Thursday, October 27, 2011

What Lending Club did for Our Timeshare Loan - Our True Story

Featured in this weeks Carnival of Personal Finance!

In September we made a leap and took out a Lending Club loan to replace our timeshare financing. I wanted to give you the details of this deal. And see, I'm a numbers kind of gal. I'm logical to a fault and numbers just make sense to me. So although this post might be a bit tedious to read for some, it sheds a lot of light on the subject of debt to me. Please read on whether you like numbers or not. It's truly shocking.

Here are the down and dirty details of that deal:

Original Cost for Timeshare: $17,820.00
Down Payment: $4,716.69
Total Amount Financed: $13,103.31

That was in February of 2008. 

Balance of Loan September 2011: $10,906.17

Whoa!  WHAT?! 

Yep...in three and a half years after paying $238.78 a month on time every time with no penalties, we had knocked down that loaning a massive $2197.14.

TWO THOUSAND DOLLARS in 3-1/2 YEARS? 

Yep...that's the horror of 17.9% interest. That's the horror of ANY interest. (cash is king, people!)

So, in September of 2011 we took out a Lending Club loan for $12,000 at 9.99%.  This would cover our timeshare debt as well as the loan fees associated with taking out the loan. It left us about $300 that got us through a rough period in a tight month.  But that's another story.

So we made our first payment on October 9th to our Lending Club loan in the amount of $387.15. 

So notice that our payment is now about $150 higher.  We could have settled for a payment that was closer to our previous payment but we chose a 3 year loan with a lower interest rate rather than a 5 year loan with a higher one.  We did they math and saw that we could work in the extra $150 for the hugely improved (over 17.9%) interest rate.

Of our first payment, $287.25 went to principal.  That's 74.2% of our payment that went towards principal.  One month earlier, of our $238.78 that we paid, only 31.0% (or $74.05) went towards principal.  Yep...in one month we've already paid more than 3X the amount of principal than we would have on our old loan.

To make it even crazier...we are paying $148.37 more a month for this loan, but in the first month, paid off $213.20 more in principal.

AWESOME!

And as crazy as it may sound to some of you, I actually care that my interest is going to people who are responsibly investing their money in Lending Club rather than a financial company that financially rapes people like they were us.

So, if you had any questions about whether Lending Club works, I can tell you that it has certainly worked for us. Even in one month's time.

So if you need a loan, go check it out.  Do the calculator they provide on their site. Go through the pre-approval process to see if the payments would do the wonders for you that they have done for us. Interest rates start at 6.78%.

And if you're looking to invest wisely, consider Lending Club. You may not put a large sum in, but the current returns for investors average 9.6%.  Because I invested with $50 of free money, I invested in more risky loans, and my current return is 18.01%.  Either of those beats anything you'll get with a CD or even the more risky current stock market. You can rest assured that Lending Club does not lend to just anyone; in fact, the only approve about 10% of the requests for loans before people even get a chance to decide if they want to fund them. And you can know that you are helping people who are working their way out of debt the honest, hard-working way.  

Links provided are affiliate links, but the story is all mine and all true. It really does work for us and I couldn't be happier about it.

Monday, October 17, 2011

8 Unexpected Things That Make My Day

I love when the unexpected is perfect. Those little things...they really make my day.  Here are a few off the wall ones
  1. Entering a public restroom to find the seat lifted. This typically means your tush will be the first to touch it since it was cleaned. (yeah...only works on women's rooms, fellas).
  2. Parking within two spots of the front door without having to stalk fellow patrons leaving the store.  I know...it's better to walk for your health, but when you're in a hurry, this is perfection!
  3. Finding an available register at the grocery store or Walmart.
  4. Learning that a client/vendor/friend is taking me to lunch unexpectedly on a day when I wanted to get out of the office but was struggling with the idea of spending the extra money.
  5. Finding a broken parking meter that I am allowed to park at.
  6. A song that comes on the radio that I had forgotten was once one of my favorites. Yes, I crank it up and sing like a fool.
  7. Pouring the perfect amount of milk into my cereal.
  8. Clean sheets on a bed.  Love, love how tightly they are tucked, how smoothly they are fitted and how they smell like laundry detergent and bleach. Call me strange, but this is one of my small pleasures in life.
So there they are. Little things that no one does FOR me, but I just happen upon. Okay, so you can argue that #8 doesn't JUST HAPPEN, but it is one of my ultimate happy moments that has nothing to do with anyone's actions to make me happy. It's just a moment that I get to encounter as a side effect of having to clean the linens. And it is pure bliss.

What about you?  What would be on your list?

Photo credit: bosela

Thursday, October 13, 2011

5 Steps to Becoming a Better Listener

Whether you are trying to run a business, manage a group of employees, or just be a good friend, really knowing what another person is telling you is key to being someone who is liked, respected, and trusted. Take these five steps to really get to know other people.

Step 1: Listen Aggressively
Make sure you are listening and really grasping what people are telling you. And I don’t just mean the words. Listen to their tone of voice and listen to what they are actually NOT saying.

For instance, if a cashier at the grocery store looks at you and snarls when she spits out the words, “Have a nice day,” you don’t honestly believe she wishes you well, do you? Obviously she is having a bad day or going through a difficult period in life. Or maybe you just irritated her. The sarcasm dripping from her lips is a clear indication that the words you heard were not truly what she was trying to say.

Also keep this in mind when responding to others (although that is a topic for another day).

Also…pay attention to what the person is NOT saying. For instance, is there some important point that is missing? Are there words that would normally fit into the conversation that you are having but are absent from this one? Is there anything they are avoiding telling you?

Listening is very different from hearing. Make sure you know (and practice) the difference.

Step 2: Observe Aggressively
Have you ever what one of the many police dramas on TV (can you miss them?!) or courtroom shows where it is obvious that something just doesn’t look right. Take a step back and look at the other person while they are talking to you. Do they look withdrawn? Do they look uncomfortable or nervous? Are they avoiding eye contact or fidgeting? Is their body facing toward the door like they are ready for a quick escape?

These are all signs that somewhere there is some missing truth in what they are telling you. They are avoiding the truth or covering up with a lie. Even a lie of omission is a lie and something is really going on here.

Did you know that I was told that FBI agents are told that during their first interrogation, they are to completely ignore what the person is saying and strictly observe. Pure observation is what tells them who to bring back for a second interview most of the time. That's serious business, people!

Step 3: Talk Less
Listen 75% of the time and talk 25% of the time. People are coming and talking to you because they have something they want to tell you. Don’t assume that they want your opinions or for you to relate to them unless they ask for it or the conversation leans in that direction. Don’t immediately turn the conversation into something you’d rather talk about or into something about you. They didn’t come to learn about you, most likely, but to relay something important to you. Make sure you are listening and get your ego out of the way.

If you do learn that they seem to want confirmation or acceptance, you can relate a similar story about yourself, but keep it brief. They have come to talk. Rarely do people come to you just to sit and listen to whatever you feel the urge to say at the moment.

Step 4: Take a Second Look at First Impressions
As the conversation continues, sort out for yourself how this needs to be perceived. Don’t go off of your first gut-reaction. You need to observe the person and think about the situation entirely before jumping to any rash decisions or assumptions.

Why is this person coming to you with this information? What do they expect to get from your conversation? What would you like to hear in a similar circumstance but with the tables turned?

Give people the benefit of the doubt. Even if you are wrong, you’ll feel better about being wrong than if you had not trusted a person of integrity in the beginning.

Step 5: Step Back
Take your emotions out of the equation. Force yourself to step back and use your observation skills to make a decision rather than your emotions. Although our emotions are a gift from God, we do not always use them correctly and often cause hurt, distrust, and degradation. When you check your emotions out of the game, you immediately become more observant, a better listener, and are able to think more clearly. Carry on the conversation in this manner, not with the emotions that may have arisen during your talk. Make sure you act and do not react.


Are you a good listener? If so, what do you feel contributes to this? If not, what can you work on?




I swiped this info from a presentation that I attended for work purposes. The five steps and some examples are not my own although some of the elaborations are mine. I shared them in hopes that you can use them as I plan to be able to.

Photo credit: Ambro

Monday, October 10, 2011

Happy Columbus Day!

Our Financial Status - Update #20 - September 2011

Well holy cow! I mean seriously, where have these updates been?  The last one was in April of this year and a lot has happened (and has NOT happened) so this will be a strange update with some bits and pieces updated.

Let's start by looking at the regular monthly expenses. I'm going to warn you now...it's pretty ugly.  We had an extra paycheck this month (three paycheck month for me) but some other items fell through (Chip didn't get paid the $400 he was promised for a wedding he played).  With the extra money, we paid off some bills and used some to fund a bigger than usual birthday party for Patrick. The rest went to pay off some credit card debt.

Also since my last update?  The stock market has done some severe dipping and took my 401k with it. So although it didn't affect my monthly spending/budget, it did affect my net worth. Boo, hiss.  Oh well....

INCOME:
Right on target for the month.  Since the last update Chip has not been through OCS with the Army (long story) but plans to go next summer. So we did not get the bonus we were hoping for this year and he does not yet have regular income except for the monthly drill pay.  I have gotten a small cost of living raise, which I will take any day. =)


UNDER BUDGET:
Pharmacy: $3 under budget.  Not bad since I only allot $5/month for this area. =)
Mortgage/HOA: This was actually $283 under budget. Why?  We refinanced our timeshare this month and didn't have to pay this month. This budget needs to change to allow for the new higher payment (for lower interest rate and quicker payoff) for next month.
Baby Supplies: $20 under budget for the month.
Childcare: $40 under budget for the month.
Hair: $25 under budget for the month.


ON BUDGET:
Auto Insurance: No surprises here. We're still saving over $500 annually because have officially deemed our cars not worth full coverage due to age and mileage.
Mobile Phone: No surprises, but the bill is $15 cheaper a month than it used to be due to getting a military discount. Woo hoo!
Term Life Insurance: Steadily plugging away at protecting the family.
Alarm Monitoring: Regular charge.

OVER BUDGET:
Car Parts/Repairs: Had some major issues with Chip's car, so we're $554 over budget for this month. That's the price you pay when you have an 18 year old car. Also my car had an issue that had to be fixed as well. Hooray. But that's why we have an emergency fund.
Electricity/Water: $120 over budget. That's the price you pay for living in the South during the summer. The overage should iron itself out during the fall and the rolling budget should even out. That's the plan at least.
Gasoline: $229 over budget. Ouch.  We did travel to see my mom who lives over 6 ours away. And Chip has been traveling for drill as well as for some trumpet rehearsals with a church orchestra he sometimes plays with.
Groceries/Eating Out: $557 over budget. What happened, you might wonder?! I know...it's ridiculous. Some of it was eating out (for two different birthdays). Some of it was groceries for Patrick's birthday party. Some of it was poor planning.  All the way around...bad, bad month!
Doctor: $110 over budget.  This was a bill I received from some health issues and their resulting tests that were done in June. When our "extra" paycheck came during the month of September, this was paid off.  No more doctor's bills. So although it wasn't part of the regular budget, I don't mind since it's a debt elimination. =)
Pest Control: $165 over budget because we had our annual termite inspection.  I really don't count this as over budget since we knew it was coming and our "extra" September paycheck covered it nicely, but it is out of the norm, so I'm counting it.
Home Supplies: $3 over budget. Negligible. Cleaning products.
Toiletries: $23 over budget for the month. No big deal - these will roll out with our rolling budget soon enough. Everything just hit at once, it seems.
Clothing: $57 over budget. Great sales to get some nice clothes for the kids for this winter.  This will get swallowed in the rolling budget over the next couple of months, so I'm not too worried about it.

ADDITIONAL COMMENTS:
  • Spent $86 on Halloween costumes for the whole family. That's pretty unusual for us to spend much of anything, but we're going to be awesome for Halloween. =)
  • $86 for auto tag renewal.  This is $40 less than expected because Chip got a huge discount for getting a National Guard tag (only had to pay ad valorem tax and got the tag free).
  • Spent $400 on Patrick's birthday party.  I know...that's a bit extreme. But it was his biggest ever and we probably won't have another like it for a long, long time. It was awesome though and I'll be sharing pictures soon.
  • $25 went to the charity for a good friend.
  • We had one wedding gift and one birthday gift to buy this month.
  • The awesomeness:  Paid more than $635 over what I usually send to credit cards this month!  YIPPEE!
  • As noted earlier, we took out a Lending Club loan for our timeshare.  We're going to have higher payments but will pay it off FAR sooner and save a LOT of money doing it!  Read more about that here.
Debt Paid off Since October 14, 2009: $22,060.92

Change in Networth from October 14, 2009: + $39,603.99

Next month we'll get back into the regular posting of this so it's not so chaotic!

How did you do this month?

Sunday, October 9, 2011

Fees for Using Your Debit Card?

Is your bank one of the ones about to start charging you for using your debit card?

Mine's not.





Find a bank today that will let you use your own money for free!
 

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