Easy Change

This is a post in a series on divorce. The list of divorce topics  is here.  Understanding this process can be incredibly difficult, I felt compelle to share some of what I have gone through and learned personally. If you'd like to read the first post, click the link above. Once the assets have been divided, it is then time to start living a separate life. For me this meant dealing with a series of issues around money, time, and space. This post talks a little bit about the money aspect of the separation/initial divorce period...this IS a finance-focused blog after all! In the next post, Reclaiming Life, Restarting Goals, I will discuss more about the other aspects, time and space, but for this post, I am focused solely on the money aspect and the impact that living separately has on someone in this situation. Personally, I was fortunate while I divorced to have a good job and to be able to afford my own apartment and living expenses. While this may seem good at first, th...

This is part one of a multi part series of posts related to the process of divorce. In this post, I describe the process of moving out as part of separation. This article is written as a retrospective though, since it was written during the time of the events, but only recently did I decide that I would publish it. I moved out a year ago in late March/early April. I actually wrote about this process back then, but decided to hold off on posting about it. In fact, I have not updated this blog since that point. Now, I think the time has come to write about the experience from a financial perspective and with that, here's my first post: After a very long relationship of nearly 15 years, it is now over. Recognizing it is over is often the most difficult thing to do. And while the emotional stuff was a whole separate set of issues that I won't get into here, the real issues with the financial stuff is where there is definitely some interest and so far, I think that things are ...

It's nearly April 2014--not that you'd know it from the weather that we're having. It is supposed to snow in the next day or so. But when I really consider the amount of work we're doing here, it makes sense to get the taxes done earlier than this.....but I say that every year. For some reason, despite a refund, I still find myself delaying the tax filing process; I don't know if that will ever change. (And yes, I am one of those people who is giving uncle sam a 'free loan'; I justify this only to say that if I didn't do that, I'd probably never file and then be in jail :) ) When it comes to filing this year, things are getting tricky since I have recently started the process of becoming single. For tax purposes, it wasn't enough time to matter in terms of the dependents etc, but it certainly was enough time for me to realize that I don't want to file a joint return if I am not going to be with the person next year. Separately, determi...

I have decided to pay my mortgage off early. There. I said it. I wrote it down. After having several at-home discussions, I have finally become comfortable with the idea. Thankfully over the past few years at my job I have been very fortunate and this has translated into a significant amount of disposable income that can be funneled into prepayments on the mortgage. Explaining why this is a good idea has been done in many other places like FiveCentNickel and I know that there are not really any huge advantages to be gained from making the right call for me in either direction. Here's how I think about it. At my current mortgage rate of 5%, and assuming a steady return in the Stock Market of 7%, I am losing about 2% yearly by prepaying my mortgage. That is the simple math and for each 100K of mortgage, this is 2000 dollars. It is certainly not a small sum, but it is a finite sum. Here's the problem with the "keep the mortgage" argument in my view. Of course you c...

So, around September of 2012, I was out to a nice dinner on the water at a restaurant with my mom and stepfather. During this time, over the course of dessert, a delicious cheesecake and cappuccino, we discussed the idea of renovating our aging kitchen. Previously, my mother had remodeled her kitchen as had my in-laws, so I was fairly familiar with the process, or so I thought. Immediately, my mother seized on the idea and encouraged me. I felt fairly confident that things were going well and would continue in such manner so that we would be able to afford a modest remodel and so I suggested that we go forward. As I continued to discuss it, we began to make tentative plans to secure a contractor to discuss the overall vision as well as plans to our local home depot store to look at various materials and see if we would be interested in going forward on the project (depending on the cost of the materials needed). This remodel included all aspects of a remodel other than change of...

Currently I live in a suburban town in southeastern Massachusetts with a condo association with a ridiculously low condo fee. There. I said it. I am sure that like any organization, there are people in my association who are happy and some who are unhappy. A year ago, I was elected to the board of trustees of my condo association. That was certainly the case then; people were unhappy at the way the property looked and how much service they were getting for the money spent. However, now it is very clear to me that the amount of money that is being spent is not enough to cover the basics on the property. What is the result? People end up spending large amounts of their time and frankly, wasting large sums of money on the property. Condo fees in townhouse style condos typically go toward building maintenance, plowing, and landscaping. In our complex there is no pool, no clubhouse, no exercise room or other shared space. The net result is that the fees can remain relatively low. Howev...

Thankfully, I have been debt free except for mortgage for over a year, and without a personal car payment on my own car for more than two years. My car is approaching 200,000 miles and knowing deciding what kind of car to buy has consumed a lot of time for me and I find myself wondering what the best kind of car is to get when the time comes. Budgeting the money for a new car is a major motivation for this. And in order to know how much to budget, I have to consider what kind of car I will purchase which is the subject of this post. In terms of changes since I last bought a car, I now have a pug. As a result, there is more fur than you can shake a stick at and I am considering a car with a hatchback/cargo area for the dog where he could be safe and comfortable as opposed to being stuck with having a bulky crate in the back seat. Other than that, I know that I want to maintain with either a small or mid-size car, but nothing larger (although truth-be-told, I'd love to have one)...

It has been a long time coming and I would be lying if I said that I hadn't really been looking forward to it. After about two years of payments, finally enough money being in the emergency fund, there was enough to pay off the car. And that, about 26 months early! The best part was the phone call from Toyota. The service rep asked if there was any interest in buying a new car. Of course, they would offer a discount of 1% on any financing needed. I just think that there is a tremendous amount of pressure both from the company and from the society in general to stay in debt. I wasn't that surprised, but everyone loves to have someone in some sort of hock to them. And this, is the real crux of a personal issue I am struggling with. Dave Ramsey is so strongly against debt, it makes me wonder if there are some cases where it makes sense. Regardless of your feelings on this issue, it undoubtedly is better to not have any debt. And this month is the first month that there will be no ...

This past week was filled with excitement, albeit the uncomfortable variety when I had to pay my bills quickly via my bank's electronic payment system and made a mistake which will be annoying at least, and costly at worst. First, the week was a busy one in which I did not feel like I had the time I needed in order to do it properly. Lesson Learned: carve out time in your normal routine to pay bills and check on finances. Not doing so will cause mistakes. The mistake was a rather easy one to make: I paid one bill on my electronic banking instead of another bill. They were named something similar so the mistake was fairly easy to make. The result was a large credit on one account and an outstanding balance on another. Second, I discovered the mistake but was so blindsided by it that I didn't handle it properly, immediately and instead intended to simply run up this month's expenses against the card with the credit. And thereby paying everything off within the next 30 days or...

I just picked up this story on the net tonight and I thought it was really worth sharing because this is really innovative, I think. Go here to read more about the Gum Wrapper Prom Dress . I think the story is very cool and timely with Prom right around the corner for some students.

Recently, the unexpected happened. One of the cars broke and started to feel like it was going to completely break down somewhere on the side of the road when there was no one around to help. Personally, I am not a huge fan of living with stress. In fact, I'm nearly 100% convinced that this is the cause of many health problems. So, when I can avoid the stress, I do. In this case, having a car that was unreliable and just waiting for a final breakdown was not appealing to me. So, after deciding on a car and what we thought would be a reduction in sticker price and trade-in, we went and found the car dealership closest to where we live, walked in, test drove, and finally bought a car. In short, we did it in a single trip, single transaction. Fortunately, we were able to afford it and had good credit. Other people are not so lucky. The big lesson learned is to not wait until the last minute. The car had already started showing signs of getting worn down and needing repairs. A repair b...

One of the things I remember when I was in the process of getting my first mortgage before any refinances etc, is that they said that you had to plan to have about 1% of the value of your home in addition to mortgage payments set aside. This money was to handle the upkeep of such a home. Fortuntately, I have been in the position that there hasn't really been a ton of upkeep. The roof was replaced which was a pretty big expense and there were a few other minor things. However, when all is said and done, it was pretty reasonable given the quality of the space that this money had purchased. Even now, in the midst of spending a tidy sum on redoing the two bedrooms, I can't help but feel like this is money that needs to be spent; it is not extravagant and it should help the value of the place as well as the quality of life overall. So far, these have been the expenses: 2300 dollars for new carpeting (original was over 15 years old). 120 dollars for paint 200 dollars for new curtains...

Recently, I got some very good news with regard to work-related compensation. In this economy, and in this troubled time of unemployment, any good news is really great news. So, for us right now, we're looking at a bonus, albeit smaller than expected. In addition, there will be a three percent raise. So many people are losing their jobs, that there are not situations where people who even have their jobs may not be getting raises or bonuses at all. So, I'm quite grateful. I think that it is important that people are grateful for what they have and realize that this is a time to be even more conservative. In this regard, I'm practicing what I preach here. And even in a good economy, this type of behavior is a good idea. It will make you more likely to keep your job when times are tough and more likely to get a raise and/or promotion when times are good. I'm convinced that these principals are what has helped me succeed in my current job. 1. Work hard. This is general, bu...

A Freedom Fund is a great supplement to the Emergency Fund. It stands to reason that there are categories of upcoming expenses that are likely to come up within a year or two and you can easily save for these expenses, a little each month, above and beyond your normal savings. This past weekend, the cat got sick and required an ER visit which totalled over 300 dollars. This was an unexpected expense -- the reality is that most people can't easily absorb it. My budget is certainly tighter now this month, but it is not undoable in any way. Fortunately, the experience has showed me it is a good idea to review the expenses to see what, if any need to be revised. The first that you might be overlooking (if you're like me) is pet expenses. These can run into thousands of dollars, so it is important to budget for this so that a pet-emergency doesn't totally ruin your finances. The second is an inflation buffer. This seems a little strange, but the reality is that our normal adjust...

This evening, I decided I would log in and check on my current portfolio of prosper loans. Not long ago, I railed against prosper and now it appears that there is definitely something big going on over at prosper. The message from their website: start of message Prosper Filing Registration Statement; Enters Quiet Period Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. If you're an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you'll be able to track and monitor your loans; and you'll be able to withdraw funds from your Prosper account. If you're a borrower with an existing loan, you will continue with your current borrower agreement and be ...

I'd like to say that this was going to be good news. It isn't. I just found out, on the way home tonight, that my parking as a commuter in the great state of taxachusetts is going to be going up by 40% starting in less than a month. MBTA Increases Already Exorbitant Parking Fees is the link to the web page where they shamelessly announce it. My curiousity gets the better of me though. Do they really think, in this economy, in this recession that it is a good time to charge even more for these services, the services that help people work and actually generate real tax revenue? I'm not completely oblivious; Massachusetts and California were both in extremely dire straits and they needed to get short-term loans at high rates. Details are available at la times website . But in the end, it is not the increases that bother me so much as their size. People can absorb a small increase of a few percent. You adjust your budget, you make small lifestyle changes. However, this change...

In the craziness that continues to happen in this economy, it is important to stay focused and remember to review your overall plan. Focusing on this plan is a big part of making sure that you are able to withstand all of the news and panic that is running amok lately. For me, personally, the plan is pretty straightforward and so I figured I'd share it with you. 1. Pay all bills. Not just on time. Early. Period. 2. Never commit to debt that I am not extremely comfortable with paying off in 3 years or less. The only possible exception to this is a mortgage in the event of a move. 3. Continue paying down outstanding debts, focusing mostly on the smallest debt until it is paid down. Personally, I do not focus every free penny on debt paydowns like some personal finance experts advocate doing. I think that the importance of a significant emergency fund is just ignored during these broad statements about debt reduction. 4. Continue building the emergency and freedom funds with approxima...

In the latest net worth post I made, I found, unsurprisingly, that my household net worth continues to decline. This in the face of a painfully slow economy, a housing slump, and a languishing stock market. Here's the link to the details: https://www.networthiq.com/people/easychange In short, this month marks a nearly 3.5% decrease in overall net worth. However, all that being said, I feel richer and more secure than I have in a long time. So, what does that tell you? I've made two interesting observations from this: 1. People are aware of the behavioral finance concepts now...especially those who are really 'in tune' with personal finance. That is, if me and my neighbor each has 100k, I feel worse than if I have 50k and he has 10k. The idea being that it is not simply enough to have lots of money, you need to have more than your neighbors to feel good. On some level, it feels a little sad to me, but alas, this is how most people feel/think...and I confess, I am not ver...

So I am about to go on vacation; plane leaves tomorrow. And since this is a blog about money, I thought that I would talk a little bit in this post about my plans for the vacation and how I plan to manage the money. 1. I plan to bring several hundred dollars of american money to convert to foreign currency in an airport exchange. 2. I plan to bring several hundred dollars of travellers cheques in american currency which I will likely exchange at the hotel or a bank during my stay. 3. I plan to use a credit card for major purchases and to pay for parking when I return. Even though this vacation will be somewhat expensive, it will be quite fun since the money has been diligently saved up in order to really enjoy it. Furthermore I feel comfortable with my progress toward financial goals so this will be a real treat. Of the options above, here's why I am doing each. First, I like to have some currency on hand. Second, I like to have additional currency that is available in the event o...

I just read this entry ( http://www.iwillteachyoutoberich.com/blog/an-annoying-email-i-got ) over at I Will Teach You To Be Rich and I think that it is brilliant. So many people I know never save up before they get luxury items. This is a fundamental difference from those who are "into" personal finance versus those who are not. The quote and concept and explanations that Ramit points to here are the core of people who are serious about personal finance and those who aren't. Over the past two years I've become quite addicted to personal finance. I really like knowing where all my money is going, and what it is up to. Did it stay out past it's curfew, is it getting into trouble with the neighbor's money etc, etc. The bottom line is that for many of us, our wealth just isn't high on the priority list. Instead "paying the bills" is important. Or perhaps even "getting a better paying job" is important. Small things don't really matter....