Too Lazy to Pay Mortagage -- How to Stay on Financial Track No Matter how Busy or Lazy You Are

I recently found out some very "interesting" information about an acquaintance that shocked me. The other day Be-Mine and I were out with his best friend and his best friend's wife. The four of us are very together people especially financially. One of the topics of conversation was about a couple who they are friends with struggling to put their old house on the market. A few conversations later we started talking about how prevalent its become for people to just walk away from their mortgages and allowing their homes to go into foreclosure. I remarked about how I just couldn't ever imagine doing that and "wife" brought up the fact that the wife of the couple we were just talking about just walked away from her house a year ago after she got married because she just never listed it for sale with a real estate agent. It was joked that she was more lazy than our two men combined.

This blew me way, how can someone be so lazy that they allow a house to go into foreclosure, especially this individual who I've always know to have a ton of energy and be very dedicated. I'm not certain this is the full story since I am aware that this couple has had some financial troubles in the past and declared bankruptcy, but none the less, I thought I'd explore this idea of being too lazy or just too busy to take care of financial business. I know we are all busy people and some times get stretched way too thin (I'm feeling that pain right now) so I thought I'd recommend some ways to ensure that your financial matters get taken care of no matter how busy you are or how lazy you are.

1. Automatic Bill Pay for recurring payments (Rent/Mortgage, Car Payment, Insurance etc) --- Use it for all of those bills that you know are the same amount each month and you don't need to check before they are paid.
2. Use online banking --- Use online banking to quickly check your accounts on a regular basis so that you do not have to waste time at the end of each month reconciling accounts to ensure that the checks that cleared were correct.
3. Utilize online bill pay --- Don't waste time organizing bills to be mailed on certain dates, writing checks, and stuffing envelopes. I love online bill pay, I receive a bill in the mail and that very day I open it, review it and then schedule payment. I probably spend all of 5 minutes max performing this task.
4. Make Savings Automatic via banking transfers --- Save time and ensure commitment towards saving by having a pre-determined amount of money transfered from your checking to saving monthly/weekly/regularly
5. Make Retirement Savings automatic via payroll deductions --- Sign up for your 401k/403b etc at work and all the paperwork is complete for you. In addition to this you can sign up for payroll deductions to your Roth IRA or other retirement accounts. It only takes a few minutes to sign up with your HR department and then you never have to think of it again for a full year
6. The Number One Way to Ensure you're on financial track despite busy times is to MAKE GOALS AND REVIEW THEM OFTEN --- Every year I set goals for myself - financially, professionally, and personally. I write these down because goals only move from dreams to goals when written, I then create an action plan for each goal and post both my goals and action items in a nifty colorful pyramid and post these in appropriate places. For example my professional goals are posted on my desk drawer, my personal goals which include my running goals are posted on the refrigerator, and my financial goals are posted next to my computer. Goals help you keep your eye on the prize no matter how busy or lazy your are, plus by creating action steps you not only have a starting point towards achieving your goal but also baby steps that can be accomplished even in busy times.

I hope these tips help you stay focused during busy times. I'd love to hear your tips for keeping on financial track when you're busy or if you're just plain lazy?

Roth IRA Update

After my wonderful banking experience on Monday I decided to tackle diversifying my Roth IRA today, which is one of my goals for this year. Haha…yeah – not such a great experience, not only did I not get the advice I needed to do what I wanted to do (which I can understand not getting my way) but more importantly I didn’t get very helpful, friendly or knowledgeable people. Usually I really like Vanguard, but then I guess I’ve never had to call their call center.

Currently my Roth IRA is invested only in an S&P 500 Fund. So in theory my Roth IRA is “diversified” in domestic stock but I’d like further diversity as in more than one fund. The one problem with diversifying my Roth is that there is a minimum initial investment per fund of $3,000, unless you invest in the Vanguard Star Fund (which after reviewing this fund, I’d rather stay all in the S&P 500). I only started my Roth in 2007 so there’s only slightly more than $4k in my account.

I contacted Vanguard and talked to several people trying to find some way around this $3,000 minimum, such as using automatic deposit (which I’m currently doing) or paying a small penalty or really any solution and I was told no and given probably the same pat response that’s given to everyone “The minimum investment amount for all funds is $3,000”. Well I’d already done my research before calling and that’s not the case, there is one fund, the Star Fund, that you can invest in with a minimum of $1,000. So I’m very disappointed that that wasn’t even offered to me, not that I’d use it, but at least to prove to me the person I was talking to was at least familiar with the products offered.

Since it appears I’m not going to have any luck getting around this $3,000 minimum rule I now have a decision to make. I need to decide if I’m going move this goal to next year after my Roth has increased or if I’m going to have to dip into my other savings to fully fund my Roth at once. If I do choose to dip into savings most likely it will be my house down payment savings as I don’t want to dip into my emergency fund and my regular savings for irregular expenses (ie car maintenance) is not sufficient to cover this expenditure.

Here’s the Pro’s and Con’s of each options

Option 1 – Move Diversification Goal to Next Year
Pro: It’s the easiest and simplest option and it does not require adjusting current allocation of savings.
Con: I would have to continue investing in the S&P Fund for this year and then sell a portion to invest in a different fund, which would go against my philosophy of buying and holding.

Options 2 – Fully Fund Roth IRA for the Year at One Time
To do this I would have to dip into my down payment savings and would pay back my down payment savings by the end of this year with what would have been my monthly Roth contributions.
Pro: This would allow me to diversity this quarter and would theoretically be investing when the market is low.
Con: Loose the interest I’m currently earning towards the down payment. Investing in one lump sum means I am no longer dollar cost averaging. On top of that I would no longer have the artificial smaller paychecks with savings automatically directed to Roth savings.

What do you all think? Which option should I choose?

Author's Note: 2/27/08 Trent over at the Simple Dollar Appears to be having the same issues with Vanguard's $3,000 minimum, thought you all might want to check out his post too.

Mid-Year Performance Review Update

Well no real news to report on the Mid Year Review front. I met with the Boss man, according to him my work is doing awesome and that I'm already performing at the next level so there's no tasks or project I need to master before I can get promoted. Okay I'm thinking if that's they case why am I not promoted yet? So I polity try to ask this question but just get blown off. So now what do I do???? On top of this come April I'm getting transfered to a different department with different job descriptions but the one good thing is my soon to be new boss man, "Mr. VP", recognizes me as a high achiever. RRRRGGGG that was no help - so it looks like I'm going to bide my time for now.

Progress on Goals for 2008

Alright all, its officially been over one month since the start of the new year so thought I should check up on my action plan for achieving my goals especially since some of them had January and February due dates so here goes:

1. Have Net Worth of $105,000 – My net worth is increasing (yeah!) and a very quick calculation of my net worth is over $90k. I have not been as good about saving the $100 a month outside of my retirement accounts, so I need to establish some set plan to prove that I’m saving the $100, be it via a phony withdraw listed in my accounts etc so that I don’t touch this money. I plan to have this plan established before the end of February.

2. Fully Fund my 401k and Roth IRA – I’ve confirmed that my 401k automatic deduction is still set at 27% which will allow me to save the max. When I get my annual cost of living increase I will have to decrease so that I don’t reach the max too soon and loose out on the company matching but the cost of living increase won’t happen until September, so no action is required until then. I have investigated the most economical way and easiest way for me to contribute to my Roth IRA and that is with a once a month automatic transfer from my bank account to Vanguard. Because I’ve signed up for electronic statements there is no cost to do this. So every month on the 22^nd $417 is withdrawn from my bank and invested.

3. Diversify Roth IRA – I’ve made no progress on this one other than to check into other mutual funds. This one will require some more investigation on my part as far as the way to do this economically via Vanguard. I know the minimum transaction required to start a different fund in vanguard is $3,000. So I will need what the best method to procure the other fund (i.e. sell some of my S&P 500 fund and invest in the other or lump sum contribution). I plan to have this work complete by February 29th. Does anyone have any advice on how you did it?

4. Get Promotion – I’m working hard towards this one no only am I 1. Continuing to do an "amazing" job on every task but I also have my mid-year review coming up on Tuesday where I plan to work with my boss to 2. List my responsibilities and compare to established tables for positions 3. Talk to my boss about the discrepancy I find in responsibilities and position and request to know the steps I need to take to make it to the next level (additional tasks to take on, people to talk to etc). 4. Continue to Ace my Performance Review and take the opportunities that are offered to me

5. Get Ready to Buy a House - I’ve pretty much deleted this goal from my list. (read my Rent, Don't Buy Post to better explain my reasoning). I’ve decided to rent for one more year, continue to save for a down payment (above and beyond 20%), and wait out a raise and hopefully promotion to have more monthly cash flow.

Well what do you think, am I on my way to achieving my goals for this year?

My Mid-Year Performance Review is Tuesday

One of my financial goals for 2008 is to obtain a promotion. To me a promotion equates to this equation promotion = more money = more savings = closer to financial freedom

My career goal was two years after my college graduation to obtain a promotion and by the end of this year it will have been two years. (And I will have worked for the company for over 6 years! – wow saying that makes me feel old even thought I’m not). To date I’ve only received one promotion and the event that prompted this promotion was graduating college since I had been verbally given a promotion a year before then contingent upon graduating college. Because of the company bureaucracy, I understood that I could not be “officially” promoted due to a lack of degree even thought I was very deserving of promotion based upon my contributions to the company. (I think there could have been a way around this but I was willing to follow the rules for the time being, since bucking the system would have meant possibility not having as much flexibility in my job like telecommuting two days a week so I could attend some classes only offered at specific times.)

In my company, promotions are typically given out in September following our end of fiscal year evaluations. Our mid-year evaluations are now in full swing, mine happens to be schedule for this coming Tuesday. The company norm for length between promotions for those of us lower on the corporate ladder occur between 2-3 years for each position, of course dependent upon an individual’s performance. People mid-ladder pole 4-5 years, and then upper ladder it really depends some are 1-2 years, while others peak out and it takes 10 years to move up. I’m still currently on the lower end so a promotion by the end of the year would be with in the norm.

Okay, enough background of my status and the company, I think I’ve sufficiently proven that a promotion is realistic with in the parameters of the corporate bureaucracy and I won’t get into all the money and client contacts above the norm I’ve made on deals for the company or the outstanding job I’ve been doing because I’ll save all that for my review on Tuesday (plus this post is already getting really long). The real meat/intent of my post is that I’ve long sense done my homework for researching how to achieve a promotion since my last one I didn’t have to strategize to obtain (and maybe this one I don’t really need to either but I’d rather be proactive). I stumbled across an article about the key steps to achieving a promotion - I wish for the life of me I knew where I got it as I’d like to give them credit and also revisit this article for my use (if you know the article I’m referring to please let me know where its from). The only remnants I have of this article are my notes on a post-it stuck to my bulletin board above my computer.

Here’s what my notes say:

1. Determine Expectations --- research HR for specific tasks/abilities, talk to Debbie about this
2. Perform a Gap Analysis between current duties and next level --- per HR’s def – ask G if there’s specific form already created, also ask about at Mid-year and request to come up with a list together to achieve the difference
3. Schedule meeting with list of skills and responsibilities, goal is next level, find project etc that will help achieve promotion --- also do together at Mid-year PPM
4. Prioritize and document assignments --- also success and stats from completed projects especially the pharmacy and $$$ made
5. Cash in chips – show documentation that achieved --- start list today of accomplishments with stats

I’ve done a real good job of following this advice over the last couple of months. I have figured out the expectations according to the corporate info established and will find out my boss’s expectations on Tuesday, I preformed my gap analysis and have already put the bug in my boss’s ear about wanting to do this as well as create a list of skills and responsibilities during the review, and I’ve clearly documented success of projects and tasks completed. So I’m hoping all goes well.

My question is what else should I do to a) prep for my mid-year, in past years I’ve already been ready with a jot list of success and my goals, but I’ve never been actively seeking promotions and b) beyond what I’m doing what should I do to position myself to be promoted in September?

Alright you seasoned professionals with several promotions under your belt…any other good tips for me?

Sticky Situations at Work

One of my big goals for 2008 is obtaining a promotion. But some times its hard to do that when you're caught in sticky situations with a boss or co-worker.

One of my biggest problems at work and is with a co-worker who's a major slacker. This man is not my boss but he is in a position of higher rank and authority than I am. We both report back to the same boss.

I've tried to figure out a way around this situation and talk to my boss in generalities about this issue when I first got put on the same team with "slacker" more than a year ago. I did not feel I was stepping outside of my bounds since my boss asked for my feed back since several other team members were giving unfavorable reviews of "slacker" and he wanted to know if they were true. Plus until this situation arouse I've always had a really good relationship with this boss and have worked on several other projects for him. When I tired to address this issue before I could really express my concerns I was informed that one of my job responsibilities was to make both my boss and "slacker" look good to the brass in our company, which I agree with to an extent. Talk about having to suck a sour egg! But I've come to accept this situation that I'm in and realized it was only for a short time (if you call just a hair over a year a short time) and that by doing both my job and "slacker's" I would be gaining valuable experience. However, every couple of months I get mad, real mad, about the situation and it starts to eat me up inside. I start thinking about the tons of extra hours I put in each week to do both of our jobs, I think about the social activities at work I'm missing because I'm trying to keep up with everything and keep the project afloat and I start resenting the situation. Don't get me wrong I like to work hard and I get enormous satisfaction from a job well done, but everyone needs to pull their own weight, especially on a team. I keep reminding myself that its only for a short duration and it will get better but sometimes its hard, and I know my usually cheery work personality suffers because of my frustration with this problem.

It's wildly accepted and the standard that a person in my boss's place wouldn't do any of the grunt work, he's job is to manage people like "slacker" and me, maintain the relationship with the clients, and relay information from top management to "slacker" and me, but "slacker" on the other hand is fully in a position that he's supposed to be in the trenches and know the project and contribute to the project, in fact its expected and really his only responsibility. Instead "slacker" wants to pretend he's about two levels higher and I'm responsible for all of the work and he just needs to sign off and/or distribute my work, so instead of contributing "slacker" spends all day working on his high school alumni website. (As a side note "slacker", myself and the rest of the team are located in a different office and city from the boss and the boss only comes and visits about once a month to check up on us).

(Additional side notes "Slacker" is only one position above where I am on the career ladder. The side story about how "slacker" came to work for our company about a year ago is that "slacker" was "laid off" without a severance package from his previous two employees -- I don't know about you but to me that sounds like the man was fired, not contributing enough to his other companies since he was always first to be laid off, or he keeps choosing the wrong companies. Personally I'm going with option 1 or 2, either way they don't bode well for "slacker".)

Well anyway, I think you get the problem with "slacker" and can probably read between the lines to see my frustration, especially today -- it was one of those mad days that it really gets to me.

Well I stumbled across this article called Eight Sticky Boss Situations at CNN.com and one of the eight was "While your boss kicks back in her office making personal calls, you're doing both your job and hers. When the time comes to present projects to senior management, your boss takes credit for your hard work." And thought this might apply to my problem with "slacker", except I really believe that the boss knows this is the situation and accepts it because the work is getting done and done correctly (thanks to me) and he doesn't want to rock the boat. This is very typical of his personality, it took one other slacker loosing almost 2million for the company for him to take action and go through the chain of command to reprimand and ultimately fire the other slacker.

So while this might not completely resolve my problem I only have 3 more months of this and at least it gives me hope and a strategy try to deal with the problem. Do you all have problems like this? How did you handle it?

Progress on 2008 Goals --- Progress on obtaining Promotion

I just got back from the airport after being out of town for work since Tuesday and wanted to take a quick second to let you all know about an interesting conversation I had while out of town before I crash in bed since I've hardly slept in the last 4 days.

In my company the culture when you're traveling with a group of people is that you're expected to go to dinner and the hotel bar with everyone each evening (not sure how productive the next day meetings are since every one's usually pretty hung-over). I always end up staying up too late and my schedule gets all messed up, but at the same time I don't think I'd have it any other way because once you've socialized and "boozed it up" with the bosses you always get to know the inside scoop of what's going on in the company. You can find out who's performing and who's not, what's the next cooperate strategy that's going to roll out, etc etc etc -- its really invaluable knowledge you receive.

Thursday night one of the Vice Presidents and my old boss (soon to be my current boss once I move back to Atlanta) was talking about the problems that he's having in his department with some of the new hires and how he's is really looking forward to having me back to set an example as well as bring positive energy and enthusiasm for the job. We'll call him "Mr. VP" goes on and on about how I'm such a valuable asset. I'm taking this all in and listening to him and he continues on, so I'm thinking this is good that he recognizes I'm a valuable asset but I also realize the man's had about ten vodka tonics and he likes to talk. But "Mr. VP" goes on and says he wants to see me succeed and that when I come back in April we should sit down and talk about my career path. Again I'm happy but he's still drunk so he might be just talking but the next day at breakfast as "Mr. VP" is hesitantly drinking his coffee and shading his eye he asks me if I remember our talk last night, I say yes thinking he wants to let me know I should keep that info to myself since my career path wasn't all he talked about, but rather he says he wants to make sure that when I do come back in April that we talk about my career path because I'm a "super star" according to him and he wants to keep me challenged and happy. Inside as I eat my bagel I'm silently jumping for joy! Exactly what I need, some one in a high place that wants to help me get ahead and recognized that I'm good at my job.

Well thanks for listening to my exciting news, in April I'll have to let you all know how our talk goes, but for now I'm crawling to bed and won't resurface until late on Saturday.

8 Smart Money Moves for 2008 includes Rent, Don't Buy

I was doing my usual daily reading of financial news and came across US News 8 Smart Money Moves for 2008. One of the 8 smart moves was to "Rent, Don't Buy" which helped reinforce my hesitation to buy a house this year. I then started searching more about Renting instead of Buying and found these great articles: Why rent? To get Richer at MSN Money, 6 Money Dilemmas including Buy or Rent at Money, and Rent, Grow Rich, Be Free at Millionaire Mommy Next Door Blog.

I'm really struggling on whether I should buy a house or not this year. I'm starting to think that if I'm struggling this much then maybe now is not the best time for me to buy but on the same token if I'm going to buy a house within the foreseeable future I feel like now's the time. In the next 3 months I'm being transfered back to Atlanta after working and living out of town for the last year. Now that I'm finally settling in one location for the long term, have a sizable down payment (well over 20% of any house I'd choose), and with real estate prices falling it would seem that in the coming months would be the ideal time to buy a house for me.

Here's my hesitations for holding off buying a home:
I'm not sure if I'm ready to make the committment of owning a home and all of the work it entails. I don't think I'm ready to start giving up a potion of my weekends to maintaining a home, I do work in construction so I enjoy building things but I enjoy my current maintenance-free lifestyle. Every time I visit my mom I end doing her "Honey Do List" it always feels like she's got to have something done, yard work, HVAC cleaing, etc etc, and I just don't know if I'm ready to take on that. That's strike 1 against home ownership right now.

I also don't know if I'm readying to stay put for several years. Committing to one location and one house for years seems scary. Heck, I have a hard time committing to watch a movie from start to finish half the time, who am I kidding trying to buy a house that according to this great calculator by KJE which compares the financial aspects of buying vs. renting I need to own and stay put in the house I buy for at least 6-8 years to break even. At this point in my life 6 years seems like a really long time. That's strike 2 against homeownership.

On top of that I'm still a single woman, who at some point in her life would like to settle down and have a family and I can't see the home I buy this year to be the same one I'd want to have a family in. So it makes sense to wait, although I think its some what silly ---- its not like I want a knight and shinny amour to come and "save me" and then support me, I think I'm perfectly capable of taking care of my self and possibly a future family - its just that the cute little townhouse or house that's small enough for just me to take care of right now probably won't work with fido, junior, and hubby in toe. That's strike 3 against buying a home -- I guess three strikes and home buying gets put on hold.

I think for at least the next year I'm going to hold off on the house and continue to rent, we'll see where I am financially and mentally next year and reevaluate my decision then. I'm not planning to never buy a house, eventually I want to have my own place I can take pride in, but whether this home comes into my life now or in five years remains to be seen.

Financial Goals for 2008

Its nearing the end of the year and its time for me to finalize my goals for the coming year.

So far I've narrowed down the list of goals to the following:
1. Have a Net Worth of $105,000*
2. Fully Fund my 401k and Roth IRA
3. Diversify Roth IRA
4. Get Next Promotion
5. Get Ready to Buy a House ???

My Action plans are:
1. Have Net Worth of $105,000 - My net worth is currently slightly above $85k, to reach the $105k I plan to fully fund my 401k ($15,500), fully fund my Roth IRA ($4,000), and save $1000 "cash". To save the $1000 I plan to set aside $100 every month with the exception of November and December. Those months I'll use the $100 to go towards my gift shopping budget.

2. Fully Fund my 401k and Roth IRA - To continue to fully fund my 401k I will leave my automatic payroll deduction contribution at 27%. Since I just opened my Roth IRA this year with money saved outside of the account I will need to establish an electronic transfer on a regular basis. I plan to contribute $330 per month towards my Roth IRA but will need to investigate Vanguard to find the best way to contribute to minimize fees (ie. contribute $990 quarterly, $165 bi-weekly, etc.). I plan to have this investigation completed by January 31st.

3. Diversify Roth IRA - This one will require some more investigation on my part. I know the minimum transaction required to start a different fund in vanguard is $3,000. So I will need what the best method to procure the other fund (ie. sell some of my S&P 500 fund and invest in the other or lump sum contribution). I plan to have this work complete by February 29th.

4. Get Promotion - This one takes a little more finesse. At this point I feel like I was hired in at a lower level than my experience and work load would normally bring and most of the reason for this is that I only recently graduated college; however I been working for my company for a little over 5 years. I went along with this because I was assured I would advance quickly. To ensure I get a promotion before the end of the year I need to: 1. Continue to do an "amazing" job on every task 2. List my responsibilities and compare to established tables for positions 3. Talk to my boss about the discrepancy I find in responsibilities and position and request to know the steps I need to take to make it to the next level (additional tasks to take on, people to talk to etc). 4. Continue to Ace my Performance Review and take the opportunities that are offered to me

5. Get Ready to Buy a House - This one I'm a little unsure of. A couple of years I ago I couldn't wait to buy my first house, I saw it as the key to success, but now I'm not so sure. While I feel I have more than a sufficient down payment to put down on a house I'm not sure if I'm ready for the additional upkeep on a house, plus there's the added monthly costs I would incur. So for this goal I'm going to leave it open and allow myself to investigate more by researching my options to make a sound financial decision.

*I calculate my net worth by the value of my assets in banks/brokerages. I do not include the value of my car or personal possessions. I also do not figure in debt because I have none other than a credit card I pay the full balance monthly, if at some point I develop debt/liabilities I will include that in my net worth calculations.