The Raging Tech

Light at the End of the Tunnel

The financial crisis in the economy has some light at the end of the tunnel, at least for me. I realized today as I started to get a knot in my stomach about how tight things had become in my budget, that there’s plenty of hope and I’m not at all in a bad situation. First of all, I work for the state, in an IT position. My job is probably a lot more secure than a lot of people. I’m glad I didn’t try to go freelance or go start my own business just yet, because a lot of people will be tightening their belts and not hiring freelance writers or computer repair guys. 

Secondly, I bank at a credit union, not one of those giant corporation banks that has investments on Wall Street that could make or break them. My mortgage was not a sub-prime mortgage and while things are tight now (because of my house payment, not because of the economy), they’ll be better for me soon. 

Good news that affects me: the new home owner’s tax credit is still on for this tax season. It’s basically a $7500 zero-interest loan from the government that gets paid back over 15 years. I’ve been trying like crazy to refinance my credit card debt to all lower interest rates, and I’m pretty sure $7500 will cover my debts (including what I owe Mom) and you just can’t beat zero percent interest. That’ll leave me with just my car, student loan, and house payment and regular utilities, groceries, and gas. I recently deferred my student loans until 2014, because I’m back in grad school, paying for it out of my pocket. 

So basically, I just have to be poor until after taxes are processed, and then when the tax credit comes in I have to solemnly swear to spend it all on knocking out debt, and not crazy stuff I don’t need. Knocking out debt feels great. When I got my inheritance money I paid off my Bank of America card entirely and closed the account. It felt SOO good, and now I don’t have that monthly payment anymore. If I can eliminate all of that, I’ll be a good ways on my way to being debt-free.

My house will probably be the last thing I pay off, and I hope I can do it in less time than the 30 years my mortgage is supposed to last. I’ll figure that out later, though. Maybe eventually when I’m out of all other debt I can put that same amount towards the principal on my house that I was paying every month, and get it paid off sooner. 

I hope for all of you that if things get bad, you’ll look for hope, and if you aren’t sure where to find hope, look to Jesus. He’s our provider and He always takes care of those who love Him and are called according to His purpose (That’s in the Bible, kids).

Back to the (Financial) Future

With a new house adding to my total assets and net worth, I’ve been looking at my finances rather closely lately. I’ve decided the smart thing to do with my inheritance check (rather than all those things I’d like to have) is to pay off a couple of credit card debts and my closing cost loan from the sellers of my house. That’s a good amount of Debt help that’ll leave me feeling better about my budget.

I’m still going to get my furniture and paint, and a few small things that shouldn’t add up to very much, and the rest is going to giving me a little less headache every month when I pay bills. I think having that breathing room is a gift that is going to keep on giving!

If you’re financially retarded, you may want to take a trip over to Bills.com and take their Bills IQ test. I scored a B, because I’m financially ditzy but at least I know where my problems lie. You may find that Debt consolidation is a route you may need to look into. If you’re struggling to make the bills each month, Bills.com can hook you up with some good Debt relief resources, before you need to file for Bankruptcy, which could really hurt your credit.

How Do You Put Away Savings?

In this era, you just can’t rely on social security for retirement. Also, when you’re my age, you might be thinking about the future: marriage, a house, kids, kids’ college funds, vacation money, hire a hitman for the in-laws money, etc. Or maybe you’re just thinking about how to get out of debt.

Recently, I received my Economic Stimulus payment from the U.S. government. And as a single person, I qualified for the full $600. I thought “whoopee! 600 bucks to blow!” and then immediately went - “No, I’m broke nearly 1/3 of every month. I need to buckle down, form a budget, and open a money market account,” which I did. I opened a money market account at the credit union and deposited almost half my payment. I hope to try and match that each month and once my car is paid off (27 months from now) I’ll try to put my car payment into that account as well, since I won’t miss it.

I did some basic math, and not including what I’ll earn from dividends, in five years I’ll have saved up about $24k - not too bad if I can stick to it and not spend it all.

What I can’t decide is - instead of putting so much into savings, should I instead pay off my higher-interest debt and then as those are paid off start saving the money I was paying in my Money Market account?

Know some better ways to put away for another day? Leave me a comment below on how you do it.