Weekly Money Checkup | Oct. 3, 2011

1. The most I’ve spent this last week was on:  Bills!  Luckily though, they are paid, and now the rest of my paycheck can go to savings... What a nice feeling!

2. Today I am thankful:  for General Conference yesterday.  There were so many inspiring words spoken!  I had such a wonderful time just hanging out with my family, and feeling uplifted!

3. Money can’t buy happiness. One free thing I did last week that made me happy was: I made cupcakes for an activity tonight.  Sometimes I really enjoy cooking/baking, it can be so relaxing.

4. I will consider this week a success if I:  Pass all of my exams.  I didn't study at all this weekend, and now I'm kicking myself for it!

5. I like Fall   because  of the beautiful colors, the crisp air, boots, and the reminder that holidays are just around the corner!

Month 3 | Binge Spending

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I'm sitting here calculating this month's numbers, and I gotta say, it doesn't look good.  I began this month with a trip to go meet the new boy's parents.  I have to say, I set a budget of $300, and I came in at just under $200!  However, I think the fact that I had so much financial aid left over kind of screwed me.  I think that my subconscious mind was thinking "Ooo, look at all the money you've already saved this month.  You don't need to stick to your budget.  Heck you don't even need to look at your budget."

And I didn't.

Until this morning...  I seriously have not tracked one item I have purchased this whole month!  If you want a sneak peak into what my-old-spending-habits-that-are-not-changing are like, I've posted my monthly spending tracker below.  UGH!  Do you see all of the red?  Red is not good.  Red is money I could have saved. 

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$957.00!

I think I'm going to be sick!

As usual, I'm hoping next month will be better.  I'm hoping that this sick feeling lasts long enough to force me to get my butt in gear and not screw around for another month.

Start a Spending Fast by Next Week | Week 5

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You're almost ready to start your Spending Fast.  How are you doing?  If you're just joining us, you can catch up here:

Week 1

Week 2

Week 3

Week 4

If you have debt, I recommend going back to Week 4 and working on that until you're debt free.  Once that happens, it's all gravy, and you're ready to start the real saving!

Here's my personal Spending Fast savings process:

I get paid on the 1st and 15th of every month, so I split up my savings deposits the same way. At the end of each pay period I look at everything left over after my "necessities" have been paid/purchased. I then literally "empty my checking account" and distribute my savings to a few different places based on my savings goals.

If you haven't set financial goals for yourself, I suggest doing that now.  Once you get your goals on paper, they become real.  They are easy to accomplish when you can see them, and the feeling of crossing off each item is so satisfying. 

My personal savings goals go as follows:

• Roth 401K (as much as I can)
• Emergency Savings account with a goal of 12 months of expenses (necessities)
• Money Market account (this is where I put most of my savings because I want $20,000 for a down payment on a house)

Usually on the 14th and the 30th/31st of every month, I look at what I have saved, and divide it into these three accounts.  I try to do it like this:

• $200+ to Emergency Savings
• $400+ to my Roth 401K
• Everything else to my MMA account.

Once the money has been deposited, I don't touch them. This is key. What's the point of saving money if you're just going to dip into your piggy bank?

It takes discipline, and it's hard, especially when you're like me and spend money because you're bored, or just because you have it. This is why I recommend emptying your checking account twice a month and putting the money into savings. That way, you won't be able to spend it with that oh so easy debt card swipe.

Also, I suggest using Internet savings accounts from places like ING or Sallie Mae. You don't get checks or debt cards, so it's harder to access the money you save.

Repeat these 5 steps for one year.  You'll be surprised how easy it becomes.  You will save so much money, and kick yourself for being so wasteful in the past!

Start a Spending Fast by Next Month | Week 4

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This post is talking all about debt repayment.  Most people don't do a spending fast to save money.  A lot do, but a Spending Fast is sort of extreme, and people usually only go to extremes when something more serious is involved... Something like debt.

If you have debt, you need to consider your debt repayment BEFORE you begin saving for a rainy day.  Saving is important, but can come later, get out of debt first.  Why?  I'll tell you.

If you have $500 worth of debt but you save $500 next month, you have three options regarding what to do with your money? 1. You could spend all $500 on anything you want (bad idea).  2  You could put your $500 in a savings account at >1-2% annual interest (great for no-debtors).  3. You could begin paying off your $500 of credit card debt at 18% interest (yes for everyone with debt). 

If you're just saving, by all means, put the money in a savings account, or add it to your retirement fund, buy some CD's, shoot, just save it.  But for those of you paying off debt this is not advised.  Let's say you save $500, and no more, over the course of the year.  Let's see what happens to that money.  Right now, the economy is not great.  The national savings rate for a "High Interest Money Market account is only about 0.057%/year."  So after one year, your hard saved $500 will earn $2.86 in interest.  Wah wah.

If you don't put that money towards your $500 of credit card debt, and don't charge anything else, or make any payments on the card; after a year that $500 debt will end up costing you $108 in interest, and close to $420 in fees.  That brings your total debt to $1028!

See my don't-start-"saving"-yet-point?

Alright, so what if you're feeling overwhelmed by your debt?  How do you even begin to pay it off with what you save from the spending fast?

I like the Snowball Debt Repayment method.

Look at your debt bills. Seriously, look at them. It's amazing how many people don't look at their bills.  The number will be scary, but you need to do it.  Then, make a list of all of your bills, this includes credit cards, and loans.  Next, find out what you're paying in interest and write down that percentage next to your list of bills.  Finally, you want to re-write the list in the order of HIGHEST INTEREST RATE first.  No matter what the largest balance is, you want to list the highest interest rate as #1.

For example if you have a Visa with a $100 balance at 10% interest and a MasterCard with a $30 balance at 20% interest, a Discover card with a $600 balance at 12% interest, and a signature loan for $1200 at 6% interest, your list will look something like this:

1. MasterCard       $30     20% 
2. Discover Card   $600   12%
3. Visa Card          $100   10%
4. Signature Loan   $1200  6%

Every month with what you have saved, you're job is to make only the minimum payments on #2, #3, and #4, and put every leftover penny towards #1. Once #1 is paid off, then you'll make minimum payments on #3 and #4, and put everything you have left towards #2.  Get it?

It's amazing how fast people actually pay down their debt when they're aware of their interest rates! 

Start a Spending Fast Next Month | Week 3

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How's it going?  I hope you're getting excited to start your Spending Fast.  If you missed them, check out Week 1 and Week 2!

Now we're starting Week 3.  By now you have chosen your "necessities" and decided how much you're going to spend on each one every month. On the sidebar of this blog I have created/posted a non-budget-money-tracking-template which I have been using and find SO helpful! Go download it for free.  Seriously, go.  I'll wait.  After that, read through the instructions.

Ready?  Good.  See how it is divided into major spending categories, and then into specific ones?  Hopefully your all of your necessities are listed.  Insert the your pre-determined "necessity" amounts in the "Projected costs" column. As you spend throughout the month, insert those numbers and keep a running total. I have divided the "Actual costs" into two columns so that you can account for the 2 pay periods in the month.

Have you heard of the Hawthorne effect?  From 1924-1932, the company of Hawthorne Works Western Electric Company did a study to see if their factory workers were more productive in low light or higher light environments.  The interesting result was that the workers' productivity seemed to improve study occurred and slumped when the study was concluded. Although illumination research of workplace lighting was the basis of the experiment, the results found that the workers' production rates didn't have a lot to do with lighting; but more with the fact they knew they were being watched.  Once they weren't being studied anymore, they stopped working as hard.  Makes sense right?

Your money works the same way. It seems to grow when you're watching it. If you keep track of what you spend or don't spend, you know how much you have all the time, and can spend based on fact. However, if you're like I used to be, and don't monitor your money, you may go shopping thinking you have $500 in your account (but forgot to take into account the groceries, the boots, and the computer you bought the day before...) when really you're broke.

I find that using some method of tracking my spending, like my spreadsheet, is a total Spending Fast.   life saver!  Because I can see all of my transactions in one place, I can see where my money is going, and how much I have left, faster than my bank's website can tell me. One of the only difference between the wealthy and those who are drowning in debt, is that the wealthy watch their money and know where it goes.

Seeing how much or how little you're saving will also be a good motivator for future months. If you always go over budget in one category, or are consistently under budget, fudge your numbers so they fit your lifestyle. Again, you have to be realistic so if $10/week for groceries doesn't work for you, then you need to increase your numbers. The goal is to save as much as you can, and you can't do that if you're not properly planning.

Start a Spending Fast Next Month | Week 2

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How did Week 1 go?  Not so bad right?  Well Week 2 is going to be a little more tough, but still not too bad, I promise!

Now that you know what your necessities are, it's time to look them over. How many of them are really luxuries that you're trying to sneak in? Come on! Cross those off the list. Do you NEED cable, and Netflix or could your time be better spent doing something else? You're striving for bare minimum! Just think, if you cut your $150/month cable to a basic cable package at say, $40/month, by next year you could have saved $1,320! Thinking about the big picture is KEY!

Next, it's time to figure how much you're necessities will cost and once again trim the fat! A good way to determine how much to budget for each necessity item is to go back over your last six months worth of payments for that item. Add up the total of each individual item and then divide by six. This will tell you, on average, how much you spend on that item in one month and will be your new "budgeted amount/projected cost" for the remainder of your Spending Fast!

So, did you find those numbers? Good, write them down on the list next to your necessities.

If you have to spend that money, decide if you NEED to spend that much? Do you need a smart phone with Internet package, or could you go back to a non-smart phone and use your Internet at home or work? You can buy a $10 flip phone and then buy a Pre-Paid plan with unlimited talking and unlimited texting for only $30/month. A typical smart phone package costs about $100+/month. That's $840 saved during the course of a year!

I mentioned that I consider my hair highlights as a necessity.  Some people think it's silly, but I need them.  I have been able to cut the cost of expensive salon visits a few ways. Do you know how much your stylist charges for a trim?  Mine considers it a "cut" and charges $35+! So I got rid of those. My hair is long enough to where my mom can trim it for free and it looks fine.  I also only get my hair done every eight weeks instead of every six weeks, and I only get a partial highlight, not a full. Those little changes cut my cost by about 60%!

Make your cuts, but make sure they're realistic. No, you probably make it through a month on one tank of gas, but you could buy a 30-day bus pass for the price of one tank of gas.  Again, though, this would require planning ahead.

Be realistic, but be strict.

Think of how much you'll be spending on that item over the course of a year. Is it worth it, or would you rather have that money in a savings account earning interest? (spending $15.00 on Netflix a month equals $220 a year!)

Start a Spending Fast by Next Month | Week 1

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Do you want to start a Spending Fast but are feeling a little overwhelmed? Don't! This is going to be easier than you thought, I promise. Week 1 is about getting organized.

Did you know that most people don't have a clue where their money goes every month? I didn't. I've always made "enough" money, but at the end of every month, as I was making withdrawals from my savings account to supplement my income, I would sit in the drive through ATM , scratching my head and asking, "where did all my money go?"

The first step of starting a spending fast is do decide "What is essential?  What are my 'necessities'?" These are the things you spend money on every month that you absolutely have to have - for survival - like if Bear Grylls lived with with you, what you guys pay for?  Daily coffee from Starbucks is NOT a necessity; but daily coffee might be, in that case, you would add a can of store brand coffee into your grocery budget.  Whether you're doing the spending fast to pay down some debt, or just to save, you have to make sacrifices. So, what do you HAVE to spend money on (not counting debt repayment*)?

I've mentioned before that Anna considered her gym membership a "necessity." I, on the other hand think $50+ a month for the gym is ridiculous.  Especially when running, push-ups, and crunches can be done at home for free. However, I do consider getting my hair highlighted a "necessity." Decide what's important to you. It's also good to have one "luxurious necessity" item, otherwise you could go crazy.  Keep in mind, the expense should be small, and I said one item, not two or three.  Also, keep in mind, that mostly everything you spend money on can be DIY.  To help get your brain juices flowing, here's a list of my monthly necessities:

Tithing (10%)

Cell Phone

Car Insurance

Groceries

Gasoline

Hair

Social*
Doctor Co-pays
Prescriptions

That's it. That's all the money I'm allowed to spend every month. When I lost my job a few years ago, I was out of work for over a year and had to move back in with my parents. The reason I'm doing the spending fast is to save enough money to put a down payment on a house of my own.  However, because I live with my parents now, I don't have to pay things like utilities and rent/mortgage, etc., which are most definitely necessities. I also have a "social" category. I did not have this "necessity" when I started the spending fast. But since then I have become single, and I don't want my new guy to have to always pay for everything. While he's the kind of guy who insists that the man pay for everything because that's his job as man, sometimes it makes me uncomfortable.   I've set this money aside in case I'm allowed to pay for a date once a month. (If I don't use it this money gets saved, but it's there just in case.)

A word about groceries... I usually only spend about 70% of my grocery budget every month. Notice the category is called "groceries" not "food."  This is because I only buy groceries, I don't grab food.  Eating out is no longer an option on the spending fast.  An individual adult can eat, healthy and well on about $10 a week (yea, seriously, $10!); contrast this with spending $5-$15/meal everyday if you were to dine out.  That's a savings of about $7,300 over the course of a year.  Cutting back on food requires a lot of patience and planning!  I have to plan all of my meals in advance, and  then grocery shop sales, coupons help, but beware of the "extreme-couponing=buying-more-than-you-need" trap.  I also buy mostly "ingredients" and not pre-prepared things.  Again, making from scratch takes time and lots of Google recipe searches, but it's more inexpensive than buying ready made.

So, figure the things you ABSOLUTELY MUST PAY EVERY MONTH and write them down. If you have a few luxury items, really think hard. Do you need it? Look at what that item will cost you over the course of a year, and ask, "would I rather have that money in one year, or not?"

*More on the Spending Fast and Debt repayment to come.

Under Budget Vacation

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This past weekend, I was invited to go up to northern Utah.  I was born there, but really haven't ever been back, so while a holiday weekend wasn't in the Spending Fast budget, I decided to treat myself and go anyway.  I've heard that flights can be relatively cheap from Las Vegas to Salt Lake City, so I looked into it.  $235.00 for an hour flight, round trip.  Hmm...

I then went over to Gas Buddy and calculated how much my trip would cost in gas.  $137.00.  It was the responsible thing to do.  I had already decided on a $200.00 budget for the weekend which was to include gas, food, and anything else that might need to be purchased, like souvenirs...

I had an amazing time, and was able to see and do so many fun things.  My "tour guide" was so thoughtful to plan and prepare our every activity, and make sure it was Spend-Fast-friendly.  And the best part is, all in all, I spent $197 and change!  Hooray for staying under budget!

Weekly Money Checkup 9.6.11

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1. The most I’ve spent this last week was on:  Gas!  I went on my first solo road trip and ended up spending about $200, $150 of which was on gas!

2. Today I am thankful:  For sleep.  It's going to be a long semester, and I'm so thankful for the days when I'll get a full 8 hours!

3. Money can’t buy happiness. One free thing I did last week that made me happy was:  Play tourist around Salt Lake City, I just fell in love with Temple Square.

4. I will consider this week a success if I:  Manage to get to work on time.  I recently changed my work hours to accommodate school, and now I'm working nearly 2 hours earlier... ugh.

5. I am willing to splurge on: an experience.

Super Surprise!

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I received a super surprise yesterday!  I was informed that my financial aid was accepted by my school!  Now I dont' have to worry about all of my Spending Fast savings going to school instead of a down payment on a house!  I feel like a $3,000 weight has been lifted off of my shoulders... Oh wait, it has!  While this was a much needed blessing to pay for school, there was enough left over to cover some other expenses... So here's the breakdown:

Awarded: $6,250.00

• $2,603.00 went towards tuition, fees, and other campus charges
• $125.00 bought me a parking pass for the year
• $325.00 paid off a parking ticket from 2007 I didn't know I had, and thus removed the warrant for my arrest!
• $300.00 is going to contribute to my travel fund (for a trip this weekend) and included oil change, tire balance & rotation, steering column fluid change and gas.
• $550.00 will pay off my signature loan
• $2347.00 is going straight into my Money Market Account! 

Hooray for extra, free income and nearly tripling my house down payment fund!

Month 2 Made it Through...Barely!

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I am so discouraged!

Month 2 was a total fail.  I feel like the fact that I forgot to factor in Tuition and other school expenses into this month's projected budget set me up for disaster.  When I planned my August budget with tuition and books factored in I wasn't expecting to "save" any money at all.  To make ends meat, I cut everything out of my budget this month except for my necessary bills and retirement savings (yep, even groceries were gone, and I've been eating a lot of pantry goods and frozen meals).

I wasn't sure if I was going to qualify for financial aid from my school because as of last year, I had exceeded the allowed number of credits for any student.  Basically they said I have been in school too long, and they're not helping me pay anymore.  Although I appealed it, and was given back my financial aid, every semester since then has been a game of Russian Roulette, and I'm usually on the loosing end.  Last year I didn't find out my financial aid didn't go through until classes had started.  Imagine my excitement when I received a letter telling me that I had one week to come up with $3,000 or else I would be purged from my classes.  That's why I had to take out that ridiculous Signature Loan. 

While I originally saved quite a lot after the first pay period this month.  ($516.00), I was feeling so discouraged by the 2nd half of the month that I went into crazy.bad.habit mode and overspent most of my potential savings/tuition!  What I had left ($100.00) was not enough to make a dent in tuition, so I put it towards the Signature loan.  I'm hoping my financial aid comes through.  I feel so disappointed and anxious and stressed out, and I'm kicking myself as I review where I went over budget:

• Food ($197):  Cutting out groceries was a huge mistake, because there are only so many Cup'o Noodles I can eat in a month before I go crazy.  I ended up eating out this month more than I ever have in my life!  Normally I budget $100 a month for groceries, and $0 for eating out.  Of the amount I went over budget in the food category, $156.00 was from eating out!  Seriously? It would have been so much better if I had just budgeted even $50 for groceries.  Since I don't eat fast food, eating out cost me a fortune because I had to get food from "nicer, healthier" places.  Thomas' birthday was also this month, so I decided to take him out.  We didn't do anything super expensive, but I paid for dinner and dessert.   
• Taxes ($23):  Taxes get me every month!  I never know how much to budget, and my estimations are always wrong.  Maybe next month I'll just highball the figure!
• Entertainment ($127):  While I try to do as many free activities as possible, sometimes spending money is inevitable.  It's times like this that I wish I had purchased a $100 emergency gift card.  I know a girl who is new in town and doesn't have many friends.  She asked me to go to the movies, and while I had told her about my Spending Fast, she wasn't really getting that "movies isn't something I consider a necessity."  So I ponied up, and went... twice.  I also purchased a portable DVD player for an upcoming road trip (I justified it because I had a gift card, and bought it refurbished so it was like half off).  I also bought a few songs on iTunes and two books.
• Personal Care ($123):  I own two pairs of jeans, which I wear literally every day.  One of them ripped, and while I tried to sew them (make do & mend), the only way to save them was to turn them into Capri pants or shorts...  I needed jeans.  I bought two pairs at Forever 21 for just about $11, and bought some shoes too.  I'm still trying to force myself to return them.  I also purchased a gift for Thomas' birthday, as well as some fabric.  Since I started going back to church I realize I don't own any skirts or dresses.  Trying to be thrifty, I decided that making these items is much less expensive than buying them, and I'm right.  Fabric for a pencil skirt costs $12, an actual pencil skirt costs at least $20.  Bargain right?  Sure, just as long as you don't run out of fabric and have to spend $50 to "Special Order" more!  D'oh!
• School expenses ($119):  I had to purchase textbooks and pay for a campus parking pass.  Most of my leftover money went for this this month.  Ugh, if my financial aid doesn't work out I'm going to have to pay my tuition out of pocket.  That means no money towards my house down payment for the next four months!

So there you have it, I went over budget $589.00!!  Wait what?!  Where did that money even come from?!  I feel nauseous.

Luckily, I did have some extra income this month.  We had a problem at work a few months ago, and because of it, everyone is required to work 4-8 hours of overtime every week until further notice (probably through the end of the year).  I have been maxing out my hours, and I'm so glad because without them, I probably wouldn't have finished this month with my head above water. 

Everything I made on overtime pay went directly to my MMA account, either for my house, or in case I end up needing it to pay tuition, and all of my regular leftover Spending Fast Savings went towards my Signature Loan.  I know it sounds counter productive, but I'm trying to pay off the Signature Loan I used for tuition last year, so that if my financial aid doesn't go through, I can take out another one.  I am willing to empty my current Spending Fast savings, but I still have only saved about ⅓ of what I need.

My total savings for the month of August is $1158.00!  I am so excited by this number, especially considering I wasn't planning on saving anything.  I am kicking myself for going over budget as much as I did (A monthly tuition payment!)!  To think, I could have saved a whopping $1747.00!  I'm also a little nervous that my online bank statement, and my excel money tracker aren't matching up...  My tracker says I should have about $150 more leftover than I actually do.  Where is the missing money?!

On the bright side, this month I was able to reach 6% of my total savings goal of $20,000; so despite everything else, that was at least exciting!  This, my friends is totally depressing!  I am sick to my stomach at how easy it was to fall into old habits.  I've decided I'm going to stick with it though.  I said one year, and I'm going to do one year, and maybe more. 

Next month my goals are to get better about creating a more realistic budget, planning ahead (for things like school) and I am also instituting the Envelope budget.  As much as I love how easy it is to track my spending with my debit card, clearly I am not responsible enough to be doing that yet.  I need cash.  That way, when I'm out, I'm out!

  

Where Did the Savings Go:

$546 to Money Market Savings Account
$294 to my Roth 401K

$0 to Emergency Savings Account (This all went towards my Signature Loan)

$318 to Signature Loan (Student Loan for last year's tuition)

The Itch to Ditch

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Happy Back to School!  Today, I just wanted to share a quick little message for all of you college aged "kids."

Sometimes it's hard to get up and go to class.  Especially to an 8:00 am college class.  Especially when you don't live on campus and have to drive across town to get there.  Especially when you also work full time and were up late studying the night before...

To be honest, I used to ditch class all the time.  I would just study the material on my own rather than sit through lecture.  One of my Ecology professors actually conducts a study every semester about how class attendance effects test scores.

Before every test, we would have to write down how many classes we had missed since the previous exam.  That number was then compared against test scores and the rest of the class' attendance/scores.  It turns out its true.  When you miss class, grades suffer.  But did you know that missing class can also cost a fortune?

What if you went out to dinner and ordered two entrees but only received one? What if you were charged for both of the meals?  I think a fuss would be made and you would demand the second entree be brought to you, or demand that it's charge be removed from your bill..  You didn't eat it so you're not paying for it, right?  Unfortunately, this does not work with college tuition, and yet people still don't realize the impact that missing a class can have on their wallet.

For example, at my school tuition for a single three credit class costs $531.75 each semester, not counting all of the added technology, library, health facility fees, etc.  With those fees, that number jumps to a whopping $927.98 just for one class!  In an average semester, each class meets between 22 to 25 times.  That means that each lecture or exam costs about $37.12.  Every time you ditch, you're basically throwing away almost $40!  That's a tank of gas, or a date night, or even groceries for a week!

Next time you get the urge to sleep in, remember, you've already paid for class, you may as well show up!

Weekly Money Check-up 8.29.11

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1. The most I’ve spent this last week was on:  The most I spent was on textbooks!  I spent about $120.  It's a lot, but I rented them instead of buying, so I saved myself close to $600!

2. Today I am thankful: For the chance to sleep in!  I took the day off of work so that I could go to my first day of classes.  Waking up at 8:30 was so wonderful!

3. Money can’t buy happiness. One free thing I did last week that made me happy was:  Played a lot with my new puppy, Chael!

4. I will consider this week a success if I:  Get everything on my to-do list done!

5. The thing I will miss most when summer is over: Freedom!  I'm back to school full time today.  I'm a little nervous since this will be the first time I am a full time student and working full time.  I know I can do it though.

FAFSA 101

Have you heard of FAFSA?  If you're a college aged student I hope you have...  I didn't learn about it until I was a Junior in college and had already put 2.5 years of tuition and other college expenses on credit cards!  Yea, that's right.  I was applying for scholarships left and right through websites like Fast Web, but I was seeing little to no results.  Although I graduated high school with all AP classes, and a 4.1 GPA, I wasn't getting anything!  The only other avenue I knew of for financial aid was whatever my school awarded me... nothing. 

If you're new to college, or, like so many of my friends, have been in school for awhile but didn't know that financial aid was actually available to you, keep reading!

What is FAFSA?

The FAFSA (the Free Application for Federal Student Aid) is the first step in the financial aid process.  You use it to apply for federal student financial aid, such as grants, loans and work-study. In addition, most states and schools use information from the FAFSA to award non-federal aid.

Your FAFSA form contains a bunch of questions relating to your finances as well as those of your parents.  This form must be filled annually, preferably at the beginning of the year, right after filing your taxes.  FAFSA uses your tax information (if filing independently) and/or your parent's tax information (if filing as a dependent) to determine your family's financial strength, and thus your eligibility for financial Aid.

What is an EFC?

Your EFC is your Expected Family Contribution.  This is the number that through a series of calculations, the government estimates what you and/or family should be able to contribute to your college expenses.  Using your EFC, another series of calculations is done based on what the average cost of secondary education.  The number found is typically what you will be awarded in financial aid whether it be grants, scholarships, student loans or work-study.

What is a SAR?

A few days after submitting your FAFSA information, you will receive a SAR (Student Aid Report) via mail or via the Internet.  This report will show you all of the information you submitted on your FAFSA as well as tell you your EFC.  When you receive your SAR, it is important to review your information and make any corrections.  Even a small mistake can drastically change your EFC, and therefore change what aid your are eligible for.

How Much Do I Get and When Do I Get it?

Your EFC, along with the rest of your FAFSA information, is made available to all the schools you list in on your FAFSA form. The schools use your EFC to prepare a financial aid package to help you meet your financial need. Financial need is the difference between your EFC and your school’s cost of attendance (which can include living expenses), as determined by the school.

Any financial aid you are eligible to receive will be paid to you through your school. You can check your school's financial aid website to see what money you were awarded, and accept any awards you wish.  If you were given both grants and loans, but only wish to accept the grants, you can do so.  Typically, about 10 days before the start of the semester, your school will disperse your money.  They will first put your aid towards tuition, fees, and room and board (if provided by the school). Any remaining aid you accepted is then distributed to you - either by check or direct deposit -for your other expenses (textbooks, parking, etc.).  If you do not accept aid, it will not be dispersed to you once your expenses are paid, you are denying that money, and can not get it at a later semester in the school year.

Helpful Tips:

1.  Do your Taxes:

Filling out your tax return first will make completing the FAFSA easier. However, you do not need to submit your tax return to the IRS before you submit your FAFSA. But, once you (and/or your parents if you are a dependent student) file your tax return, you must correct any income or tax information that changed since you filed your FAFSA. Inaccurate information on your FAFSA may delay your receipt of federal student aid. Also, you will be required to return federal aid you improperly received based upon incorrect information.

2.  Apply Early

Deadlines for aid from your state, from your school, and from private sources tend to be much earlier than deadlines for federal aid. To make sure that any financial aid package your school offers you will contain aid from as many sources as possible, apply as soon as you can after January 1, 2006.

The U.S. Department of Education will process your 2006-2007 FAFSA if received on or before July 2, 2007. However, to actually receive aid, your school must have your correct, complete information before your last day of enrollment in the 2006-2007 school year. So it is important to apply early to make sure you leave enough time for your school to receive your information and to make any necessary corrections.

3.  File Electronically

You can fill out and submit your application through FAFSA on the Web at www.fafsa.ed.gov. Electronic filing is the fastest, easiest and most accurate way to apply for financial aid. The information you enter in FAFSA on the Web will be checked on the spot, and we will call your attention to any errors or missing information. This reduces the chance that you will need to correct your information later. Preventing errors means your school will receive your application results sooner. By filing online, you may also be able to skip some questions based on your answers to earlier questions.

If you have a U.S. Department of Education PIN (Personal Identification Number), you can even sign FAFSA on the Web electronically. To request a PIN, visit http://www.pin.ed.gov/. Your parents can also request and use their own PINs to sign your FAFSA online. We encourage you to apply for a PIN prior to submitting your FAFSA, but if you don’t we’ll automatically send you one once we have processed your application.

Free Money!  What's the Catch?

I love FAFSA, it has allowed me to get a college education, however, I do think they could do somethings differently when it comes to calculating EFC.  The forms essentially use information from your taxes to determine how much aid each student should receive.  This amount, however is determined almost entirely from taxes.

When I started school, it was not taken into account that my parents had a mortgage, and 4 car payments.  It did not take into account credit card debts, student loans, or other debts that we had.  It did not take into account regular expenses that we paid every month, and it did not take into account the fact that my parents had 3 kids entering college in the same year.  They really just looked my income, as well as my parents' incomes, and said, OK, here's what you can afford to pay!  The number they gave shocked us all.  There was no way in a hundred years that we had that much money just laying around.

I strongly recommend that if the student is under 23 years old, has a job, and will be filling out their own tax information, that they claim themselves independent.  Be sure to get your parent's permission to do this - they get a big tax break and more money back for having you as a dependent.  If the student files as independent, they will be awarded more financial aid that if they file jointly with their parent's information.  For any students older than 23 years old, you will have to file independently, even if you still live at home.  Once you reach 23 years old, your parents can no longer claim you as "dependent."

I hope this information is helpful and has given you another resource to receive money to help pay for school!  I know every semester, I am awarded almost 5x more than my actual expenses, so it really is a lifesaver.  Good luck!

Wanting Stuff

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Before I started the Spending Fast, I had some pretty bad spending habits.  I've mentioned it before, but I'll quickly recap.  As soon as I would get paid, I would first pay my bills.  As soon as the bills were paid, I would check my account balance.  Immediately, everything that was leftover would have to be spent.  All of it.  The money practically burned a hole in my pocket and my mind raced with the goodies I could purchase. 

Notice that nowhere in the above story did I mention paying 10% to my church or even taking care of Number 1.  Being young, I am still fairly selfish, and it amazes me that I never ever paid myself!  Sure, I had my savings account, and contributed to it, but it really acted as more of a back.up.checking.account.

Since I began the Spending Fast, as soon as I get paid, I first write my tithing check to my church for 10% of my pay.  One hundred dollars is automatically deposited into my Emergency Savings account and I then pay my bills.  Until the next pay period, I oogle at the amount of money left over, and the bigger it is, the more excited I get.  I might spend a little on my necessities such as gas, or groceries, but overall, I just let it brew.  At the end of the pay period, I transfer everything that's left in my checking account to my Money Market account (hopefully to be used on a down payment on a house).

Today, however, I am really feeling the urge to slip back into my old pattern of spending.  I'm looking at my bank account, and while I know that money should be saved, or might even have to go to pay my Fall tuition, but my head is crawling with other things, sparkly things, I could buy instead.  Things I don't need, but things I want:  white skinny jeans, chiffon blouses, feminine skirts, pretty school supplies; you know?  Stuff.

Stuff that I don't have room for.  Stuff that won't make me happy, but will more likely create great feelings of guilt and buyer's remorse.  Just stuff.   I still have eight days until I make my MMA transfer for this pay period, and I'm beginning to worry that the urge is too strong.  I need to find something to focus on, or maybe just make my transfer early, and leave myself completely broke for a week. 

I look back on my blog posts so far, and up until now, the Spending Fast has been somewhat easy.  Now, however, I feel the glitz of saving is wearing off and I'm starting to feel how hard this really is.  It is hard.  It sucks.  But I know I can do it.

Potential Spending Fast Hold

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I have encountered a large bump in the Spending Fast road...

That bump is more commonly known as tuition.  Every semester, it seems as though I have "issues" (to put it nicely) with my financial aid.  I qualify for it, the government awards me money, and then my University thinks of a reason not to give it to me... I often wonder if they are just pocketing it for themselves.  This semester is no different.

After applying for financial aid, the government awarded me $6,2500 for both the Fall 2011 and the Spring 2012 semesters.  Insert sigh of relief because I will finally be able to finish school and not have to take out another loan...  I was so excited.  Not only would I able to finish school and graduate, but I would be able to continue saving money for my house down payment!

Holy crooked criminals Batman, the greedy University monsters are at it again!

Shortly after being awarded my government money, I received a letter from my university stating that I was not eligible for financial aid.  The reason?  I have exceeded the maximum credit allowance for my university, which is 186.  What?!  That seems like an awful lot of credits to have earned without a degree...  I met with my financial advisor, and she assured me that in fact I only had 125 attempted credits, but typically, "students who reach 100 credits are flagged," and thus forced to appeal the revocation of financial aid.

Of course I submitted an appeal, but found out that the process will take about 30 days to complete.  Meanwhile, my tuition is due in 2 days.  If it is not paid in full by Friday at 5:00 pm. I will be purged from my classes, with very little chance of getting back in due to wait listed students.  So what do I do?

I tried signing up for the school's offered payment plan which would allow me to make payments for the next three months, and because I would be paying, I would not be purged from my classes.  I am so upset, why should I have to pay, when I was awarded financial aid?!

At least until my financial aid is appealed and the money goes through, the payments on the plan are something I can afford.  So, with much lament, I decided to sign up.  At the very least, at least I could be reimbursed later when my aid goes through.

Not so fast!

Because I have "Pending Financial Aid" I am not eligible for the payment plan.  I was to told I would have to pay my bill up front.

"If I had the money up front, I wouldn't have applied for financial aid, or tried to sign up for a payment plan," I complained to the undergrad freshman who was manning the Financial Aid office and being very unhelpful about finding a solution to my problem.

So, it looks like I am stuck paying a bill I had not counted on paying.  The only money I have is the money I have saved so far from my Spending Fast, and even still, I am still about 2/3 short.  I have emptied my money market account and am in the process of taking out a signature loan through my credit union to pay the rest.  I am determined to pay the loan back in the same amount of time that the school's payment plan would have allowed, 4 months, so that I can continue saving again as soon as possible.  As sad as I am about my diminishing house fund, I have to pay for school, so all of my Spending Fast savings for the next four months will not be going into my money market account, but now will be going to pay back my tuition.

Let's keep our fingers crossed that my financial aid appeal goes through, and I will be reimbursed so that I am not completely deterred from my saving.

Half.com

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With School beginning next week, I had the ever so glorious task of buying Textbooks today. While most students groan and mumble about this inevitable errand, Science students downright dread it. The average Science book costs $300.00. Given that most scientific subjects are ever changing, most text books need to be purchased in their NEW condition every semester, even for a class like Biology I and Biology II.

I got on my University Bookstore’s website and compiled my textbook list for this semester. I’m taking 14 credits of upper division Biology classes along with a Spanish class, so apart from mi libro de español, I needed all new, all expensive texts.

The Grand Total at check out for a Statistics text, 2 Biochemistry texts, and an oh-so-fascinating text on Ecology?

*GASP!* I think my heart stopped. After I cried a little, I realized that it was worse than I was expecting {around $400.00 or so}, but I also realized “I can do better!”

I headed over to Half.com. Have you heard of it? I’m almost certain I mentioned it on my other blog a time or two. In case you missed it, just type in the text book name or ISBN and it will search for every copy of that book that is being sold, and listed in order of its condition. Sometimes the site may find a result for $50.00 but upon further investigation it is $50.00 for a "poor condition" text with "major highlighting" and "coffee stains on the cover."

Typically, I try to buy all of my books “Brand New,” “Never Used,” and “Still in Shrink Wrap,” or as close to it as possible for the cheapest price possible.  I usually save a fortune!  This year however, Half.com has added a new feature enabling students to RENT their textbooks!  Luckily for me, all of the textbooks I needed this semester are available for rent.  Even the super.new.updated.with.one.new.discovery science books.  Do you know how much I paid for all 4 of my books?

$119.00!

Attention all college students! If you haven’t already, head over to Half.com for some serious savings. If you’ve already purchased your books for this semester, return them! Seriously, there is still time, and then go to Half.com and rent them.

Weekly Money Checkup 8.22.11

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1. The most I’ve spent this last week was on:  $119.00 on my textbooks.  I actually saved close to $400 because I chose to rent them over purchasing!

2. Today I am thankful:  that I was finally able to get a hold of someone with half a brain at my University's Financial Aid office.  For the past month I've only been able to speak with student.employees.who.don't.know.anything.about.anything!  Now my financial aid is all figured out!

3. Money can’t buy happiness. One free thing I did last week that made me happy was:  I was able to spend some time in my garden.  It's been so hot that mostly everything was fried by the sun, and because I felt like a farming failure, I haven't tended to it in over a month.  I pulled all of the old crops and planted my winter garden.

4. I will consider this week a success if I:  Get all of the work I need on my car done, as well as get my school supplies ready for Monday!

5. The best prank ever pulled on me was:  The time my roommate put Saran wrap all around my car.  It looked like a giant leftover, and it took forever to take off!

Net Worth

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Do you know your net worth?  Do you know what net worth is?  Do you know why it's important? 

A person's net worth is essentially their wealth.  Knowing your net worth can be helpful in understanding where you assets and liabilities lie so that you better understand your financial position.  Aside from that, "net-worth" is essentially an over rated financial term that isn't good for much else.   

Many people consider their net-worth to be a key factor in determining their ability to retire, this is a big mistake.  The problem with most net worth calculators is that they take an unrealistic approach to "assets."  For example, your car, jewelry, art work, life insurance and furniture may all be counted as assets.  However, owning a couch doesn't mean someone has more money than someone who doesn't own a couch, it just means they have a couch.  Unless all of those "non-liquid assets" are sold, I personally don't feel like they should be considered in determining someones net worth.  On that note, what good is considering life insurance as an asset?  You dont' see the money ever, and no one else will see it unless you die.  See what I mean about being "over rated?"

With that being said, if you're still curious bout your net worth, here's how you calculate it:

Take the total value of your assets (liquid cash) and divide that number by your total liabilities (debts). 

  Assets  

Debts

Easy enough, right?  I think I'm going to start doing this, just to see where I stand.  I am using a modified excel template I found online (you can see how I modified it below).

Holy smokes!  It is crazy to think that I don't have any consumer debt (my only debt is student loans), and a good credit score, and yet my worth is that much in the red! -$23,182! 

You can see, though, how much I altered this calculator.  If I had used the original one, my net worth was closer to $33,000.  Why?  I currently have a $50,000 life insurance policy and I own my car outright for another $6,000.  On paper, those things look pretty good, but I need my car to get around, and I don't ever get to see money from my life insurance policy.  Only my beneficiary's wealth will increase.  Make sense why I didn't include those non-liquid assets in my determination of net worth?

If your net worth isn't good (saaammmmeeee!), don't freak out, it really doesn't mean anything.  It's just a nice easy way to see where your money is and where your debts are!

Lovelorn

I am currently wanting, wishing, dreaming about MAC Lipstick in Lovelorn.

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Weekly Money Check-up 8.15.11

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1. The most I’ve spent this last week was on:  I spent $57 and change on gas!  While riding the bus was a fun experience, I ditched it.  I was still using my car to get everywhere that didn't involve going to and from work.   Again, I live in a part of town where the bus is not a common means of transportation, and there are only a few bus stops in my community.  While the bus was saving me about 50% of my transportation cost budget, planning a four hour trip to the grocery store just wasn't worth it.  Also, now that I have to drive to school three days a week (across town), the trip would take too long on the bus.  Luckily, however, I heard on the news this week that gas prices should go down by $0.50 per gallon in the next few months!

2. Today I am thankful:  for sunshine and warm weather.  I'm sad that it's already starting to fade.

3. Money can’t buy happiness. One free thing I did last week that made me happy was:  I attended another Free Concert in the Park on Friday.  I went with a bunch of friends from church, and we had such a good time!  I love that my community is willing to spend money to give back to us and provide free, family-friendly entertainment.

4. I will consider this week a success if I:  Don't spend any money.  My bills are paid, my gas tank is full, and I have my groceries for the week; so there shouldn't be any reason to spend a single penny.  I also want to work out at least three times this week.

5. If I had today off:  I would be at the lake, or at least a pool playing in the water and working on my tan!

Buy a Mountain

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For anyone who was alive in the 90's and old enough to remember Mad TV, there was a skit that I always thought was funny.  It was a sketch making fun of Oprah and her millions of dollars, and her encouragement of people to accomplish lofty goals.

In one skit, "Oprah" had a guest on the show who's life's dream was to buy a mountain.  While the guest made a measly income, and let's face it, purchasing natural land masses isn't necessarily allowed, it was not a deterrent.  While speaking in her powerful from.the.stomach.voice and nodding her head in exaggerated encouragement, Oprah gave the following advice:

"Buy a mountain!  Do it today, buy a mountain!"

This sketch has always stayed with me.  Mostly because it was so rediculous but also because sometimes in life we set lofty goals for ourselves.  Goals that many people wouldn't think are feasible.  Whether out of boredom, the need for a challenge, or just to keep afloat, it is good to have goals.  Many readers of this blog have started spending fast, or are in the process of getting out of tons of debt or they are simply trying to start saving.  It stinks.  It's hard, but the good things in life are never easy.  So, whatever your goal, to you I say:

"Do it.  Do it today.  Buy your mountain!"

Happy weekend

Mustard Please

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I am so in love with mustard colored tights!

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Balance

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A few years ago, I went in for an interview with my Bishop.  No, it wasn't that kind of interview, I wasn't "in trouble," it was the how's.your.life.going kind of interview.  After talking for about 30 minutes, he basically told me that my "life balance sucks."

"Morgan, imagine you're a waitress holding a tray.  Now picture the different aspects of your life like glasses on that tray.  Part of having life balance means you can put all of the glasses on your tray, and organize them in such a way that you won't drop anything.... In your life right now, you dont' even have all the glasses...  You've got school, you go to church and have good family relationships, but what about dating? Or career? Or friends? Or finances?  Or your own home? Or personal improvement and hobbies?"

Uhhhhhh?

I said I'd work on it, but I never really did.  I'm really good at substituting one aspect of life for another, but I've never actually tried to achieve "life balance," and I often wonder how in the world people do.

Lately, I've been really stressing about school.  This coming semester I am enrolled as a full time student (14 credits);  it will be the first time I've tried going to school full time while being employed full time.  I know it will be tough and I'll be tired all the time, but I think I can do it, even with everyone else telling me I can't.

I know I can do school and work, but what about everything else?  Where am I supposed to find time to date?  Or play with friends?  Or exercise?  Or garden?  Or keep up with my budget? Or anything else I normally like to do? 

Any tips on achieving life balance?

Book Review: Debt Free U

{Purchase on Amazon}

Last week, I mentioned I heard of a book called Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents by Zac Bissonnette.  The title alone sparked my interest so I went to the library and checked it out.

It almost sounded too good to be true and I'm not exactly sure what I was expecting.  Maybe a way to cheat the system, stick it to the man, or just get some realistic advice on how to pay for school.  This book was written by a 21 year old college graduate.  He did not come from money, in fact, while writing the book his father's home was in foreclosure and his mom lived in a condo with her parents!  Zac, a financial wonder kid, was still able to go to a well known college without accruing any debt, at one point in the book he mentioned that at graduation he had one million dollars saved in his stock portfolio!  Currently he writes for AOL's Daily Finance blog, and contributor to many national financial newspaper columns.

 I dove right in to this book and read it in two days, but overall, I have to say I was disappointed. At this point in the game, for me, all of his advice was old news.  Here are just a few pieces of advice from the book, and how they relate to my college financial woes:

1.  How much can you afford and where will you get the money? 

Rather than actually answering this question, Zac spends a lot of time talking about how scholarships are few and far between - and really only pay about 1/20 of a student's overall college expenses.  He says student loans are dangerous and advises against them at all costs - citing that within 5 years of graduating 1 in 5 students default on their student loans.  He discusses that tuition & fees rise close to 18% every three years, and gives rough estimate costs of a 5 year education.  He also briefly touches on the downfalls of applying for financial aid and ways parents make mistakes trying to finance their children's education.

• I couldn't agree more about scholarships.  I graduated high school with a 4.17 GPA, I was involved in three Varsity Sports, and a myriad of clubs and other activities.  It did not pay off.  I received one scholarship from Target for $1,000, as well as a small in-state scholarhip that quickly ran out - and that's the only free money I've ever seen. 

• I never qualified for grants, because my dad made "too much money," however FAFSA didn't take into account that my parents had three kids going into college the same year, their own student loan debt, mortgage, car loans, etc.  FAFSA is great, but because it looks soely at income and not debts, it's not always realistic.

• Many parents save early for their kid's college, some borrow money or take loans from their retirement to finance their kid's education.  Bissonnette says this shouldn't be an option, which is good, because for me, it wasn't.  My parent's told us up front they couldn't/wouldn't give us money, but we could live at home while we went to school.

So where does is the money supposed to come from?  Bissonette says that all teens planning on going to college should start working summer jobs as early as possible.  This money should then be invested in high interest accounts and used to pay for college.  It makes sense, and would be a great way to teach kids about money, right?

When I was in high school, getting an education was my job.  My parents were completely against us working during the school year, but during summer break, we were allowed to work to earn some "fun money."  They were getting sick of forking over money so that we could go out with friends, and our allowance wasn't doing the job.  Every summer in high school, I worked as a Swim Teacher and Lifeguard, and I loved it!  I made about $200/week, which to me, at that time, was really good money!  However, with a job comes the need for transportation and therefore car payment, insurance and fuel costs. 

Contrary to Bissonnette's advice, I wasn't saving every penny earned, I was spending most of it on fun summer activities- you know, the whole reason for having the job in the first place.  By the end of my four years in high school, if I had saved all of my summer money, I could have saved close to $9,600!  That's half of my current student loan debt!  If I had invested it, and earned interest on it, I would have been much better off than I am today.  Instead, I started college with no savings and took out loans to pay for my education.

2.  Does It Really Matter Where You Go to College?

I found it amusing that most of the book dealt with the "dilemma" of where to go to college.  Is getting into an Ivy League school really that important?  Bissonnette points out that an education is an education.  What big name schools offer is prestige and networking opportunities and an empty wallet.  Many people think it's just fine to pay up to 40% more for a name!  Let's be honest, networking can be done at any school.  Like every other life experience, college is what you make it.  Success is not determined by a school, but by the person.  Anyone can turn an average Uuniversity into an Ivy League university if they want to.  He also recommends community colleges for general education requirements.  Tuition is often only 1/3 of what universities cost, and all credits are easily transferable.

•  I've never thought big name schools were worth the price, especially since I was the one paying for it.  Growing up, I always knew I'd go a religious private school, but when I didn't get accepted, I "settled" for my state's university.  I wish I would have taken advantage of getting my core requirements at the local Community College because I could have saved myself a fortune.  While Bissonnette stated earlier that every three years, the average costs for a college education raises 18%, my university is averaging 19% increases every school year!

3.  Make Money and Save Money

Did you know that most college age students spend 10.5 hours every week consuming alcohol?  How about 12 hours watching TV or playing video games?  There have been all sorts of studies done to show how much time college students waste "gaining a college experience."  Most of that free time could be used constructively in one of two ways: 

1. It could be used towards studying, and therefore getting through school faster.  Bissonnette points out that by channeling most of that wasted time towards school, students could easily graduate in three years, rather than the average of five it's taking most.   
2. The total amount of the average student's wasted time comes to about 35 hours each week - that is almost a full time job!  Bissonnette suggests that all students could successfully work a part time job (20-25) hours each week, have adequate time for study, and socializing.  It's about finding balance.  The money earned from a part time job at say $8.00/hour comes to about $3,200 each semester and would help pay for the next semester's tuition, fees, books, etc. 

Saving money is also relatively easy.  Bissonnette suggests not only working part time during a school semseter, but full time during summer and winter breaks.  Money earned should be applied to school and the rest should be saved or invested.  This is how Bissonette was able to become a millionaire by the time he was 21!  He also advises to stay away from using credit cards, creating a budget and sticking to it, and using wise finance practices- even taking a personal finance class.

Again, this would have been good to know when I first started college.  My parents didn't want me to work while in school, so I lived off of loans for my first two years of college.  Once I started working, I had credit card debt, and other bills that needed to be paid, so saving didn't happen, let alone funding my education.  And so the vicious loan cycle continued.

Is it worth reading?

I would say yes to those who are soon going to start college, or to parents of college age kids.  There is a lot of helpful information about the college planning process, that you may not know.  Most financial information provided by college financial aid departments and counselors is not very helpful, so any other resources are always good.  However, because this is such a large expense, this book should be coupled with other research and study. 

If you're just wanting an answer on how to get a cheap education, this is not the book for you.