11 April 2014

The Lending Club Experience

So as I mentioned awhile back in my self-made raise post, I finally took the plunge and went over to Lending Club* a couple months ago. However, while most PF bloggers are there to invest, my mission was different: pay off my high interest debt. Lending Club is somewhat famous for this sort of mission, so I figured that it would be a good place to start. Since the overwhelming majority of the pieces I see about Lending Club come from said investors, I'm taking it upon myself to offer my experience with them.

It was basically like my computer giving me money.
Photo from jannoon028.
The process wasn't as easy as applying for some other types of credit have been (i.e. credit cards), though it wasn't pure drudgery either. The whole process took about a week, including fielding a call from a Lending Club agent to confirm information, the trial credit/debit to my bank account to make sure it worked, and setting up an actual account online. (By the way, you can't borrow and lend from the same account, but it seems like making separate accounts for those two functions would allowed. I've yet to experiment with that.)

Once the formalities were done, money made its way to my bank account and my interest-charging credit card balances quickly became zero. In addition to freeing up money from interest, it also simplified the whole debt repayment ordeal. Instead of having several bills to keep track of, I now only have a single payment for a single amount. No more juggling and constant checking to make sure several different cards all get their amount at the various times. And of course, paying it off also comes with the financial benefit of lower interest costs.

Eight months later, things continue to go smoothly. I guess perhaps the true test would come if I were unable to pay, but I don't see that happening. Lending Club doesn't wait for you to "forget" to send in the payment because they do a direct debit to your account for the payment amount. To further make sure that you're ready, they send an email reminder 5 days in advance to give the heads up and make sure the money is there.

All in all, I'd recommend an account with Lending Club* to anyone looking to get back on their financial feet but needing a little extra help. While some places offer "instant approval", Lending Club certainly isn't in that camp. They don't do payday loans. However, they may offer a decent opportunity to anyone looking to seriously wrest control of their financial ship. The lower interest rate as well as simplification are also welcome. As they say, "less is more". In this case, more in money your pocket and more peace of mind. Don't forget to cut up your cards!

*Note: If you choose to borrow from Lending Club via that link, I'll get a referral bonus. Thanks for the support!.

14 February 2014

Happy Valentine's Day! 14 Ways to Show Your Finances Some Love

Love your wallet and it will love you!
Legend has it that Cupid shoots arrows at the best deals in the grocery store. Today is Valentine's Day, a time to buy roses (or whatever the flower shop has left over), go out to dinner (better already have reservations!), and pretend you haven't been ignoring your significant other since Christmas. But your wallet is probably still suffering from Christmas! In acknowledgement of that fact, here are some things you can do to show your finances that you love them. At any time, really.

1. Track your finances
Garbage in, garbage out. But how do you even know what's going in and out (but sadly not In-N-Out) unless you keep track of it? Whether you use Mint, Personal Capital, Excel, or just a pen and some scraps of paper, make sure you know where your money is coming from and especially where it goes.

2. Stop driving
With the IRS allowing us to deduct $0.56/mile for business expenses,  that means that most people's driving costs a similar amount. However, driving is one of the least obvious drains on the wallet. Even if you drive a Volt that you got on a mythical $179/month lease, miles add up quickly because many people do not have a good concept of distance. I used to routinely drive 400 miles/week, and that was barely my work commute and a few errands. I hardly felt like I was driving. I've since reduced my driving by quite a lot. I suggest you also cut back somehow . The extra money is nice.

3. Stop paying interest
One sure way to make sure that you're sabotaging your progress is by sending portions of your money to others just because they let you use their money. The sooner you can stop that practice, the better.

4. Increase your income
Whether that means dusting off the résumé for a round of hiring manager roulette or just creating a debt snowball, more money never hurt anybody. Yes, I typed that with straight fingers.

5. Cut the leaks
Or in other words, make sure you're not trying to heat the state of North Dakota in the dead of winter nor cooling the Mojave during a Cali summer. You probably cannot have too much insulation. For starters, make sure your windows and doors are effective barriers against the elements. Expand into the walls if you can. Even with the HVAC system is up to snuff, keeping it from having to run by taking care of leaks will save lots of money.

6. Get out your bike
This is how you get around once you stop driving as much. You do have a bike, right? Take it out and ride it. Like yesterday. Don't worry if you don't have any Lycra, that stuff is overrated anyway and not necessary. But you can never have too much light. I roll with two lights on my bike to make sure that I see the potholes.

7. Cull your junk
One quick and possibly easy way to get the income figure increased (at least temporarily) is to sell any unneeded and unwanted items you have sitting around. If you can. There's no one good way to sell your stuff. Ebay works for some, Amazon for others, and yard sale for a third category. Unless you need the stuff gone tomorrow, you should have time to research and find out which method gets you the biggest payday. Do it.

8. Trace the money
How much is eating out costing each month anyway? With the monitoring you set up in #1, it will be much easier to figure out where exactly your money goes. Follow up to make sure that it goes where you think it goes and that where you think it goes is where you want it to go.

9. Learn something
Knowledge is power, you're never too old to learn. While learning never ends, the learning of school is rather limited. You don't have to go sign up for classes to learn, even if you want to explore the nuances of Schrödinger's cat and his equations for fun. (You can just buy previous versions of textbooks on just about any subject from Amazon or eBay for pennies and teach yourself.) But learning new skills can be a good way to help #4. Everything from getting a degree to learning how to properly track your mileage can be used to your advantage in earning a few more pennies.

10. Stay healthy
Historically a relatively minor portion of most people's expenditures, healthcare expenditures are set to explode for many. Sure, Obummercare is supposed to result in everyone getting insurance and "allowed" those who liked their plans to keep them. While healthcare inflation is no longer galloping along at multiples of the economy, many of us are still going to see higher costs in one way or another. Regular exercise can stave off diseases such as diabetes, improve libido and work performance, yada yada yada. With employers offering more carrots & sticks to promote health, those who are healthier will stand to benefit many times over. The recommendation of 150 minutes weekly can be easily divided into daily segments that are manageable to accomplish, so not having time is hardly an excuse.

11. Get rewarded
Companies like to pay you to do all kinds of stuff, hoping that you'll return the favor by buying stuff from them. So from the more obvious like frequent flier miles and grocery rewards to the obscure, the chance to profit from your spending exists all over the place. One way to ensure that you get rewarded even when a specific rewards program doesn't exist is to carry a rewards card to use for as many purchases as you can. Of course, pay it off monthly! We've already discussed interest and I've yet to find one that pays higher rewards than the interest rate it charges.

12. Negotiate your purchases
Prices usually aren't set in stone, not even in the big box stores. (Just last week, I successfully defended a UPC scan for a folder that didn't agree with the shelf for a $3 savings.) However, if you just roll over and accept them, then they are for you. I know, I've done it. Always find out if the price you're supposed to be paying is the best that the seller can do, and if it's not, send them back to the drawing board. Still not happy? Leave. You hold ultimate control over your own purse strings.

13. Embrace change
This one might seem to be at odds with the premise of this entire post. Change is generally associated with new, which is often combined with spending. But change doesn't have to require breaking out the wallet. There are plenty of changes that can be beneficial to your wallet. Some of them have already been mentioned, e.g. changing driving or health habits. All can have a positive effect on your financial situation, so embrace the change and the spare change that it brings! And unless you're Bill Gates, it's probably worth your time to pick up spare change too.

14. Pay off debt
Last, but certainly not least, we come to the topic that might seem to be the most obvious to be on this list. As such, I'd better not disappoint. This isn't just a tip from me, it's something that I'm also actively working on in my own life. I also carry financial obligations to several entities. They aren't currently anywhere near a absolutely crucial level, though MMM might disagree. However, if I were to become unable to work, they would indeed cause issues in quick order. Therefore, I am committed to erasing them as fast as possible using as many of the tools in this post (and others) to do so. If you're also carrying any debt, it's probably a good time to look at the terms (again) and get them altered.

Photo credit: Danilin on freedigitalphotos.net.

04 February 2014

FinCon14 Tix are On Sale!!

That's right, tickets for Financial Blogger Conference 2014 (FinCon14) are now on sale! The event will be taking place in New Awlins at the end of the third week of September and I again intend to attend. (Don't say that more than once fast!) What's FinCon? Glad you asked, it's a chance for all of us people who sit at our computers and type about personal finance things gather to network, learn, and just generally have a grand 'ole time. I went to FinCon13 last year and it was a good experience. Learned a couple things and met a few folks. All while enjoying the amenities of the Gateway City. I expect nothing less for this year's event and hopefully a hurricane doesn't derail the plans. I guess that's it for now, buy your tickets! In future posts, I'll [actually] explore options for traveling there. Until then, ciao.

17 January 2014

How I Gave Myself a 20% Raise

Costs are going down. Image sourced from SalFalko on flickr.
One of my goals for 2013 was to pay off my debts. While I've already detailed the progress that was made on that front, I also had a big boost along the way. I got a 20% raise. But, it's not what you think. My boss didn't call me in and say that he valued me that much. In fact, he couldn't do that anyway due to company policy. I was already quite a ways up the pay scale and there wasn't 20% left to give me that much of a raise.

No, I got my 20% raise by refinancing my debts to substantially lower interest rates. I've spoken before on tricks that can save you a few bucks here and there (and lots of time) via overpaying and paying early. But those pale in comparison to reducing or completely eliminating your interest charges completely. Which is exactly what I did. I started by paying off my car note with a 0% balance transfer. That was followed by a loan from Lending Club which allowed me to pay off a card that has a mind-boggling 29.99% interest rate*.

However, I still had to pay off some other cards. This was accomplished via both a loan from my retirement account (cue the choir...) as well as balance transfers onto new cards with much favorable terms, i.e. 0% interest for over a year and of course no annual fee. Originally, I'd intended to transfer and close. Then I realized the folly of closing the old ones since their history is substantially longer, but they now sit dormant and will continue to do so. Especially the one with the ~30% interest rate. (Except for the Chase Rewards when a 5% cash back category rolls around that I actually use.)

As a result, I now have 20% more money every month to throw around at debt. Of importance is reducing the 0% balances before their introductory periods end and the interest charges start. However, that's equally challenged/balanced by the fact that with their extended time frames, it might make more sense to attack other balances that are currently charging me interest (i.e. Lending Club and my student loan). But if I'm not able to pay them off and pay off the transfers before their intro period ends, it makes more sense to leave them alone and finish the payoff schedule. I'll have to play it by ear. Nonetheless, I still expect to be able to pay everything off completely within a year.

But enough about me, what about you? Have you been able to refinance any of your obligations recently? Do you have any debts that you'd like to refinance? Any tips on other ways to make paying of debt easier? Share with us in the comments or via email. Auf wiedersehen!

*That's the normal rate, not a penalty APR due to late payments because I've never paid late. Card was originally 0% on first $250, then 16.99% for anything above. Over the years, the limit and rate both increased substantially. Original limit was $750, it now is over $10k. I've shredded the actual card and they owe me $1 due to the rules and power of compounding.

01 January 2014

Hump Day Herald: HAPPY NEW YEAR!

2014 is entering the puzzle of life!
Image credit: Stuart Miles / Freedigitalphotos.net
Can you believe it? It seems like just last week that we were ringing in 2013 and now we're doing the same for 2014. How. Time. Flies. Anyway, lots of things happened in 2013, which I alluded to in my last post. But first, let's review the goals that were set for the year. I checked in with a six month progress report back in July, but a lot more has happened since then. Let's review them again.
  • Pay off Chase: done, but currently has an interest-free balance
  • Pay off car: done via 12 month interest-free offer from Chase, currently $800 still remains
  • Pay off retirement account: low-hanger, was already going to occur
  • Replace/supplement car: new bike was obtained + much more bus usage
  • Pay down First Financial: took out a consolidation loan from Lending Club and paid it off, put the card away for good
  • Boost emergency fund: I've recently gotten at least a good year's worth of interest-free springy debt
So, that's what happened in 2013. Now on to 2014 and what I plan to accomplish in the upcoming year:
  • Develop a budget - Since I've moved out and altered my funding sources, it's finally becoming time for me to not just do the mental budgeting that I've practiced for far too long.
  • Automate my finances - This is a bit related to the first point. With my finances squared away, pretty much all of it can be paid online. Practically all of my credit cards are rewards cards, so it only makes sense to use them to pay for everything and get a slight discount on my normal expenses.
  • Acquire motorized transportation - Though I have the bus and bike available that both see frequent use, they often end up taking about the same amount of time to the vast majority of my destinations in the area. (Although I'll gladly jump on the bus if it's passing.) One is just a bit sweatier. I'll see how things pan out, but I get the feeling that I'll end up with a car or motorcycle within a couple months.
  • Eliminate debt - I still have some balances that need to be dealt with. Many are currently at 0% so I need to pay them off before that changes. Then of course, I have the two biggest balances which are NOT at 0%. Still, the 0%s are all pretty small balances and offer a good debt snowball opportunity since paying extra on the bigger balances doesn't lower the monthly.
  • Finish my flight training - Possibly a lofty goal, but avgas isn't getting any cheaper either.
  • Develop multiple funding sources - I've never been much of a salesman, but I certainly can do quite a few things. I figure I should start getting paid for doing them.
I'm sure more things will pop up as the year progresses. Life happens. I'll update as it occurs. What about you? What do you plan to get done in 2014? Is there anything left over from 2013 that you want to extend into 2014? Leave a comment and share your story!