Year In Review

There are only a few days left in 2011, and it was quite the year for me.  I did a lot of traveling, did a lot of writing, lots of interaction with the yakezie and even my first blog conference.  I’d like to go back and look at how I started the year and how I finished the year (just like last year) to give everyone hope that debt repayment is possible and one reason I think you should focus on it: freedom.  Unfortunately, I didnt pay off as much debt as I did last year, but I was able to thoroughly enjoy the fruits of my labor from last year.  I had more cash flow, and I participated in quite a few weddings and bachelor parties, all out of state.  I didn’t have to say no to any of my good friends when they asked me to stand with them at their weddings or just asked me to attend because I “couldnt afford it”.  That in and of itself was awesome.

Along with all the travel this year, I also got engaged to an awesome woman and someone that I’m excited to share my life with.  I got a new job  so that I didn’t have to drive 100+ miles every day to and from work, and while the savings in dollars didn’t materialize right away, I do enjoy having a 7 minute commute instead of having a 50 minute one (though it sucks when it’s cold out).  Along with all of those, I did tons of work toward finishing my masters, and it should be officially done by May, 2012 – 3 years after I was supposed to be done, and 5 years after I started in the fall of 2007.  Better late than never?  I kept up with my goals for the year 2011 as best I could, and didn’t really totally fail at anything.  Though my spending got off track for a while, it was because I was taking money that would normally be used for debt repayment and spending it on something that I enjoy (spending time with friends and traveling) – which is more than OK with me.  Even though I would have liked to be totally out of debt before I did this, I didn’t add any new debt, so that’s all that matters.

Debt:

At the beginning of 2011, I had debts from 2 student loans and 1 vehicle loan, totaling $33,854(!!!) broken down as follows:

  • Truck Loan: $17,695
  • Student Loans (2):  $16,158
This was a far cry from all the old demands on my paycheck, when I had 7 different debts that I had to make minimum payments on.  That was a lot of people coming after my check before I could use it how I wanted, and the tax man isn’t even in those 7.  I was able to eliminate 4 of those in 2010, leaving me with 3 in 2011.  My goals for 2011 were to pay off the smaller student loan (~6k) and the truck loan.  I was able to pay off the student loan (despite tons of problems), as well as make significant progress on the truck thanks to a low interest rate on the loan and a hail storm.  After all that progress, here’s where I am now:
  • Truck Loan: $9,466
  • Student Loan (only 1 left): $11,359
The total remaining for my debt is $20,825  and it has gone down by $13,209.  Last year, I was able to pay down 17,964.  This year was a little bit lower than last year, but I’m still happy about the total.  The number is going down and not up, thankfully.  The only reason that my debt didn’t go up at all is because I worked so hard in 2010 to make sure my finances were on the right track.  However had I not done that, I would have either had to skip out on close friends weddings and bachelor parties, or put everything on a credit card.
How did you do this year?  Did you build up reserves, pay off debt, or do neither or both?  What are you looking to do next year?

Year End Goals Review

It’s getting towards the end of the year, and it’s a great time to review the goals that I had for the year and how I fared with them.  I put some of my goals up on the site, and you can find them here.  I’ve also been doing some quarterly updates that you can read if you’re curious (Q1, Q2, Q3) but this is the final one  for this year, and soon will come goals out for 2012.  While I didnt put my goals all on the website, I did put goals for my finances and my health on here.  Goals not included were either mean to be a surprise or were not relevant to the topics on this blog, so I left them off.  So, without further ado, here were my goals and how I fared with them in 2011.

Financial Goals

  1. Pay off my Direct Loan.  The balance for this loan as of 12/31/10 will be right around $4,250.   While this wont help out my cash flow that much, it’s still by far the lowest loan balance  that I have.  I’m hoping that this will be paid off in Q1, and it should be if I can get back to my gazelle intensity that I lost in December.
Success!  I had a pretty ambitious goal of paying this off in the first quarter, but was rudely woken up when tax season came around.  I ended up using money that was supposed to be for debt repayment to pay both state and federal income tax.  After that, it was mostly traveling during the summer that ate up my extra money for loan payments, and once I was finally ready to pay it off, they lost the check.  Eventually (mid november) I was able to pay it in full.
  1. Pay Off Truck.  This goal is going to be a heavy lift, but I think that I can do it this year.  I’ve been debating if I should pay this off first or move on to the next lowest balance.  In the end, the truck is going to win out because of the amount of cash that it’s going to free up.  The balance on this note as of 12/31/10 is $17,979.
Fail!  Although I knew last year that this would probably be a bit too far out of reach, I decided to put it on here anyway so even if I ended up failing, i’d be pretty far ahead of where I was supposed to be.  I didnt make extra payments on the loan, but got a huge insurance check from a hail storm and was able to put that towards the value of the loan.  After borrowing 21,000 in December of 2009, The loan balance is near 9,000 now, which I’m more than fine with.  I originally financed the note for 6 years, but it should be long gone before then.

Health Goals

  1. Establish a routine at the gym.  I seem to be teetering on the brink of a solid schedule of gym attendance, and I’d really like to have it gel into a nice routine this year.  Unfortunately, this goal sits a bit at odds with my goal of paying off my debt (because I spend extra time working more to earn more).  I’ve got a spreadsheet tracking my progress, and I’m aiming for 4 days a week at the gym (if anyone cares, tuesday, thursday, saturday and sunday).  I think I can do this and stay focused on all of my other projects.  I’ll share these results in my monthly reviews so you can keep up as well.
Semi-Success.  I got into a pretty good routine during the first 8 or so months of the year, but kind of fell off after that.  Though I was able to regain a bit in December, I’ll be back in full force with all of the other new years resolution people in January and February, but I’ll still be there when they drop off in march.
  1. Identify an unhealthy eating behavior and stop it.  After thinking about this for a while, I’ve decided that instead of stopping an unhealthy behavior, I’m going to start a healthy one.  I’ve decided that I’m going to eat vegetarian 1 or 2 dinners per week (my breakfasts are sometimes vegetarian, and I can switch my lunch if I want).  This will give me 1 or 2 days of full vegetarian food per week, which should do great things for my health.
Success!  This went really well, quite unexpectedly.  H decided that she wanted to become a vegetarian (though she does eat fish) so that made my meal planning much easier.  When I wanted to do a vegetarian night, I’d just eat whatever she was eating.

2011 Goals

I know my goals are up a bit late this year, but in my own defense, I had them written down on the back of a piece of paper in the last week of December.  It seems like (for the first time) I’ve got too much stuff to publish, and not enough days.  I’d like to keep my Monday, Wednesday, Friday schedule that I’ve been moderately successful at keeping this year.

I think that setting goals is one of the most important things someone can do for themselves.  It can take them from just floating along with the current to swimming with (or against, if need be) and doing something you want to do.   I try to set some goals every year (I got fairly serious about it in 08, and have had a few goals every year since then.  They have changed in number and in purpose, but I try to set them every year.  I keep a few categories and break each category down further if need be.  For instance in 2008, I set a relatively simple goal in my travel category: Go to New York City.  I’d never been and always wanted to go check it out, so I made that a goal.

Last year I had a few goals, and while I didn’t have success on all of them, I did pretty well on most of them.   I hope that I can  complete everything this year, but looking ahead for the next 12 months, I have a feeling that there will be quite a few surprises and changes for 2011!  I’m excited for them, whatever they may be.  Anyway, here are some of the goals that I have for this year (I’m keeping some of them private, mainly because I haven’t figured them out yet).

Financial Goals

  1. Pay off my Direct Loan.  The balance for this loan as of 12/31/10 will be right around $4,250.   While this wont help out my cash flow that much, it’s still by far the lowest loan balance  that I have.  I’m hoping that this will be paid off in Q1, and it should be if I can get back to my gazelle intensity that I lost in December.
  2. Pay Off Truck.  This goal is going to be a heavy lift, but I think that I can do it this year.  I’ve been debating if I should pay this off first or move on to the next lowest balance.  In the end, the truck is going to win out because of the amount of cash that it’s going to free up.  The balance on this note as of 12/31/10 is $17,979.

Health Goals

  1. Establish a routine at the gym.  I seem to be teetering on the brink of a solid schedule of gym attendance, and I’d really like to have it gel into a nice routine this year.  Unfortunately, this goal sits a bit at odds with my goal of paying off my debt (because I spend extra time working more to earn more).  I’ve got a spreadsheet tracking my progress, and I’m aiming for 4 days a week at the gym (if anyone cares, tuesday, thursday, saturday and sunday).  I think I can do this and stay focused on all of my other projects.  I’ll share these results in my monthly reviews so you can keep up as well.
  2. Identify an unhealthy eating behavior and stop it.  After thinking about this for a while, I’ve decided that instead of stopping an unhealthy behavior, I’m going to start a healthy one.  I’ve decided that I’m going to eat vegetarian 1 or 2 dinners per week (my breakfasts are sometimes vegetarian, and I can switch my lunch if I want).  This will give me 1 or 2 days of full vegetarian food per week, which should do great things for my health.

Well, while that’s not everything, that’s everything that I’m going to share here.  I havent thought of environmental goals yet, but when I do, I’ll share them here.  To increase the likelihood that I’ll complete something, I’m going to make a priority goal – one that I want to complete more than I want to do all of the others –  I haven’t decided that yet either, but I’ll let you know when I do.

What are your goals for 2011?  How did you do last year, and where did you fail?  Were you too ambitious, or not ambitious enough?

Year End Goals Review

It’s the end of the year, and it’s normally a good time to review the goals that you set for yourself at different points in the year and see how you progressed.  I’ve got a post that details my financial progress throughout the year and how I fared against the financial goals that I put up on my goals page in June, so this will just be a quick review of the other goals that I had listed on the page (sparse, I know).  If you’d like to read my 9 month review, head here.

Health Goals:

I don’t know if I’d call this an epic failure, but I failed at this.  I was able to join the gym, and after 3 months, It wasn’t looking good.  I got onto this big project at work and ended up not going to the gym for almost a month.  After that, I got back on track though, and have been making it at least 2 times a week, although most weeks it’s more.  It’s not the 4/5 times that I had hoped for, but it will work for now.

Environment Goals:

These seem to have fared slightly better.  My first goal was to walk to do more things around town.  During my 9 month review, I was skeptical of the progress I’d be able to make for this because of the winter snow.  I’m happy to report that there has been hardly any snow (thus far) this year.  I havent been walking as much as I was, but I’ve been riding my bike to meet friends and whatnot, so I’ll consider this one a success.  I’d like to keep this up for next year, as well.

The next goal was my compost heap.  There was very little progress made on this goal at all, and while I can say I now know you can toss almost anything in there, I still dont know how to make it work faster/better.

How did you do on your goals from last year?  Where would you like to improve for next year?

It’s Called “Personal” Finance for a Reason

Personal Finance is one of those things that’s different for just about everyone.  Sure, some parts can be strikingly similar like saving money and spending less than you earn, but for the most part, it’s a different beast for every person or family.  One family may not value things that their friends do, and it will reflect in their spending habits and money management.  I’ve been thinking a lot lately about one thing that I did that flew in the face of all the personal finance advice that I have read and seen, and I’d like to go into depth more about why it has worked out well for me.

The decision to buy a car will confront all of us at some point, and if you’re in your 20s like me, it’s probably the most expensive thing that you will buy until you buy a house (excluding that education that we took out loans for).  Due to this, there is TONS of advice out there for people who are looking to buy a car, related to how much they should spend, what capabilities they need and whatnot.  Most of it is great advice for 95% of the population, and if you follow it, you’ll end up just fine.  The biggest spokesperson for some of this advice is a  titan of personal finance, a person who (some believe) stands below, but quite close to the big man (or woman) upstairs: Dave Ramsey.

Dave has a lot to say about cars, and for good reason.  During the time when Dave was losing all his money, there was 1 thing he felt like he absolutely had to keep, and it wasnt his home.  It was his Jaguar.  To keep up appearances that people had expected of him, he felt he NEEDED to have the jag, even though it was a huge money pit for him.  Dave learned a valuable lesson as the car was (I think) repossessed some time later.  Dave is now completely against the buying of a new car for anyone at any time (unless they can pay cash, I’d assume).  This is because most vehicles typically lose a large percent of their value after you take it home from the dealer (its around 30% I believe).  This, coupled with the american habit of wanting a new car every few years means that you’re borrowing to pay for something that will lose much of it’s value right away and will stay at that lower value until the typical consumer trades it in for a new one, and the process starts over.  Dave calls this a “Stupid Tax” , meaning that you only pay the tax if  you’re stupid.  For 95% of the population, I think Dave is completely right.  If they took this advice, they would probably be much better off buying a car that is a year or 2 old.

My issue with this is that it’s a blanket statement, and many of you who make blanket statements know that they are most likely going to be eaten at some point.  If you say X always leads to Y, you are begging for someone to prove you wrong.  In my case, Dave’s advice wasn’t the most applicable in my situation, and I feel like he left out a few of those things that were present in my situation that are not present in everyone’s situation, and I’ll list them below with a bit of explanation.

  1. Dave Says that you should buy a used car because you’re going to trade it in a few years down the road.  What I’m assuming he means by this is that you’re not going to ” drive it until the wheels fall off ” and the car absolutely wont go another mile.  Who could blame you, anyway?  You could end up driving around a 25 year old car.  I was taught that you bought a new car if you could afford one, and you drove it for 15 years or more. My parents have done this for as long as I can remember, and I picked it up from them.  If you buy and hold a new car, a new car isnt a bad purchase, it’s just a purchase like any other.  You’ll lose a lot of value in the beginning (but it’s only paper value), but if you plan on rolling in the car until you’ve got to take it to the scrap pile yourself, who cares if it loses some value 30 minutes after you bought it?
  2. It’s also common knowledge that your car will depreciate after you drive it off the lot, and you’ll be upside down (owe more than  you can sell the car for) for the next year or so.  This is true for most cars but not for trucks.  Trucks are (no-no-)notorious for holding their value years down the road.  When I was test driving vehicles, I test drove a truck that was 3 model years old (it was a 2007) that was fairly nice with some extras, but nothing terribly fancy.  They were trying to sell it for about 3500 less than what they wanted for that same truck that was brand new.  Curious to see how my truck was holding it’s value, I checked it on kbb.com recently.  I don’t recall my exact sales price (but it was less than $25,000) but the value of my truck currently is $22,000 and the total cost of my loan was somewhere in the mid to high 23’s.  As it sits right now, If I sold the truck, I could make approximately 3500 on it, because I’ve been paying a small bit extra each month, and because the value didn’t tank when I drove it home.
  3. My future.  I went to the readers of Debt Free Adventure and got advice similar to what I’ve listed above.  It was all great advice, it just did not take into account one of the most important things about money: My (or your) personal future goals.  In the future, I would like to do a few things, most of which involve needing a truck or at the very least, something with high ground clearance and 4 wheel drive.  Where I live, 4 wheel drive is also almost a requirement due to adverse weather.  Along with possibly using this truck for a business that I’d like to create, I’d also like to purchase some land and work it.  I’m thinking of raising some sort of animals or growing alfalfa, but I have not really decided.  This is something I really want with my life and I know it’s in the future, so I figured why not get a truck, drive it around nice and new for a while, then when I purchased land and started a business, turn it into a work truck.  Whenever I see one of those really old beat up trucks on the road, I tell myself that soon my truck will be beat up and super awesome like the one I’m looking at.

The way that I see it, I made a pretty good decision and was able to balance my needs and wants and fly in the face of some sound financial principles.  Even though this is still debt and I still don’t like it, It sure beats waking up in the middle of the night wondering if my car will start so that I can get to work later that morning.

So readers, do you think I’m in an alright spot considering I broke a cardnial rule of Personal Finance?

If you were in a similar situation where you were going against most of the PF literature that you have read, would you be able to go through with it?  Admittedly, mine was easier because ‘normal’ people buy new cars, and typically people who buy used ones get looked at like they’ve got 3 heads.  But the question remains, Could you still go it alone?