Mid-month Update :: Coming soon!

My lovely mother treated me to a weekend away at a Women’s confernece, so I’m a little behind in posting (I unplugged from the virtual world – didn’t even take my computer!), but I will be working on my Mid-Month Update for May and hope to post today/tomorrow.

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$90 in Savings

Today’s check of the bank accounts revealed that we have ~$90 in our savings account, which we have accrued for the last month. We bank at Bank of America, so we are able to participate in the Keep The Change program. Some people think that it means that every transaction is “rounded to the nearest dollar,” which is *sort of* true, but it doesn’t make keeping track of your checking account any easier.

Here is how it works:

You purchase a cup of coffee and muffin for $4.59 and use your debit card to pay. The coffee place gets $4.59 and that is reflected on your bank statement. BofA notes that you have $.41 coming to your Keep the Change account and at the end of each business day, BofA transfers that $.41, plus any other “change” from your transactions, into your bank account.

The first year, they match 100% of your “change” for the first 3 months, and then 5% thereafter, as long as you are in the program, up to $250. It pays out every year on the anniversary of your enrollment (as long as you are still in the program).  The first year, we had a payout of $166 (because of the first 3 month bonus). This year, our payout was $20.08. That, along with a small interest accrual, brings us to $91.43 in savings.

It’s nice, because we hardly even feel it going into savings.  And it’s a small amount, but if we could do even *that* every month, we’d save $1,000 in a year.

Update on Mint.com

A friend shared this link with me about the Mint.com site developing a “Financial Fitness” game-like feature. 

Check out the link here: http://www.gamesetwatch.com/2009/04/mint_turns_personal_finance_in.php 

I asked my husband to take a look at mint.com to see if it is something he would be more interested in than Microsoft Money (no feedback, yet), but I’m thinking this feature might interest him a little. 

Is this something that would entice you to try out the site?

Dave Ramsey’s take

My younger sister (who doesn’t believe in owning credit cards, and therefore, hasn’t built up much of a credit history at age 31), is a big Dave Ramsey fan and I’ve heard many others talk about him, both digitally (online) and analog (in person).  So, I thought I’d take a look at his site http://www.daveramsey.com and see what I could glean in a 30 second glance. The first thing I lit on were the Baby Steps.  Here they are listed below (directly from the website):

  $1,000 to start an Emergency Fund
  Pay off all debt using the Debt Snowball
  3 to 6 months of expenses in savings
  Invest 15% of household income into Roth IRAs and pre-tax retirement
  College funding for children
  Pay off home early
  Build wealth and give! 
Invest in mutual funds and real estate

This is interesting – the first goal is to build up an Emergency Fund. It goes against what Suze Orman *used* to advise (she has since changed her tune, but more on that later) and it is a little counter-intuitive for me. I understand that it is harder to get credit, now, and that even those who are paying on time and don’t maintain a balance are finding that their card companies are cancelling their credit lines, so it makes sense that you would need to build your own emergency fund for “in case” instead of counting on your credit cards. 

I’m just trying to gauge the practicability of waiting to pay of debt until the $1,000 is saved. At this point, we’d default on our settlements, so I think we’ll just continue on in putting a little aside each month into savings and work on building up the Emergency Fund while co-currently paying down our debt. It will be great to see how much we will have in savings three(ish) years from now when our debt is gone. I suppose I should set a goal.

What is your thought about Dave’s Baby Steps?

Salary Reductions

It has been communicated to my husband that his company is going to be exploring salary reductions for the next fiscal year (starting July 1).  Management had communicated this about a month ago at an all-staff meeting, but assured everyone that they were going to try to cut everything else that they could before staff. Following the meeting, management made several tough decisions to abandon projects that they knew would impact expenses but not provide a proven return. They have also taken a hard look at other operational costs.  But recent communication has made it clear that there will be some form of staff reduction, beginning with salary reductions and probably layoffs. This is not a frivolous company – they are tight and smartly run non-profit arts organization. So it hasn’t been a matter of bad money management – just think how many times in the last month you have thought to yourself “I have some extra money to spend on a ticket to a live performance” – right. No one else has either. 

They were originally looking at three options for reducing personnel costs:

  • Furloughs
  • Across the board salary reductions
  • Reducing the company contribution to employee pension plans

They found out that they cannot furlough exempt staff without changing their job status to non-exempt, so that is now off of the table. It looks like there will be a 5% (ish) cut to one or both of the other two. 

Normally, this would seem slightly catastrophic to us as we have already made about all of the cuts that we can in light of our situation and what we are trying to accomplish in the next three years. However, because of our new budget and our grasp on our financial situation, this does not seem insurmountable at all – we will be able to adjust and figure out what to do to make it work. I’m also very hopeful that my raise will help us to even out a little bit – I should know by next month.

May 2009 :: Goals

April posed some complications for us and we didn’t end as strong as we had hoped we would, but we are glad that we made some progress, instead of staying flat or adding more debt.

Our goal for May is to pay $3,145 toward our debt. Of course, there is interest ($471) , so it won’t be a net reduction of $3,000, but it should be around $2,674, which is still progress!

So our totals at the end of May should be:

Credit Card Debt  ::  $44,015.18
Taxes Owed           ::   $   4,316.83
Personal Loans    ::   $  5,400.00

Total Debt*            ::  $53,732.01

*does not include school loans