Still on track!

So the job change has cased a little bit of a hiccup in my financial plans, which I had planned for and am happy to say I am now done with. It’s not a big deal – it basically comes down to my new job having a slightly different payroll schedule, and of course the fact that there’s a certain lag between when I start and my first paycheck. In order to be prepared, I basically held off on Baby Step 2 until my first paycheck from my new job. At that time I figured everything would be okay, and I could use the accumulated amount towards Baby Step 2.

It worked – but I have to say that psychologically, I felt very much off-track during that time. I had almost forgotten how much I loved putting money on my car loan and seeing the balance drop. So when I finally put another principal payment on my car loan, which was an amount equal to what had accumulated while between jobs, well, it felt pretty good.

I’m happy to say that I feel like I’m on track again – not that I was really ever off track – but I feel good that I’m able to see progress again.

I like my new job, although, I have to admit I miss my old job. A lot. It’s strange how you miss the things you took for granted. At my old job my lead was able to teach me a LOT. I like being on the learning side of things. At my new job – I hesitate to say this, but it’s true – I’m smarter than my lead, and it bothers me. I continually have to explain things to him, and sometimes he doesn’t get it. I think he’s just inexperienced, and maybe a little over his head in his position. He also likes to argue, especially when he feels defensive (I sense just a little bit of male machismo in his defensiveness/argumentativeness). Now I know that all this sounds pompous, but I’m not sure how else to explain it.

I really miss my old job. I miss being able to ask my lead questions and learn from him.

After my first week at my new job I had made the decision to work this all out as a challenge – in other words, see if I can learn from the experience rather than run from it. I was in a very similar situation a long time ago, and I found another job as quickly as I could. This time I’m going to see if I can work through this, and learn from it.

At any rate, I’m on-track, or back on the Baby Step 2 express.

My last day at my old job is tomorrow. :(

So it’s probably obvious I did in fact take the new job.  It was such a difficult decision, but ultimately it matched up with what I want to be doing – and it seems like a more secure job in terms of layoffs.

So aside from leaving people I’ve worked with for the past few years, I am looking forward to the challenges of the new job.  It comes with access to a gym, so I’ll be able to continue working out – and moving forward with both my health and financial goals.

I’m STILL in Baby Step 2.  My last car payment is inching closer every single day.  It feels great that I’ll finally be free of that albatross – and of course I’ll be focusing on paying off the last of my debt:  my student loan.

I’ve somewhat settled into the routine by now.  My biggest struggle has been that I can’t make it happen in hours or days instead of months.  I’m okay with that now.  I know it’s going to take some time – but I can stay the course and implement my plan.  It’s actually, well, no big deal.  That’s how it’s supposed to be I suppose.

I probably wrote this before – but I’ll write it again:  Having the plan and implementing the plan is just about as good as having achieved the goal itself.  It is the best I can do right now.

I have been looking forward to Baby Step 6.  You see, Baby Step 3 will take me a couple more months, and Baby Step 4 is a flip of a switch.  I don’t have children, so Baby Step 5 is a non-issue for me right now.  Baby Step 6 is the one I’m really looking forward to.  Baby Step 6 is to pay off your home early.  For me, this means actually saving up for, and buying a home.  I’m still going to have to get a mortgage, but I’ll pay 20% down first and get a 15 year fixed rate, which I’ll probably pay off in about 7 years if I stay on track.    I’ve already set up the spread sheets.

So it’s basically same ol’ same ol’ for me right now.

Looking Forward

So if you’ve read my previous posts, you know that I’ve been mulling over a new opportunity for several weeks now.  This has been one of the most difficult decisions I’ve had to make because I really like my job, but there’s been several layoffs since I started, and the future isn’t quite as certain.

As I mentioned in a previous post, I was approached by another company, fairly soon after our last round of layoffs.  I interviewed with them, and then heard nothing back – for several weeks.  I had thought I was off the hook, and almost put them out of my mind assuming they had decided not to hire me.  And then yesterday the recruiter called to tell me that they wanted to move forward with an offer.  So I figured I had one more night to think/sleep on it.

I received the offer tonight and faxed my signature to them accepting it.  I believe it will be good for me, both personally and professionally.

So…  I’m still on Baby Step 2 – but still making really great progress.  If you listen to Dave Ramsey’s radio show you hear him say that when you start the debt reduction process it’s like you get a raise – because you address both the income and spending areas of your life – you learn to live on less than you make, and therefore spend less, and you find ways to make more money.  The new job helps – it’s not a BIG raise, but definitely significant.  But more importantly, I’m living on quite a bit less than I used to.  So ultimately I’ll be able to pay off that student loan just a little bit faster. 

Baby Step 2 is a long process for me – but I’m finding ways to speed it up. 

A Taxing History

The year is 1865. Andrew Carnegie steps out of his carriage sporting a gold watch. At home in Carnegie’s Pennsylvania estate, his grandchildren bang on a custom-made piano. Things are quite comfortable for the Carnegie family. And why not? The steel baron and later philanthropist would earn $84,000 that year—the equivalent of about $2 million today

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Foreclosures jump 57 % in last 12 months

Home foreclosure filings surged 57 percent in the 12 month-period ended in March and bank repossessions soared 129 percent from a year ago, as homeowners struggled to make mortgage payments, real estate data firm…

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Serial or Parallel?

As I was writing the last post, I started thinking about the Baby Steps, and whether they are supposed to be done sequentially, or whether some can, and probably should be done simultaneously.

For instance, Baby Steps 1, 2, and 3 are almost certainly sequential because they represent, to some extent, a priority.  You need a baby emergency fund before you start your debt snowball.  And, to some extent, you probably want each and every available dollar to go towards the debt snowball before you start saving for your fully funded emergency fund.  If this was not the case, then Baby Steps 1 & 3 could almost be combined.

At the same time, Baby Steps 4, 5, and 6 can probably be done simultaneously.  Obviously Baby Step 4 is a flip of a switch – you begin the process of setting aside (hopefully automatically) 15% of your income into pre-tax retirement accounts.  Once that’s started, it’s not going to end until retirement.  I haven’t given much thought to Baby Step 5 as I don’t have children, but I’m sure it can and probably does happen at the same time you’re paying your home off early in Baby Step 6.

Dave – if you’re out there, please help me to clear this up! 

Baby Step 3B?

Yesterday I attended an FPU class with a friend.  I have always wanted to ask somebody when the right time is, to save for a down payment on a home.  At first glance, Dave’s baby steps seem to assume that you already have a mortgage, given that it says to pay off all debt except the mortgage during Baby Step 2.  It doesn’t mention the mortgage again until Baby Step 6, which is to pay off your home early.

So somewhere between Baby Step 2 and Baby Step 5, someone without a home should purchase one.  Baby Step 2 seems too soon, as your focus is getting out of debt, so to take on what will probably be your biggest debt in your lifetime seems wrong.  It seems intuitively correct that you would want a fully funded emergency fund before you took on such a big responsibility, so it must be after Baby Step 3?

The answer, it turns out, is Baby Step 3B, according to what I learned in FPU last night.  It turns out that once you have your emergency fund built up, you can start saving for a down payment on a home.  Dave recommends putting at least 10%, if not 20% down, with a mortgage payment not to exceed 25% of your take-home pay.  Oh, he really thinks that paying cash is the best way to go.  I believe he’s stated on the radio that he does not use debt:  ever.  That includes buying a home.  For his listeners, he seems to make an exception when it comes to a home loan.  He’s still pretty clear that cash is best, but if you buy a home with a loan, do it with a fixed rate, 15 year mortgage and pay it off early.

Anyway I learned last night that there is this Baby Step 3B – to save for a down payment on a home.  I’m a little bit concerned that I should flip the Baby Step 4 switch first – begin putting 15% of my income into pre-tax retirement plans – which basically means Roth IRAs and 401(K)s.  I say “flip the switch” because unlike Baby Steps 1, 2, and 3, it pretty much amounts to doing the paperwork to get it started.  Once started, it seems like it’ll be ongoing, and continue right up until you retire.  At least that’s how I plan to do it. 

So I wonder if it shouldn’t be Baby Step 4B?  Or maybe I’m assuming that these steps are serial, and not parallel.  Maybe I’m thinking too much about it.

As I do not have children, I could easily make Baby Step 5 the one where I save for a down payment on a house.

Okay enough.  I’m not even finished with Baby Step 2 yet.

Microsoft reaches for Google’s turf

The proposed Yahoo deal, and other companies’ efforts to thwart it, show how powerful the search leader has become.

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I didn’t want to see Microsoft buy Yahoo!, and to be honest, this looks like desperation on Microsoft’s part, to participate in the future of the Net.  What’s frustrating to me is that I used to believe in Microsoft because of their innovation and creativity and drive.  But I don’t see Microsoft as an innovative company any more.  They were once a leader; Microsoft was a company made up of people who were hungry for success, who understood that being at the top was precarious, and there are always others wanting to be number 1 (ahem, Google).

I haven’t seen anything truly innovative come from Microsoft in a very long time.  They don’t seem to take risks anymore, and it almost appears that their leadership has lost their hunger.  So when I first heard that they wanted to buy Yahoo! – well, it smelled like desperation to me.

Senate passes foreclosure bill

Plan includes tax breaks for builders, credit for the purchase of foreclosed property and grants to buy and repair abandoned homes.

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Glenn Beck: America needs a 12-step program

I read this article several times. I don’t agree with everything Glenn Beck says, but on this he is right on target. I am guilty of complaining about our government, especially during tax season, and as I’ve watched things like the Patriot Act get passed. The thing is, we’re all in this together and we all need to take personal responsibility to uphold the values our country was founded on.

I remember once listening to a radio program where they interviewed people on the street, and asked people if they knew what the “Bill of Rights” is. As you might expect, most Americans did not know. When I started listening to the program I felt proud that I knew that the Bill of Rights is the first 10 amendments to the Constitution – but was convicted when some of the listeners were asked what each of the amendments actually are. I could only name a couple at best.

Read Glenn’s article (http://www.cnn.com/2008/US/04/09/beck.twelvesteps/index.html) – he is right. America needs to own up – it’s too easy to complain and do nothing.

I read an article a couple of days ago saying that a high percentage of Americans think we’re on the wrong track as a country. I agreed wholeheartedly. Glenn’s read the same article, and his take is this:

“A recent polls says 81 percent of Americans now say that our country is on the wrong track. If you’re one of those people, who do you blame? The Bush administration? Congress? The media?

Here’s a crazy idea: How about blaming ourselves?”

To pull this around to finances – he makes a great point, which is why I wanted to post a blog entry about his article:

“But we have to start somewhere, and the best place is with the defects that almost all of us agree on. For example, does anyone really believe that being addicted to Saudi Arabia’s oil is a good idea? What about China owning billions of our debt? Speaking of debt, what about the fact that we’ve saddled our children with $53 trillion in future Social Security and Medicare obligations?”

America, we need to act.

I’m going to start by really investigating the choices in the coming election.  I am going to try and become more involved, and try to never allow another election to pass without participating.  I’m not sure that’s enough – but it’s a start.