My Boring Finances

It’s me here, the non-PF blog-half with, like, no knowledge of investments.*    What even is an annuity?  (Please don’t tell me in the comments!)**  I take the standard deduction on my taxes, yo.  I do things the easy way.

student loans: on track to be paid off in approximately 2018 — oof!  However, that’s assuming I don’t make extra payments, which I just did.  (#2 says WOOO! )

My current principal is $14,712.20.  Ow.  My interest rate is somewhere on but I am too lazy to find it.  I do get the quarter-percent lower interest rate (or whatever it is) for automatic electronic payments.  I consolidated at some point in the past when rates were good.  The calculator-thingy says I will pay back over $18k if I stay on the graduated payment plan and don’t make extra payments.***  Ow, again.

The amount of my student loans seems like a lot.  It’s mostly for undergrad, though I did take a few thousand dollars in grad school to get me through the summer once.  I went to state schools and worked during the summers, but did not work during the school year for undergrad.  All my loans are subsidized.  I had them in deferment in grad school and I think for a while afterward.  I am on the graduated repayment plan, in which payments increase every two years.  I plan to make extra payments on top of this amount sometimes.

Car paid off.  I moved to my current location from a big city, where I was able to use my partner’s car, get a carpool, or take public transportation.  Here the public transit is practically non-existent, and my partner’s not here.  So I had to buy a car.  I made it my top priority to pay off, and I did it in around 18 months.  (#2 says wooo!)  I had a substantial down payment before I bought, around 30%.  Some of this money came from generous gifts from family, including my partner.

Saving for house down payment some day.  It really depends on where I end up living, though.

retirement: on track.  I have automatic paycheck deductions and I set up extra savings recently.  One of the perks of my job is that my employer makes a whopping large contribution, percentage-wise, to my mandatory retirement fund and I don’t have to wait for it to vest.  My meeting with the guy from TIAA-CREF reassured me that I am ok to leave my settings alone for now and I might not be destitute when I’m old.  I hope.

There.  Are you bored yet?

*#2 says:  note that #1 is the person who got me on the pf kick, way back in graduate school when she told me I shouldn’t keep my entire semester pay of 10K in a savings account when I could earn 5% interest on some in a CD (or money market) and still spend it when I needed it in the summer.  That was AWESOME and eye-opening.  I’d known about long-term stock investing but had no clue on more immediate concerns outside of savings accounts.

**#2 says: ooh ooh, I know this one!  Social Security is an annuity!  So are old-fashioned DB pensions.  (#1 says: yes, this is exactly what I didn’t want to hear about.)  An annuity is insurance against outliving your assets.

***#2:  My BOE says that’s somewhere between 3 and 4 percent.  So, higher than a savings account these days but lower than my mortgage.  One day safe investments will be making more than again that but not today.   Waaaay lower than the 7-8% loans my DH had for undergrad.  (Shakes tiny fist at private loans.)

27 Responses to “My Boring Finances”

  1. First Gen American Says:

    So now I am curious..which one of you reads my blog, the PF half or the non-PF half? As people say I don’t really write about PF stuff..even though I kinda do sometimes.

    You don’t have to answer but it got me wondering as I do still see you as one person.

    I’m so glad my student loans are behind me. If there is such thing as a funner debt, mortgage debt seemed nicer because I can live in it and it’s more tangible than knowledge that you gain from school.

  2. nicoleandmaggie Says:

    You’re on the blogroll, so we both do. One of us comments on pf blogs more often than the other, you may have noticed. The other comments more on academic blogs. (Though at certain points at work, they’re probably both equally likely to procrastinate with commenting on blogs.) When we comment we generally comment as separate people, unless the person only allows wordpress sign-ons.

    And yes, we’re still one person (except for the mushrooms). #1 just doesn’t acknowledge her inner personal finance guru and #2 does.

    #2 has been having problems because ever since she pulled out the amortization calculator and made a big payment (more on this Nov 1st) she’s been keeping herself from going overboard and completely liquidating her emergency fund which would be a bad idea. Also bad would be running out of money for food next September because of mortgage prepayments. (Add to that DH’s job situation…) But it is so much FUN to knock time off the mortgage.

  3. Everyday Tips Says:

    Well #1, I think you know more than you realize. Regardless, it just goes to show you don’t need a financial ‘background’ to do well financially. You just need to cover the basics of earning more than you spend and save where you can. If you do that, you will be fine unless you give all your money to Lehman or Bernie Madoff. Therefore, I think you are doing a great job.

    Good luck with those loans. You know they were worth it, but I am sure you could do without the constant reminder. (In the form of a monthly payment.)

    • nicoleandmaggie Says:

      Actually the problem is I tend to forget about them! Aside from making sure I have enough money in checking to cover the amount, I usually don’t notice them. I would like to notice them more, so that I actually pay them off sooner!

  4. SonyaAnn Says:

    If only I was smart enough to follow you!
    Anna is paying for part of college with loans, we figure that she should have somewhere around $13000 when she is done. We have a plan though. Even though we can’t pay for all of their college, they can move back home for a year or two and live rent free as long as the money goes to pay off the debt.

    • nicoleandmaggie Says:

      Lucky girl, and nice parents. My dad told me no living at home after age 18, unless I pay rent. Of course it would probably be very low rent and free food, but the principle was there. Fortunately for me, I have never had any desire to move back in with my parents, and my career precludes it anyway. It’s great that you can support your kid like that!

      • Tara Says:

        My parents’ policy on living at home was that allowing for the 2 months summer after finishing high school, if you went to university, you didn’t have to pay rent, pretty much ever. But if you didn’t go to university and chose to continue living at home, you’d have to pay rent. So I never paid rent during the 2 months between high school and university nor in the 3 months between university and moving to start my full-time job. My parents are reasonably cool, but there’s no way I would have moved back with them indefinitely after university (maybe if I didn’t have a job yet… but that’s the only possible reason). Plus, where my parents live, I could not have found a job in my field with less than a 2 hour commute. So no thanks.

      • nicoleandmaggie Says:

        #2 here: I thought DH and I could spend a couple months with my parents after graduation and before graduate school. Apparently I thought wrong. They did loan money for last month’s rent and deposit though.

  5. Nick Says:

    Don’t worry about boring finances. If you’ve read any of the Tom Stanley books (which I believe you’ve said you have), you’ll know that boring often leads to a solid financial foundation – and, even better, less stress.

    I’m not a big fan of debt, but if you have a solid plan for retirement and are on track to get there, keeping it boring is not a bad idea at all.

    The key is really having goals and plans and then making sure you’re on track to achieve them within a comfortable time frame. Let everyone else worry about derivative or other over-complicated investment strategies. You’ll be just fine.

    *but please don’t borror money for a car again… sorry, I couldn’t leave that one alone… way too risky.

    • nicoleandmaggie Says:

      #2 Here. While it is generally good practice to never borrow for a depreciating asset (such as a car), in #1’s case it was justified. In this case she did not have an alternate mode of transportation (no public transportation in the boondocks, no other vehicle available) and she needed to get to work. The appreciating asset was herself (or her career). So investing in the car meant she could make more money. In general it’s not a good idea to borrow for a car, but sometimes you have to and it is justified.

      • Tara Says:

        I would also argue that borrowing for a car when you could pay cash, the interest rate is very low, you pay for no more than 12 to 24 months, and you are using it as a way to improve your non-existent credit history is also a reasonable idea. Collateral loans (e.g. car loans) are much better proof of repayment ability than revolving loans (e.g. credit cards or lines of credit). I am personally planning on taking out a car loan, if the interest rate is favorable, because I have a credit score of ZERO, which does not remotely lead to buying a house with a reasonable mortgage rate.

      • Nick Says:

        Well I’m definitely the wrong person to ask about it because I give no value to cars other than “getting from A to B.” I drove a 1997 Geo Metro hatchback until June 30, 2009 when my wife MADE me buy a Honda CRV after we had our son. The depreciating asset is only part of it to me. I’m happy buying a $1,000 car and saving up to get nicer ones.

        I don’t necessarily hold it against folks who borrow for a car if they get intense and pay it off fast. The big risk for me is if you crash your car, owe more than insurance will pay you and have to come up with cash to pay it off or roll it into a new loan. If you don’t have the cash, you can be in trouble. But if that doesn’t sound like your situation.

        And I’m all for building credit. When I was 20, I financed a motorcycle and paid it off in a month or two just to build credit. But I had the cash when I bought it, so I didn’t see the risk as great and paid the finance charge to apply and two months of interest as a cost of doing business.

        But building credit can be done a few ways, including a car loan. (i.e. store credit card, major credit card, secured card with your local bank or credit union with an agreement to release the security in 12 months). If you choose the car route to build credit I would just be careful to get a small loan with a big down payment.

        I’ve been very spoiled – having lived only in Boston and New York with the exception of one year in Los Angeles when I had a motorcycle. My wife can’t wait to get to the burbs! I’m in no hurry, but a house with a yard would be quite “nice.”


  6. SonyaAnn Says:

    My concern is that we didn’t get along so great before she went away. I can only speculate on what she will be like when we get her back after 4 years on her own!

  7. Everyday Tips Says:

    This has nothing to do with this post, but Paul the octopus has died. (The one that kept successfully predicting the outcome of world cup soccer matches.),1518,725399,00.html

  8. frugalscholar Says:

    My finances are boring too, thank heavens. With a paid-off house, I too take the standard deduction.

    Boring is also good when the news is full of dire cuts to higher ed–28% last year (already happened) and around 35% coming up next year. Check out Louisiana higher education of you think I’m exaggerating.

  9. Money Reasons Says:

    Finance is a bit boring (shhh, don’t tell my blogger peers!).

    I run a little against that grain… I’ve never read Dave Ramsey (although, I did win one of his books and it’s sitting on my shelf). I like to keep my own unique perspective on financail matters, I read the books, but I only take what I think has value (I guess that’s why I still drink lattes)…

    What keeps me interested is my speculative play in the stock market. The total money that I’m playing with is less than 10% of my portfolio, but even that 10% keeps me engaged and interested!

  10. Gene Perez Says:

    seems like you are doing alright

  11. Tara Says:

    I would say that your finances being boring is a good thing! I would say that I am in a fairly similar state, minus the student loans.

    I am only haphazardly saving for a down payment on a house some day because I don’t see it happening anytime soon (i.e. for at least 5 years) because I don’t know if I see myself staying in my current city for an indefinitely long period of time.

  12. Suba @ Wealth Informatics Says:

    My finances are boring too, well for most parts. We think we spend too much. So we try to cut each others’ (husband and I) expenses and fight to make it interesting :P does that count?

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