Stephanie, Author at Poorer Than You

Net Worth Update: November 2009

By Stephanie, updated December 1, 2009 5 Comments
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It’s time to put a cap on November and start in on all the joys and pains of December! But before we move on completely, let’s have a looksie at the progress I made in November:

Change: $920 or 2.37 %

Hot.

A lot of this month was about playing catch-up. I stopped contributing to several of my savings goals because for a few months, I was living out of one of my savings accounts! Now, granted, it was my “Getting Established” savings account, and that’s what it was meant for. But it didn’t make any sense to me to move money from that savings account into other savings accounts — robbing Peter to pay Paul. So I socked away as much as possible this month in an effort to get back on track.

So are we finally seeing the climb up out of the “valley” in my net worth? Possibly. My student loan progress is slow, taking a back burner to my savings goals. The interest rate on my loans is so low that they just don’t earn priority over saving for retirement, growing my emergency fund, putting money away for weddings I’ve been asked to participate in, saving up for an eventual new-to-me car… yeah, other things demanding my moneys. Even though I get flak for it from time to time, when it comes to my student loans, I’m on the 10-25 year payoff plans.

If you have any questions about my net worth or how it is calculated, feel free to ask them in the comments. Also, if you’d like to see how I stack up against other personal finance bloggers, be sure to check out The Wealthy Blogger List. (Spoiler alert: the name of my site is highly accurate.)

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Fees Suck – Don’t Pay Them

By Stephanie, updated November 20, 2009 13 Comments
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Even the word “fees” stinks. Think about it: it sort of reminds you of the word “fleas” (another terrible thing), and when you say the word “fees,” your face twists up into a terrible grimace to get the “ees” sound out. Don’t believe me? Go say the word “fees” into a mirror, and you’ll see what I mean. You look stupid when you say it.

While we’re avoiding saying the word “fees” so that we don’t look silly, let’s avoid paying them as well, shall we? Because by definition, fees are something you shouldn’t have to pay — they’re a price for nothing. They’re candy coated as being for “conveniences," — like paying late, paying for intangible services, and (my favorite) paying because a payment didn’t go through… those things are convenient? Bah!

Obviously the best way to avoid fees is to… avoid them. Stay on top of things, make all of your payments on time, blah, blah, blah. Yeah, we know that. But fees happen anyways — they sneak their way onto cell phone bills, credit card bills, even student loans and mortgages. What a load of horse hooey! But it happens to the best of us, and when it does, it’s time for stronger tactics.

Negotiate Your Fees Away

Yes, fees can just *poof* disappear. Most of the time, all you have to do is ask. It sounds too simple to be true, but… when’s the last time you tried asking? For me, it was yesterday. And it worked.

In September, I set up my federal student loan payment for automatic payments. It went through just fine for the month of October, so I thought nothing of it. On Monday, I got an email saying that my payment went through, so I thought all was well. But by Wednesday, the payment still hadn’t been taken from my bank account. So I logged in to see what was up. Well, a payment bouncing back and a $20 fee, that’s what was up!

I used the live chat on the website to get some answers because of course, they want to discourage you from calling. It was actually a fairly helpful chat and not a robot, so I found out that my routing number had been mistyped (I left off a "1", but in my defense the "1"s on checks kinda look like the weird symbols they use right next to the routing numbers!). My payment hadn’t gone through and I’d been charged an "NSF" fee. I asked the woman in the chat if I could get it waived, but she told me I had to contact my school (boo!) and gave me the number.

So I called Financial Services at my college, and all I had to do was explain what had happened with the routing number. I didn’t even really have to ask about getting the fee waived — the woman at Financial Services could tell that’s what I was calling about. She offered to waive the fee, since it was a one-time occurrence and it’s already corrected and set to not ever happen again.

And that’s $20 that can go toward my loan principal instead of fees. Hurray!

I did have to pay a $1.50 fee for a “privilege” of paying online with an instant e-check. My other options were: pay $4.14 for the privilege of paying instantly by credit card, or set my payment up to go through in a week an a half… and hope they didn’t charge me a late fee in the meantime. That’s the thing about fees: they will find a way to get you sometimes.

The next time you’re faced with a fee… try asking not to pay it. This isn’t the first time that simply asking has erased a fee for me, so I know it’s not a fluke. You’d be surprised how many people never even try. But think of it this way: the answer is definitely “no” if you never bother to ask.

(Psst… phone phobia? Not an excuse.)

Net Worth Update: October 2009

By Stephanie, updated November 1, 2009 8 Comments
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Did it go up? Did it go up?!? Did it go UP?!?

Oh yes, it went up! 🙂

Change: $112 or 0.29 %

Finally, a little breathing room! The last few months of moving and not finding full-time work right away really took a toll on me emotionally — and on my finances. But, things are starting to come solidly come together!

Work: Income is a little funny right now. I’ve got a huge freelancing job that’s 40+ hours a week, and the clients are pretty awesome. I love working with them. But, I still have to be careful about money. Because I’m an “independent contractor,” I have to take care of taxes myself — nothing is withheld for me. So, as I’ve always done with freelance income, one third of my income is put aside for such things. Between moving to a new state and having only 1 month of W2-type work this year… my taxes are just gonna suck.

Savings: Now that I’m working “full time,” I’m ready to ramp up my savings and siphon some of the two-thirds of my income (what’s not going to taxes) into my goals.

Weddings Fund, Formerly called my “Brother’s Wedding Fund,” I’m expanding it out because I was asked to be the groomswoman in my best male friend’s wedding. Also, I figure I myself may do the white-dress-and-veil thing, and there’ll be no money coming in from this bride’s family, so I’ve got to save for it myself. With the first wedding scheduled for the end of May, it’s time to really ramp up my contributions to this fund.
Retirement Fund, growing at a pitiful $5 per month right now, needs to be kicked into high gear. I still don’t think it’s a good idea for me to sign up for a Roth IRA that requires certain monthly minimum contributions, since I’m still on irregular freelancer income. I’d much rather save up $3,000 in my savings account and then open a Roth IRA at Vanguard. Not sure how long that will take me, but I have this pipe dream of doing it before April 15th so that I can open it for the 2009 IRA year. (IRA years go from January 1st of the year in question until April 15th of the following year. Yeah, it’s weird, I know.)
All other savings funds are going to stay the same… for now. I’m going to have to adjust my Savings Snowball a bit, but all that really needs to be changed is moving Retirement to the top.

Phew… so relieved to see that little line go up! Do you guys have any questions about this month’s net worth update?

How To Pay Off More Than One Debt

By Stephanie, updated October 28, 2009 27 Comments
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If you’ve only got one debt hanging over your head, paying it off isn’t rocket science: you pay as much as you can every month until the sucker is gone. But if you’ve got more than one debt to worry on, how do you prioritize them?

No New Debt

Before you even think about how to pull yourself out of a debt hole, you’ve got to stop digging the hole! Stop acquiring debt. Don’t use your credit cards if you’re carrying a balance on them from month to month. Use a debit card instead. If you’ve got some fancy home equity line of credit, don’t draw anymore from it. If you can’t stop acquiring new debt, you won’t be debt free. If you’re having trouble making ends meet without using debt, you need to drastically change something in your life.

What can you drastically change to stop acquiring debt? That’s something you have to figure out for yourself, but I can tell you what I did: I had to drop out of college for nine months and vow not to buy anything unless it was used (except food). Hopefully you won’t need to take as drastic of measures, but I’ll tell you something: it worked! I’m debt free now, except for my low-interest student loans.

Write Down Your Debts

No matter what theory of debt pay-off works for you (see below), each of them starts off the same way: making a list of all of your debts, including the total balance of each debt, the interest rate, the minimum payment, and a little something I like to call the “annoyance factor” of each debt. The annoyance factor should be a number, and it doesn’t matter on what scale (1-5, 1-10, 1-100, whatever!). Just as long as a bigger annoyance factor means the debt is more “annoying” to you than a debt with a lower annoyance factor.

There’s a spreadsheet below for entering all of this information into. First, here’s a quick explanation of the debt repayment theories.

The Three Theories of Debt Repayment

Lowest Balance theory: Pay off your debts in order from lowest balance to highest. This is best if you have a very emotional relationship with money, and you want to see progress quickly. If you would get frustrated and give up if it took you too long to pay off the first debt, this is the theory for you.

Highest Interest Rate theory: Pay off your debts in order from the highest interest rate to the lowest. This makes the most mathematically sense, and works well for number-oriented people. If you want the most dollar-for-dollar efficient method, this is the theory for you.

Annoyance theory: Pay off your debts based on how annoying they are to you, or how pressing it is to pay them off. If you have a debt from a company you really hate, or personal debts to family you want off your back before you deal with any other debts, this is the theory for you.

Free Debt Snowball Worksheet

Open the spreadsheet in Google Docs (it’s free and totally awesome, don’t worry)

In your copy, you can now edit the spreadsheet and put your own debts in. Don’t forget to replace the “Example” with a debt of your own!

Now comes the fun magic of Google Docs. If you hover your mouse over the gray bar underneath any of the headings (Balance, Interest Rate, or Annoyance Factor), you’ll see that it turns orange and says “Sort.”

For the Lowest Balance theory of debt payoff, click the arrow on “Sort” under “Balance” and choose “Sort A > Z”
For the Highest Interest Rate theory, click the arrow on “Sort” under “Interest Rate” and choose “Sort Z > A”
For the Annoyance theory, click the arrow on “Sort” under “Annoyance Factor” and choose “Sort Z > A”

And now your debts are cleverly sorted for you, based on the payoff theory you’ve chosen. So all you have to do now is throw as much money as you can manage at the debt that’s sorted onto the top, and make the minimum payments on all the debts listed below it.

When your first debt is paid off in a few months (or, in some cases, years), you just have to open the spreadsheet again, delete the paid-off debt, and start throwing as much money as you can at the new top-dog debt!

The great thing about this is you don’t have to stick to any one of the theories if it isn’t working for you. You can start out with Lowest Balance, and if you decide to change to Annoyance later, you can just re-sort the spreadsheet and adjust your payments. See — who said change isn’t easy?

Have an Idea for How Twitter Can Improve the World?

By Stephanie, updated October 26, 2009 4 Comments
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If you’ve got an idea for how Twitter can be used to improve the world, and you can communicate it in less than 140 characters, up to $1,400 could be yours!

CollegeScholarships.org, the organization that once gave me a $100 scholarship for this blog (really!) is sponsoring something new called The 140 Scholarship. The entry requirements (from the site):

Currently attending full-time in post-secondary education; and

If you win, you must be willing to allow us to list your name, your picture, and your twitter username, and your winning Tweet on this page.

To enter, you’ll need to tweet your idea for how Twitter can be used to improve the world, and then put out a second tweet @Scholarship with the hashtag #Scholarship and a link to your tweet about how to improve the world.

Hint: to get the link to your tweet to post in your second tweet, click the time (ex. “2 minutes ago”) underneath your first tweet, then copy the address from your address bar when that tweet is alone on the page.

Hurry! The final day to submit your tweet is Thursday, October 29th 2009 — winners will be chosen and announced on October 30th.

The 140 Scholarship from CollegeScholarships.org

Also, you can follow me on Twitter: @stephonee

Net Worth Update: November 2009