2015 Net Worth Update

Now that I’m back to actively trying to get my finances on track, I figured it’s about time to check out my Net Worth…for the first time in four years. 😦 I’m fairly confident it has gone down by a significant amount…however, my income has gone up significantly, so I’m hoping to change this quickly!

Assets: $1913.66

Liabilities: $27833.84

Net worth: -$25920.18

The very simple way to find this, for those of you who have not tried to find your Net Worth before, is to add your assets (car, house, expensive item, etc.) and then your liabilities (loans, personal loans, bills, balances, etc.). Subtract the latter from the former. When I did so, I ended up with a net worth of – $25920.18. Which is pretty terrible compared to the average for my age group, which is $8525 (according to sources).

I have a few major purchases that will probably need to happen within the next year or two, and I need an emergency fund built up, so there’s a lot of major repairs that need to happen with my finances. It’s hard to try to deal with all the cards on the table, but it’s my just dessert for not being a tight wad and instead being a loose spender for a few years.

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Finance Snapshop – May edition

So I said I was back, and I am! It’s actually taken a lot of thought to figure out where I wanted to go from here, you know, fresh starts and all that jazz 😉 So after outlining a few ideas of traditional posts I’ve done that I like and figuring out new things to push my comfort zone, I’m starting with the basics. Where I’m at. It’s hard for me to look at myself, because the knowledge of what to do and what not to do is in my grasp, in my head even! And yet, here I am.

Not quite in financial ruin yet

Pretty Much

Pic. Source

So I am in no way in financial ruins. Every time I look at my bank account and get a frog in my throat, or open my wallet with a shudder, I try to put things into perspective.  The well-being of others does not rely on my financial success; I am not bankrupt, I am not homeless, hungry, or sick. I’m just a broke college student with no one to blame but herself who needs to make better life choices and actually stick with them. So where am I at right now?

  • Discover: $1,401.49
  • Checking: $155.01
  • Savings: $0
  • Cash: $100.05
  • Loans & Interest: $13,753

This puts me at a cool –$14,899.43 as far as networth goes. Well, looking back at it almost a year ago, I’m down by $4,752.43 from –$10,146. I was really confused until I remembered that I anticipated $3750 in loans that I ended up not taking out that were accounted for and that I valued my car at $5000 (it has since had some…problems); however, I really tanked my savings and cash (plus I got that…credit card). And even in writing this post I wanted to mislead myself and look at my networth as having “gone up,” when it really didn’t at all. I never had the loans I was taking into account, so my networth was never that low in the first place. Denial is not just a river in Egypt, y’all.

Of course, I’m not exactly pleased about this, but a great quote by Thoreau is “Never look back unless you are planning to go that way.” Of course we should always learn from our mistakes (like don’t charge Christmas to your card, and when you get reimbursed for expenditures, treat it as a reimbursement and not as “Ooooo free monies!”). Or, in my case, even though I KNOW KNOW KNOW that credit card money is not actually my money, to not say “I have $400 left of my limit! That’s $400 I have to spend!” And curbing emotional spending. And hobby spending (knitting can get expensive). And not just avoiding my finance-related life out of shame. I really love the PF atmosphere and am genuinely interested in it and getting better. I need self-control. And I need it soon.

As of right now, I’m living with my parents until I leave for an internship in Pensacola, FL on May 24. There, I will have free housing and meals, and a $3000 stipend. That last bit is pretty important because as of August, many things will come to a head.

  1. My Discover Card will have an interest rate (est. 17-20%)
  2. Tuition. I dropped my 2 minors in order to drop my tuition from $3200 to $1500, so that helps, but at least half of it is due the first week of August…so $750 bones…
  3. Rent & deposits on my first ever big girl apartment
So the plan is to get an additional job while in FL (the internship is 30 hours a week, so I would have the time) so that I know for sure I can take care of all of those financial obligations. The next step is building up my EF  and savings. And loan interest repayment…but I’m getting into another post entirely here 🙂


New Job & Less Loans

This post could be more accurately titled: “How I got lucky and was offered a job that offers free housing (because I am suddenly ineligible for the loans I was using to pay for it,” or, “How $3750 of my student loan debt disappeared in a day.”

Some back story. Beware, this story is full of dumb mistakes and wasteful spending. Read at your own risk.

Warning - Warning - Warning

I was admitted to the institution I am currently attending with a full scholarship and then some (raking in $1500+ a semester in extra cash after housing & tuition & fees are paid off). I ended up squandering that money on Chinese food, digital cameras, a computer, and feeding myself and a lazy boyfriend at fancy restaurants – plus expensive gifts (leather jacket, anyone?). I felt rich and careless…and acted as such. At the end of the day I have nothing to show for this time period. The computer is horrible (I had to replace it), the digital camera just broke, and the majority of it was just squandered away. The summer after my sophomore year I worked and brought in a few thousand dollars…which was spent on Rockband and food (squandering). Next year, same as freshman year. That spring I lost my scholarships and had to take out my first loan. This was June of 2009.

Remarkably (and luckily I might add), I was given a scholarship from my mother’s workplace and continued to receive another that covered my tuition. I could have made it without loans. Alas. Instead of getting and keeping a job, I lived off of loans. Infinite money. Thousands of dollars. This continued until my senior year, when I got my current campus job (which I have been at for 1 year – record for me woot woot!!!). Horror suddenly gripped me as I decided to take a fifth year and go to an internship in Canada. I was suddenly taking out loans to pay for my passport, to pay for my plane ticket, and then, how was I going to pay for next year?!

Loans. And a bit of what I made this summer. I started this blog in July 2011, when I was still in Canada. I had been reading a few personal finance blogs and was about fed up (and completely ashamed) of my bad habits.

So here I am, in my fifth and final year as an undergraduate. I took out $7000 in loans for this year, $3750 a semester. This pays for all of my residential housing (I live on campus as a stipulation of a leadership position I hold), and I still hold one scholarship that pays for my tuition. The rest I cover from my aforementioned job. I was anticipating nearly $17,000 in student loans by the time I graduate (much of that unneeded, but you learn I guess).

Not to further overuse this image, but truth.

Then, new job offer! I was offered a job last Friday as a resident assistant, a job I had applied for in March…one of the perks of this job is that it pays for your housing!!! Woot! I now didn’t need my loans for the spring semester ($3750). I planned to cancel them. Planned a dance. Party. Celebration. But. Apparently I was not the only one to reach this conclusion, although the federal government reached it by other means.

I am apparently not making satisfactory academic progress. Not that I’m graduating in May mind you. Really, what it boils down to is that one of their requirements is you complete your degree within 133% of the credit hours of your degree, a cap of about 160 hours. As of last semester, I hit 164, for a lot of reasons. Mainly because I switched majors, went to summer school for 3 summers (taking many hours), and took the max nearly every semester. So, even if I wanted to keep my loans, I wouldn’t be allowed to. No looking back now.

I just think, of how lucky I am, because I’m not sure what I would have done without that new job. Tis the seasons indeed. This drop in my debt has made my goal of paying of my student loans by the time I graduate from graduate school (May 2014) a complete reality. Although this has really been a blessing in disguise (as much as it would have been a horror story otherwise), I’m really thankful for all of you out there that are helping me budget along. I’m a completely different spender (in that I know there’s no magic “free” money) now, and although I look back with shame, I learned a lot.

So for those of you making those bad choices, stop! And for those of you rectifying your decisions, congratulations and hats off to you!

-L.

 

Net Worth – October 2011

I haven’t revisited my Net Worth since my previous post July 21st. I used the same site as last time, Net Worth IQ that calculates your net worth for you and compare it to others in your income bracket, your age bracket, and all of those other brackets. My net worth in July was -$10,147…so how does October compare? 

October 2011 Net WorthThe answer to that is…badly…sort of. My net worth for October 2011 is -$12,148…which is a $2,001 decrease. This is entirely due both to not rebuilding my cash reserves by spending rampantly in September as well as spending the cash I had in July on tuition in August…so it did decrease, but the money I spent on tuition was worth it 🙂 (I am a big fan of finishing degrees!). The comparison in that chart there is not kind to me; however, if I achieve my eventual goal of paying of my student loans by the time I graduate graduate school, I will be in pretty good shape financially. So, if you’re in the red right now, don’t beat yourself up! Making lasting changes takes time, and it is a lot of work to undo mistakes that were made (like spending all of your scholarship money on Chinese food and electronics -cough-cough-). 

-L.

Start your Emergency Fund … Now!

An Emergency Fund…you know, I had the best intentions of having one. You can even read earlier posts if you don’t believe me. I had reasonable budgets drawn up and had resigned myself to the student loans necessary for tuition now that my 4-year scholarships are up. I had it made in the shade so to speak. I had even looked at cutting my work week (at one of my jobs) down to 15 hours from 20 because I was taking more classes than usual. I had started getting my financial ducks in line.

This could have been me.

Pic. Source

[Background: In the states, you apply for financial aid through something called FAFSA. It has your (or your parents’) income, general info, etc on it and determines whether you are eligible for need-based aid or just regular loans]. Mine is generally filed by my mother, but it was filed a few months late (another story for some other time). I got a confirmation email Monday stating it had been sent to my school, so I should be expecting some sort of offer. I knew the loan amount I needed and since it was not need based, I knew I would be eligible. Day 1: No info, Day 2: No info, … Today: No info. Finally, out of sheer frustration, I started looking under every single tab. This is my 12th semester here [I did a lot of summer school], so I know what I’m doing by now. Under an arbitrary tab I’ve never seen before, it says “Form Required: Grade/Loan Appeal.” There is no link, no further information. To Google! So I find out that I am not making “satisfactory academic progress” (More Backstory: Fall ’10 was a rough semester for me. A lot of family tragedy and bad grades). Now, more context: I am 3, that’s right, 3 classes away from completing my math degree. So I have to fill out an appeal. I look all over the site for the form, and it is nowhere to be found. Then I find a single line that says it was mailed to me.

It's unsustainable & takes too long

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Why am I not happy about that? Well, for one thing, if it was sent, it was sent to my campus address (I haven’t been on campus since May, Canada remember). It wasn’t sent to my home address (so my parents couldn’t give me a heads up), and under that single line it says: Please mail back within 3 weeks of receiving. I have NO idea of when it was sent. The time-stamp under the tab was 8/2/11, but I’ve learned that it doesn’t mean anything. So why am I really unhappy about this, and what does it have to do with an Emergency Fund? (I swear it’s not just mindless ranting!!!)

I deferred payment waiting for my loan offer, so I owe $473.66 by the 11th of August (not a big deal, I can handle that); however, I owe $1171.66 x 3 [due October 1st, November 1st, & December 1st]. My income is not large enough to be able to pay this without loans. I can’t. I’m not being pessimistic, I’m being realistic. I make $7.50 an hour and can work a maximum of 20 hours a week. I have another job based solely on commission, and donating plasma will get you around $50 a week. I have a starting amount of $1145. I have no fear about my appeal not getting accepted (I have a good reason and proof that my grades improved by leaps & bounds), but it’s a matter of how long will it take:

  • For the appeal to be approved
  • For the appeal to process
  • For the loan offer to process
  • For the amount accepted to process
  • For that amount to get sent to the school

So I am crossing my fingers that it would be taken care of by November 1st (or I’m SOL anyway). And so, this means I need to make sure I have at least $1171.66 on October 1st (unless it processes before then, then it’s just moot). Oh, and I have to buy textbooks & eat during this time, and buy my prescriptions, oh and pay for gas. So, this means a very tight budget.

The currency is obviously pesos

Pic. Source

The end all, be all point is that it wouldn’t be as big of a deal if I had an Emergency Fund or any amount of savings. I am going to have to scrimp, save, sell my body, & be very uncomfortable to guarantee to myself that I can pay for school at least through October 1st (I imagine if my appeal is approved, everything will process by then). If I had an emergency fund, my food budget for August & September wouldn’t be under $100, I wouldn’t have to sell plasma, and I probably wouldn’t be as frustrated. I know, when this is over, I really will pay myself first (a common PF thought) and have an EF. If you don’t have one, I suggest working on it. You never know when you’re going to need it (I guess that’s why it’s an emergency fund ha ha).

-L.

Loans

So I’ve only had 2 posts so far, and both of them have mentioned my hatred extreme dislike of the only debt that I have accumulated in my short life, $17,111 of student loans (as of my last undergraduate academic year, 2011-2012). I know many people out there have it far worse, but it’s enough to make my toes curl. And if you’re like I was up until about three weeks ago, you may not know how much you have in student loans and how much interest they’re collecting. So, I’m here to give you the “down and dirty” of student loans (at least for people in the U.S.; I’m not quite qualified on this subject in other regions).

Pic. Source

Don’t know how much you have in loans/how much they’re accruing in interest? Don’t really know what interest is? (that’s totally okay by the way!) Go to this site. It’s the government’s spreadsheet on what you’ve taken out, whether they’re subsidized or unsubsidized, & how much interest you’ve got. Be prepared with your FAFSA number & Social Security Number (they’ll ask, but they’re legit).

Now that you’ve got that number and the type of loan, do you know the difference between subsidized & unsubsidized?

  1. Subsidized Stafford loans are not accruing interest while you’re still in school. They are the loans to have. After you graduate/fall below full-time, you have a six-month grace period, and then you have to pay it up. As of that moment, your subsidized loan will have a fixed interest rate of 4.5% for some. Check it online and make sure it’s the correct interest rate for the year you got your loans. Your interest will also compound. This is when your interest adds to your principle (the amount of your loan) to form a new principle which then accrues interest. Essentially, you’re paying interest on your interest. I’ll explain it in more detail after we tackle the unsubsidized loans.
  2. Unsubsidized Stafford loans are accruing interest while you are still in school. These are loans that the government has not subsidized for you. Generally, this is due to the need assessed to you after filing your “Free Application for Federal Student Aid” aka FAFSA. You should do this early in the summer. But I digress!! Your unsubsidized loans will be accruing a fixed interest rate of 6.8% that is not compounding while you are in school, but like the subsidized loan, once the 6-month grace period is over, all bets are off and it starts to compound.

So I’ve mentioned that a lot…compounding interest. It’s important, but it can also get complicated (unlike its counterpart, simple interest, which doesn’t make new principles). So, how do you do it? 

Simple Daily Interest Formula:
# days since last payment x
Principle Balance Outstanding (PBO) x
Interest Rate Factor = Interest Amount

Yeah yeah, sort of makes sense (by the way, principle balance outstanding would be how much you owe as of that last payment), but what the heck is an interest rate factor? Find your IRF by dividing your loan’s interest rate by 365.25 (# days in a year). Not too intimidating. So, example time!!!

Say I took out $2000 in unsubsidized Stafford loans (haha). Now I’ve graduated and my 6-month grace period is up. Month one: I pay $150 toward the principle, so the final amount remaining is $1850 right? Nope. Say I paid on the 31st. Then there’s also that interest. Ick.

.068 / 365.25 = IRF = .0001861738

so 31 x 2000 x .0001861738 = $11.54 in interest, so I’m paying $150 toward a principle of $2011.54, not $2000. So the final amount remaining is $1861.54 and not $1850. Not a big difference, but it can get there, especially if you’re taking a while to pay off your loans.

My plan is to pay off my interest before graduating with my undergraduate degree and keep it paid off, and if I end up going to get a Master’s, pay off my undergraduate student loans while there. Ambitious, yes, achievable…probably =)

-L.

Net Worth

Argh! There’s this really great site called Net Worth IQ that will calculate your (you guessed it) net worth for you and compare it to others in your income bracket, your age bracket, and all of those other brackets. If you don’t want to do it that way, it’s actually pretty simple to calculate your own net worth (but if you’re like me, the numbers are going to be pretty painful).

So, the how to’s of calculating your own net worth (which you should never confuse with your self worth – which is always in the black!!!)

Ingredients: Financial Statements, guestimates of your assets (if you own a car, house, etc) and BE REALISTIC!!!

  1. List out your biggest assets. These are things like a house, big things. To be realistic, if you’re a college student like me, your asset is going to be a car at most (and even then, you’re hopefully lucky enough to own a used car or be near paying off another!). And be honest with assessing the worth of your -erm- assets.
  2. Now, get your bank statements together (checking, savings, cash, etc). The previously mentioned are probably what you’ve got, but for those who are more ambitious, this includes retirement accounts, investments, etc.
  3. Here’s the miscellaneous section. This is stuff that you own that is worth a considerable amount of money. That ipad 2 you just bought? Totally gets listed here! Generally, if you would sell an item for hundreds of dollars, this gets listed in your assets.
  4. Now add ’em up!!! These are your total assets! Look at that number, and savor it. Savor it. Savor it. 
  5. Now comes the icky part. Liabilities. Ew. Gross. Ick. But, it totally exists. So, look at your basic loans first. Loans for a new car you had to have, a down payment on something, etc. List ’em out. I personally don’t have a general loan, but I’ve got some icky loans in the next category.
  6. Now, list your personal loans. These are things like credit cards and student loans. Student loans: the bane of my existence. Yeah, I may not have to pay them back immediately, (go deferment go!), but they’re totally leering at me from afar.
  7. Add ’em up. That’s your … liability. Look at that number and be sad. Just kidding, but seriously, prepare, you will be a little sad.
  8. Final step: subtract your liabilities from your assets, and you’ll get your net worth! If it’s a bit in the red, that’s fine.  Remember that it’s NOT your self-worth.
  9. Repeat however often you want! I am hoping to do it once a month to see how I’m progressing.

Now I’m going to go out on a limb here (and hope I don’t get judged) and post my comparison charts given by Net Worth IQ. Yeah…not as bad as it could be, but I’m still pretty far off people my age (under 25). My current net worth is – $10,147 (or it will be once I take out my student loans for this year and get my final internship payment). So, like I said, if you’re a bit in the negative, red should I say, don’t feel bad. It’s net worth, not self-worth, so keep on keeping on!!!

-L.