"A dilemma"….follow up

About two weeks ago I posted about a dilemma I was having. For those unfamiliar, I was unsure of the amount of my disposable income I wanted to allocate to my “future house fund” and how much I wanted to throw at my student loan. That article has been my most read post and by far the most responded to. After mulling it over, running numbers, and deciding what I wanted my goals to be, I have reached a conclusion. I am committing to throw $1,000 each month towards that bad boy. That was the overwhelming recommendation from each reader that responded! I think in my head I was justifying the necessity to hoard my cash and put it all in my savings, when this clearly opposes mathematical reasoning.

Although I still believe personal finance needs to remain personal, I agree the numbers need to be strongly considered. I became focused on the desire to purchase a house (taking on more debt) when I should have been concerting my efforts towards breaking up with Sallie Mae.

This decision couldn’t have come at a better time! With a little over $12K in the bank, my Emergency Fund is fully funded (6 months pay) and allows me the freedom to throw as little or as much money as I’d like at my future house fund, or even better, towards my school loan.

So on this day, April 3rd 2009, I commit to putting a minimum of $1,000 to my school loans each month. Thank you fellow bloggers for whispering wisdom in my ear and opening my eyes… hey its like that Ace of Base Song… “I saw the sign, and it opened up my eyes, I saw the sign!Booya for Ace of Base, Booya for sweet advice from bloggers, and double Booya for paying down debt!

I am punching Sallie Mae in the face!

I LOVE having a net worth of Negative $2,000!!!!!!!

No Im not crazy! I’m super excited to have a net worth of -$2,000 because on 01/08 my net worth was -$28,000. Never would I thought owing money would feel so good! Essentially my net worth is pretty easy to calculate because I don’t own very many things. I have a savings/checking account and a couple retirement accounts . I chose not to include things like personal belongings (laptop, camera, etc) or my car (which would add probably $5K to my worth) because I figure those are things I will always need and wouldn’t really want to go with out. My negative net worth comes from my evil Aunt Sallie Mae  and her 25,000 friends (It used to be 28K). I have been making double payments on my student loans every month (minumum payment $178) and trimmed $3k worth of fat off her last year.

So read it and weep fellow bloggers. Below is my net worth graph. The green bar is the cash I have in savings, checking, and my two retirement accounts. The blue bar is the amount of debt I owe (again all school loans). The red dot is the tracking of my overall net worth (you can see on this graph I was worth negative $22K this time last year). The goal is to have that red dot cross the threshold and enter into the green zone in ONE MONTH baby! Can’t wait to actually have a POSITIVE networth!!!!!

It feels good to be broke,

I love learning about finances….and I love my Credit Card!


So I got a Credit Card that awards one airline mile for every dollar I spend. I know most people recommend cutting all credit cards up to avoid high interest on any consumer debt, but I am quite a fan of my card. I have never needed to use the “credit” aspect of my credit card. I treat it like a debit card and pay the full balance every month. If I don’t have the money, I don’t buy it. There are two BIG advantages to using my credit card for EVERY purchase I make.

The first is that I get one airline mile for every one dollar I spend. I put everything from a $1 pack of gum to my $1,000 laptop on my credit card. Just by using my credit (instead of debit) card for ALL my purchases I basically rack up enough points to earn a free flight every year. I don’t know about you, but I’ll take a free ticket any day!

The second advantage to using my credit card is basically free money for one month. This allows me to make purchases before my paycheck gets auto-deposited in to my account. For example, I bought my laptop for $1,000 dollars on the 10th of Jan. At that time I only had $900 saved for my new laptop, but since I charged it to my credit card I was able to walk out the door with it before I had the full $1K saved. I got my paycheck two weeks later and took my “$100 a month laptop fund” added that to the $900 I had already saved and paid off my credit card balance in full. The laptop didn’t cost me any more then it would have if I used my debit card, but I was able to get it two weeks earlier.

I’m fully aware of the dangers of owning a credit card. It takes discipline, but as long as you don’t spend money you don’t have, I’m convinced that credit cards  are an asset to my financial success. I have plenty more to say about credit cards and I would love to hear what you all think about them. Keep looking for more of my financial habits and advice.

What do you think?