• Posts Tagged ‘money’

    Breaking the Financial Rules – Co-signing Loans

    by  • March 7, 2012 • Tagged: , , ,  • Comments

    Break rule

    I have no idea.

    image: Eason41

    Don’t spend more than you earn. Don’t buy too much house. Don’t forget to pay your bills on time. There’s quite a few financial rules that are floating around that we’re told to follow, or else. Just like rules in your everyday life, sometimes you need to know when breaking them will benefit you more than following them. One of the “rules” I often see is to never co-sign a loan. However, I’ve twice been a part of the breaking of this rule.

    Co-sign Me Out of Debt

    When I was in graduate school I had a plan: consolidate all of my debts so that I can get a better overall rate and more manageable monthly payments. That plan didn’t work out so well as some parts of the plan involved getting a payday loan and locking my keys in my car and myself out. Eventually I figured everything out and applied for a personal loan from the credit union associated with my university. Although I had been keeping up with the payments for my various debts, the loan officer was reluctant to give me the loan because of past missed payments. She told me that I could get a loan if I could get someone to co-sign the loan.

    After careful consideration, I decided that my brother would be the perfect sucker co-signer for my loan. He is seven years older, he had a great job, a house, and high income. I called him and asked for him to co-sign my loan, with the promise that since the payments would be deducted directly from my paycheck (which was true), so as long as I was a graduate student getting a stipend I would never miss a payment. After a heavy sigh and what seemed like a 20-minute pause before giving me an answer, he agreed.

    The loan was eventually paid off in full without any missed payments before I completed graduate school. A few years later, I told him over drinks, “See? You had nothing to worry about.” He made me buy the next round.

    Co-sign Her Out of Debt

    A few years after my first co-signing incident, Her and I were living together and had just combined our finances. Of course, I did this with great reluctance as I was also agreeing to help pay of Her’s enormous student loan debt of ~$130,000, of which was half federal student loans and the other half private student loans. The private student loans were the most egregious, with the interest rates at just under 10% with a monthly payment of around $750. Although we used a bunch of methods to decrease our balance and pay off the loans ten years sooner, it was still an enormous burden. Her received in the mail a letter from the private loan company stating that the interest rate could be lowered if she were to get a co-signer. Of course I was hesitant to agree to this, but I figured that it’s our student loan debt now, and that anything we can do to mitigate its financial effects would be good. I agreed to co-sign the loan.

    Me co-signing the loan did decrease the interest rate by a percentage point or so, but didn’t change the way we attacked the loan. Our saving grace came when we transferred $11,000 of the balance to a card at 1.99% for life and when Her’s godmother paid off the rest of the balance of $50,000. We laid those loans to rest, which freed me from my co-signer responsibilities.

    Have you broken any financial “rules?” What were the circumstances for that decision? Let us know in the comments!

    The Cost of Charlie Work

    by  • September 29, 2011 • Tagged: , ,  • Comments

    He's king of the rats, you know.

    Charlie gets a new rat stick

    We’re big fans of It’s Always Sunny in Philadelphia. That show does wonders for turning our brains off after a day of work and being a parent. In the show, Charlie tends to get stuck with the duties and chores that no one else wants, ie, Charlie Work. Since we’ve had a baby, we definitely have a lot more Charlie work to do around the house.

    When it was just me and Her living in our dishwasher- and laundry-free apartment, we dirtied an amount of dishes and clothes proportionate to 2 normal adults. BUT, did you know that a baby dirties 100x the amount of dishes and 1000x the amount of laundry?!?!? What the hell, baby?

    As you can imagine, we spend a lot of time washing dishes and running out to the laundromat – our very own Charlie work. We’ve stayed in our current apartment for now because of our super-low rent ($1,000/month). But would moving to another, more expensive place with a dishwasher and washer/dryer be more cost-effective for us since the median rent for a  3-bedroom apartment in our neighborhood is $1,400/month? Let’s do the math.

    Washing dishes really isn’t that big of a deal as we take advantage of economies of scale, ie, we wait until there’s a large pile of dishes to wash them instead of doing a few here and there (yes, we’re slobs). The costs of doing the dishes by hand are fairly negligible. We don’t pay the water bill, so all we cover is dish detergent and sponges. We go through maybe 1 bottle of dish detergent a month and a 6-pack of sponges every 3 months. Assuming that a bottle of dish detergent is $5, and a pack of sponges is $5, then we spend a total of $80 a year on these items. We’ve been living in our place for 6 years, so we’ve spent a grand total of $400 on washing dishes.

    Laundry is still the chore that we love to hate. We’re still schlepping over to the laundromat, folding, and putting away our clothes ourselves. Other than a few unfortunate events, laundry generally costs us about $15 per laundry event which is about every 2.5 weeks. We’ve been living in our apartment for the past 6 years, so I estimate that we’ve spent around $1,872 on laundry.

    The total amount we’ve spent on Charlie work during the past 6 years is $2,272. If we originally moved to a place that had both a dishwasher and laundry, we’d be paying at least $1,400/month, which would have been $28,880 more than what we’ve currently spent in rent in the last 6 years, which means we’ve “saved” $26,608 in more costly rent. (As always, someone please check my math…)

    Of course the one variable that I didn’t include here was time. Is it currently worth the time to do Charlie work? Currently, it’s not taking away from time from the baby since we do these chores when the baby is sleeping. However, when it starts interfering with baby time, we’ll probably reconsider our current arrangements.

    How To Afford Anything – Personal Finance Lessons From Ken Rockwell

    by  • January 23, 2008 • Tagged: , , ,  • Comments

    If you’re a camera buff, especially a Nikon camera buff, you’ve probably heard of Ken Rockwell. He provides reviews of camera stuff I want.

    His style of writing is similar to personal finance type gurus – you take it or leave it, and you either love him or hate him. He has a strong opinion of things, and while they may not make the most sense, he doesn’t give a damn about what anyone else thinks. He does tend to give the bottom line with his camera reviews, especially for those who can’t stand sharpness tests or MTF charts.

    When I was cruising his website the other day, I saw an article on how to afford anything. It reads like a years worth of personal finance blogger’s posts stuck together; it is probably just as lengthy. Personally, I love it when I find personal finance articles in places I wouldn’t expect to find them.

    Here’s the article in bullet points:

    Don’t:

    • Don’t buy a new car (he drives a used Mercedes)
    • Don’t drove to work (he only had jobs that were within walking/biking distance from his home)
    • Don’t eat out (food, you perverts)
    • Don’t buy a big house
    • Don’t buy on credit or take out loans
    • Don’t rent
    • Don’t worry about what you own (keepin’ up with the Joneses)
    • Don’t be afraid to ask for a deal
    • Don’t buy extended warranties (or any sort of insurance for any loss you could cover out-of pocket)
    • Don’t buy cheap; you’ll end up paying for it twice
    • Don’t have kids (they are the root cause of all pollution and environmental destruction)
    • Don’t become a photographer

    Do:

    • Order from the dollar menu, get water
    • Go dutch all the time (he admits not very popular with the ladies)
    • Live at home
    • Read and understand the fine print (especially with mortgages, namely ARMs)
    • Return what you don’t want or need
    • Know the difference between investments and expenditures (with a Kiyosaki-like view much like the asset vs. liabilities debate of a house)
    • Only buy from stores that give full cash refunds
    • Use coupons
    • Avoid addiction: caffeine (with the obligatory latte factor reference), nicotiene, television
    • Tip big
    • Marry smart (with some questionable misogyny peppered in there…)
    • Go to college and get a real job
    • Go to college, go yachting, and get a job as a captain

    My favorite line? “It takes the guts to be a cheapskate.” Yep, sure does.

    So what has all of this gotten him? How about every Nikon camera and lens from the last 10 or so years. Or a couple of (used) Mercedes. And a lot of smugness.

    If there’s something in his writing, it is passion. He’s willing to focus his finances to get exactly what he wants in life. There’s definitely a few lessons I can learn from him.

    Most Financially Ethically Dubious Act?

    by  • October 6, 2006 • Tagged: ,  • Comments

    Over at Get Rich Slowly there is a great debate over the ethics of frugality – with topics such as “free” wi-fi, or is is wrong to bring food into a movie theater.

    For the record, I have only “borrowed” an unsecured wi-fi connection when my own was down, and I have brought in food to a movie theater, but more often than not I’ll just skip eating for the two hours.

    There are a lot of things that I have done to get money in my life that I’m not of proud of. My dad has a habit of leaving his wallet in another room when he was sleeping. When I was a kid, I would often take a few $20′s from his wallet to…wait for it…buy my friends. Having $40 when you’re 13 was like being like Donald Trump. My friends and I would usually end up spending the whole thing on arcade games. Now, I don’t even remember a lot of those kids’ names. My total lifetime “borrowed” from my dad – probably over $1,000.

    Another not-too-proud thing I did for money was steal from my employee when I was a teenager. I worked at a fast food chain, and a manager and I became close friends. We came up with a pretty good way to “keep” a lot of money that was supposed to go into the cash drawer. Total money scammed: over $3,000. I used that money to buy my first car, insurance, and a pager.

    I’m going to continue to reiterate this: I’m not proud of what I’ve done and I’m quite ashamed of things that I’ve done in my past. Currently, I try to atone for my past grievances by doing as much volunteer work as I possible and donating to charities. Those two acts in themselves will never replace that money that I took, but will shift me towards the positive in terms of moral balance.

    What is the most ethically dubious thing you’ve ever done to either save a buck, or gain more money? Anonymous comments are accepted and even encouraged.

    Create Your Own Wedding Monogram On A Budget

    by  • May 23, 2006 • Tagged: , , ,  • Comments

    It’s easy and inexpensive to brand your wedding with a classy wedding monogram. You can purchase a ready-made design for $50 at Bliss Wedding Market, or you can pocket the cash and design your own. If you’re uninspired, you can check out their selection to get ideas. To make your own is really easy though.

    Step 1 – Get Fonts
    For a designer touch, you’ll want better fonts than your computer came with. Google terms such as “script font” and “wedding font” to find free font download sites. When you find a font you like, download it. Usually you’ll have to extract the font. You’ll end up with a file name that has a .TTF extension. Now you have to install the font. Browse to My Computer/Local Disk/Windows/Fonts. Drag the file into the fonts folder. An installation screen will appear briefly, then your font is ready. You can install as many as you like.

    Step 2 – Get Inspired
    Browse through the monogram collection at Bliss, or look at other wedding sites for inspiration. Pick a few styles to experiment with, keeping in mind the limitations of your software and what shape your wedding initials are (wide? tall? long? short?). You might want to print out copies of your favorite monogram styles for reference.

    Step 3 – Create!
    A good, basic software program to use is Powerpoint. Set up a blank slide and add a text box with your initials in it. Experiment with fonts and sizes until you like how it looks. You can also add basic shapes (rectangles, circles, ovals, lines, etc) in Powerpoint. If you wedding has a theme, try adding a stylized graphic to the monogram (you can download tons of free graphics online too).

    Step 4 – Brand Your Wedding
    Once you have your monogram, incorporate it throughout your wedding to create an “expenisve” designer look. Some places to consider: Invitations and other stationary, save-the-date magnets, menus, place cards, paper napkins, balloons, painted on the aisle runner, added to your dessert plates with a sugar stencil, etc. If you are printing your own items at home, it’s easy to copy and paste your monogram into most other software packages. If you’re having your items professionally printed, you can submit the monogram on a CD.

    I sat down the other day and created a selection of eighteen monograms for our own wedding. It took about 3 hours. Now we just have to choose which one we like best. We might use three: One (with the Chicago skyline at the top) for our save-the-dates, a second one (more formal) for the day of the reception, and a third (with our combined initials) for after the wedding. Doing it all myself was fun and easy, and saved us $150.

    $125 Richer – Thanks Bankdeals!

    by  • May 16, 2006 • Tagged: ,  • Comments

    Though it is a small hassle to open an extra checking account purely for the incentive offered, the Meadows Credit Union deal posted by Bankdeals today was just too good to pass up. I called the bank to confirm that there is no minimum balance required, and there mostly isn’t. The eChecking account comes with a mandatory Member Savings Account, and each has a $5 minimum balance in order to stay open. So the total minimum balance required for the deal is $10 (This is for a 0% interest account. If you want to earn .65% interest, the minimum is $2500.). Even without the addition accrued interest, making $125 off of $10 is like earning 1250% interest! Now that’s a great deal!

    I started the account opening process today during lunch. The online application was quick and straightforward, and after that I had to fax in a signature form. Now I’m waiting for a customer service rep to phone me, which they say will happen within one business day. Not bad! After I speak with her I should receive some account information in the mail, and then I just have to set up a direct deposit and I’m all set. Easy breezy.

    Call For All Relationship And Money Posts

    by  • April 26, 2006 • Tagged: , ,  • Comments

    Hear ye, hear ye, or something.

    We want YOUR entries about how you handle relationships and money. We welcome all topics of personal finances, as long as it deals with how you and your spouse / girlfriend / boyfriend / friend with benefits / life partner / “person you made a pact with when you were 20 that if you weren’t married you’d marry each other” handle money.

    Example posts would be:
    -Joint finances
    -Dividing up the financial duties
    -Who picks the stocks
    -Fighting over money
    -If you and your partner aren’t on the same financial page

    But what are you going to do with all of them? Please don’t hurt them.
    We’ll be nice, we promise. We’re actually doing to compile all of your posts into one ginormous post that will highlight money and relationships. We hope that this can serve as a resource to people who are looking for advice on how to deal with finances in their relationship.

    What’s the deadline?
    Never. If you EVER have a post that talks about finances in your relationship, please submit it, and we’ll include it in said monster post.

    When will you post the list?

    As soon as we generate a good response. I’d say when we reach ten posts or so.

    How to I submit?
    Good question! Please email a link to your entry to us at lovenotdebt@gmail.com with the subject line of “Money and Relationships Post”; alternatively you can go to our contact page and fill out the form, again with the subject line of “Money and Relationships Post.” I’ve closed comments so that you EMAIL all entries to us.

    Please, try and spread the word. We hope to hear from many of you!