Mid-Year Financial Check-Up | Progress on 2015 goals

Wow! I haven’t blogged since late January.

What happened? Love happened…well, a little bit. I started dating a handsome guy and reading everything about love and relationships. And I just got lazy. My cares about personal finance blogging took a backseat.

But I’m getting back on track with reading and writing about money. And I feel as if I’m on track in regards to my goals.

Let’s revisit the financial goals I set at the beginning of 2015:

  • Save $53 per pay period to have an additional $1378 in the emergency fund by the end of the year –> I have been automatically saving that money each pay period. I’ve had to use some of those savings for big purchases, but that’s what it’s there for.
  • Learn more about investing by reading at least one book or completing an online tutorial quarterly –> I haven’t kept this up, but I look forward to catching up.
  • Reset Roth IRA contributions to contribute at least $100 per month –> I reset my Roth IRA contributions, but to $50 a month. I decided to put more money toward debt repayment for now.
  • Pay off two of the three remaining credit cards in full using the Debt Dash or snowball method –> I will pay off the first of those three cards in June. I should repay the second card by the end of the year.
  • Pay at least one extra student loan payment within the year by making a small extra payment each month –> I decided to put more money toward repaying higher-interest consumer debt instead of toward low-interest student loans.

Seeing some progress is better than seeing none. At one point, I never thought I’d finish paying off credit card No. 1. It was a card I got for car repairs. The card allowed promotional purchases in which you wouldn’t incur any interest for six months. But when those six months were over, the 29.99% interest kicked in. Woo!

So finally seeing a balance of about $2,100 (near the $2,500 limit) in June 2014 go down to a couple hundred bucks (MY LAST PAYMENT) is a huge feat. I’m excited to roll that payment into the payment for Card No. 2 and paying it off before the interest kicks in March 2016. Also, I think I’ve saved enough so that I won’t have to use the card again. Progress, people! Progress!


How to Be Financially Successful in Your 20’s

Weeks 2 and 3 oHowToBeSuccessfulMillenialf the Live Richer Challenge were full of tasks that I had already completed after applying lessons from previous readings, which is a good thing. The Budgetnista’s in line with other financial planners.

This week (Week 4) is all about credit; and the next, investing. I’m excited for the investment portion for sure. That topic often scares me. The Budgetnista has a way of breaking down tough concepts into simple measures so most can understand it. That’s great for her target audience of young, black women.

The main points I took away from Weeks 2 and 3 were the importance of automation and notes from this free ebook The Budgetnista contributed to on MoneyTips.com — The Millennial Next Door [Revealed]: How To Be Financially Successful in Your 20s. The survey answers from other 20-somethings helped me see where I am among my peers.

  • The majority (55%) earn from $25,000 to $75,000
  • 63% have less than $25,000 in assets
  • 30% say student debt has impacted their ability to be financially independent or successful
  • 87% of successful millennials have set financial goals and are on track to meet them at least to some extent
  • 85% successful millennials keep budgets
  • On average, successful milleninals save 21% of what they earn
  • 91% say they are financially literate

The top 5 financial concerns are:

  1. Saving enough to live comfortably in retirement (47%)
  2. Earning enough to afford the lifestyle I/we want to live in the future (46%)
  3. Pay off student loans (35%)
  4. Living within my/our means (34%)
  5. Maintaining my/our current lifestyle in the event I lost my job and/or can’t find work (29%)

The biggest financial missteps so far include:

  1. Taking on too much consumer debt (23%)
  2. Spending frivolous (22%)
  3. Racking up college-related debt (19%)
  4. Making investment decisions they later regretted (8%)
  5. Not saving enough (5%)

The e-book featured great tidbits from financial planners and bloggers.

Words On Budgeting

Matt Becker said he understood that budgeting isn’t something that works for everyone.

“I think it sets people up for failure by putting the focus on spending less instead of the real goal of using your money purposefully to get more of the things that make you happy. Instead, I encourage my clients to focus on three things:

  1. Automate savings
  2. Tracking spending (so you can make informed decisions)
  3. Creating good habits that align their daily lives with their long-term goals”

Words On Debt

“The biggest financial misstep I see millennials make is taking on large amounts of unnecessary debt for things like home, vehicles, or college. Many of these same millennials would say they place a high value on flexibility and freedom, when in reality they are getting neither. Debt almost always limits flexibility and freedom.” — Ben Wacek, CFP

Words On Setting Goals

“While finance is very mathematical, it’s also very emotional. People tried to accomplish their goals faster when they’re tied to something that’s exciting to them.” — J. Money

Words On Investing

“Just get started. Many people do tons of research and are victims of paralysis by analysis. Trying to decide whether they should invest into load or no-load mutual funds, ETFs or dividend-paying stocks. Take a small amount and invest into something. Even if it ends up being a crummy investment you’ll learn a ton by going through the motions versus doing more and more research.” —Jeff Rose, CFP

Two Checking Accounts Keep Bills and Spending In Check

Has anyone tried the two-checking account system? This is when you use one for bills and one for spending. It’s no different than earmarking savings accounts for different goals —vacation, car maintenance, emergency fund.

On Day 11, Tiffany “The Budgenista” Aliche prompted us to define our dollars by opening multiple accounts that day. Otherwise, you’ll have “gumbo money,” she said.

“When you have all of your money in one pot, you never know how what’s really happening. How much of this is for saving? How much for bills? How much for savings?”

Tiffany’s task couldn’t have come at a better time. While reading her prompt, I remembered that just minutes before I was calculating how much money I’d have left in my checking account after paying bills. It can be exhausting to think: “When this payment goes through, will I have enough money for the oil change, the hair appointment, gas, etc.?”

I already have multiple checking accounts (Big Bank, credit union and online bank), but two are tied to savings accounts that I don’t want to touch. I’m afraid if I start using those two checking accounts, then I’ll start transferring money from my savings. Don’t want that! The debit cards are out of sight and out of mind for that reason.

My main option is to open another checking account at the Big Bank. However, I’d need to directly deposit $250 each month or have a large average daily balance of more than $1,000 to avoid a $12 monthly fee. Decisions, decisions.

When you have all of your money in one pot, you never know how what’s really happening. How much of this is for saving? How much for bills? How much for savings? — Tiffany “The Budgetnista” Aliche

Of course, I looked to the great wide Internet to find out how other people are using the two-checking account system for paying bills and discretionary spending. Some folks have it all figured out.

Here are some reasons to use two checking accounts for budgeting:

  1. You don’t worry about dipping into your bill money for discretionary spending.
  2. You can automate all of your bills and spend less time managing your money. You know the money will be there, so you can put your finances on autopilot.
  3. If forces you to be more frugal and save. You will be motivated to save as the money in your “Spending” checking account grows. Who wants to see it depleted all the time? Because the amount of money in the “Spending” account is finite (and not nebulous) and I can see exactly what’s left in the tank, then I’ll be forced to really think about what I’m spending.
  4. No overdrafts.

Great reasons, right? This system could really help me clear my mind and separate money for different purposes so spending doesn’t affect paying the bills.

LIVE RICHER Challenge: Day 8 and Day 9

Tiffany “The Budgetnista” Aliche graciously allowed the LIVE RICHER Challenge to read Day One of her book, “The One-Week Budget”, to start Week Two of about budgeting and saving. I thoroughly enjoyed it.

curlsandmo-com-one-week-budgetIn the intro, she said, “There is a magic about money.” When money is not planned for, it disappears. When it’s well-documented and used wisely, it inexplicably multiplies for the for the skilled handler.


It’s not anything that I’ve learned before, but I loved how she put it.

Throughout the chapter, she described how her clients faltered financially. Until they wrote down their expenses in black and white, they didn’t understand the error of their ways.

So we also were tasked with creating “The Money List” with all of our expenses. Then we’d subtract it from our take-home pay. I’m going to run over my December numbers to see how I fared. Oh, boy!

Side note: I was talking to a gentleman caller yesterday, and he was talking about his goals for this year and the next. He traded in his gorgeous luxury car for a Toyota Camry to save himself $300 a month. I exclaimed, “Look at you being responsible, being a man!” I was so proud of him for making that decision. He said he wanted that car for a long, but after he got it, it lost it’s luster after a while. It reminded me of a few male financial experts I read. They, too, had to confront that monthly payment and their pride. Then they gave up the car to get ahead financially. It’s great to have met someone with a similar financial mindset.

LIVE RICHER Challenge: Week One (Changing Your Money Mindset)

Week One of the LIVE RICHER Challenges was all about changing your money mindset.

The tasks included setting goals and denoting your needs, wants and loves. Those were my favorite of the daily tasks that week. Tiffany “The Budgetnista” Aliche said needs = purpose. and loves = passion.

Need it? > Love it? > Like it? > Want it?

“If you don’t need it, or love it, then you should leave it,” she wrote. “Spending money on likes or wants, means you’ll have less money for purchases that truly improve the quality of your life.”

She makes it sound so simple, right?

She prompted up to mentally list our needs. Then write down two loves and commit to them for the next six months. My loves — the things I would do if had Oprah’s bank account — travel, exercising and volunteering. Many of the women used the same list.

Spending money on likes or wants, means you’ll have less money for purchases that truly improve the quality of your life.

As part of committing myself to travel, I’ll complete my goal of renewing my passport. I’ll continue to exercise and volunteer to keep me physically and spiritually healthy. Things have recently ractheted up in both departments.

My 29th birthday gift to me: No more credit card debt

A co-worker read a poignant quote yesterday.

Do one thing every day that scares you. – Eleanor Roosevelt

Well, I did something very scary today. I am trying to transfer $3,000 from two credit cards onto one with a 0-percent interest rate for 15 months. Meaning that I’ll have to stick to my Debt Dash/Snowball plan and budget to the T in order to pay this off by March 2016.


Why did I agree to transfer that much?! Why didn’t I give myself breathing room and put $2,500 on the card? That $500 makes a difference.

According to my plan, I can pay off the transfer by February 2016. That’s just a month ahead of the introductory fee and the month of my 29th birthday.

So my 27-year-old self is making a pledge to my 29-year-old self that I will not burden her with high-interest credit card debt. She will most likely have student loan debt. We’ll continue the snowball to get rid of that eventually.

But in 14 months, I want to be out of this hole.

It takes a lot of will, discipline, courage and help to slay the debt monster. But it can be done. – Dave Ramsey

I will continue to freelance and use half of that money for debt. That will expedite the process.

I just received my first payment of 2015 for a freelance piece and was unsure of what to do with it. Perhaps, I’d try the three savings buckets system and split it equally for:

  1. emergency savings
  2. save to spend
  3. retirement

But, no. I’ve got to use part of this freelance income to hit this balance transfer. Every little bit counts. It’s not cute to continue to be the slave to the lender.

The rich rule over the poor, and the borrower is slave to the lender. – Proverbs 22:7

I’ve scared myself straight. I must make sacrifices to achieve this goal. My 29-year-old self deserves to be free of credit card debt.


What to expect when doing a credit balance transfer

I’ve heard of balance transfers for a while now, but have been wary of doing one. This basically allows you to get a new credit card to pay off the old one. The key is getting a new card with a low- or zero-percent introductory interest rate over those months, for example 6 or 12 months, so you’re putting money toward your balance, not the pesky interest. It can help you get out of debt quicker and save money overall.

Strategize Before Getting a Balance Transfer

While listening to Ready For Zero’s MoneyBuzz podcast, a co-hostess talked about how she once got a balance transfer card but didn’t create a strategy to pay off her balance before the introductory period expired. She got hit by interest twice. Boom!

Years later, she ended up using another balance transfer to pay off that debt within the allotted time period. The plan made the difference. She knew exactly how much to pay each month to avoid interest. Hearing her success story made me seriously consider doing a balance transfer for the first time.

What To Consider When Selecting A Balance Transfer Card

  • Purchase Annual Percentage Rate (APR) | Of course, you hope to qualify for a card at 0 percent.
  • Balance transfer APR | 0 percent, please!
  • The expiration date for the teaser rate | It could be 6 months, 12 months or longer. You don’t want to get caught up and not pay your balance within 6 months. You have to be careful. After the 6 or 12 months are up, the interest rate jumps up significantly. A card I considered chose between 12.99% and 22.99% depending on the card applicant’s creditworthiness. Obviously, you don’t want to have a balance and get hit with those high interest rates…AGAIN.
  • Balance transfer fee | Some cards charge a percentage, for example 3 percent, of the balance you wish to transfer to the new card. So you would be charged a balance transfer fee of $3 for a card with a $100 balance.

While looking around, I noticed that you can’t get do a balance transfer within the same company. So example, you can’t dump debt from one Company A card to a second Company A card.

I ended up getting a card that offered 0 percent interest on new purchases AND balance transfers for the first 15 billing cycles of my account. Also, there was no fee for balance Balance Transfer Screen Shot 2015-01-07 at 2.56.17 PMtransfers within the first 60 days of opening the account. I qualified for the lowest APR after the 15-month teaser period. Thanks, good credit score! The company approved a full transfers from one card and a partial transfer from another. Using this balance transfer calculator, I estimated that I could save $762 in interest over the duration of the promotion. After the promotional period, I could save about $19 each month.

I called the company to better understand how this will all work.

  • Balance transfers help consolidate payments. Depending on your situation, you can make one payment for two cards.
  • My old companies will receive payments from the new cards, so they won’t necessarily know that I made a balance transfer. It’s as if I paid the cards in full.
  • The balance transfer could have a negative impact on my credit score temporarily.

How Balance Transfers Affect Your Credit Score

If you plan to apply for credit like a loan or mortgage in the near future, then some folks advise against doing a balance transfer. Why? A balance transfer could negatively impact my credit score in three ways.

  1. Debt utilization (30 percent of my FICO score) | I’ll basically max out the balance transfer card. The rule of thumb is to use 30 percent or less of a card’s credit limit. That’s not good.
  2. Opening new credit (10 percent of my FICO score) | Opening new accounts could lower my score. Lenders don’t want to see that you apply for new credit often. That’s risky.
  3. Length of credit history (10 percent of my FICO score) | The longer I’ve had a card, the better.

It’s a good thing I don’t plan on applying for anything soon.


Looking Forward

I’m going to continue to use the Debt Dash/snowball method to pay down these two cards using the balance transfer. It’s great that my cash will go toward the balance instead of interest. Cheers to the interest-free future!