Small Financial Victories

As of today I have paid off all debt with the exception of my college loans. I paid off a lump sum of about $3,000. in debt to Capital One (who contrary to what they claimed in their ads a couple of years ago) are a huge hassle. I also paid off about $700. in debt to Mastercard. While I was on track with Capital One and would have been finished paying off my debt by next year had I continued to pay $200./month at 9% interest, it is my Mastercard that stressed me out. This is a revolving account, my first credit card which I signed up for in front of the dining hall in college. Though I paid on time and always paid at least 5X more than the minimum, I had not seen a zero balance on this card in almost 4 years. The highest it ever reached was around $2300. in 2005 and finally last summer it was looking like it would be paid off by August. But low and behold I charged a couple more things on it and I could not get out of the $500. balance range for the last several months. Finally about 3 weeks ago I decided to pay them everything I owed which was $694.86. I am not a homeowner so I have no idea what having 6 figure debt feels like but this was stressful enough. My biggest challenge now is should I shred the Mastercard or not because I still feel like I may feel like I "need" to use it during my next trip to the gas station. When I called Mastercard today and heard the automated service say the words I have been longing to hear for so long "your balance is zero dollars" I also noticed they added $1,000. to my line of credit. Thanks for the temptation.

And in one last final financial victory, though I normally do not pay coupons any mind, I received one in the mail last week for a free sandwich at Potbelly and I put it to use today. One veggie sandwich on the house. I feel so liberated.

Recent articles on 20-somethings

These recently published articles on young people trying to make it in these times makes life look not so fun.
Starting Salaries but New York Tastes
Checking out Roommates
Toughest Summer Job This Year is Finding One

Downsizing

I have always admired people who have been able to get rid of all of their belongings and live somewhat stuff-free. I guess I am too attached to certain possessions to get rid of them though I have tried. I always regret letting go of those items later, whether it be clothing or books. Since I have realized that I am not strong enough to let go of my possessions I have pretty much stopped buying new stuff. At least I'm trying. I just gave away 6 pairs of jeans this weekend which were all in great shape and went to the mall on Monday and wanted to buy a new pair of jeans. While in the fitting room I realized I would just be keeping myself in the cycle of buying stuff which I barely use and then have a difficult time parting with, so I left the mall empty-handed. Keep in mind I still have about 10 more pairs of jeans to give away. Unless the item of clothing is a necessity ie: work clothes ( I barely even buy that) I try not to buy it. I have only purchased about 4 books this year (all used). I do not buy electronics (I just use other peoples'), CD's, gadgets, candles, and all the other stuff people spend on regularly. My biggest weakness is by far toiletries (make-up, hair care, lotions) however I justify this by saying that at least once I finish these products they will not take up space, of course the empty bottles will most likey end up in a landfill. Believe it or not I have not adopted this lifestyle to save money but rather because I am sick and tired of clutter. Anyone who has moved lately knows how shocked you become when packing by the amount of stuff you can acquire in a short period of time. I have no attic or garage to store my stuff so it is more obvious that I have too much stuff in my home since storage space is at a minimum. While I do not ever think I can take on the somewhat hippie-like minimalism of the couple mentioned in this article I do understand where they are coming from. Like the sociologist quoted in the article says "You have to care for it, store it. It becomes an appendage, I think. If it enhances your life and helps you do the things you want to do, great. If you are burdened by these things and they become the center of what you have to do to live, is that really positive?” If you do not believe me ask go ask someone who has recently moved. So if you know me and I will be buying you a present soon it will probably be something like dinner or a drink because I care about you and I want you to avoid clutter as well.

Carnival of Personal Finance #147

Thanks to MoneyNing.com for including me on the Carnival of Personal Finance #147. I'm honored.

Foreclosure

This year I decided to learn more about the foreclosure process and see if I can strike gold with a house that is in foreclosure. The problem is nobody could really teach me about the foreclosure process and people in the real estate industry did not want me to learn about it because that meant no money for them. A couple of people in the mortgage loan industry finally told me that my best bet would be to go down to the courthouse and look at the foreclosure records. Though this is free it is very time consuming and will require more than one trip to the central files room in your local courthouse. Upon finding a house you are interested in you have to go back to the court with the case docket number and ask to look at the file so that you can see exactly what the owner owes on the house and any other liens. Once the home goes to auction there is also the issue of securing a cash deposit for the day of auction just to be eligible to bid.

There was a house I was interested in and it was on the market for $435,000. though the house was assessed at closer to $390,000. The owners refinanced with an ARM loan in Jan. 2006 and now owe $455,000. (Yes I saw all this info in their files at the courthouse.) Nobody bought the house which is very small though in a convenient location. The starting bid at the auction on Wednesday was $400,000.!!? Did the bank (HSBC in case you were wondering) think anyone would really bid that high? The house is worth less than that!! Anyway I am curious to see how low this house will go because banks are not in the business of holding properties and they will not get it off their hands for $400K.