Day Late, Dollar Short

Yep, I realize it's been a little over a week since my last post. I've gotten a little tied up in school and work and managed to go a little crazy with my spending. Right now, I'm down to $34.01 and I still have to last until next friday!

Hopefully everything will be back in order soon...

Baby Goes to College

"A father is someone who carries pictures where his money used to be." ~ Anon

Over the weekend, I stopped in to visit my sister and my nephew. While I was there, we started talking about my income and she jokingly asking if I was going to pay for my nephew to go to college when he was old enough.

This was something I had actually considered doing not long ago. When I was setting up my savings plans, I thought about starting one for him. Truthfully, I would have done it then, but I'm barely making ends meet right now after a mishap at the bank. I may one day take a portion from my regular savings and move it into a 529, which is something I would have to research further, but I did however find some information relevant for my near future...

From Money 101 Lessons
Top Things to Know - Saving for College:

9. Lenders can be flexible when it's time to repay.

There are still ways to cut costs after you graduate and begin repaying your student loans. For instance, if you make 48 consecutive on-time payments, most private lenders will knock two percentage points off your interest rate.

10. Taxpayers with student loans get a tax break.

You may deduct the interest you pay up to $2,500 a year if your modified adjusted gross income is less than $65,000 if you're single or less than $130,000 if you're married filing jointly. The deduction can be taken for the life of the loan.

I'm excited to learn that repaying student loans isnt all bad. Having just consolidated my student loans last week, I was pretty upset about my final bill - 43,000$

Marrying for Money?

Just a quick post today about an article I found here about women and their money mistakes. It talks about a book by Liz Perle, "Money, a Memoir: Women, Emotions, and Cash”. She's pretty straight forward about what these problems stem from...

Perle's financial awakening inspired her to interview hundreds of other women, online and off, about their own convoluted relationships with money. Much of what she found, many of us already know:

• A lot of women suffer from the secret fantasy that Someone Else will solve their financial problems.
  
  
• Many women are given mixed messages about how important money is supposed to be in their lives.
  
  
• Growing up, most girls aren't given a straightforward financial education -- and many get negative feedback about how competent they are with money.

What I found most eye-opening was this: Because of a host of cultural and historical factors, women tend to harness even basic financial decisions to all kinds of emotional baggage. (Until the 20th century, most women couldn't own property -- and in some cases, they were property, Perle points out.)

This isn't just about shopping, she asserts. Just about every financial choice in a woman's life can be and often is freighted with values, judgments, desires and fantasies that, at bottom, have nothing to do with money.

Sometimes a cigar is just a cigar. But a pair of shoes is often about a storm of other issues brewing beneath the surface:

• Self-esteem ("If I look good, I'll feel good")
  
• Envy ("So-and-so has such nice shoes")
  
• Deprivation ("I never get to have what I want")
  
• Being good ("I've worked hard/had a crummy week/hate my boss and I deserve this treat")
  

Definitely hit home for me!

An "F" on Personal Finance

Quote from MSNBC article about Teens financial knowledge...

" The average score for the survey was 52.4 percent -- a failing grade in most U.S. schools. Surveys in 2004, 2002 and 2000 also yielded scores in the 50-percent range.

"What we are looking at are students who by any educational standards are flunking the test of their financial lives," said Lewis Mandell, a professor of finance at the State University of New York in Buffalo, who conducted the study for the Jump$tart Coalition for Personal Financial Literacy. "

Read the entire article

So, I managed to download the quiz that the seniors took, which I probably did worse than the average. Seriously, where was I supposed to learn this from? School, TV, Parents?

For example:

10. If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?

13.5% a) Sales tax may be charged on the interest that you earn.
13.0% b) You cannot earn interest until you pass your 18th birthday.
50.9% c) Earnings from savings account interest may not be taxed.
*22.7% d) Income tax may be charged on the interest if your income is high enough.

* indicates correct answer

I definitely did not know that. As you can see, 75% of seniors didn't either. In general, my age group (18-24) doesn't know s@#%^ about personal finance.

One of the exact reasons I started blogging...

Learning New Things

Wow, I don't know where to start. I was reading another PF blog I like this morning and her post scared the poo out of me. She linked to this article which talks about how paying old debt can hurt your score...

wtf?

I recently joined a debt management program (DMP). Actually I started in January, so this is my fourth month making payments. To be perfectly honest, I didn't really do much research before joining. Originally I had planned to sign up with Consumer Credit Counseling Services which was recommended to me by a couple of people and seemed to be pretty reputable ( by the way, their site has some nice resources), but after talking with a counselor and discussing the process I wasn't confident. I decided to just take it like a man and sign up and I had every intention of doing so! I received the forms in the mail and began gathering all of my statements and pay stubs to send back. The envelope was all ready to go, for about two months... I just needed a stamp. Yeah, I'm one of those people who handles all of their business online. I can't even remember the last time I stepped foot in a post office. Seriously, if I had to mail in payments for anything, all of of my utilities would be shut off. Anyway, the envelope sat on my desk, then moved to my bag (which I thought would remind me to buy a stamp), and eventually back to my desk.

So, about 3 or 4 months passed (I know) and my mom and I were talking about debt one day. She told me about some DMP she saw on MSNBC. I wanted to check out for myself, so I went to their site. Naturally, my first thought was "wow, their site is much more aesthetically pleasing", which is a big deal to me...

Can I just mention now that a big reason I didn't like CCCS was because I would required to mail a money order every month. Not going to happen.

I ended up joining the program right away. It had a lot of good reviews, nice web design, and I could take care of everything online! A counselor explained the monthly payments and how the cash would be distributed to my creditors. She also explained that some creditors would lower the interest rates for the DMP and to keep track of my statements...blah blah blah. I should probably confess that I don't even look at my statements. I rarely even open the envelopes. So I asked if joining the program would improve my credit, which she said it would help. I know that each item stays on your credit for 7 years, and that there is no company that can "fix" or "clean" your credit report, but I was just hoping for some improvement.

Now to my point...

Have I got it all wrong? Was beginning a DMP the wrong decision? I was under the impression that paying off old debts was good. I believed over time, I could pay everything off and gradually see some positive change in my score. Last I checked, (before DMP) it was a 560.
VERY low, but it used it be lower - believe it or not. I'm not one of the people who "live or die by their credit score", but I would really like to buy a home and maybe a car in the next 7 years. Am I totally screwed?

Not saying I'm quite there yet...

The Saving Mindset - as quoted from another PF blog I read:

Here are a few tips on how to think and act frugally that I've found to be useful:

- Create 5-, 10-, 15- and 20-year plans. Having short and long term plans will help you be disciplined with your financial goals. Keep a small business card-sized card in your wallet that reminds you of these goals whenever you open your wallet to buy that expensive bottle of perfume everyone is buying.

- Your fellow twenty-something year old friends are not You. Don't buy all the coach bags, flat screen TVs, and Juicy Couture clothes that they buy. I hope this doesn't offend any of my friends who happen upon this blog.

- Anything that costs over $50 should go through a need or a want analysis.

- Don't let your money slip away on small items, such as spa manicure/pedicures. Instead, let your money build up for big things that will make a big impact on your life, such as an emergency fund or down payment for a home.

- Gifts for others don't need to be elaborate. Unless your friends and family really don't love you but just love your presents, which I doubt is the case.

Uh, wow... I really need to work on these, especially the part about letting money slip away on small items. I'm absolutely horrible with that.

Little Budgeting Calculator

Something that may be helpful I found through my DMP...

One day you'll look back and laugh...

Short Term Goals:

* Contribute 3% to my 401k to receive 3% matching
* Save $ 1,000 for a vacation fund by September, 2006
* Save $ 1,000 for deposit on a new apartment by September, 2006

Intermediate Goals:

* Pay off $ 5,000 or so left of my debt
* Build up my 401k/Roth IRA
* Save $ 7,500 for a house downpayment by October, 2007
* Save $ 2,500 for a car downpayment by April, 2007

Long Term Goals:

* Reach $1,000,000.00 by age 45

Introductions

My name is Jessica, I live in Pittsburgh, and I'm 23 years old. I'm a full time college student, work full time, and perform various sexual acts for creditors in my spare time.

I created this blog for three reasons:

I need to completely erase my debt.
I need to regain control of my personal finances.
I need to learn budget, save, and invest.

This is mainly a way for me to track and share my progress. Maybe I'm the only 23 year old who doesn't know anything about savings/investments, but I'm betting not. I've found alot of great blogs on personal finance so hopefully I can share/relay what've I've learned with some of the other "Generation Debt"-ers.

Current financial stats coming soon...