As most of you have probably heard, there's this huge debt ceiling deal going on right now in Washington. Specifically, back in January we realized that the debt ceiling needed to be raised because by May 2011 the U.S. would pass the legal borrowing limit of $14.294 trillion (we passed it on May 16). A short term solution was to move some money around to pay our bills. But now...we need a long term solution...legislation to increase the debt ceiling. If this doesn't happen it would would be quite horrible for the U.S. economy and also possibly reduce the U.S.'s S&P credit rating. A reduction in the credit rating would mean that the U.S. would incur higher borrowing rates (because they'd seem like a less reliable borrower; it's pretty much the same thing as if your credit score dropped). The bad part for us is that if the U.S. incurs higher borrowing rates, that will mean higher borrowing rates for me and you. Here's where we will most likely be impacted:
1) Credit Card rates will increase - although most credit card rates are tied to the prime rate which probably won't increase, credit card companies may raise the margin rate tied to the prime rate. So instead of your interest being the prime rate + 10% you may be seeing new rates of the prime rate + 11 or 12%. The good thing I guess is that your credit card providers are required by law to let you know about any interest increases 45 days before the change.
2) Slightly higher mortgage rates - for anyone looking for a home right now, you may want to pay close attention to this. Although the rates may not raise more than 0.2%, no one wants a higher mortgage rate. For current homeowners, your rate wouldn't be impacted until it's reset.
3) Student loans may undergo even higher increases than currently planned - student loan rates are already scheduled to increase from 3.4 % to 6.8% for federal loans. This would become even higher if the debt ceiling legislation is not passed. And for private loans that could mean interest rates out of the WAZOO! We know how they will take you for everything you own.
4) Slightly higher car loan rates - of course as soon as car financiers feel the pinch of the increased loan rates they will pass it on to consumers. This increase is thought to only be about 1% though which does not make a huge dent in a car payment. It is still something to keep in mind if you're in the market for a new car.
5) Money market and savings account returns see NOTHING - unfortunately the current returns on your savings and money market accounts will stay the same. Yes, we'll have to pay more interest but they won't have to pay us anything extra. Just the way the cookie crumbles.
6) Investment portfolios - this is going to be something you'll want to watch closely as it will have all sorts of impacts if this legislation doesn't pass. For one, people will start to sell their stocks and bonds, decreasing stock prices. Corporate earnings will fall as interest rates on corporate debt increases and in turn make investment in companies look less attractive - another hit to the stock market. Lastly we'll also be hit by a loss of confidence in investments and any impact to our current economic environment, especially anything portraying it as more uncertain will negatively impact stocks and bonds.
Now why can't Congress get this done:
As always, Congress can't agree on anything! The House refuses to pass a debt ceiling bill that won't cut enough spending. Obama has vowed to veto any bill that only extends the debt ceiling in the short term. The Republicans are threatening to filibuster. There's all of kinds of disfunctionality going on here. And the worst part is...if this doesn't get solved by tomorrow, August 2nd...the U.S. is officially BROKE. And you can prepare for your grandparents, great aunts and uncles to not receive their social security checks until the U.S. gets some money to pay its bills.
Lord have mercy.
Take a look at the actual budget amendment bill here
Monday, August 1, 2011
Friday, July 8, 2011
Are you financially compatible with your (potential) spouse?
I found this cute quiz on CNN Money and thought I'd share. We're at that age where marriage is an option and most of us are looking forward to spending the rest of our lives with someone special. But oftentimes we underestimate the impact of our own (or our partner's) financial habits on the potential lifelong partnership. You will hear this over and over, and statistics have shown, repeatedly, that the leading cause of divorce is MONEY.
Somehow, when we're all in love (and before we're married), we don't take it as seriously as we should. I mean how petty would you sound if you told your homies you were deciding not to marry your sig other because his/her financial habits are just atrocious...or don't align with your long term financial goals. That sounds kind of silly right? It's like, you're giving up on the supposed love of your life because of THAT...something as simple as money. Their money habits could change! You aren't perfect either. You'll just take ownership of the bills and budgeting. You'll closely monitor the spending. You'll keep it all in check.
As quickly as we put this problem to the side and decide to deal with it later...it comes rearing it's ugly head and we wish we would've thought twice.
One of the things I admire most about one of my "young role model couples" is that before they got married, they seemed to have a very secure hold on how they would work together financially. They didn't live together but they both considered each other in the majority of their financial decisions. A financial problem for one person, was seen as a financial problem for the other as well. It was always a group effort...even while they were on their way to marriage. Smart move I think.
So the quiz asks a few questions (about 11) on your spending habits and financial decision making skills. At the end it categorizes you into one of four buckets:
1) Socially Driven
2) Financially Driven
3) Physically Driven
4) Inner Driven
I ended up with at least two points in each bucket but I ended up being mostly inner driven. My close second place was financially driven. I would have to heavily agree with both those assertions.
You take it (even if you're single) and have your partner take it (if you're not). See if it matches up with your perceived financial strengths in the relationship. Maybe you'll find out something new! At least, you'll start up a conversation you may need to have before making any major decisions :-)
Financial Compatibility Quiz
Somehow, when we're all in love (and before we're married), we don't take it as seriously as we should. I mean how petty would you sound if you told your homies you were deciding not to marry your sig other because his/her financial habits are just atrocious...or don't align with your long term financial goals. That sounds kind of silly right? It's like, you're giving up on the supposed love of your life because of THAT...something as simple as money. Their money habits could change! You aren't perfect either. You'll just take ownership of the bills and budgeting. You'll closely monitor the spending. You'll keep it all in check.
As quickly as we put this problem to the side and decide to deal with it later...it comes rearing it's ugly head and we wish we would've thought twice.
One of the things I admire most about one of my "young role model couples" is that before they got married, they seemed to have a very secure hold on how they would work together financially. They didn't live together but they both considered each other in the majority of their financial decisions. A financial problem for one person, was seen as a financial problem for the other as well. It was always a group effort...even while they were on their way to marriage. Smart move I think.
So the quiz asks a few questions (about 11) on your spending habits and financial decision making skills. At the end it categorizes you into one of four buckets:
1) Socially Driven
2) Financially Driven
3) Physically Driven
4) Inner Driven
I ended up with at least two points in each bucket but I ended up being mostly inner driven. My close second place was financially driven. I would have to heavily agree with both those assertions.
You take it (even if you're single) and have your partner take it (if you're not). See if it matches up with your perceived financial strengths in the relationship. Maybe you'll find out something new! At least, you'll start up a conversation you may need to have before making any major decisions :-)
Financial Compatibility Quiz
Monday, June 27, 2011
Now Year's Resolution
I've been on a list kick lately. Today alone (well the day I wrote this post), I've made four lists. I think that when things are going as planned (at least somewhat), I start to go planning crazy and I use lists to continue formulating the working plan. Anyway, the list I'm sharing today is my "Now Year's Resolution" list.
I suggested for you all to make your own as well. Please feel free to share how you interpreted this and how it helped, if at all? If you'd like to dive into specific items on it, feel free. As open or closed as you wanna be. Go for it. Comment away! :-)
As for mine, I wrote a list of all of the things I would still like to accomplish in 2011. These may be things that were on my list at Jan 1, 2011 and have yet to be accomplished, new tasks that I've added, or enhancements to tasks that weren't fully developed at Jan 1. I also tried not to make it too long. Once I got to about ten items, I decided to just focus on those because I'm learning that I don't deal well with being overwhelmed...and let's admit, long lists are frickin' overwhelming!
"Now Year's Resolution - 2011"
1) Complete apartment vision - Since moving in I've realized that getting this place together is going to be a LONG process, but I want to have an end goal in mind. And btw, one of the other four lists I made was a "Things to add to my apartment" list. lol.
2) Make (semi) permanent career decision - I can't dive too deeply into this decision but it includes whether to make a career move, change, or go back to school and pursue another masters (maybe more than one) or a ph.d. TONS to think about...and fast.
3) Lose 20lbs (at least) - I can't even start with my weight right now on this blog. It's a contiuous personal journey/struggle for me. And as with most ppl, weight loss is on the top of my list at all times. Why wasn't I just born with a super fast metabolism that lets me suck up all food and sight and never pay the consequences. deep sigh. I digress.
4) Take a makeup instrcution class - I've always wanted to be able to do more with my makeup but today while looking through Essence on the plane I thought to myself, why don't I take a class on this one day. In my spare time. The spare time I'll have once I accomplish #2. :-)
5) Take boxing lessons - I've heard this is an awesome workout. Also passed a spot in the South Loop over a month ago (and found out a friend goes there) and thought to myself that it could be a really fun workout.
6) Cook three times per week - I mean if I'm going to get married some day in the next 5 years (I am SO speaking this into existence), I should probably put this into practice.
7) Pay off all credit card debt - After I achieve this, I'm going to have to come up with a plan to not drive the debt back up again. I'm really good about getting it to $0 but then I get comfy and start spending again. Stop. Pay off. Anddd the cycle starts again. Yeah. Bad. I know. BUT, I am not of the belief that not having credit cards are the way to go. I think they are an absolutely necessary addition to one's financial portfolio. I just also think you have to learn how you can manage them best (and not let them manage you).
8) Increase savings by at least $3,000 - This is just necessary. I'm still young. I'm into saving agressively right now while I have less financial committments that I will one day (kids, mortgage, etc). Of course, everyone should tailor this to their own situation.
9) Keep on tithing - Jesus is a waymaker. If you didn't know, I'm telling you. Ever since I've been tithing, I haven't had to worry about one financial issue. I found my own place within my budget and the blessings keep on raining down on me. And I still LOVE writing my bimonthly check to my church :-)
10) Two words: David. Yurman. - This is more of a prize at the end of the rainbow. To keep me motivated and focused. I went to the David Yurman store in Houston today. Love. Y'all know how I am about jewelry. And it's time to add a little Davie :-)
I suggested for you all to make your own as well. Please feel free to share how you interpreted this and how it helped, if at all? If you'd like to dive into specific items on it, feel free. As open or closed as you wanna be. Go for it. Comment away! :-)
As for mine, I wrote a list of all of the things I would still like to accomplish in 2011. These may be things that were on my list at Jan 1, 2011 and have yet to be accomplished, new tasks that I've added, or enhancements to tasks that weren't fully developed at Jan 1. I also tried not to make it too long. Once I got to about ten items, I decided to just focus on those because I'm learning that I don't deal well with being overwhelmed...and let's admit, long lists are frickin' overwhelming!
"Now Year's Resolution - 2011"
1) Complete apartment vision - Since moving in I've realized that getting this place together is going to be a LONG process, but I want to have an end goal in mind. And btw, one of the other four lists I made was a "Things to add to my apartment" list. lol.
2) Make (semi) permanent career decision - I can't dive too deeply into this decision but it includes whether to make a career move, change, or go back to school and pursue another masters (maybe more than one) or a ph.d. TONS to think about...and fast.
3) Lose 20lbs (at least) - I can't even start with my weight right now on this blog. It's a contiuous personal journey/struggle for me. And as with most ppl, weight loss is on the top of my list at all times. Why wasn't I just born with a super fast metabolism that lets me suck up all food and sight and never pay the consequences. deep sigh. I digress.
4) Take a makeup instrcution class - I've always wanted to be able to do more with my makeup but today while looking through Essence on the plane I thought to myself, why don't I take a class on this one day. In my spare time. The spare time I'll have once I accomplish #2. :-)
5) Take boxing lessons - I've heard this is an awesome workout. Also passed a spot in the South Loop over a month ago (and found out a friend goes there) and thought to myself that it could be a really fun workout.
6) Cook three times per week - I mean if I'm going to get married some day in the next 5 years (I am SO speaking this into existence), I should probably put this into practice.
7) Pay off all credit card debt - After I achieve this, I'm going to have to come up with a plan to not drive the debt back up again. I'm really good about getting it to $0 but then I get comfy and start spending again. Stop. Pay off. Anddd the cycle starts again. Yeah. Bad. I know. BUT, I am not of the belief that not having credit cards are the way to go. I think they are an absolutely necessary addition to one's financial portfolio. I just also think you have to learn how you can manage them best (and not let them manage you).
8) Increase savings by at least $3,000 - This is just necessary. I'm still young. I'm into saving agressively right now while I have less financial committments that I will one day (kids, mortgage, etc). Of course, everyone should tailor this to their own situation.
9) Keep on tithing - Jesus is a waymaker. If you didn't know, I'm telling you. Ever since I've been tithing, I haven't had to worry about one financial issue. I found my own place within my budget and the blessings keep on raining down on me. And I still LOVE writing my bimonthly check to my church :-)
10) Two words: David. Yurman. - This is more of a prize at the end of the rainbow. To keep me motivated and focused. I went to the David Yurman store in Houston today. Love. Y'all know how I am about jewelry. And it's time to add a little Davie :-)
Thursday, June 23, 2011
Bills Bills Bills
Rent is due. By July 5th. Boo.
I've taken the liberty to re-vamp/ re-organize my bill payment schedule. This means I need to take a look at and decide if I would like to change:
Update: Monday June 27th
So at the time of this post I wasn't able to fully explain WHY I'm re-organizing my finances but now since it's official I can tell you all. I got a new job! I'm moving on from my current place of employment. It's a bittersweet feeling because I've learned a ton and fostered some pretty awesome relationships there but I'm so ready to move on to phase 2 of my career. A new apartment, new salary, etc. all led me to a mid year reorganization. Whenever you experience major changes like these, you should take the time out to see if your budget is still representative of your financial situation also.
I've taken the liberty to re-vamp/ re-organize my bill payment schedule. This means I need to take a look at and decide if I would like to change:
- Which bills are paid from which paycheck (the 30th or the 15th)
- Make all necessary due date changes to the bills I decide to shift around. In case you didn't know, you can change the due date of most bills. Very convenient.
- Which bills are automatically deducted from my checking account.
Update: Monday June 27th
So at the time of this post I wasn't able to fully explain WHY I'm re-organizing my finances but now since it's official I can tell you all. I got a new job! I'm moving on from my current place of employment. It's a bittersweet feeling because I've learned a ton and fostered some pretty awesome relationships there but I'm so ready to move on to phase 2 of my career. A new apartment, new salary, etc. all led me to a mid year reorganization. Whenever you experience major changes like these, you should take the time out to see if your budget is still representative of your financial situation also.
Sunday, June 19, 2011
Halftime: What's Your Game Plan?
It is almost the end of June 2011. Can you believe it?! That means half of 2011 will be over in just a few weeks. I decided today that it would be a perfect time to evaluate my progress through 2011 thus far....in all realms of life. What has changed? What is the same? Am I keeping up with what I planned to attain this year on Jan 1? Where am I behind? Why? If I'm doing well, how can I make the last half of the year even better?
If you can't tell by now, know that I'm BIG on feedback, constructive criticism...basically anything that allows us to learn and grow.
I'd encourage all of you to do the same with yourselves. What were your goals for 2011 and how are you progressing? This can be financially or otherwise. Let's not get to December and realize we haven't gotten where we wanted. Life is going by quickly and for some reason I just really want to get it right...after all, this is the only chance I've got.
My next few posts will be dedicated to evaluating. Let's explore together :-)
First stop: "Now Year Resolution" For fun, why don't you work on one of these for yourself. I'm not going to define it for you. I've already made mine. Make yours, with whatever you think it should include. Let's share next week!
Sunday, May 22, 2011
Quick Pick: How much is too much?
A question I get a LOT from my friends and peers: How much of my income should go towards rent/mortgage?
My rule of thumb is 25% but I read a Washington Post article that says 30% of your gross income. Gross is your income before taxes and deductions are removed. This means the following affordabale rents if you make $3,000/mo gross income:
25% - $750/mo
30% - $900/mo
This percentage is not supposed to include utilities or other household expenses.Only your home payment.
Of course you need to adjust your percentage for your other monthly committments (i.e., car note, loan payments, child support, etc). If you're looking into buying, 30-33% is a decent estimate od affordability because your income will increase yearly and your mortgage payments will not.
Hopefully this adds to your roladex of financially savvy information! Happy apartment/house hunting!
My rule of thumb is 25% but I read a Washington Post article that says 30% of your gross income. Gross is your income before taxes and deductions are removed. This means the following affordabale rents if you make $3,000/mo gross income:
25% - $750/mo
30% - $900/mo
This percentage is not supposed to include utilities or other household expenses.Only your home payment.
Of course you need to adjust your percentage for your other monthly committments (i.e., car note, loan payments, child support, etc). If you're looking into buying, 30-33% is a decent estimate od affordability because your income will increase yearly and your mortgage payments will not.
Hopefully this adds to your roladex of financially savvy information! Happy apartment/house hunting!
Friday, May 20, 2011
Well I'm movin on upppp...to the East side...
Greetings!
Sooooo.
First things first, I'm moving into my OWN PLACE. Gahhhh! I'm so excited. In Hyde Park, on a cute little cul-de-sac'd (did I make that tense up) street, one block from the lake, where birds chirp and lawns are pristine and I will have one of my very on line sisters living right across the street. I. AM. TOO. GEEKED.
With all of the excitement, I haven't really thought about the fact that paying the entire rent and all utilities (y'all cable is so expensive when you're the only one paying it!!!) solo will put me on a tighter budget than ever. Well I mean I did the financial analysis that informed me I could technically handle it. But, the reality that I won't be able to soothe my work woes with massive amounts of online shopping and weekend getaways as much, hasn't kicked in. But after month one, I'm sure that reality will kick in. Prayerfully. lol
So I went on a blogging hiatus (by the way, who does that after like 2 months of blogging???) because I'm incredibly busy with work and life. I don't think I've worked less than 12-15 hours a day for the past few weeks and therefore sleep is very limited. Additionally, I'm coming into my promotion year at work...which is a big deal anddddd seems to be really emotional (as for me, EVERYTHING is).
But I'm coming back because I need this blog to keep my sanity...and most of all I need it to keep my pockets safe after my big move!
So I'm back and I'm still...
25andretiring.
Sooooo.
First things first, I'm moving into my OWN PLACE. Gahhhh! I'm so excited. In Hyde Park, on a cute little cul-de-sac'd (did I make that tense up) street, one block from the lake, where birds chirp and lawns are pristine and I will have one of my very on line sisters living right across the street. I. AM. TOO. GEEKED.
With all of the excitement, I haven't really thought about the fact that paying the entire rent and all utilities (y'all cable is so expensive when you're the only one paying it!!!) solo will put me on a tighter budget than ever. Well I mean I did the financial analysis that informed me I could technically handle it. But, the reality that I won't be able to soothe my work woes with massive amounts of online shopping and weekend getaways as much, hasn't kicked in. But after month one, I'm sure that reality will kick in. Prayerfully. lol
So I went on a blogging hiatus (by the way, who does that after like 2 months of blogging???) because I'm incredibly busy with work and life. I don't think I've worked less than 12-15 hours a day for the past few weeks and therefore sleep is very limited. Additionally, I'm coming into my promotion year at work...which is a big deal anddddd seems to be really emotional (as for me, EVERYTHING is).
But I'm coming back because I need this blog to keep my sanity...and most of all I need it to keep my pockets safe after my big move!
So I'm back and I'm still...
25andretiring.
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