Financial Bills and Budgets

[Amaury]

If you cook a lot, then research cheaper meal plans.  If possible, and if it will make a difference (depending on your pay structure), keep the thermostat set to cooler in the winter and warmer in the summer.  Evaluate your internet package and see if a slower (cheaper) speed would be adequate for your needs.

Thankfully, I don't have to worry about these, as these are all covered by my mom since I live with her, which is a help to both of us. I forgot to mention this.

I only eat out about once or twice a week, but when there is cooking involved that my mom does, it comes from her grocery budget from the weekly shopping we do. She also pays for utilities and Internet, the latter of which I help her with, and it's part of a package with cable since we're through Spectrum. Although, as mentioned, she is happy to let me take a pause on helping her with that and the couple other bills I help her with while I get things in order. She is doing fine. She quit her longtime office job at the end of 2019 and gets social security and retirement checks (separately) once a month. They're fixed amounts, so she doesn't have to worry about something like getting 38 hours one month instead of, say, 71, and they have cost of living increases once a year, at least the social security one does. Although the retirement one has gone up, too. Then she has a house cleaning job, so she is definitely okay.

Since you seem to be very conscientious about your budgeting, having a credit card (and using it, and paying it off every month) can be a good thing. For better or worse, it establishes/strengthens your credit score, which is helpful when considering big ticket items (car, etc.) - you can often negotiate better deals with a stronger credit score.

Also, having a card with a good rewards program can be a big benefit - we fly somewhere about once a year and the rewards from one of our cards pays for the tickets, and the rewards from our other card pays for about 1/3 of our clothing expenses.

When I got the 2020 Corolla, I had a very good credit score, despite never having a credit card. I don't remember the exact number, but I only had like around 100 points less than with my mom, and I was still in the excellet range.

[ZLoth]

So, I've never had and don't personally plan on getting a credit card or line. My mom has told me this is a good thing, something she wishes she was more careful with.

Not getting a credit card is a _bad idea_. If you plan on renting or purchasing a residence in the future, one of the things they look at is your credit history. Having a bad or no credit history can affect getting a rental or paying a higher interest rate on a mortgage. In some states, including Texas, your credit rating also determines your automotive insurance rate as a bad credit rating is looked as a risk factor in getting into an accident to get some badly needed money. Also, if you travel and you fill up at a gas station, some stations pre-authorize a high amount prior to filling up, then the actual amount. That pre-authorization take a day or so to clear, but that reduced the amount of available cash on that debit card. If you have a credit card that has a high limit, that it won't be a problem. In addition, there are purchase protections that are available as a credit card benefit that are not there with debit card and/or Zelle transfers.

Should you carry a balance on a credit card? Absolutely not. It should be paid off at the end of every month. Bonus if you get cash back from the credit card which is why all of my monthly bills on my credit card. And, a good credit rating will allow you to get a lower interest rate should such emergency occur. While I understand Dave Ramsey's premise of feeling every dollar you spend

A few more items (may be covered in your post already):

• If your company has a 401(k) plan retirement which include a matching contribution, contribute at least as much to take full advantage of company matching contribution. Don't leave money on the table. Never underestimate the time value of money.
• Speaking of retirement plans, be sure you know the difference between "Traditional" and "Roth" when it comes to 401(k) and IRA and the associated tax deferrals.
• While you should establish a emergency fund, be aware that $500 is only a starting point. My emergency fund is much higher because it's exceeds the deductible for my homeowners insurance in Texas. (My policy has it as a percentage of the home value, which can be 1%, 1½%, or 2%). Ideally, it should be some investment accounts which can be easily liquidated on short notice.
• If you don't need an item right away, consider tracking the price at CamelCamelCamel so that you can view the price history and set price alerts.
• Don't forget to set aside a little bit of "Fun Fund" money for those occasions to have fun without feeling guilty such as vacations or road trips. One early fun fund purchase would be to obtain a United States passport for the possibility of travel, followed by Global Entry (preferred) or TSA Pre-Check to help expedite arrivals at airports and re-entry to the United States.

[jeffandnicole]

When I got the 2020 Corolla, I had a very good credit score, despite never having a credit card. I don't remember the exact number, but I only had like around 100 points less than with my mom, and I was still in the excellet range.

While it may vary among credit agencies and creditors, the Excellent Range is usually only a 51 point span, from 800-850. 740-799 is usually Very Good. So while both scores are generally going to get you the best rates, you probably aren't in the 'excellent' range with a score 100 points less than your mom.

So, I've never had and don't personally plan on getting a credit card or line. My mom has told me this is a good thing, something she wishes she was more careful with.

If someone had issues with credit card spending in the past, I can see the hesitation. But overall, it is a good idea to have one, even if you only get 1 with a small limit, such as $500 or $1,000,. Just use it a few times a month, such as gas or a small fast food purchase, and pay it off when you get the biill. That will go a long ways towards helping your credit rating.

Don't forget to set aside a little bit of "Fun Fund" money for those occasions to have fun without feeling guilty such as vacations or road trips. One early fun fund purchase would be to obtain a United States passport for the possibility of travel, followed by Global Entry (preferred) or TSA Pre-Check to help expedite arrivals at airports and re-entry to the United States.

I agreed with everything but the last point. Getting a passport is a good thing, especially if you find yourself with the opportunity to travel internationally. But if you're already needing to budget for "fun fund" money, and unless you're going to make it a semi-regular occurrence to travel, be it domestic or international, stand the extra minutes in a security line rather than spending the time and money to get Global Entry or Pre-Check.

[ZLoth]

Don't forget to set aside a little bit of "Fun Fund" money for those occasions to have fun without feeling guilty such as vacations or road trips. One early fun fund purchase would be to obtain a United States passport for the possibility of travel, followed by Global Entry (preferred) or TSA Pre-Check to help expedite arrivals at airports and re-entry to the United States.

I agreed with everything but the last point. Getting a passport is a good thing, especially if you find yourself with the opportunity to travel internationally. But if you're already needing to budget for "fun fund" money, and unless you're going to make it a semi-regular occurrence to travel, be it domestic or international, stand the extra minutes in a security line rather than spending the time and money to get Global Entry or Pre-Check.

The first time in getting a passport is usually the hardest because you have to make an appointment with the appropriate facility and pay a $35 execution fee to that facility in addition to the passport fee. Having said that, the passport is good for ten years, and it's cheaper when you don't have to do it in a expedited manner. A passport book is $130 while a passport card is $30 but is very limited. If you expedite it, then it's an additional $60 plus $19.53 for expedited shipping. Thus, the best time to get a passport is when you don't need it.

As for TSA Pre-Check and Global Entry, TSA Pre-Check is the easier of the two to get, but only gives you access to the TSA Pre-Check line, and is $78 for five years ($15.60 per year). Global Entry include TSA Pre-Check, but also helps expedite re-entry into the United States, and is $100 for five years ($20 per year). Having said that, Global Entry is harder to obtain than TSA Pre-Check in that, when you are pre-approved, you have to set up an appointment at a interview center or do a "interview upon entry" when you return from a foreign country. For some of the Global Entry interview centers, the wait for an appointment slot is up to a year. In addition, you can't transfer the unused amount from TSA Pre-Check to Global Entry. Once you are approved, make sure you put in that trusted traveler number in your airline profile.

Looking at the cost-benefit ratio, it's much better than CLEAR which charges ~$170 per year. No thank you.

[1995hoo]

....

Looking at the cost-benefit ratio, it's much better than CLEAR which charges ~$170 per year. No thank you.

I have CLEAR because American Express pays for it. It's useful only when the checkpoint is particularly busy. You skip the ID check line, do a biometric scan, and are then escorted to the x-ray machine/metal detector (sometimes they check your ID as a sort of auditing step). It doesn't replace either Precheck or Global Entry—it's more of an addition to either of them, though you need not have either one to use it if all you want to do is reduce the time spent standing on line. Last time I flew a couple of weeks ago, there were more people lined up for the CLEAR machines at Fort Lauderdale than there were for the regular ID check, so I skipped the CLEAR line and got through sooner.

[J N Winkler]

I would also suggest looking into what it would take to move toward not having a car payment.  I notice that past budgets included provision for a 2020 Corolla that was leased, and the current vehicle is a truck.  Not carrying a payment should free up at least $250 monthly.

[epzik8]

I get paid every other week and have different monthly bills I pay during each pay cycle. I pay only my rent by check.

[Amaury]

I would also suggest looking into what it would take to move toward not having a car payment.  I notice that past budgets included provision for a 2020 Corolla that was leased, and the current vehicle is a truck.  Not carrying a payment should free up at least $250 monthly.

Yes, my mom takes care of the car payment now. The truck is also leased. We co-signed both vehicles.

If I remember correctly, leases are for three years. After that, you buy the vehicle from, in this case, Toyota and get a loan from a bank and then pay them monthly payments. So, here's a breakdown from when I made my first big decision onward:

• In August 2019, the lease started for our 2020 Toyota Corolla SE Manual when we got the car, my first big adult decision!
  
• In September 2019, regular monthly payments started: $360.07 a month. There was an outlier in December 2019, where I had a payment of $297.32. I forget the reason why, though. There was a system glitch or something, though, as the regular payment also ended up going through, for a total of $657.39, which put me ahead and I was able to afford it back then. There was another outlier in February 2020, where we canceled that month's payment due to the aforementioned double payment. While I could afford to just keep being ahead by a month, we did that just to get everything straight again.
• In June 2020, we had to "quickly" find another pickup truck, as the head gasket in the 2002 Chevrolet S-10 Automatic my mom had gotten from a used car lot here in the city in July 2016 was going bad. Whenever a head gasket or transmission starts going bad or breaks, it's just time to get a new vehicle due to the repair costs. At least that's what I've heard. We ended up finding a certified pre-owned 2015 Toyota Tacoma SR5 Automatic at the same Toyota we got the Corolla at. It was a two-door 2WD, but we just needed something and ended up making the decision to get it the same day we went there to look for something. We couldn't lease this as leases are only done on brand new vehicles, so my mom had to get a bank loan. The sad part about this is that my mom had literally just paid off the loan for the 2002 Chevy about a month or two prior.
• In July 2020, regular payments started for the 2015 Tacoma: $351.09 a month. It was my mom's bill, but I helped her by paying half of it and set up repeating monthly transfers of $175.54 to her checking. So, at this point, I was paying a total of $535.61 ($360.07 + $175.54) a month in vehicle payments.
  
• In March 2022, I transferred my half of the 2015 Tacoma payment to my mom's checking for the last time since later in the month, we got a brand new 2022 Toyota Tacoma TRD Off-Road Automatic and leased it, as we needed a 4WD. We traded in the 2015 Tacoma, but because it was obviously not paid off yet, it made the monthly payment for the 2022 Tacoma a little higher. Everything was just incorporated together.
• In April 2022, regular monthly payments for the 2022 Tacoma started: $590.82 a month. There were two outliers right off the bat. In that same month, I had an additional vehicle payment of $545.32, I just can't remember what for. Then in May 2022, there was no payment for the 2022 Tacoma. This time things were reversed, and my mom was helping me until the Corolla's lease was up. My mom transferred her old half of the 2015 Tacoma payment to me with repeating transfers: $175.55 a month.
• In May 2022, monthly payments for the Corolla went up slightly from $360.07 a month to $360.71 a month. At this point, I was paying a total of $775.98 ($360.71 + $590.82 - $175.55) a month in vehicle payments. With the outlier in April 2022, it was $1,321.16, but that was just one single month.
• In June 2022, my mom transferred her half to my checking for the last time due to purchasing the Corolla later on.
• In July 2022, my mom purchased the car a little ahead of the lease end in August 2022 with a loan that was all set up by Toyota for her. She put the Corolla in her name so if something happens, I'm not responsible for the payments, but we're still co-owners.
• In August 2022, regular monthly payments for the Corolla on the loan started: $329.04 a month. It was my mom's bill, but like before, I helped her by paying half of it and set up repeating monthly transfers of $164.52 to her checking. At this point, I was paying a total of $755.34 ($590.82 + $164.52) a month in vehicle payments.
• In November 2023, monthly payments for the 2022 Tacoma went up from $590.82 a month to $638.68 a month. As such, I reduced my portion of the Corolla payment from 50% to 25% and transferred $82.26 to my mom's checking for the last two months of 2023, before canceling it completely due to finances. For those last two months, I was paying a total of $720.94 ($638.68 + $82.26) a month in vehicle payments.

And that brings us to the present. Beginning January 1, 2024, the only vehicle payment I have is the 2022 Tacoma: $638.68 a month. And I can't even make that before my next pay deposit without moving money from my savings. Adulting is fun!

One thing my mom and I were discussing to alleviate my current—hopefully temporary—financial situation was switching our vehicle payments. She would pay for the truck, and I would pay for the car. Rather than go through the headache of changing or doing new paperwork, we would just do it via transfers. She would transfer the amount of the truck payment to me, and I would transfer the amount of the car payment to her.

[ZLoth]

I have CLEAR because American Express pays for it. It's useful only when the checkpoint is particularly busy. You skip the ID check line, do a biometric scan, and are then escorted to the x-ray machine/metal detector (sometimes they check your ID as a sort of auditing step). It doesn't replace either Precheck or Global Entry—it's more of an addition to either of them, though you need not have either one to use it if all you want to do is reduce the time spent standing on line. Last time I flew a couple of weeks ago, there were more people lined up for the CLEAR machines at Fort Lauderdale than there were for the regular ID check, so I skipped the CLEAR line and got through sooner.

Only way I would get CLEAR is if it was included as a benefit. Some credit cards include paying for Global Entry and/or TSA Pre-Check as a benefit as well.

When I moved to DFW, I felt the travel opportunities were better than in Northern California, thus my mother and I both got Global Entry. Then Coved came and F-ed things up. Then my mother had health issues. I'm still renewing both cards this year.

[ZLoth]

Just to clarify... get a passport first, then get Global Entry later, as the passport is required during Global Entry interview. The first time application for passport and Global Entry is a bigger hassle than renewal, but the long term benefits outweigh the challenges.