Mapgirl’s Fiscal Challenge

Hooray for handy boyfriends!

Several months ago, boyfriend’s dog accidentally peed on my laptop. Instead of paying the ridiculous $750 fee to repair my laptop or buying me a new one, we decided that he was going to try fixing it. eBay has a ton of MacBook parts on sale from other damaged laptops that weren’t worth fixing.

For about $250, boyfriend got a new logic board, another $42 for a new battery and probably another $30 for some other parts and tools. Boyfriend spent a lot of evenings working on my laptop and now it’s back!

Was it worth the wait? Yes. Absolutely. I bought the laptop used from a friend who left me about 72 hours of music on it. She’s a world traveler so she had many songs and genres I would never seek out. The cost savings is more than half of the fee I’d have to pay Apple for their insane policies. Luckily I wasn’t totally out of commission with access to other computers around me, either at home or at work. It’s good stuff.

Hooray!

Since the ceiling needs repair, I figure I should do the entire bathroom. I thought maybe it would cost $5K, but after talking with a few people, I need to budget closer to $7K. I suppose this is a very salient lesson that everyone needs an emergency fund. Say 3-6 months of take home pay, which of course would cover the repairs. Unfortunately, my emergency fund has only about $1.5K in it.

In desperation for cash, I looked at all my options here. I have credit available on my HELOC and on my credit cards. I have a few CD’s expiring, which I was going to liquidate anyway to pay down debt. But since there is an emergency here and now, I’m going to use them to fund the repair.

With construction, you usually have to pay a deposit of some sort to get the work started. In my case, the earliest construction can start is in another week. The work will take approximately 10 days, taking me to early May.

In looking at my cash flow and available credit, I decided, rather sadly that I cannot attend my friend’s wedding in Boston this month. There’s just no way I can find a hotel room under $200 a night anywhere near the festivities or near the hotel where my best friend and her husband are staying. I’m looking at $1000 for just hotel and rental car alone at a time where I need the $1000 for something else.

I have balance transfer checks coming to my house all the time for a promotional rate less than 2% APR. Unfortunately, these BT’s have a fee. A friend asked me if that fee was capped out but reading the fine print, I couldn’t find any mention of a cap. I called the customer service line and asked about a cap. However the representative said he couldn’t change the BT fee. Instead he offered to change the rate from 1.9% to 1% APR after looking at my sterling payment record. It’s the best he could do, but I’ll take it.

Now the trick here is that I’m sitting on $5K borrowed for 1% APR. Do I pay off my 11.99% APR credit card balance of $4K only to ring them up further as the construction work progresses, or do I hold onto this wad of cash and wait to pay it out to the contractor? (It’s going into an account that doesn’t bear interest so there’s no arbitrage going on here and there isn’t enough time to move it around and take advantage of that sort of thing unless I’m paying off the credit card.)

The last $2K I need, I figure can come from liquidating all of my savings accounts and my next two paychecks. The problem now is that I’ve shot my 2008 debt reduction goals to pieces.

I’ve been sighing a lot this week. Life. It’s what happens to you. Dealing with it can suck, but I look forward to having a shiny new bathroom with better lighting in the shower and for the mirror when I put on make up.

Luckily for you, this week, several PF bloggers have Emergency Fund posts.
Five Cent Nickel: On building an emergency fund
Get Rich Slowly: Learning to love his emergency fund
Plonkee: On why they’re no fun

Now that I covered the non-financial side of my departure from my last job, I will cover the financial side as much as I can. Every place is different. Each time is different but I hope I can offer you something here for your next transition.

The first thing is that I was leaving around the holidays. Holidays are paid vacation days, so I made sure that I was going to save up as much vacation time as I could so I could receive a payout on those days from my company. Not every place does it, but a lot do. I took every paid holiday that was available to me, except the floating holiday that I get to use on January 1st every year. That would have been another 8 hours of vacation saved for me to receive as cash, but I didn’t want to ask my boss to approve it and then let me take the day as a 2007 vacation day. That would have been ethically shady. Either way though, I had two days for Christmas Eve and Christmas, two days for New Year’s Eve and Day, and two days post-Christmas. In two weeks, I only worked 4 days. Not too shabby.

The second thing is that I was leaving before bonus season and I had to gauge what bonuses would be like. Would they be a paltry sum or would they be the maximum amount available? Word on the street was very quiet. I couldn’t tell, so I assumed that meant they weren’t going to be that good. I weighed the opportunity cost of waiting with the present value of a higher salary. No, I didn’t do the firm mathematical calculations, but I decided the present value of a higher salary was going to be worth a lot more to me, as well as better benefits with the new firm.

The third thing is what to do with your 401k money. I knew I was forfeiting a decent chunk of my corporate match by leaving before fully vesting, but since the match is so low, it didn’t really matter. In a month or two at my new pay rate, I’ll have made that money back. I am going to pull this money out and roll it over into an existing Traditional IRA I have already. Never leave your money behind at your old company’s plan. You usually have 90-days to figure out what to do. By then you can see what your new company has in equivalent investments and roll your money into the new 401k plan, or into an existing IRA (with some restrictions).

Along with that is to double check if you have restricted funds. I just found out that due to some small transfers into an International fund, I cannot sell without a small penalty. I have to wait 60-days from my last purchase/influx of funds to sell without the penalty. C’est la vie. That’s just a calendar item for me in a few weeks. What I needed to do, was stop contributions to that fund entirely, but hopefully the market will do better anyway before I sell.

(more…)

The Dough Roller, not a blog I frequent, but he has some real gems in his blog.

A few weeks ago, I liked this Doomsday Fund article where he delineates exactly what he’d do in desperate times.

What would I do?

1) Cancel my phone service and DSL line into the house. I have a cellphone. Now that I have a laptop, I’d wardrive for a WiFi connection, hit up a free hotspot at Panera Bread, or tote it to a friend’s house and use theirs. Save $50 a month. (It would have been more, by my new phone bill came yesterday and it’s now $10 less! Hooray for calling for a cheaper deal!)

2) I’d ask my mom to pay her portion of the cellphone bill. My folks used to pay for mine, but now I pay for theirs as add-on phone lines to my primary line. Save $25-40 a month.

3) I’d consolidate my bills and loans so I’d have better cash flow every month. (Tried and true since I did this before. Maybe I should do this again?) Save $100-200 a month.

4) I’d get a second job either back at the yarn shop, waiting tables again, tutor kids, or pet sitting/baby sitting. Earn $100 a month.

5) I’d stop dining out, as much as it would pain me to do so. I’m packing lunch more often and I feel like I’m still ‘practicing’ at it rather than actually saving money. Save $200 a month.

6) I’d stop my retirement contributions completely, which I am doing now and it’s working. Save $500-800 a month.

7) I’d start to sell or pawn everything I had of value. In rough order: Books, CD’s, DVD’s. My bicycle. My iPod Nano. My kitchen appliances. My stash of yarns and fiber. Original artwork I’ve collected. My spinning wheel. My motorcycle. A diamond and gold bracelet my mother gave me for graduation which I never wear. My car.

I’d start making things to sell at Etsy.

9) I’d scale back my car insurance. Save $10-50 a month.

10) I’d sell my furniture, then my condo.

11) I’d donate what I could to charity increase my deductions and thereby reduce my taxable income.

12) I’d try to leverage this blog to earn more money.

That’s all I could really brainstorm. I’m doing a few of these things already, like stopping the contributions and packing my lunch more often. It’s working for me, albeit very slowly.

UPDATE: Voting closed. In 12 hours, consensus seems to be option #3.

Alrighty, here’s the scenario. I owe my friend $500 for a nice used laptop. I have paid her a good chunk of the agreed price, but now that I have the computer in hand, I need to pay her the rest.

Now, when I agreed to do this, I didn’t have a $3000 dental bill. I had $500 in an account ready to give to her. But now, that $500 is long gone to my oral surgeon so I wouldn’t be tossed into collections. I would like to pay my friend before Thanksgiving, but the question now is how to do that. (I am buying the laptop for my blogging business as this is no longer considered a mere hobby with casual income after the advertising deal I signed earlier this year. So ultimately, a chunk of its cost is a write-off expense.)

I am in a short term cash crunch and I foresee myself doing 3 things.

1. Take a balance transfer/credit card check and write myself a check myself to cover both the dental surgery and the laptop. ($2066.50) There would be likely a 3% fee and 7.9% interest for doing this. I figure if I am going to bother doing an advance, it should be for a large amount, rather than a small one. (Or is my thinking wrong on that?) And that I am suffering this cash crunch because of the dental bill so I might as well pay that off now, and then use the extra cash flow for the rest of the year to pay off the debt faster.

2. I could write myself a check from my HELOC, again for the combined amount of two debts, but the interest would be 10.3% and I would be lowering my home equity to a point that makes me really uncomfortable. Ditto the reasoning above on why I am considering combining amounts again.

3. Break one of my emergency fund CD’s for $404.99, losing interest for 3 months at 5.2%, but at no other cost to me. The remaining $95.01 I can pay out of my short term savings and next paycheck. But I would still owe the doctor money rather than a bank. (Mind you, they don’t charge me any interest or late fees for the payment plan I am on.)

Sorry that I don’t have a voting widget set up. So leave your vote in the comments. You have until Monday 8pm EDT to vote because I need to resolve this quickly and let her know when to expect a check. (FWIW, like a mad negotiator, I told her that I think I can pay her in two installments but I needed to check Quicken first because I had just arrived at home. She was fine with that, she just needed to know amounts and dates. I told her I had no idea as I had lost my PC for a few days last week.)

Is this all robbing Peter to pay Paul? Meh. I feel like the first two options are mega suck and the last option is probably the best bet.

So this week, some congressmen decided to introduce some legislation for dental heath care for Medicare patients, particularly through S-CHIP. That’s wonderful. Unfortunately, my dental plan really sucks. If I am going to get any more work done, I am going to have to find another job for dental insurance.

You think I am kidding, but I just got denied about $3000 in charges from the dental insurer. So I have to pay about $2900.00. But I have depleted all of my savings and will have to break all of my CD’s. That’s what an emergency fund is for, right?

Um, I’m not so sure. I’ve been a bit of a spendthrift this summer and I am going to have to chalk up the money from somehwere. A goodly portion of it will come out of my FSA funds, luckily. But I only have about $900 left since the initial $3K also came out of FSA. The total surgery was about $6K this year. I am saving the maximum $5K in my Medical Flexible Spending Account, but I have some other stuff like eyeglasses that also deplete those funds.

I have to do some serious scrambling here. I will be fine. I just shake my fist at myself and remind myself that I shouldn’t have slacked off on the saving. I think I’m going to have to tell my mom that she can’t have my bonus next year for her house project. The more I think about it, the more I want to keep the money as an emergency fund.

But the good news is that if I decide to skip my wishes for laser eye surgery, I won’t have to save $5K in FSA next year. *sigh* Forgoing my wish to have all my major medical conditions permanently resolved really stinks, but I am going to have to wait two more years. Crud. If I do that, the surgery no longer becomes cost effective and I’ll have to ride around with prescription eyewear.

Remember kids: FLOSS. FLOSS. FLOSS.

Alrighty. This was drafted at a ridiculous hour, so pardon me for poor thought processes.

The main thing is that August was a three paycheck month. I’m holding a lot of extra cash right now and frankly, it’s skewing the numbers. My car’s valuation came from the county assessor’s office. I still have a lowball valuation. They think it’s worth $5,550, but they haven’t seen the dent from the hit and run. Somehow, the market rebounded slightly at the end of the month to put me over the $50K mark. That’s nice. Kind of nutty if you ask me. I missed my goal by $453.29.

I am barely making a dent in the credit cards. GRRR. Since I’m taking an extra day off of work this week, I am going to close a languishing credit union savings account and throwing that money at my credit cards. I should have done it a long time ago, but for some reason I was sentimentally attached to the credit union for giving me a credit card consolidating loan all those years ago. For a long time, this $400.00 represented all the savings I had. It was my mini-emergency fund. If I really needed it, I’d have to run to Baltimore to go get it. Well, that day is here. I’ll have to adjust the Save-O-Meter, but the Debt-O-Meter will get adjusted as well. (After all that transferring around is done.)

I need to stop being so emotional about money and get this debt paid off. That’s all there is to it.

My tires told me ’screw you’ last night. Literally. I have a screw stuck in one of the tires. I *THOUGHT* I heard something funny driving from work to happy hour last night but I wasn’t sure. As I was leaving the restaurant, I needed to fuel up so I stopped at a Shell (and got gas for $2.93).

My father was an auto mechanic and taught me very little about cars, but the few things he taught me are these:

When you stop for gas:
1) Check your oil and top off if necessary.
2) Check your wiper fluid and fill that too.
3) Walk around the car, check your lights, look for new dents, dings/scratches.
4) Look at the tires to see if you need air.
5) Clean your windows.

To do all this, my dad gave me paper funnels, a jug of wiper fluid and my very own squeegee! My daddy loves me! Of course, I only do these things some of the time, but I do it when I am likely to need it, i.e. check the oil level when I’ve gone over 2K miles. But I always, always, ALWAYS walk around the car while it fills up. I have had bad luck with my tires from the get-go because my car was installed with the infamous Firestone tires that were recalled.

(more…)

I have been holding back a recap because I was waiting for my NCN Network graph to go up. And I actually think I’m sort of repeating myself with this post. But the skinny on my March entry is this, I got a huge bonus at work.

The big bonus means that my company will take a chunk for retirement, which is why I have a crazy large retirement bump for March. I believe, due to 401K contributions coming out of our bonus is why my company has a True-Up policy. That makes sense for the higher pay grades that will get front-loaded with the bonus contribution.

I also pulled money out of the emergency fund. You’ll see that the amount of cash I’m holding as an asset has gone down by close to the same amount my credit card debt has gone down on the liabilities side. It’s been a while and I’m still getting used to my savings account showing me a lot less money than before. It’s ok, but it definitely was an adjustment for me. I have decided to turn back an automatic savings deposit with each paycheck to build it back up slowly. I figure when there is another $1000.00 in it, I will drain it out again and pay another chunk of debt off.

There’s not much else to say since the credit card debt will be going on a little roller coaster ride this spring with work tuition reimbursement. I only hope all the paperwork will complete so I can pay it back before my 0% BT expires and really starts being a problem for me.

It’s a lyric by the B52’s. It pretty much sums up how I’ve been feeling lately about my money. It’s just a big mess.

I moved my Save-O-Meter down. I pulled out $2000.00 for my car repair, my gift to my mom to repair her windows, and to pay down my credit cards. Fortunately, the Save-O-Meter balance was higher than the amount posted, which is why I still have 59% left, and not just 50%. It was sad to knock it down, but the money is going to a good purpose by doing this. I’ll build it back up.

My Debt-O-Meter finally moved. I made some progress on it at the expense of my Save-O-Meter. Hopefully I’ll be able to make a little more progress over the next few months. I am able to pay over $1200.00 a month to credit card debt, so the rest of 2007 should see some significant progress. I’ve done all the right things, moved things to 0% balance transfer cards, called to lower my rate, etc. Now I just have to pay them down.

As far as the notebook experiment goes, well, that was interesting. I’m glad I did it but I don’t think I really learned that much from it. The bigger thing was that I used a cash allowance and that really helped me put a lid on my spending. The notebook showed me that I dined out a lot. Big Deal. I already knew that.

Mighty Bargain Hunter writes about using The Force to do your budgeting. I have to admit that I fall into The Force category. It’s the lazy way to budget. Honestly, the best thing that I can do is to keep giving myself a cash allowance and say that’s it. That’s all you get to spend on dining out, on anything. Books, etc. It’s too easy for me to fork over my debit card when I want to buy a new book. But I hate watching the cash slip through my fingers.

As the weather warms up and cold lunches become more tolerable, I am going to try and stick to having sandwiches for lunch. My co-worker and I went to her apartment for lunch last week and instead of mustard, she told me to try the pesto spread. She said it reminds her of the chicken pesto sandwich at Panera, one of our favorites. Pesto is good stuff on turkey and I recommend everybody give it a try. We walk her dog at lunch time too so that makes for some nice exercise too.