October 2012 Weddings
minionlover
mod
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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QOTD 1/2
One of my New Year's resolutions for this year is to clean up our finances and work on saving more money and I saw that a few other ladies were planning the same thing. So I am curious to know, what is everyone's best piece of financial advice? For those of you that are starting to be more financially responsible, what is your plan?
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Re: QOTD 1/2
We are on the same page. H has a budget set up in excel that has all of our expenses and it goes all the way to the end of the year. That helps us stay on track and if we want to purchase something that isn't in the budget, we can plug in the number and see how it affects us in the future. He also set up another spreed sheet with all of our debt showing when each payment is due and when each item will be paid off.
We also set a limit on how much our frivolous spending is. Things like going out to eat, to the movies, shopping, etc. We cut back on eating out a lot and it has saved us a few hundred per month easy.
Once we pay off some of the larger credit card balances from our house remodel, we will set up individual accounts for the two of us so that we can have our own spending money. We will also start setting aside more towards savings. We will have an emergency savings and a regular savings. Emergency savings will be 3 months worth of expenses for use if we loose our jobs or get very sick and can't bring in the money to cover our month to month stuff. The regular savings is for retirement, down payment on our next home, or any other big purchases we may need to make later on down the road. Emergency savings gets set up first.
I'm a freak and I love budgeting. Check out mint.com. Add your accounts in there and start categorizing your spending - it's eye openning. We have set budgets for everything, spending money, eating out, groceries, loans etc. I agree with PP, eating out was a HUGE expense we've been really working on. Mint has a blog and it has some really helpful advice - like only tackling 2 areas at a time. You can also attach your retirement etc and it gives calculators about how you're doing. And you can set goals for say a car. They're really upgraded that section and you can put in the car you want and it estimates payments. Really cool.
I also have a spreadsheet and I track every cent on there.
ETA - our plan, stay in budget as much as possible. We are using taxes to pay for 4 loans / CC and put rest in e-fund. Any extra money earn in the month will go towards my jeep payment, then student loan, then his car. NO NEW DEBTS!
Financially, we want to pay off as much of H's student loans as possible. He's paid off a lot of his loans in the past two years. He has one variable rate loan with only a little left on it, it will probably be paid off by the late summer/early fall.
We are hoping to buy a house around June or July. We actually found a decent house that needs work (that we are willing to do) online this weekend. We are going to do a drive by this week and if it seems worth it, go look next week.
Our financial goals for the year are to hopefully buy a house and still keep a decent savings for emergencies.
In order to help, someone just recommended the Suze Orman book "The Money Class." We started reading yesterday. It's good for young couples/professionals who are looking to extend savings and retirement plan. The friend of a friend who recommended the book said that by following Suze Orman's tips, he paid off $17,000 debt in under a year.
Cancelling cards can hurt your credit especially if you've had it for a long time (shows credit history). Shred the card, but don't cancel it since you are looking to buy a house in the future.
I tried looking up how many points it would hurt if you cancelled a card, and there's nothing really out there. I wanted to "clean up" because I have so many cards from dumb decisions in college. I didn't run them up or anything, but I'd do things like free pizza if you sign up haha. I figure not using them is the same as not putting money in their pockets. I guess it depends on when you want to get a house. I know I had to sign something when we were in the mgt process about 2 store cards I openned up recently and how I wasn't going to put more $ on them (their balance was $0 at the time too).
ETA - does it have an annual fee?
It doesn't have an annual fee. It's going to be at least another year before we're ready for a house - we just don't have the kind of down payment we'd like, and given that our first priority is paying down debt, it's going to take longer to get our savings up. So 1-2 years before we'd be ready to buy.
Relatedly, I really wish there was more concrete information out there about how certain things affect your score and how much. You hear this or that about it, but it's mostly just hearsay. Call me paranoid, but it's like they WANT people to be ignorant of how to manage their credit. :P
We plan on building up our savings for 2 months while paying a little more than the minimum on the CCs. After that we are going to work on paying one card off at a time. We are also going to split our tax money between CC's and savings. I was thinking about cancelling one of my cards. Its a Zales card from when we bought our wedding bands. It's all paid off so I am thinking its time to cancel it.
We are planning on cutting out eating out because we spend so much money on that. I have been horrible about cooking at home so I have to get back into a routine.
I'm signed up with a credit protection service that has helped me a lot when it comes to seeing how things can change my credit score. It has a simulator on it that lets you pick different scenarios and shows you how that might changed your score, like buying a car, paying off x% of debt, opening a new line of credit, etc. It's been pretty accurate for the last couple of years that I've had it. It's like $15 a month, but they usually have a one month free trial. You could look into that if you get curious enough. The one I use is Privacy Guard.
I've also always read and heard that closing an existing credit account can hurt your score. The way it works, from what I've read, is your score is based on your available credit. So, it's always best to have your credit cards with a balance no more than 30 or 35% (I can't remember the exact percentage, but it's around there). This shows that you don't need your credit cards and that you are financially responsible.
If you aren't paying an annual or monthly fee on that card, then I would just keep it. It's not going to hurt you to put it in a drawer and let it sit there. It will help you in the long run by showing a larger amount of available credit.