“Renting” Archive
Jun
11
Today I took a vacation day in order to get the final details of the DMP proposal to my creditors (for those accounts that are open and not already with the collection agencies, i.e. AMEX). I’m glad I had this meeting as it was both an eye opener from a budgeting perspective and somewhat of a relief to see that if the proposals are accepted, my interest rates will be knocked down dramatically. As my readers know, I was paying as much as 32% on some of these cards and now the top interest rate for a given card will be 9.9%. I’ve had prior dealings with the creditor who is charging 9.9% and in my case they knocked it all the way down to 0%, so I’m hopeful they will do this again. So, the good part is that my interest rates are lower, payments each month are only slightly lower, but the bulk of my payment will be applied to the principal. According to the DMP estimate, I will be debt free in 53 months given the current plan. This doesn’t include any additional payments I make from my side income and annual bonus, all of which can be directed to a specific creditor as long as I notify the Credit Counseling Agency how I want the money directed.
Now for the bad news. The bad news is that given my current budget and child support obligations, I have less than $100 cushion every month. This does NOT include any of side income because it hasn’t been reliable enough to include in a monthly budget worksheet at this point. I, unfortunately, have a leased car so there isn’t much I can do in terms of getting out of the lease early and avoiding those payments for the next 12 months. I have frankly cut just about everywhere I could with one exception; my current apartment.
In an earlier post, I posed the question of ‘To Move or Not to Move’, and I had decided at the time that sacrificing a quiet, stable apartment and decent neighborhood would not be a good idea, unless absolutely necessary. Well, it looks like it WILL be necessary. Rent eats up a good deal of my budget each month, and while my apartment is new and nice inside, it frankly isn’t worth what I am paying for it. I won’t go into specifics of what I pay each month, but suffice to say I can save probably $300/month by moving to an older place in a different neighborhood that might involve a longer commute. Since I plan on utilizing public transportation at least 75-80% of the time going forward, as long as there is bus access within walking distance (or a Park & Ride within 2 miles or so), I am going to move. Until I can rid myself of my car payment and have a reliable second income source, my budget is just too tight should something unexpected come up. This budgeting exercise was also a reminder of how important an emergency fund really is!
I’ll keep you updated on the search for a new apartment but given I have the day off, I think I will make good use of the time and hit some of the places TODAY!
Apr
27
Admittedly I recently let my renter’s insurance policy expire. Yes, I know what a foolish mistake that is. I had meant to shop around to see if there were better rates out there but I allowed myself to get overwhelmed with other things. As I started investigating some new apartment possibilities I noticed that many of them required renters insurance so I realized I needed to address this as soon as possible.
I have heard from many folks that Amica provides some fantastic rates as well as great customer service so I decided to give their online quote a try. After entering in some basic info about the amount of coverage, distance from fire hydrant, construction of apartment etc., I was asked for my social security number, which was optional. The site did mention that a more accurate rate would be delivered if I did enter my SS#, however. Clearly Amica uses what is called an “insurance score”. An insurance score is similar to a credit score, but differs in that it heavily weights whether or not you have paid your bills on time and for how long? Unfortunately for me, I have recently fallen behind with 2 of my creditors–part of the reason I have formally launched my mission to get rid of debt–and when the rate came back, it is clear that these late payments are damaging my insurance score, not to my mention my credit score. The rate was nearly double what I had paid a year ago; OUCH!
So why do insurers do use your credit history vis-a-vis your insurance score to determine premiums? The premise is quite simple. The thought is that people who don’t pay their bills on time are higher risk, file more claims and those claims are typically more expensive. The insurers all have quantitative analyses to support this conclusion but some states and consumer advocates feel the practice in unfair. Unfair or not, at least in Washington State, the practice is used and I’m paying for it, at least for now.
Apr
26
So one obvious way I have been looking at in an effort to save money is to move into a cheaper apartment. While I am not paying the highest rent in town, I am indeed paying more than the average rent for this area. In addition, I have about a 30-40 minute commute (most of it stuck in traffic) to work each day. With gas prices topping $3.40 per gallon out here, even for the cheapest grade of gas, driving to work is costing me a pretty penny, particularly given I drive an SUV (to be replaced next April with something much smaller and fuel efficient). I’ve found some very nice apartments closer to my work that are close to business that could quickly get me to work, so for the most part I’m at a loss as to why I am even debating the question. Well first, the apartment I’m currently living in is quite comfortable and VERY quiet. Quiet time is often a huge problem in apartment living so I’d hate to compromise that. Second, my current apartment is in an urban environs, something I, as a life-long urban dweller appreciate tremendously. Ultimately, I think the decision is going to come down to dollars and cents, particularly given my need to get my debt down. Based on my potential gas and rent savings, I think I can trim $1500-$2000 year off my combined housing and commuting costs, so this looks like a no brainer. I just hope my neighbors are quiet. I do value my rest!
If you think you are paying too much for rent, give Rent-O-Meter–no relation to the Debt-O-Meter–a try. I’ve found it to be pretty darn accurate and useful when speaking with property managers. Another finding….even rent is negotiable when armed with good information!
