Saturday, August 30, 2008

Monthly Update

Early update since the month ends with a weekend then a holiday..

Build emergency fund to 6 mo expenses - 99.3% (Up .7%)

Woohoo! As a refresher, I adjusted the goal upwards. Golly, I gotta get on that last little bit. But it's so much more fun to put my extra money in the DP fund!

Pay off car loan - 10.9% (Up 1.6%)

Wow, did I mention how I love how fast progress goes on this puppy?

Pay off student loan - 7.7% (Up .4%)
House down payment -14.5% (Up 4.5%)

Yay for another good month.

Saturday, August 23, 2008

Just Kidding..?

Surprise, my score went up 3 points. That would put it back to its 752of 4 days ago..haha. No credit alerts..

Wednesday, August 20, 2008

Score Down

Oops, lost 3 points 'cause Chase statement posted a $15 balance, which was a $15 increase over last month's $0 balance. HAHA. What am I learning? Pay off both cards right before the statement posts when I'm applying for credit. Sheesh. Down to 749, no biggie..

Sunday, August 17, 2008

Too Much Debt?

So I'm planning on having enough money for a small down payment and closing costs for a house next year. What's bothering me is that I'll still have a car loan and a student loan. It didn't bother me at first since both are at very reasonable interest rates and I plan to have a mortgage close to my current rent. My dad recently found out about my timeline and he seems worried that I won't be able to adequately maintain the house with both loans. However, if the mortgage is at my current rent level, that leaves 80% of the current rent/future mortgage for taxes and maintenance and such. I think that's a pretty good cushion.

The car loan would take a year to pay off but then I would have to start from scratch to save for the house. Of course, with no car loan it would only take about 6 months I guess to save. The student loan would consume all of my extra cash to wipe it out in like 5 or 7 years.

So for now I decided I need to get to the point where I have a dp & closing costs. If at that point I'm still bothered by the prospect of 3 loans, I can wipe out the car loan and work on a new dp. Or, with the new tax credit for first time homebuyers, if I magically find a house before the deadline, I could use the tax credit to pay off the car. Yes, I realize this is an interest-free 15 year loan.

My thoughts are, if I can find a house I can afford with a car payment and a student loan, that should leave room enough to start saving for a new car when this one's paid off. Did I mention my goal of buying the next car with cash? 10 or 12 years down the road, that is.. :) And if I buy a house without the car loan, I don't think I can restrain myself to the old price range. I think I'd be too tempted to extend the price range a bit. Then I'd be spending the same amount on debt service to cover a mortgage and SL versus a mortgage, SL, and car loan. Maybe I'm the only one that sees things this way and it's not a great way of thinking?

The Millionaire Next Door

I finished the Millionaire Next Door this week. It's an interesting read. Basically, just because someone has a high income doesn't mean s/he has a high net worth. Many high income folks just get used to spending it all. There are case studies that lay this out and a whole bunch of statistics they formulated based on their studies. I personally liked the stories best.. But the great news is that you don't need a stellar income to become a millionaire. For the best odds, live frugally and invest the remainder wisely. To make the investing part easy, just find yourself a low-expense index fund or two and you're covered. And it's important to note that if you start ASAP, your odds are better.

They basically divide the population into 3 categories - underachievers, average, and prodigious accumulators of wealth. This is based on your age, income, and net worth. You can use the calculator below to find out what you are.

http://homefinance.nytimes.com/nyt/personalFinanceCalcs/calculator/wealth/

My results:
Your net worth is 0.049 of the Desired Net Worth

To me this seems a little unfair since I'm fresh 2 and a half years out of college and burdened with school loans. I do have a financial project and if all goes as planned, by my next birthday I will be at

Your net worth is 0.136 of the Desired Net Worth

Yay! Progress! And it does look like catching up is possible! The scary part is I thought the number they gave was in percent format. But it's not. 5% is a lot better sounding than .05%, y'know?

Wednesday, August 6, 2008

Wow! WOW!

So I've been resisting the urge to buy another credit score until today.. I hate when I spend money on such an instant gratification sort of thing.
So here they are, I'm so excited.. I just can't hide it.. err.. :)

TU - 769 (8/6/08)
Eq - 752 (8/2/08, supposed to update like daily but they changed their product and I never quite know for sure..)
Exp - 782 (7/16/08)

I've heard they use middle score for mortgages which puts me above 760! TU jumped like 20 points in two months. I know an inquiry fell off but other than that I don't think anything happened.. My car loan updated and it's now 6 months..? Another account aged a year but it's closed, the car loan I had before refinancing..

One thing I did notice is they have a new address reporting in the previous address section. It's an odd combination of my old address and new address. WTF? I hope someone's not um, stealing my identity or something. I printed off a dispute letter so I guess I'll mail that in.

Saturday, August 2, 2008

Monthly Update

Build emergency fund to 6 mo expenses - 98.6% (Up .3%)
Pay off car loan - 9.3% (Up 1.5%)
Pay off student loan - 7.3% (Up .2%)
House down payment -10% (Up 5.6%)

Yay, good month. Look, progress on the SL..hehe.

I'm having a really hard time fleshing out the emergency fund.
1- It's so much more fun to put money in the house DP fund, y'know?
2- About half of the remainder should be coming in interest over the next 8 months (when I plan to start looking at houses seriously).
3- I've been trying to hitch my bank account to my Schwab account so transfers are easier. I just got word that it is set up but the letter says I have to call to take advantage of the option. And when I meant easier, I mean I could push a few buttons on the computer at 10pm on a Sunday night... not get out of my recliner, pick up the phone, dial the number, speak with a representative..blah blah blah..

Anyway, maybe I need to make that the goal for August - fill up the e-fund.