The Distant Shore

Now I know the agonized longing of ancient sailors, staring over the water at the ever-distant beam of light on the shore, a promise of safe harbor and rest.

The lighthouse for me is the elimination of my financial burdens, the heavy anchor that my limited capacity for rational thought insisted I could bear without fear. Since I signed those loan papers I've been in over my head, so close to drowning I can almost feel the water closing while I sleep...but Friday things began to look brighter.

For months I've anticipated refinancing my car loan. Every time I signed my name to an extra loan payment, I thought about what I would say when the appointment finally came. What the results would be. Where I would turn if the credit union refused to lower my rate. Finally, I couldn't wait any longer. Friday came and I decided to try my luck. Breezing into the local OnPoint branch, they immediately matched me up with a hapless loan officer, who smiled, shook my hand, and had no idea what he was in for.

I unloaded my griefs with OnPoint--the initial treatment I'd received, the credit insurance, to the payments that had wound up in my savings account instead of against my loan. I outlined my salary increase, the apartment I'd rented, the credit card I had consistently paid off for more than a year. I looked him in the eye and said, "I want a new rate...5.oo% or less. After all, I'd hate to go somewhere else."

He handled me with aplomb that I couldn't have mustered in his place. He apologized for the actions of the original loan officer and promptly offered me a rate of 4.49%. He calmly told me my credit history was good, but short, and it wouldn't hurt to open two more major credit cards if I was planning on a major purchase in the future. He asked if I was happy with my current bank (WaMu, now Chase) and if I would consider switching to OnPoint. A week later, I signed the new papers and sent in my first new extra payment, floored to see the interest they took amounted to only $7.

I'll have my first loan paid off ahead of schedule, and the second loan about four months later. I will be debt-free by the end of 2010, and my faith in my credit union is looking like it was not misplaced.

The shore looks much closer now.

There Went That Money....

Oh, yeah, I blew it bigtime...but boy am I happy about it. Now my car is just a little closer to my end vision for it and my wallet is $500 lighter. What is this, you ask? A set of Wilwood engineered MINI big brakes, now sitting pretty on my car. I unfortunately have but one major achilles heel, and that is not Manolo Blahniks but pricy automotive performance add-ons. My first car was an MGB with a big cam and a lightened flywheel, and I haven't looked back since.

How did this come about? A car my shop took in to sell was in need of new brakes, and startlingly, it had an expensive set of Wilwood four-pistons fitted. After talking over the most cost-effective way to replace the brakes before offering it, we decided we would return the car to stock (a new set of Wilwood rotors, pads and hardware was going to run $600, twice the cost of the stock brakes) and install our regular fare of ceramic pads and Brembo rotors.

But what would become of the Wilwoods? A set of big brakes was always on my list of modifications for my car (along several other mods that I deemed would wait until after I owned it outright), but I remained silent, assuming they would be dismanteled and sold separately. Imagine my delight when it was suggested I trade my MINI's stock calipers for the orphaned Wilwood equipment. I was receiving $1800 worth of front and rear performance brakes for the cost of parts, a deal I wasn't likely to get again. So I bit the bullet, a decision I don't regret in the slightest.

Two new sets of rotors and pads later and an afternoon spent scrounging through Parkrose Hardware for new bolts yielded the results in the picture above.

Those hardcore PFers who run across this post will shake their heads and sneer with disdain. I've betrayed the purpose of saving money by blowing my emergency fund on toys. Luckily, I only dipped into the money I had set aside for tires, so my $1000 emergency fund remains untouched. My tire fund will only take 3 months to replenish (and my current tires will easily last me that long). I'll lose no ground paying down my obligations in the process.

I look at it as saving money in the long term: I have less than $700 into a set of $1800 brakes, which makes any losses when I sell the car that much more bearable. Plus, the thrill I feel just on my morning commute to work is well worth the expense.

New Toy: www.mint.com

My sister blog Bargaingeneering recently highlighted a few of the on and offline tools available to help PFers manage their finances. Among those lauded was Mint.com, and having not touched a personal finance app since Microsoft Money 2003 was brand new (and entirely forgotten how to so much as make a pie chart), I decided to give Mint a try. This post is an overview of Mint.com for anyone who may be interested.

Mint relies heavily on online banking, so make sure you're set up with your banks, brokerage accounts and loan services before you sign up. Mint will help you locate the particular banking products you use--type in the name, and it will do a search for all similar entries. After Mint has successfully logged on to your accounts, the start page will look like this:

Clockwise from top: You can program alerts to e-mail you when transactions clear, you go over budget, or your account balances fall below a specified amount. Mint.com uses past spending to estimate an average monthly budget, and applies that a bar graph on the Overview tab. You can adjust the "budget" amounts by clicking on the blue hyperlink to the right of each bar (example: if you've historically spent $200 on gas and want to cut your budget to $150, enter in the new amount and Mint will track it for you). Your Ways to Save is thinly veiled advertising, but also a useful tool if you're thinking about changing account providers. Listed in the left column are your savings, credit, loan, and investment accounts and current balances. Clicking on a button will take you to the Transactions tab for that particular account. The Overview tab concludes with a handy tally of your financial assets and liabilities and your current net worth; a monthly cashflow illustration; and your monthly net income.

The Transactions tab (above) is a portal that allows you to see debits and credits that have cleared your accounts and how Mint has categorized them (this is directly tied to the budgeting feature on the Overview tab). Mint.com has a handy naming feature to categorize transactions that comes pre-loaded with budget tags that you can choose from. Tweaking with this tab forced me to acknowledge and label my expenditures, and trust me, it's not fun seeing that I've all ready blown $18 this month on my latte' habit.

The Trends tab (above) is where things get really nifty. Once you've identified the categories in the Transactions tab to your satisfaction, Mint will create a pie chart of your expenses. Clicking on a wedge will yield a further breakdown of a given category, e.g., the Auto & Transport wedge breaks down into Insurance, Gasoline, Auto Payments and Maintenance. No graphing or mathematical acrobatics necessary! Below the pie chart is another bar graph that lists your average monthly expenses in the category of your choice and allows you to compare them to other people in your area (below).

My overall opinion? Mint is a smooth, high-caliber and intuitive personal finance interface that is more than worth a look if you're considering upgrading, or even taking the plunge into money tracking and budgeting software. The fact that it's entirely free (unlike Money and Quicken) is a big plus, and more than worth the blatant but non-invasive advertising. I personally enjoy it and will continue developing my account.

(Disclaimer: I am receiving no incentives or compensation from Mint.com for featuring its product. This content is not officially endorsed by Mint.com or its affiliates.)

Who Says Friday the 13th is Unlucky?

February thundered in with a vengeance this year, as the previous post attests. Kaiser Permanente Northwest Region gleefully announced I would be celebrating my exclusion from my parents' health insurance policy on my 23rd birthday, leaving me a little more than a month to locate new insurance coverage (gulp!). Truthfully, it's about time I stopped freeloading. So I tried my hand at online research and plunged head-first into the murky world of deductibles, co-pay and HSA legalese. The one thing I've taken away from the research is that health insurance is the lesser of two evils--you still pay through the nose, but the bill is $6,000 instead of $50,000. In my terms, that's a choice between a year of paying off your emergency appendectomy or complete and utter financial ruin. I've decided to sign on with Lifewise Health Plan of Oregon. Just like my Kaiser coverage, but with chirporactic benefits, and about $100 less per month.

I tried Direct Deposit with the IRS for my 2008 taxes, and received my refund on the 13th, fully 11 days early. Thanks to Uncle Sam's timely return, my Emergency Fund has topped out at $1000, and my Tire Fund is stocked with the money for a new set of tires ($400) and DEQ/registration fees ($105)--so I can breathe easy this year. I'll be able to accelerate my loan payments ahead of schedule, which drops a month off my loan payoff date. This is the first time in my life I've had more than $400 in a savings account.

You may be asking why I opted for a refund at all, since most finance gurus preach maximizing your paycheck to pay off debt. I had my taxes structured specifically so that I would receive a big refund because I simply don't trust myself with the money I earn. In fact, I'm still not quite sure where my 2007 refund went. I'll admit that up until late 2008, that extra money in my "maximized" paycheck would have disappeared into the Ether of Good Intentions. Yes, I'm a tightwad now, but my tightwad habits are still fledgling, so I have good incentive to let the Fed hold on to my money while I work out the kinks.

In this case, it worked out; I was able to finish funding both my savings accounts with one check and can now divert my subsequent paychecks to my car loan, a milestone I've been aiming at for half a year. Woohoo!

On a budgeting side note: while browsing through the gun show at the Expo Center today I discovered a beautiful black leather purse. I've been on the hunt for a purse to replace the one I'm currently carrying, so I couldn't resist looking at this one. Not surprisingly it had all the features I wanted and a price tag of just $46, and I wanted it right then and there. Though I knew that all the money in my checking account was spoken for, the "must haves" hit so decisively that I contemplated stretching into my next paycheck, stealing from my gasoline allowance, and even (gasp!) putting it on my credit card (to heck with the financial consequences) in order to own it.

It was a hard debate with myself, but in the end I decided I could not afford it. So I walked away empty-handed, a very hard thing to do with my plastic carte blanche burning a hole in my wallet.

Have you ever been tempted to buy something you know you can't afford, but want desperately anyways? How did you stop yourself? And more importantly, is there a way to break the habit for good?