Single Girl Slays Debt

Paying Off Tsunami-Sized Debt as a Single Woman

Archives for May 2020

Net Worth Statement – Q2 2020

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At the beginning of each quarter throughout this journey, I share my personal financial statement. It displays my net worth. This quarter, I’m running behind schedule. Sorry.

As I mentioned in my first Net Worth Statement, I have just begun tracking my net worth through this journey.

I’m sooooooooo looking forward to the day that I have a zero net worth!

Some notes:

  • The checking accounts amount includes some funds I’ve reserved for sinking funds. A significant portion of it is reserved for the HOA special assessment I am obligated to pay. Though the HOA special assessment was due (and I paid it) in February, the roofing project that necessitated the assessment hasn’t started due to the COVID-19 pandemic. Since the project is on hold indefinitely, the HOA Board was willing to refund half of the special assessment back to owners until the project is set to start.
  • The savings accounts amount is, basically, my “baby emergency fund” (a la Dave Ramsey’s Total Money Makeover), which is accruing interest. This will be changing soon. COVID has confirmed for me that the $1,000 baby emergency fund is not sufficient – even in the short term.
  • The real estate market value figure reflects the value of my property, according to Zillow.
  • I do have life insurance (even though I’m single and do not have children), but it is a term policy, not one with any cash value.
Net Worth Statement – Q2 2020

Though my net worth is negative and will likely be so in the near future, I’m going through this exercise for the practice – to develop the habit of consistently being on top of my full financial situation.

Here are some significant differences between my net worth for Q1 2020 and my net worth for this quarter.

  • My net worth decreased from -$63,366 to -$74,472.
  • My total liabilities decreased by $6,134.
  • My checking account balance went up by $2,840.
  • According to Zillow, the value of my condo decreased even further by $20,798.
  • Even though my total liabilities went down, the substantial decrease in the value of my condo negated all of any gains I made in my debt paydown.

The median net worth for my age (43) is $59,800. Obviously, I’m far below where I should be. But, that’s the point of this blog, right? I’m in a terrible financial space, totally not where I want to be, but now doing what I need to do to fix it. I’ve committed to being on this journey and, as Jim Rohn says, I’m going to continue to try . . . until. 

If you’re interested in the median for you age range, see below.

  • Age 35 or younger: $11,100
  • Age 35-44: $59,800
  • Age 45-54: $124,200
  • Age 55-64: $187,300
  • Age 65-74: $224,100
  • Age 75 or older: $264,800

I’m showing the median net worth because the mean net worth figures are much higher, since they are skewed by the net worth amounts of the uber wealthy (i.e., the billionaires). We know I’ve got some catching up to do. 

Where do you find yourself, considering the median figures above? How far ahead or behind are you?

The Tsunami Situation – April 2020 Debt Report

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Each month, I record the balances on my debt obligations. The amounts shown in my debt report reflect balances as of the end of the previous month. First you’ll see the Table of Debt Slayed. This displays debts that have been paid off since I began my debt free journey.

Further below you’ll see my active debts in the Debt Report Table.

“How long should you try? Until.”

~ Jim Rohn

A few notes on the Table of Debts Slayed: 

(1) The Debt Journey Balance column reflects the balance on the debt as of the date that I started to get serious about my debt-free journey – July, 2019. 

(2) I’ve included in the Table of Debts Slayed, the balances I paid off for my 2018 Federal ($3,238) and State ($2,819) taxes, even though I paid them off the month after I learned about the obligation and the debts became due. I’m including them the list because they were significant amounts and were, technically, debts; I just paid them off quickly. I previously had not listed them in my Table of Debts slayed but am do so now.

(3) In November, I applied for and obtained a debt consolidation loan, which allowed for the payoff of all of my credit card debt. The credit cards listed, except for the Chase card, were paid off through the debt consolidation. Effectively, the debt was re-classified (which you’ll see in the table below) and not actually paid off. 

See the Debt Report Table below for the figures as of the end of April, 2020. It shows the updated order of debts to be repaid.

April, 2020 debt balances.

The difference between my March and April personal debt balance is an increase of $169. The increase is due to a new debt I have (see below). As I mentioned in my March Debt Report, I made some changes in light of the impact that COVID-19 has had on my business and, therefore, my income. With the downturn in my business and the uncertainty in my income, I decided to hold on to additional funds. That many of my creditors – Navient, Credit Union, 1st Mortgage and LendingClub – agreed to postpone or forebear payments made it possible for me to not stress too heavily about my significantly reduced income. Under normal circumstances, I would have paid all of my monthly payments and made an additional debt snowball payment that would have resulted in, at least, some kind of additional decrease of my debt. That did not happen this month.

A few notes about the Debt Report Table:

New Debt Being Attacked – 2019 State Taxes

The debt that is highlighted in green is the debt that I’m currently attacking. For the last few months, that debt has been my 2016 IRS bill. This month, it became a tax debt I now owe to the State for my 2019 taxes due.

I have the money to pay the bill in full. I decided to go on a payment plan because, again, I feel it best to hold on to cash right now. There’s a lot of uncertainty involved with this pandemic. I feel more comfortable having access to money.

Estimates

An amount that ends in a “0” or “50” may be an estimate. Often times, the IRS website does not show updated figures. It will say that “information is not available,” so I make a guess, based on the typical monthly reduction amount. 

Three Payments That (Unfortunately) Go Up Every Month

(1) Internal Revenue Service (2017)

This payment goes up every month because the IRS system will not allow me to make payments on both the 2016 balance and the 2017 balance at the same time. I wanted to make small payments on the 2017 balance so that it wouldn’t go up every month. When I spoke with the IRS, they explained that they don’t allow for that. It requires that all payments be applied to the oldest balance due. That is why the 2016 balance goes down, while the 2017 balance goes up by about $64 per month.

(2 & 3) Navient Student Loans (Yes, Both!)

The balances for both Navient loans usually go up every month because I’m on an income-based repayment plan. Since the U.S. Government has given us a break on student loan interest and student loan payments (which began in mid-March), the balances didn’t go up. And since I didn’t make any payments, they didn’t go down, either.

Business Debt

April, 2020 business debt balances.

I’ve included the business credit card balance, even though I don’t pay that bill out of my personal income. Though the money that pays it comes from the business, I am the personal guarantor of it. So, technically, it’s my debt.

The difference between my March and April business debt balance is $560.

Up until a couple of months ago, I had a business credit card that had an APR of 22.74%. In January, I thought that I had succeeded in obtaining 2 low interest business credit cards so that I could transfer the balance from my high interest business card (see Money Move – A Balance Transfer). What I did, instead, was get 1 card that would allow for a 0% interest balance transfer and another card that was 0% interest, but not on balance transfers.

What I decided to do was get a separate business loan with a low interest rate (well, lower than the 22.74% of the other card). I wrote about that here. Now, I’ve got one credit card and one business loan.

COVID, COVID, COVID

Last month, I wrote about needing to take the month of April to think for a second. I wanted to see how my income looked and also wanted to focus on getting used to living under lock-down. While I’ve now adjusted fairly well to lock-down, the money situation is still shaky.