Volunteering and my involvement with Kiva

“At the end of life we will not be judged by how many diplomas we have received, how much money we have made, how many great things we have done. We will be judged by ‘I was hungry and you gave me to eat, I was naked and you clothed me, I was homeless and you took me in.’ Hungry not only for bread — but hungry for love. Naked not only for clothing — but naked for human dignity and respect. Homeless not only for want of a room of bricks — but homeless because of rejection.” ~ Mother Teresa


In high school and college I was involved in volunteerism. Either through school activities, church, or my honors fraternity I have always managed to contribute back to society in some way other than physical. I love being able to lend a helping hand. But since I have been in Audit I have found it hard to get involved in a program where I can give back. The programs run by my church are either during the weekday (meals on wheels) or the one off activities are while I am on Audit. I looked into volunteering at a retirement home/nursing home but they want people to come in for at least 3 weeks straight so that the residents are constantly faced with strangers walking around the building that is their home.

Currently to abate my desire to change the world, I donate to Kiva. Kiva is a microfinance organization where you lend small amounts of money to help fund small loans to those in developing countries help improve their lives. These loans are used to start business, expand businesses, help someone go to college, or improve the quality of the village (building a well). Just for those of you who are wondering Charity Navigator gave Kiva a 66.78/70 rating. You can view their remarks here. For comparison purposes Compassion International (which is not micro financing but a program to support children in third world countries) got a 65.27. 

I know that there has got to be a program somewhere that I can volunteer on the weekends that I am home but even then I do not feel as if I would be connected to that community. Hopefully I can find a place where I can help improve the lives of others, be able to go on audit, and still feel connected. Until then I will change the world one loan at a time.

PS You can find more about kiva on their website www.kiva.org if you want to lend. I lend around $25 a month. I have a total of around $400 lent out. If don't I contribute any more I can relend to two loans each month if I keep the loan repayment in between 6 - 10 months.

One down - 3 to go!

I JUST PAID OFF ONE OF MY STUDENT LOANS!!!

Every paycheck I have gotten for the past three years has had $50 taken out of it and used in an Employee Stock Purchasing Plan (or an ESPP). Once I started the Total Money Makeover (TMMO), I stopped contributing to that plan and decided to sell what stock I could (you have to hold it for 60ish days in my company before you can sell stock that you purchased) and use that to pay some of my student debt. I was planning on doing that in April 2013 anyway because I would have had enough in the account to pay of my largest student loan.

I guess I should explain something about why I was putting the money into an ESPP instead of paying directly against the principal. A) AES SUCKS... that is American Education Services. If you are thinking about getting a loan through them... just don't. When I first graduated college and was working at Applebees I wanted to pay down the principal of my loan therefore reducing the time it would take for me to pay off the loan AND reduce the amount of interest (aka extra money) that I would be paying them over the life of the loans. This is was a LOOONG  drawn out conversation with them with people who didn't understand loans or lending. One lady even said that I couldn't pay against the principal. Ummmmm no. It's law that I can and it would be stupid to say that I can't anyway. You are getting your money back FASTER!! Finally after multiple phone calls over a two month period I gave up and decided just to save it up and pay a loan all at once.

Worst company ever!!! Except for comcast

Which brings me to B) I get 15% extra from my company to buy my company's stock. So say I want to put in $100 to buy some stock. Technically they give me a discount and make the stock worth 15% less but in reality I am still wanting to buy $100 of my stock so they throw an extra $15 on there and I end up owning $115 worth of TE stock. So the extra 15% is greater than my interest rate on the loans but in the end it probably all evens out because of stock market fluctuations.

Under the TMMO, it is suggested that you pay off the smallest loans first that way you see results faster. Then you take the amount you were putting towards that loan (both the minimum and whatever else you were paying) and put it towards the next biggest loan. Then when that loan is paid off you put whatever you were paying to the two smallest loans to the next smallest and so on and so forth.

Anyway I sold my ESPP shares and got back a HUGE check (at least, huge by my standards). I paid of the second smallest student loan because it had the higher interest rate. And put almost a third of the check into savings to go towards paying off the smallest loan. I am hoping that with the money I have already saved up, the portion of the ESPP I have saved, along with future savings I will be able to pay off the second smallest loan in about 3 months :D. And that isn't even considering the money I save on groceries and gas when I am on audit. :D

ONE DOWN THREE MORE LEFT TO GO!!!!

Total Money Makeover

Matthew 25:20-21

The man who had received five bags of gold brought the other five. ‘Master,’ he said, ‘you entrusted me with five bags of gold. See, I have gained five more.’ His master replied, ‘Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master’s happiness!’

I can not tell you the number of times I have heard about the parable of the master who entrusts his servants with coins before going on a journey. Upon his return the servant he has given 5 coins has earned 5 more. The one with 2 coins has earned 2 more. The one with 1 coin had hidden it and only had the initial coin to give back to the master. The master is well pleased with the first two servants and throws out the last one from his household. This is used as an example of using wisely what God has blessed us with.

I have been extremely blessed. I went to an excellent university that despite all the bad press is still well regarded for it's academics, I graduated with just over $15,000 in student loans (cheap in this day and age) thanks to my parents commitment to give their children good educations. God  blessed me with an amazing job during our "great depression". I was able to live at home for a year after college allowing me to put 20% into my 401k during the 6 month period I lived at home and worked at Tyco Electronics.

Upon moving out of my childhood home God has blessed me with great apartments and experiences. I have come to fully rely on him for everything that I need. Once I learned to trust him to provide for me, now it was time to learn how to manage it. Unfortunately it has taken me a year to realize this was the lesson I was suppose to be learning.

Even through all of the amazing blessings I have had I absolutely STINK at managing money. I start saving and that would work until my brakes needed to be replaced. Or a windshield. Or pay for CPA prep classes and Exams. Often I would think that I had plenty of money in my checking account and decide to treat myself to one thing or another not realizing that the student loan or the car insurance would be automatically deducted from my account in the next couple of days. Frequently in the last couple of days before the new paycheck would come I would have to transfer money from my savings back into my checkings. And that is if I caught it. If I didn't catch that I was low, PNC automatically pulls money from my savings to my checkings for a nice tidy fee of $10. I can say that PNC has made a lot of money off of me the past year and a half or so.

I just wasn't getting the message. Even the months that I was traveling for work and I didn't have to buy gas or food I would overspend on Souvenirs or Tours in a new place rationalizing that I didn't have to pay to get there or stay there. If I was to do it again it would be more expensive so I better spend the money on it now. God decided it was time to throw the book at me...

Literally

For the past couple of years I have heard my mom talk about Dave Ramsey. Since she has moved to NC she has mentioned him more often. I would have to say that she has a financial crush on him. :) She recently has read his book The Total Money Makeover and has suggested I read it. I didn't really want to. I mean yeah I was getting a ton of fees from PNC and my money moved from account to account faster than laundered money from the mob but I wasn't struggling. I was paying all my bills and investing in my 401k and Employee Stock Plan. Although I was bit high on the balance for my credit card but definitely no where near the credit debt that many students have coming out of college. I had Mint.com to categorize my expenses for me. If I was curious about where my money had gone I could just log in and check. I didn't need money advice.

My Mom's financial crush

For my birthday my Mema had given me a giftcard to Barnes and Noble (that place is like my crack and she is just enabling me). I couldn't find any books that I was interested in, which was rare. I normally walk in saying "one book... just one book" and walk out with 3... or 5. So on impulse I buy Dave Ramsey's Total Money Makeover. Honestly I expected some get rich quick ideas and investment advice that was hard to follow. That is not what I read at all. What he said was simple but he said it was going to be hard.

First thing to do - make a budget. Sure - been there done that. But this time I did it differently. I started by planning out what I was going to spend monthly, but also setting up another tab to track what I was going to have to spend my money on for that pay period. This way I could know when I was going to be hit and how much I did have left over after all the "regulars".

Next is to put $1,000 in a savings account (preferably a money market fund) to have ONLY for emergencies. Ok I had some already in a savings account. I switched $1000 to a money market fund.

I couldn't see what was going to be so hard about this total money makeover (I was reading the next step only when I completed the step I was on)

Then comes the hard part. For my age he suggests stop contributing to my 401k (except for the % that my company would match). WHAT?!?! He said to use that money and any extra cash flow to pay off my student debt and credit cards. He despises credit because it is essentially going into debt each month even if you pay it off. I couldn't believe it. That went against everything I had been taught. I was always told to contribute to a 401K cause even 5 exta years of just a little bit would add up in the end. Not to mention that credit cards are so easy to use! But then he quoted Proverbs 22:7

"The rich rule over the poor, and the borrower is servant to the lender."

That stuck a chord. About 3 years ago I tried to pay over my minimum amount to my student loan company but they just took it as a "prepayment" on future bills and did not apply it to the principal. THAT IS THE STUPIDEST THING I HAVE EVER HEARD! I fought with them for maybe 3 months to be able to permanently have that removed so I could pay against the principal. Never worked. Now they hate me and I hate them but I still have to deal with them every month for the next 10 years. Oh and they get around $60 of my money each month in interest. Great I am paying them to basically be jerks.

I am on track to pay off my credit cards in 2 months and my student loans hopefully within a year. Then I can start saving for a down payment on a house as well as a fairly new used car. There is more to his baby steps to a financial makeover but I will let you buy a copy (or borrow my own) to decide if it is something for you.

I am just glad that I am finally taking steps to control my money instead of the other way around.