Fixing Mistakes: I goofed my math on my money tracking.

I am very careful about tracking my money since I maintain a relatively tight budget. I use a combination of mint.com and Excel spreadsheets to keep my stuff straight. I have just discovered that I have some pretty large errors in my numbers and I have less than my spreadsheet says I do.

Luckily I got a bonus from work that more or less covered the errors. It is pretty much as if I did not get a bonus at all mathematically. It could be worse!

It basically boiled down to me forgetting to do some transfers and recording of transactions. It also was partially the result of me working out my spreadsheet tracking system for items that I do not budget for. It developed over the past year and is now fine tuned to be correct. The earlier months are incorrect and thus created bad numbers.

I have a solution!

I am going to Asia for a month and will almost exclusively use cash while there. This will let all of my credit card balances clear off for the most part so I can start clean in December. I will have a better idea of what I "really have" in terms of disposable cash. I am pretty close now but probably still a bit off.

I will start the day I get back with a clean slate spreadsheet and continue to track it very carefully. Having my work expenses reimbursed does complicate things a little but is well worth it to get all of the extra points that allow me to travel more often! I am just glad I have not added on more debt!

My Home Refinance: Changes of plans

So I got my appraisal in for my newly renovated house. It came it at well over what I paid for it but also MUCH lower than I was expecting. This has essentially scrapped my plans for refinance and now I have to take a different route.

Because I can only borrow 80% of the value of my home I am going with a home equity line of credit. This will give me enough to repay my family for the materials cost of my remodel. At this point I am happy to be able to pay them off!

As for my other plans, which included consolidation of my debts and faster repayment, I am stuck with my current set of monthly payments. Combined with my new home equity payment my budget just got a lot tighter. I am now making what small adjustments I can to help compensate.

All in all I am still going to be OK. This was a major blow to me mentally at first but now I am going to suck it up and move on. Nothing can really be done at this point unless I find a much higher paying job. I am now focusing hard on getting more side work and doing what I can to start to pay this down as quickly as possible. Sometimes the road of life makes unexpected turns that you don't necessarily like...

My 6 Personal Financial Mistakes

Going along with the adage that "no one is perfect" I have decided to share my personal financial mistakes. I hope that sharing my mistakes will help prevent others from doing the same thing. It is never easy to admit mistakes, especially when it involves money, but I think it is a good exercise to perform.

1. Student Loans: I currently am carrying almost $14,000 in student loans. Most of this was used for living expenses during college. If I could do it over again I would have worked at McDonald's in order to avoid them. Luckily I locked in a 2.79% interest rate.
2. Credit Cards: This one is two fold. I used credit cards to fund my 18-month around-the-world trip. I consolidated and then used some again to fund a failed small business. This is a very expensive lesson that I will pay for the next 5+ years.
3. Investing: I learned the hard way that index funds are the way to invest for the long term. I thought I could beat the market and got "schooled". I have straightened it out now but had some losses to begin with.
4. Tracking Expenses: Before I learned about personal finance (thanks to a class in college!) I basically just checked my bank balance. I have come a long way from living hand to mouth to having an emergency fund of any kind.
5. Buying a car: Back in 2003 I bought a brand new 2003 Honda Civic. I made a good choice in the car itself as I still drive it today. I made the bad choice of financing it. I locked in a 2.9% rate but the next car I buy will be cash (or 0% with cash to back it up). That car payment was not fun in college (hence the student loans above). On paper it is paid off but I still have the student loans.
   
6. Unemployment: For nearly 2 years in college and another 20 months during my around-the-world trip I was unemployed. This is by far the most financially devastating event(s) in my life to date. I have a mountain of debt to prove it. I now have gotten into networking and better interviewing plus an emergency fund to combat future problems.

I have learned a lot of hard lessons that I am now paying for. If I had been taught better habits at a much younger age I would have been much better off. Most of us don't learn about how to handle money until college or well after. Now is the time to live within your means!