Unraveling Money – My Exploration of Personal Finance and Productivity

June 16, 2009

The day of beating down the doors of various financial institutions

Filed under: Debt — unravelingmoney @ 5:07 pm

Inspired by Ramit Sethi’s great book, I went on a financial-institutions-rampage. No, I didn’t show up with a weapon, I started calling, and I probably spoke to 10 different customer service agents in order to accomplish the following:

– Got the APR on my oldest card reduced to 7.99%

– Found out the the APR on my card with the highest balance got moved back up to 12.6% even thought it used to be 6.99% because I missed a payment (but I got the late fee removed on that back when the incident ocurred)

– Got a balance transfer offer of 2.99% on my oldest credit card that is good for 14 months – they had a 0% offer but it was only good for 2 months. Got a credit line increase so that I can transfer more away from the high-interest-rate card. Sure, credit line increases aren’t great – but I fully intend on paying off my debts and then having the limits reduced again.

– Set up a new IRA with Schwab and rolled over an old 401k account I had with my previous employer

– Inquired about a personal line of credit with my main bank to assist in paying off credit cards, but declined as soon as they told me the APR of 15%! My credit cards are lower than that…

And in between some of this, I actually did some work. You know, for my real job. Which pays me…

June 15, 2009

End of the line for Union Bank

Filed under: Uncategorized — unravelingmoney @ 3:53 pm

After getting a tip from a commenter and from a friend who is a mortgage broker, I decided to call Union Bank again to request some kind of reduction in interest rate apart from the government loan modification program. The answer? It is, in fact, possible to get a refinance without have 20% equity. Also, the rates these days are much better than what they used to be. The only problem is this: my main loan has a prepayment penalty of 1 year – so I can’t do anything until September. Basically – I’m stuck. No loan modification and no refinance options.

It was promising to hear that my monthly payment would go down signficantly – by over $600. So – I’ll need to figure out the cost and the payoff time if I do this, because I’m sure there will be fees galore from the bank.

This is on hold for now…

June 9, 2009

How to really save money

Filed under: Saving — unravelingmoney @ 5:20 pm

Tips for saving money abound. There are a thousand-and-one ways to save on utilities, entertainment, and just about everything else.

Unfortunately – saving money is kind of like weight loss. No one wants to confront the truth that EVERYONE actually knows – the only way to really save money is to…not spend it in the first place. Similarly, the only way to lose weight is to not gain it in the first place – by limiting the amount of calories you take in and increasing your calorie output by exercising more. There are no real secrets to saving. All you need to do is slow down spending and start actually putting your money in an interest-bearing account. Simple stuff, when you get down to it – but it’s definitely not easy.

Spending used to be such a carefree activity for me. I could throw my credit card down at any minute and buy pretty much everything I wanted, and since my income was relatively so much higher than my tastes (I tend to like a lot of cheap things rather than one very expensive thing), I never saw the repercussions.

Now I’m working on getting used to the fact that I don’t have the ability to go out and buy whatever I want, even when it seems like I’m buying “necessities”. It’s about reexamining what those necessities really are – for example, I bring lunch or snacks with me much more often now when I go out and I try to eat dinner at home every night rather than just assuming I can go out to eat. I stay away from drugstores because I have a tendency to buy a bunch of stuff there – from body care products to hairties – I always come away with a bunch of stuff that apparently, I can live without.

At this very moment I’m sitting in one of the most beautiful places on earth – Southeastern Alaska – looking out at an inlet and over to some mountains. I’m so lucky that my family lives here so that I can travel for cheap and stay for free – but this really reminds me why I’m doing this entire get-in-control-of-finances project in the first place.

I think it’s extremely important to have some kind of inspiration. Whether it is something personal or something for your family – it’s good to really examine why you want to be in control of your money and your financial life.

Saving money is an integral part of that puzzle – but like weight loss, it’s incredibly simple and at the same time, incredibly difficult.

June 2, 2009

My Expenses – Adding it all up – May 2009

Filed under: Keeping Track of Expenses — unravelingmoney @ 11:31 pm

Here comes the moment of truth – my personal balance sheet for the month of May. I’ve kept pretty good track of my expenditures this month, and to back me up I have Mint.com and Wells Fargo – they do a pretty good job of categorizing as well.

After completing this exercise, I intend to define my personal savings plan and finish setting up my ING savings/sub-savings accounts as planned. If there is one thing that this month has taught me, it’s that one absolutely needs a “stupid mistakes” fund.

Expenses

So – I somehow managed to spend ALMOST $9,000 in May. OMG. I can hardly believe it. My income was $8,480 – which includes expenses payouts from previous months as well. Ok, when I look at it that way, I guess it’s not TOO bad especially when you consider that $1,353 of my expenditures were expenses I’ll get back, I paid about the same to my credit cards (just a coincidence this time, I promise), I saved a small amount and I donated a small amount to charity. Regardless, I need to find ways to increase my income as well as cutting back on spending.

Going through this process was EXTREMELY valuable for me and I’m going to make it a habit every month. It’s very clear to me that I need to cut down on eating out and non-essential shopping immediately. I feel like I have already slowed way down on this – and my Mint.com account shows the same – but I need to do a better job. I still have a lot of credit card debt to pay off.

Next step – define my savings plan and get all of my accounts set up correctly.

New York Times article on…my problem!

Filed under: Mortgage — unravelingmoney @ 10:13 pm

Very timely – the New York Times has a great article about homeowners who do not qualify for loan modifications even though the MakingHomeAffordable site states that they should:

For Some Homeowners, Promised Help Proves Elusive

The article profiles a homeowner in Arizona who, according to MakingHomeAffordable, qualifies for a loan modification – however, she has not been offered one by her mortgage bank, Countrywide (they’re still around??). Like me, she went down the checklist – mortgage greater than 33% of income, recent reduction or loss of income, owes more than home worth…but still apparently isn’t getting an offer from her bank.

It’s really frustrating – the only response from the government is that they need to “fine-tune” their reporting with these banks.

June 1, 2009

Digging into Mortgage Deferment with Union Bank

Filed under: Mortgage — unravelingmoney @ 10:33 pm

One of my new rules when dealing with financial issues is to make sure that I have asked all the questions necessary to get the full picture of anything I’m signing up for. I think that in the past I have been somewhat deficient in this area, and it needs to change. So with that in mind, I worked up a comprehensive list of questions for Union Bank regarding the potential deferment of my mortgage for some months.

Here’s the list:

1. Are there any negative repercussions to my FICO score or to the interest rate(s) of my loans at any point in the process?

2. Is there a lump sum payment due at any point after the deferral?

3. What is the maximum deferral period allowed? Any minimum?

4. Will taking part in this program affect my chances of being eligible for a loan modification or refinance later on in the life of the loan?

5. What are my chances of being approved? I haven’t missed any payments on my loan yet, nor do I want to.

6. Are there any other hidden costs or negatives that I’m missing?

With this list in hand, I called up Union Bank again and asked away – to their credit the agent on the phone was very nice although as with everyone in this industry right now – she didn’t have many answers.

The bottom line is this: I have no idea who mortgage deferment would be right for. The kicker for me was that if I was able to get my mortgage payments deferred, it would probably make me ineligible for a future loan modification, but *not* a refinance. Since I’d really just like to get my loan modified, that wouldn’t really make any sense for me.

That all being said, there is currently no loan modification at Union Bank of California, since they did not take TARP funds and are not required to offer the Making Home Affordable program. So I’m essentially going off something that the agent at Union Bank said – they might offer something similar later this summer. We’ll see.

Back to the Mortgage Deferment program – they said that it would not harm my credit/FICO score, and they said that there were no extra or hidden charges or rate increases associated with it. When i pressed the agent to explain to me who exactly would be eligible for this program, she guessed that perhaps someone with temporary high medical bills might be – but they would still have to show ability to pay in the near future.

Summary: Not for me – I’ll hold out for a loan modification or some kind of refinance – which will hopefully be coming sometime soon. It’s just a shame that no one can tell me when.

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