Saturday, June 30, 2007

June Net Worth & July Budget

Our net worth for June skyrocketed due to settlement with Bank of America. It went up a total of $8,417, though our savings were wiped out from it. Well worth that feeling of a little more freedom. Our budget for July consists of the following:

$1400 Rental Income
$2700 Day-Job Income
$100 Misc Income (Keeping estimate on the low end)


$990 Mortgage (going up in August to $1150)
$300 Auto Gas (On the high side, in July we used only $240)
$145 House Gas
$40 House Phone
$50 Water
$89 Electric
$158 Cell Phone (Yes, I know, it's high)
$95 Life Insurance
$255 Ticket (didn't wait long enough for a crossing guard to ok my turn on a green light)
$110 Debts
$30 Toiletries
$1400 BofA (carry-over, utilized 7/1 day paycheck to take care of full bill on 6/30, I know bad idea but my paycheck cleared early due to 7/1 being a Sunday).
$547 Emergency Fund

One major thing missing this month is our tithing. We really need to build up that emergency fund again, so I am willing to delay tithing for a short period of time (just July) so that we can get it built up. I'd hate for us to have a financial problem and having to go to the church again for help. In the past year they helped us with getting our water line replaced and turning back on our electricity.

Other minor items missing is our fun money, our dining out money, as well as money for car maintenance. In August those items will be reinstated, but July is going to be buckle down and have free fun together at the library or parks or in our growing garden.

Check Bouncing Class Completed

This morning at my local community college I had the pleasure (sarcastic) of spending 3 & 1/2 hours with fellow check bouncers. We bounced a check at Target a year ago and didn't have the money to take care of it until now, so our county got involved and required a class in addition to paying $254 for a $45 check.

To start off with, the instructor was late. At least she was nice about it and let the others that were late stay as well. She is a director at a nearby university in their finance department, so she's one of those book knowledge folks. With credentials like that, I was hoping we would be going into some budgets, saving money, etc.

The first 2 & 1/2 hours was all about emotions. How our values and behaviors interact, being out of balance, comparing our actions to terrorists (at least she said we weren't as bad as them...). Everyone there pretty much felt the class was a waste of their time (at least at the beginning) and I could tell we were going to spend more time on our inner feelings when the instructor had us all call out our favorite dessert one by one.

We did go through how to use a check register, but she went through it so quick, half the people were still confused after her explanation. She should have check by walking around the class to see if everyone understood before running through it on the board. We also were given "homework" for making a budget, how much should be in each category, skimmed over quickly the power of compound interest, etc. Of course, the "homework" will never be looked over since we don't have the class again.

Overall, I think maybe 10-15% of the class got some really good stuff out of the class and I heard some making goals to start tracking their expenses, saving up for their daughter's college, etc. One lady in particular I'll be praying for in the coming days, she kept on believing that she had no money to save and she probably won't until it is her goal to have some money to save. I'd say about 25% of the class basically decided not to use banks anymore and just work with cash.

We're pretty close to that last crowd, for our day-to-day expenses we use cash only and our monthly expenses (utilities, mortgage, debt payments) we use the bank account.
I made sure to speak up and tell them about having an emergency fund (mentioned near the end by the instructor when everyone was wanting to get out).

Thursday, June 28, 2007

Judge A Book By It's About Us Page

I get a good amount of spam, which I delete most of the time, but one came up that I thought I would check out. The site is Christian Debt Trust at and so I thought I would check out the "About Us" page. What a load of trash!
  • "Money is the root of all evil", my memory says it's the "Love of Money is the root of all evil"
  • "See those pop-ups or your in-box filling up with someone offering you a quick and easy fix to your financial situation.", isn't that you filling my in-box?
  • "Remember, God helps those who help themselves.", nowhere in any bible that I've read is there something that says that.
I was leaving their page and they had one of those "auto-chat" features on their site startup. I have one of those setup at our office and it connects you to someone directly if you start typing in it, so I figured I would ask them a question or two. It just kept sending me canned responses, not responding to my questions. I asked if there was a human there, no response besides giving an 800 number.

Wednesday, June 27, 2007

Final Settlement on BofA Balance

Here's the final result on the BofA balance settlement. I received in writing the offer for $3909 to settle the balance and received a call from my buddy Mark over at the collection company. I explained to him the issue that I get paid on the 1st and 16th, making it hard to have the money by the 28th (tomorrow). They asked me how much I could have by the 30th (Saturday), explained again about my check not coming until the 1st (Sunday) and that I would just have $3400 available on the 2nd. (a little fib, I'll have around $3440 at the low end of my estimates, $3700 at the high end of my estimates).

In the end we made the deal of $3400 as full and final payment on our balance of $9772 to be charged on 6/30 (which may or may not bounce, my employer has been known to pre-deposit on Saturdays). If it bounces, the worst case is we get charged another $35 (A line they told me). I had this debt listed originally as $8561 on my debt list.

What I need to do in the coming days to make this happen:
  1. Current bank account has $1100
  2. See if one of our renters that pays on the 1st can get us the check on Thursday (enough time for it to clear). It shouldn't be a problem for him. ($400)
  3. Deposit 1 check that has both our names on it into the bank account. ($30)
  4. Move $750 we have in one account at one bank to our checking account at another bank.
  5. See if we can extend the paying of our cell-phone bill by a couple of days until Monday.
  6. Have my paycheck of $1349 direct deposit (already setup).
  7. Deposit $100 rent payment made on Friday night into the account Saturday morning.
If you did the math, you'll see we will have $3729, but have our $150 cell phone bill to take care of too. I explained to my wife that the coming month is going to be tight, but we won't be rolling coins. We're just going to have to be walking on pins & needles this coming month, checking the balance in the bank account daily and not spending anything beyond the mortgage, utilities, and gas for the car. Everything though will be current by the end of the month.

Tuesday, June 26, 2007

Update on BofA Settlement Letter

I got some really good advice yesterday, so I figured I would give an update on things. This morning I'll be calling the collector back, requesting first that he provide me the offer we discussed into writing and fax it over to me today. Tomorrow, I will try again to have them settle for the full amount on the 17th of next month and then go with my 3 payment plan if they do not like it.

The threat of bankruptcy is mainly just a threat, I have considered Chapter 13 as a way to take care of them (pay over 3 years a set amount that would take care of the $40K). Several places I've read they recommend that threat to have them back off (because they may get nothing then...) I know I owe them and I want to pay them back, but have been unable to until now.

Regarding them going after me through court, my concern is the wage garnishment. From what I've read, they can take up to 25% of your paycheck. I'm pretty certain my employer wouldn't let me go because of this, but I've been at places where they would just try to find another excuse to get rid of someone. I am also in the works of starting my own consulting business (shhh!), but don't want them trying to take too much cash that I have troubles keeping it going.

I'm also planning on talking to the tutoring job I had in the spring about doing some work in the coming 2 weeks so that I can ensure a cash flow so that this settlement does not leave me without gas money. My other on-call job has been very slow, I suspect it's because people are hopefully playing outdoors instead of breaking their computers.

Monday, June 25, 2007

BofA Balance Settlement Letter

I have drafted up a letter to send to the Bank of America to settle my $9773 balance with them for $3909.20. They requested on Friday over the phone in the kindest of ways that they want that payment by the following Thursday (6/28) or it will be sent to a lawyer near me to go to court. I of course don't have $4K just sitting around the house and they asked me to borrow it from others. I am sick of debt though and I'm not going to borrow to pay them off, even if I could. Here is the letter I am drafting to them and planning on sending to them on Wednesday. This plan would take out our emergency fund, have us living on bare essentials with no wiggle room. Please provide any feedback on it:

Per our phone conversation, I have been attempting to gather the $3909.20 for the Bank of America balance settlement. Below is our repayment plan of $3909.20 with details regarding all of our expenses and income. The rental income is us renting out 4 bedrooms within our 5 bedroom home, we only have 1 property, with 3 currently rented at the rates of $400, $350, & $300 and one to be rented out at $350.

Savings: $1700
Rent Income in July: $1400 ($400 on 7/1, $350 when we bring in another renter, $350 on 7/10, $100 on 7/6, $100 on 7/13, $100 on 7/20)
Full-Time Job: $2698.70 (Half on 7/2, Half on 7/16).
On-call Job: $100 (Varies, but previous check was for $50 for 2 weeks).

Mortgage: $990
Automobile Gasoline: $300
Utilities: $482
Insurance: $95
Food: $0 (On Food Stamps)

Cash Flow:
+$1700 Starting Balance (6/28)
-$1303 Bank of America Payment #1 (6/28) = $397
+$400 Rental Income (7/1) = $797
+$1349.35 Full-Time Job Paycheck (7/2) = $2146.35
-$150 Automobile Gasoline (7/2) = $1996.35
-$1303 Bank of America Payment #2 (7/5) = $693.35
+$100 Rental Income (7/6) = $793.35
+$350 Rental Income (7/10) = $1143.35
-$990 Mortgage (7/13) = $153.35
+$50 On-call Job Income (7/13) = $203.35
+$100 Rental Income (7/13) = $303.35
+$1349.35 Full-Time Job Paycheck (7/16) = $1652.70
-$1303.20 Bank of America Payment #3 (7/17) = $349.50
-$150 Automobile Gasoline (7/17) = $199.50
+$100 Rental Income (7/20) = $299.50
+$350 Rental Income (When Renter Rents) = $649.50
-$482 Utilities = $167.50
-$95 Insurance = $72.50

Outstanding Debts:

The above plan is the best that we can do and meet all of our other obligations. If this is unacceptable and the Bank of America decides to forward this to the court, our only option will be filing for bankruptcy.

What do you think?

Thursday, June 14, 2007

Discount OutdoorTV Antennas @ Circuit City

Well, with more roommates in the house, we decided to cave into the idea of having TV signals (we were watching movies on DVD & downloads). The little bunny ears above the TV don't work in our area (most towers are about 30 miles from us), so I went down to Circuit City to see what options they have.

Right now in my area (Chicagoland) Circuit City is getting rid of Terk's large outdoor antennas. They normally go for over $100 but the low-end one (TV32) is going for $20 and the higher end one (TV36) is going for $40. I picked up the TV32 one last night because my local store did not have the TV36 anymore in stock, but I found another store near my work that has them available.

You won't find this deal on their web site, the only way I found out about it was going into the store, explaining my situation with bunny ears and tired of paying $20/month for basic service. Always make sure to ask for what specials they have whenever you visit a store, you might just find what I found.

Tuesday, June 12, 2007

Missing Renter

It's official, I have a missing renter. We thought we had a full house of renters, but one stayed for a couple of nights and then never showed up again. We called him this past Friday to see what was up and he called us during the day asking for me to call him back. I've called him Friday night, Saturday, Sunday, & Monday with no call back.

I was planning on refunding him the $100 he paid for a week if he had issues with the room, but now that I'm getting no response and concerned I may need to change the locks, that decision is changing. If I don't hear any response tonight, I'm posting up again on Craigslist regarding the room for rent or contacting one of the previous requests to see if they are still interested.

Saturday, June 9, 2007

Old Bounced Check = 1/2 Day Class

Exactly a year ago from yesterday, we bounced a check. We actually bounced quite a few checks last year around this time. Our finances were in a ruin, money was being spent left and right, we weren't tracking it properly and then I lost my job. With the lack of a job, it made it hard to fill the bank account back up and pay the NSF fees.

One of those checks went a long way. I know what the check was for, it was for birth control we bought at a Target pharmacy. They first charged a $25 NSF fee and asked for payment. The $64.73 payment they were asking for at the time was an enormous sum at the time when we didn't have two nickels to rub together and if we did we were pumping them into the gas tank so I could look for work. They then forwarded our bad check claim to the county's bad check program. The county then tacked another $190 onto it in legal fees, bringing it to $254.73 with the threat of jail time and/or additional fees if it was not taken care of.

I was scared to call them this week to find out the payoff amount, but yesterday I called them and it was still at the $254.73 but I also have to take a 1/2 day class on financial accountability. I'll be taking it on 6/30 and let you know what happens with it. This weekend I'll be making a money order to take care of the balance and mailing it out on Monday. I don't know what they're going to cover over 4 hours that could be summed up in "Don't write bad checks! Spend less than you make!" but we'll see.

Thursday, June 7, 2007

We Have A Full House

I just got off the phone with my wife, it's official, we have a full house. Out of our 5 bedroom house, we are renting 4 of the bedrooms out. Our newest roommate is going to college for her second masters degree, working, and making a film screenplay. This will allow us to live rent & utility free (and then some) at our house. The roommates that we have are so busy with work and their lives, they pretty much just sleep at the house and that's it. Last night we were home and it was just my wife and I until the wee hours.

In addition, I started this morning the hunt for the best price on homeowners insurance. Our current policy is $1300/yr which is very high I feel so we're going to see what we can get. The best "automatic quote" that we received so far is $620, but I suspect it will land around $700. The automatic quote included us using them for auto insurance, which we're not willing to change from our current $40/month for 2 cars. We had one homeowners claim at the beginning of last year due to a broken bay window from neighborhood kids, which caused our rate to go up last November.

Wednesday, June 6, 2007

One Foolish Wanna-Be Renter

Last night I talked on the phone with one prospective roommate that was supposed to send in a deposit tomorrow and decided to suggest to him to not rent from us. The reason being that he can't get out of his existing lease and is wanting to secure a room for when it ends in 2 months. The way I do rooms though is on a first-come-first-serve process, securing rooms with the first one to make payment.

What it would come out to would be him paying $700 (that he can barely afford) to reserve a room for August, then paying $350/month then. The room would be vacant for 2 months and he would try to be taking care of two leases. I'm all for filling the rooms, but not at the loss of another person's well-earned money. I reminded him that other people will be renting rooms as well in the area and he should look in a month for a room.

Tuesday, June 5, 2007

Money Saving Tips

Over the months and years, I've been learning many money saving tips. It's amazing how many are out there, here's a few I was just talking to one of my co-workers as I carpooled with him.
  1. Carpooling - I live between work and home for one of my co-workers, so we carpool every other week.
  2. Discounted Gift Cards - I know there's credit cards that give you 5% cashback on your gas purchases, etc. but I'm sick of debt and that includes credit cards. One of the local gas stations though (Speedway) has a special this month when you buy a $25 gift card, you pay only $24. In an average month, we're going through about $300 worth of gas, so that saves us $12.
  3. Free oil changes - We are signed up with a mystery shopping company that always has listings for oil changes. They in essence pay for your oil change a bit more. We end up saving more through using coupons at the same time.
  4. Buy only practical that you need - My co-worker just bought 3 pairs of knock-off sunglasses for $12/pair. Sunglasses are practical, but he has a pair that just needs a $0.50 rubber piece near the nose. He thought my $20 video game purchase wasn't practical, but then I told him how it's one of those games my wife and I will probably play for at least 60 hours, making it's value to us very high (Lego Star Wars). We played the 2nd edition for about 40 hours and still haven't finished it but it was a free rental from her previous job.

Monday, June 4, 2007

Craigslist Is My Friend

Many moons ago, I used to have a good friend called eBay. That friend though started charging me more and more for less and less help. It has gotten to the point now on eBay that the prices for things on there are quite often more expensive than going down to the nearby store. I left them for another friend.

That new friend of mine is Craigslist. For those of you not in the know, it's basically a free classified ad site with no third-party ads covering the site. It knows what it's there for and it does a great job at it. I had tried posting in local spots for people to rent our rooms and that went miserable, so I used Craigslist and haven't stopped using it since. For example, I picked up a storm door and a lawnmower this past weekend for $20 total from someone moving this week. In the past I've picked up a humidifier, dog kennel, manure and many more things.

Taking Care of < $200 Debts

This week we're hitting a milestone in our goals of getting out of debt, ratching up to the < $200 debts taken care of. We had been for a while on the low hanging ones less than $100, but this week will bump us past that point and into new territory. The way we've got our organized is the following:
  1. A folder for less than $100. That one is now empty and if anything comes that small, we'll just take care of it right then and there.
  2. A folder for $100-$500. This one has 10 in there, most landing at the $300 mark.
  3. A folder for $500-$1000. This one has 6 in there, not looking at too much. Planned to take care of 9/07 - 12/07.
  4. A folder for $1000+. This one has 7 in there and it's one we're not even touching until next year.
I called up on one in the $100-500 folder to take care of and the balance was actually higher than our bill, so that one will have to wait until next month to be taken care of (from $127 to $308). There are 4 in that folder that we'll be taking care of this month, I'm planning on one a week. This week's one is a house phone bill for our foreclosed condo that my father never paid (he rented from us and didn't pay anything).

Saturday, June 2, 2007

Money Don't Fix Everything

Last night while I was working on our PF and doing some gardening research, I received a call around 2:30 AM asking for help. He is one of the people on our cell phone plan and after he pays us for his portion of the bill, he has gotten in the habit of asking for money afterwards. This time, he needed to be picked up. The only question I asked him was where he was so I could come out there.

Once I picked him up, I found out more of the story. For one, he had been drinking and got together with one of his dealer friends and took drugs. His ride had left him stranded far from home, he lives with his parents (he's over 18) and they wouldn't pick him up. He also borrowed some money from a not-so-nice dude that wanted the money last night, but our guy doesn't have the cash until Tuesday when he gets paid.

After picking our guy up, he of course asked for money to fix his problems. I told him I can't do that, but the best I could do is provide him with a warm bed, a nice shower, some food and help him get clean. He accepted it and is resting right now. If he chooses, we are willing to house him for the next few days until he gets paid to keep him out of trouble.

When he wakes up, my game plan is to give him a sheet of paper and a pencil and ask him to list his goals in life. On another sheet I'll suggest he list what he thinks how others view him. And on a last sheet I'll ask him to list what how he wants others to view him. I feel these three lists will be much more worthwhile to him than the money. He may not like them, he may turn down the idea, but I will have at least tried. If he doesn't like them, he's going to be put to work with me around the house.

June Budget

Our budget is starting to get pretty boring, which is good. With the baby and everything, I've been the one bringing it to my wife, making sure that I didn't miss anything. For July, she'll be making it and bringing it to me. Without further ado, here it goes:
  • $400 Tithe
  • $990 Mortgage
  • $300 Auto Gas (Brought down due to better MPG vehicle)
  • $145 Natural Gas (Monthly Set Rate)
  • $50 Water & Trash (More use with more people & garden, bumped up by $10)
  • $89 Electricity (Monthly Set Rate)
  • $158 Cell Phone (More about that...)
  • $30 Wife's Fun Money
  • $30 My Fun Money
  • $30 Dining Out
  • $30 Toiletries
  • $300 Plates, Insurance on second car & car maintenance fund
  • $500 Chimney & gutter repair
  • $823 Debt snowball
Regarding cell phone, my wife this month is going to work at either getting people removed from our plan or us canceling it fully. Even with cancellation charges, it might be better for us to go on a pay-as-you go plan right now.

This past month I got both the electricity and the natural gas on their fixed rate programs, so we will be paying the same amount every month now for them.

Last weekend I was cleaning out the gutters with my father-in-law and he noticed some issues with them (brackets broken, drainage too close to the foundation causing leaking into our basement) as well as I knew our chimney needed to be fixed up, but I didn't know how bad it was until I went to clean the gutters. I'm concerned that we may be leaking water into the attic or will soon be doing so. It was a want project before, but the chimney has now become a need-to-do project so we're delaying debt a bit to take care of that.

Our debt snowball will probably be a bit bigger than is listed above, it's mainly dependent upon if the two people we have that have committed to the two bedrooms follow-through, as well as the amount of work I receive for my on-call job. Right now my on-call job has been slow (1/week), but a month ago it was going 3-4/week. If the two move in and my on-call stays the same as it has been, we're looking at about $1K snowball.

May Net Worth/Budget Results

Our net worth changed in ways this month I was not expecting. At the beginning of the month, our station wagon had it's water pump go out on us and it was cheaper for us to buy a used hatchback for $400 than it was to repair the 195K mile beast. In addition, we received a second car from a friend of ours as a donation. This bumped our vehicle assets up quite a bit.

We reached our goal this month of $1K in savings, even with the fun car stuff at the beginning of the month, and then some. We're using the excess beyond the $1K to take care of some debts.

My in-laws had given us money last year and I hadn't included it in our total debts since we didn't know the exact amount that we owed them. They came to visit and told us to consider it a gift.

In regards to following our budget, we did pretty well. We didn't overspend in dining out, my fun money was spent getting a replacement power supply for our computer, and my wife didn't spend all of her fun money. The only unbudgeted item was the car replacement, which with extra work in the month didn't cause much of a hiccup for us. We will be correcting for that by starting to put away some into a sinking fund for our cars. We also didn't use up all the gas money this month due to my in-laws visiting for a weekend and driving everywhere, our daughter being born so I didn't go to work for 2 days, and our actual 30 MPG hatchback we purchased.

Adding Roommates

We have 1 new roommate moving in tomorrow, paying weekly and another one will be moving in on the 7th. That will bring us to full occupancy (4 of the 5 bedrooms at our home rented) with the following income:
  1. One @ $300/month, discounted due to being here the longest and low-paying job. Pays weekly throughout the month to pay the $300.
  2. One @ $400/month, pays on the first of the month like clockwork.
  3. One @ $100/week, moving in tomorrow. Will come out to average $425/month but will probably not be staying too long (construction worker, working on nearby project). They also have the largest bedroom.
  4. One @ $350/week, moving in on the 7th. They have the smallest bedroom, but plenty of sunlight.
That brings our income from our home to about $1475/month. That will cover the mortgage, utilities, and repairs on the house. I wish last year we had gotten us to full occupancy like this, but I'm happy we will be having it now. One way I pushed the renting of the rooms this time around was started at $400/month on Craigslist and didn't get much action on them, saw I was landing in the same price range as others so bumped it down by $50 to be $350/month for the smaller room and $350 for the first month of our largest room.