaded with special-interest provisions.

After Democrats were unable to break a Republican filibuster threat, the leadership headed back to the negotiating table, finally agreeing to leave rebate check amounts at the House level. (Senate Democrats had lowered them and raised the income caps.) The Senate measure also added checks to more than 20 million Social Security beneficiaries and 250,000 handicapped veterans and their widows who were left out of the original House bill.

The Democrats dropped demands for an extension of unemployment benefits, energy assistance for low-income households and tax breaks for energy providers.

"This legislation is not everything that I wanted," Reid said. "But I am very happy."

While the members of Congress and Paulson applauded the bill's quick passage, a survey found that about one in four Americans (26 percent) said they would spend their tax rebates.

Nearly half (46 percent) said they plan to use the rebate to pay off debt and a quarter (28 percent) would save the money, according to the International Council of Shopping Centers and UBS Securities, which jointly commissioned the study of 1,005 households between January 31 and Sunday.

"The money will go into the hands of lenders rather than retailers," said Mike Niemira, chief economist of the International Council of Shopping Centers.

The crushing weight of Americans' debt load was underscored Thursday when the Federal Reserve reported Americans owed a record $943.5 billion in credit card debt at the end of December.

Including loans other than mortgages and home equity lines of credit, Americans are shouldering a record $2.5 trillion in debt.

That amount increased during the month by a relatively modest 2.1 percent, an indication that Americans have been restraining their spending


Justthe shear amount of debt boggles my mind. $2.5 trillion in debt not including mortgages and home equity loan? Wow!!!

46% said they would use it to pay off debt. I wonder what the actually numbers will be. I say most of the 46% will spend atleast some of the money.

Crunch time!!!

February 8th, 2008 at 01:16 pm

We all have that one week in the month that is like the hump. Once we get over it, itís all down hill. This is that week for me. The second week of the month.

My outflows:

Insurance: 1,250
Mortgage: 2,800
Ĺ car: 316
Medical: 500
Groceries: 100

Needless to say, I donít take home that type of cabbage on a weekly basis. This is where a budget fails. A typical budget looks at these items occurring within a month without regard to the cashflow. This is why itís important to have a funding plan. Your inflow and outflows donít match up. Some weeks are feast and some weeks are famine.

This is my third month of having a budget and funding plan, and I always had doubts on the second week. Is this going to work?

Well, this is the first month that I truly donít feel stress paying these bills. I do have doubts about how much I will pay my debt down this month but not how I will pay for the essentials.

I guess what I am really trying to say is that I am starting to fully trust the plans (budget and funding plans). And as the saying goes, ďPlan the work and work the plan.Ē

PS: No my employer doesnít have health insurance. And this was the best plan for piece of mind. Sometimes the expense is worth the peace of mind (especially if it keeps the wife off my back). Iíll probably look for a cheaper plan next year.

More agressive goals

February 5th, 2008 at 05:26 pm

So, I have a spreadsheet that tracks all my debt except the mortgage. I have everything bucketed by month and what I plan to pay off and when. I have a regular and aggressive payment sheet. The theory on the regular is that the are realistic numbers and if I stay on track I should hit them. The aggressive numbers are a motivational tool. Just out of my grasp but attainable in a perfect world (barely).

Well, after much debating internally, I have decided to redo my goals. I am dropping regular plan and adding a super aggressive plan. I donít know how Iíll even come close on the super aggressive plan, but the goals on the regular plan were being easily accomplished.

1) Credit Card Debt (0% until May 08) Ė Balance 1/1 Ė 6,000

Regular: April 2008
Aggressive: March 2008
Super Aggressive: February 2008

2) Car 1 (4% interest rate) Ė Balance 1/1 Ė 5,726

Regular: July 2008
Aggressive: May 2008
Super Aggressive: March 2008

3) Car 2 (3.9% interest rate) Ė Balance 1/1 Ė 17,046

Regular: February 2009
Aggressive: September 2008
Super Aggressive: July 2008

4) Wifeís Braces (0% interest rate) Ė Balance 1/1 Ė 2,652

Regular: March 2009
Aggressive: September 2008
Super Aggressive: April 2008

5) Sonís Medical (0% interest rate) Ė Balance 1/1 Ė 18,000 (estimated)

Regular: August 2009
Aggressive: January 2009
Super Aggressive: September 2008

Letís see how this works. Strive for the super aggressive plan and settle for the aggressive. Keep the focus!!! I donít know how Iím going to do it, but thatís the challenge.