The Weight of Money

Spring seems to sprout more weddings than flowers at times. Since many people are busy planning their weddings and possibly stressing over the price tag, I wanted to highlight the wedding budget report I posted last year. Take a look at our detailed wedding budget. I recently added a few pictures and more details (in the comment section) in response to the emails I’ve received.

I’m happy to discuss ways that we prioritized and compromised to fit our wedding dreams into our budget. I’m so happy that we decided up front that saving for a house and paying off debt was more important than over the top spending for just one day. In fact.

We’ve seen a house we think we want. Oh, madness to think that spending just an hour scouring a place from top to bottom is enough to commit to living there indefinitely. The space isn’t as much as we wanted, but enough for what we need. The house isn’t tiny but may have some space challenges just the same. There may be some structural issues that need addressed — for older home, you don’t jack them up, you just stop them from sagging more.

I’m excited. The partner actually wanted to act on this, he’s been the one always dragging his feet with considerations. Perhaps it is the losing the last house that we were on the fence about that has him suddenly motivated. Time has been ticking and we’ve certainly felt the strain of it.

So, the nitty gritty details: It is an awesomely, old house - 1870s old house. There are three spacious bedrooms, two full baths (major plus! for old homes), gas stove (major plus for the area we’re looking in), .8 acres (not what we wanted, but not too small either), small cellar good for wine and veggies, and a couple of small extra rooms.

The potential major downsides: it is an older house with older heating system (coal and steam to water conversion radiators), the floors sag in some areas and concerns about structural integrity versus normal old house drooping, high speed internet is not available, maybe there are not enough extra rooms, no garage or workshop - must add something for the machine shop, we’ll not be cutting our expenses getting this house.

So, tomorrow we either go and make and offer or we decide that this isn’t the house an continue the process. However, it’s looking like we’re leaning much more on yes, than no, this time around. But lets see what dinner and a bottle of wine does for our decision making process.

Housing adventure summary, thus far:

• Round One was a four bedroom rowhouse in downtown Westminster. Our offer ($175K) was accepted, but the seller failed to behave ethically and drug his feet so long we walked out on the contract.

• Round Two was a one (actually two) bedroom, tiny, cute house in dense, residential Catonsville. We put an offer ($180K) in but it was reject in favor of a higher offer — it was listed at $200K and a one-bedroom simply isn’t worth that much.
• I’m not getting my hopes up on round three because I expect another buyer will come in and outbid us ($250K), or that the inspections will uncover something more than expected. However, I do hope the inspection will give us some wiggle room on the price and on what needs to be taken care of.

Today marks the one year anniversary of The Weight of Money. It has been exciting, eye-opening, and excruciatingly honest. This is the perfect time to take a look at the past year of honest, accountable financial decisions.

First, the numbers:

• I have written 170 posts and received 228 comments from my fabulous readers.
• Net Worth: My first net worth posting in May 2006 totaled -$17,627.18. One year later, our net worth is $900. Positive net worth in just one year; I didn’t think it could happen.
• Debt Reduction: When I started this site, the partner was working to pay down credit card debt and we’ve paid off $10,640.84 in the past year.
• Savings: We started putting money into a joint savings account in October 2006. At this point, we’ve managed to save a total of $7,288.88. The Home Savings meter has been updated to reflect this progress.
• Retirement: We committed to increasing our retirement contributions (from $0) and have invested $6,900 so far. The contributions have been fairly minimal, considering our retirement needs, yet are steadily increasing.

Now, for the personal elements of the past year:

• We were married at a perfectly personalized celebration in July 2006, paid in full with cash.

• While we were planning the wedding and I was finishing my degree, we began our housing adventure that continues today.
• The partner and I combined finances in October 2006 and discovered that there is no room for “I” in joint finances.
• Post graduation, I discovered that a new job is full of financial considerations and less-obvious costs.
• In December, I made the difficult decision to leave a job that completely meshed with my ideals and professional aspirations when it conflicted with what matters most. I’ve since taken a position full of uncertainty that is less rewarding than the last.
• I’ve continually considered ways to bring in additional income and have since found steady sewing work.

The year to come:

• This site has had a couple of advertising requests and I’ll continue to consider the option of including non-intrusive ads. However, the requests/offers received so far have been for companies that conflict with responsible personal finance.
• I will continue to start conversations about money and hope that more people will feel comfortable facing their finances when they realize that others are in the same boat.
• We will (hopefully) buy our first house and make it our home. Moving will further accent the weight of money if we must liquidate more large machines and as we move those that remain to their new home.
• We will further consider expanding our family.
• We will continue to live intentionally and increase our frugality/cheapness (and be proud of it too).

Thank you to my readers and your many comments. I’ve learned a great deal this past year and look forward to continuing this journey with your support and feedback.

Note: The writer/pseudo-grammarian in me feels the need to clarify the constant shift between “I” and “we” in this and other posts. While I am the sole writer for The Weight of Money, most of the financial elements discussed here are based on joint decisions. To continue striving to truly make our finances a cooperative effort and avoid the feeling of sole-ownership over an issue, I try to use “we” where appropriate.

Wow, I never realized just how effective some minor steps with credit correction could be. The results are encouraging.

In Part One of Credit Correction Challenge (CCC), I discussed the starting steps including challenging all old addresses listed on your account.

Credit Scores at the beginning of CCC (March 8, 2007):

• Equifax:612

• Experian:659
• Transunion: 630

CCC Actions Taken:

• Step One: Obtained copy of all three credit reports.
• Step Two: Obtained all three credit scores.
• Step Three: Challenge all past addresses with Credit Reporting Agencies (CRA).

Since completing the last step, we met with a mortgage broker regarding our housing plans and discovered that I really needed to take more aggressive action in credit correction. Instead of waiting for the results of Step Three: Challenging Past Addresses I had to move on to the next steps.

Step Four: Blanket Disputes with CRAs. There were several accounts that needed disputing and the hope is that they’ll be removed. However, it isn’t exactly that simple. The CRAs must attempt to verify that the debt information with the reporting creditor. They have 30 days to complete this process (the clock is ticking) and must delete unverifiable information. I expect that several creditors will be unable to supply the proper verification, but that they will probably report back as accurate anyways.

Step Five: Request Validation from Creditors. Following the results of the blanket disputes with the CRAs, I will then send validation requests to each creditor that is reporting inaccurately. This is another 30-day window and has varying degrees of success based on the creditor. If information cannot be properly validated, it must be deleted.

Even though everything is still in process, there have been considerable improvement to my credit score. My median score has raised from 630 to 668 since beginning the Credit Correction Challenge.

Current credit scores are:

• Equifax: 678 (66 point increase)
• Experian: 673 (14 point increase)
• Transunion: 668 (38 point increase)

To be continued… this is an ongoing process with several interim time lines (30-day waiting periods). I’m currently waiting for the results from the blanket disputes and then will begin with step five. I’ll post my progress as I get updates.

Very Important Note: I’m following steps based on my extensive reading and research at creditboards.com/forums/. There is an amazing wealth of information there. Credit correction shouldn’t be attempted without first understanding the process and consequences possible. There is a lot of information relevant to my personal process that has been omitted to keep these posts a reasonable length. This is NOT advice, simply my personal experience.

The Weight of Money is approaching it’s one year anniversary. In preparation, I’m gathering our net worth data and look to compare where we stood a year ago to today. The timing is great because I’m currently sending copies of all our accounts and statements to the mortgage broker to verify income and cash on hand, so no additional scrounging for numbers will be needed.

I’m please to say that we have a total of $29,800 in cash assets, $6,900 of which in in our retirement accounts, leaving $22,900 in cash/savings. This really cheers me up since I’ve been feeling stressed in the money department. We hit a money snag in our relationship recently in discussing cash available for home purchase and this help relieves some of the tension, on my part at least. Hopefully I can get in more detail later this week (the post is half written, at least).

Between now and the end of May, I’m currently juggling multiple projects varying from musical rehearsal, finishing 3-D sculptures for an upcoming art show, nonprofit planning, professional sewing, house hunting, and an ever increasing workload. Needless to say, it’s been a challenge keeping up with all of these items and our finances.

I’ve yet to compile April’s budget and haven’t entered spending for March. It is moments like these that I love living on last month’s income. I don’t have to stress too much because I know that there is money in the bank, even if I haven’t had a chance to budget for it yet. If we were counting on each paycheck, it’d be a much more stressful position.