Saving Up for a HouseGoing from $0 to $60k in 24 months

Several weeks ago, my 27″ standard definition CRT TV from 1999 (Panasonic CT-27G14) stopped working properly. The picture took up the full width of the screen like normal, but it was only an inch or two tall. Sometimes, when I hit the side of the TV, the picture filled up the whole screen for a split-second, but then it went back to being squished.

I always feel really bad when one of my gadgets breaks. I’ve taken great care of my electronics, even as a child, so I guess part of me expects them to last forever. This one lasted 10.5 years.

I’m fortunate because my girlfriend had an extra TV in her basement…a 32″ 720p Toshiba LCD HDTV from a few years ago. Wow! If it weren’t for my girlfriend and her TV, I would’ve bought a cheap older $50-$100 CRT TV off Craig’s List instead of paying hundreds or thousands of dollars on something new.

The following weekend, we brought her TV to my apartment and set it up. The TV itself worked fine, but I noticed something weird: we could watch live shows and change channels, but none of the graphics from the cable box were showing up. For example, the channel information bar at the bottom of the screen was missing. The guide and DVR menus weren’t showing up either. I tried using different wires and different inputs on the back of the TV, but nothing solved the problem.

I called Comcast and after a half hour of troubleshooting, the woman told me to bring the cable box to their office and switch it with another one. I really didn’t want to do that because we had a ton of shows recorded on the DVR we hadn’t watched yet. Switching the box meant losing all of those shows, but by keeping the broken box, we wouldn’t have been able to watch the shows anyway, so we were out of luck no matter what.

I was thinking about canceling my cable TV service entirely and connecting my computer to the TV instead, but when I called Comcast, the woman gave me a good price for the next six months, so I’m sticking with it for now. I had already lowered my cable and internet bill to $116 a few months ago, but now it’ll be even lower…roughly $76 for the same exact channels and internet speed. Plus, I’m getting an additional $20 off my next bill because I wasn’t able to use my cable box for a couple of weeks.

In a way, it’s good that my box broke; if it hadn’t, I wouldn’t have called Comcast and gotten my bill lowered for six months. Now, I’ll be able to put an extra $40 toward my girlfriend’s credit card debt every month! When the special price expires in October, I’ll re-evaluate the situation.

So, my TV and cable box broke, but now I have a much newer TV and a new box, and it cost me nothing. In fact, I’ve ended up spending less money as a result. Go figure!

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I went to H&R Block a few days ago to file my income tax return. I usually get it over with in February, but for whatever reason, I kept putting it off this year. Before I went to the H&R office, I plugged my numbers in using one of the online tax services, just to get an idea of how much I’d owe or get back. According to the web site, I was going to receive a refund of around $1,000. Excellent!

I would’ve submitted my tax forms online, but I’m a freelancer and wasn’t sure I completed everything correctly. I figured it’d be worth paying a professional to avoid any fees, penalties, or audits. I’m glad I went because the tax advisor entered my data a little differently than I did and my refund increased to almost $1,500!

Of course, paying an expert at H&R Block was much more expensive than filing online, but even after the added cost, I still ended up with an extra $100 or so…plus, I bought H&R’s $30 Peace of Mind extended service plan, so if there’s an error and I receive a penalty, H&R will supposedly pay for it, up to $5,000.

I use the word “supposedly” because now I’m doing research online and it seems as though – just like with most extended warranties – it’s bogus. I’m finding story after story about people getting notices from the IRS about errors and having to pay fees, and H&R finding obscure loopholes to avoid honoring its end of the service plan. Great.

I hope I’ll never have to call upon H&R to pay my tax penalties because I hope my return was filed properly in the first place, but if there were a mistake, I’d expect the company to take responsibility for it. Do you hear me H&R?? I usually avoid extended warranties, but the only reason I spent $30 on the Peace of Mind insurance is because several years ago, my return was prepared by someone at Jackson Hewitt Tax Service who left a line blank and cost me a penalty of almost $1,000.

Anyway, I’m happy about my refund. Once I receive the money in a few weeks, I’ll put most of it toward my girlfriend’s credit card debt. She’s doing the same thing with her refund. By then, we’ll have paid off $11,000 of her debt and saved up a little, too…all within three months. We’re very proud of our progress so far!

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I received my Capital One credit card in the mail yesterday! It’s my first and only credit card since roughly 2005. It’s been a while, but I’m back in the game and am starting over from level one. My credit line is $500 which isn’t much, but I’m happy just to have a credit card again and re-establish my credit history.

What’s weird is that I was approved online for a Capital One Student Rewards card, but I received a Capital One Standard Platinum card instead. Maybe the student cards are only sent to actual students, which I’m not. With the platinum card, I won’t receive one or two percent cash back on my purchases, but I wasn’t going to use the card much anyway, so that’s fine. I’ll be okay without the $1 per month reward.

What’s also weird is that roughly a decade ago, my first credit card ever was a Citibank Platinum card with an $8,500 limit. How was I approved for that much credit? I was paying off my $10,000 student loan at the time, but had no other credit history. I don’t get it. Now, I’m only approved for $500, even though I’ve paid off my $8,500 Citibank card, $1,800 in store cards, my $10,000 student loan, and my $5,500 car loan. Yes, a few years have passed since those were all paid off and closed, but don’t those count for anything? Evidently, they don’t.

It doesn’t matter. $500 is a good starting point and in several months, I’ll apply for a store card and ask Capital One to increase my credit line, too. A year from now, I’m hoping my credit will be better than before because I won’t max out my cards or skip payments. I can’t believe I used to do that, constantly. I try not to think about how financially stupid I was.

I’ve definitely learned my lesson though, and have become much more responsible with money these past several years. Now, I’m making sure to do everything the right way so that when the time comes to apply for a mortgage, my girlfriend and I will be in good shape!

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Regarding my previous post about being denied an Old Navy store credit card and resorting to a secured card…

My online application for a Capital One Student Rewards credit card was approved! I should receive the card and all of the documentation in the mail within the next seven to ten business days. Awesome, especially since it’s a normal card and not a secured one!

I was searching the internet for secured cards and came across a page on Capital One’s web site that allowed me to browse various credit cards based on my credit history and score. The Student Rewards card had a note next to it – “This card is for people with a limited credit history” – so naturally, I applied for that one.

I was considering the Capital One Standard Platinum card, but with the Student Rewards card, I get 2% cash back on restaurants, entertainment, and cell phone bills, plus 1% cash back on everything else. Of course, I’m not going to use the card frequently and run up my balance, so the 1-2% cash back will amount to less than $1 a month…but it’s still better than nothing. There’s a 23.9% variable annual percentage rate (APR) which is very high, but again, I’m not going to use the card frequently and will pay my balance in full every month to avoid any interest charges at all. There’s also no annual fee.

I’m so happy and relieved that I’m able to take the first step in re-establishing my credit history. In several months, I’ll apply for a store card again and several months after that, I’ll check my updated score and proceed accordingly.

I still hate credit cards and the whole stupid credit game, but I have to play along in order to reach our goal. Thank you Capital One for giving me a chance and bringing my girlfriend and me another step closer to owning a house. If I can boost my score from 655 to 755 during the next 12 months, that would be fantastic. Is that a realistic expectation?

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I posted yesterday about trying to build my credit history and raise my credit score. I was denied a Chase Sapphire card, so my girlfriend suggested I apply for a store credit card instead.

I went to Old Navy after work last night, applied for the store card, and was once again denied. What the heck?

How does someone like me, who hasn’t had a credit card in four years, obtain credit and build my history? Any advice?

The cashier at Old Navy told me to go to my bank and ask about getting a secured credit card. Once that’s added to my credit report, I’ll have a very small-but-established history and could apply for more significant cards afterward. Is this a good idea? Are there any other, better things I could do?

Some of you know way more about this than I do and I need your help. Please leave a comment with your suggestions. Thanks!

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Nicole’s recent post on Rainy Day Saver included a link to AnnualCreditReport.com. I thought I’d take a look at my credit report just to see what was in it and to make sure everything was accurate. It was.

I haven’t had an active credit card account since 2006. Actually, I haven’t had any credit at all since then. Everything has been paid in full – my credit cards, student loan, and car loan – and everything I’ve bought in the last four years has been paid for with real money that I have in my bank account. I hate credit cards and didn’t want to fall back into the trap of racking up tons of debt, after I worked so hard to be debt-free.

After I read my credit report, I clicked on a link to see my credit score. I had to pay $7, but I figured it was worth it to see where I stand. My score is 655, which isn’t horrible, but isn’t great either.

My girlfriend and I are planning ahead to buy our house, so one of the things I want to do is improve my credit score. What better way than to get a credit card and use it wisely? I applied online for a Chase Sapphire card last week and waited to receive an answer in the mail. The letter arrived yesterday; I was denied the credit card. Chase’s reasons for denying my application are:

• Credit report shows total available credit on accounts is too low
• Too few accounts on file for a sufficient length of time
• Credit report shows recent delinquency or past due balances

So, I don’t have enough recent credit history to be approved for a new card. And yes, I had missed paying a doctor’s bill, but that’s been paid in full since March 2009.

My girlfriend suggested I start small and apply for one or two store credit cards, like Macy’s or The Gap. That seems like a good, logical idea to me…I’ll keep my spending at a minimum and slowly build my credit history and raise my score. I’m hoping in several months or a year, I’ll be able to get a major credit card so I can continue to build my history and raise my score even higher.

I still hate credit cards, but I’ve entered a game and I’m playing to win. I want the high score!

Do you have any other tips or suggestions for building my credit history and raising my score? Are there any simple things I can do?

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My girlfriend and I have returned from our trip. We had such an amazing time, but now it’s back to reality.

To help reach our savings goal, instead of taking a couple of big vacations throughout the year, we’re planning several small, inexpensive mini-vacations. That way, we won’t spend as much money and we’ll still get to experience fun, romantic times together.

Our recent two-day road trip cost us a total of $389. That’s cheaper than the price of one round-trip plane ticket! Here’s the breakdown:

Fuel: $30
Tolls: $3
One bag of potato chips for the road: $4
Two concert tickets: $60
Two souvenir T-shirts: $60
Romantic dinner: $95 including tip
Hotel room: $110
Lunch the next day: $27 including tip

Yes, we splurged a little on the hotel, dinner, and T-shirts, but this was our first trip together and we wanted it to be special…which it was! To balance out those costs, my girlfriend mastered the art of cruise control, which helped us conserve gas, and we got a light, inexpensive lunch on our drive home.

We have several other ideas for road trips and mini-vacations we can go on this year: wineries, farms, beaches, and museums in Manhattan. They aren’t planned out yet, so I don’t have exact figures, but based on this recent trip, we can go on another five or six during the next nine months and still spend roughly $1,000 less than if we were to take two big, expensive vacations like many people do. That’s six or seven road trips/mini-vacations a year for less than the cost of two big vacations!

We figure we’ll have plenty of time to go on big vacations after we’ve reached our goal and are settled into our house in a couple of years. Until then, we’ll continue to think of ways to save up as much money as we can while still having our fun, romantic getaways. :)

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Sorry for the lack of updates and money saving tips recently. My girlfriend and I have been extremely busy these past couple of weeks. We took my two cats to the animal hospital to get neutered and then one of them caught an upper respiratory infection from another cat there, so we took him to the vet and got antibiotics. He was constantly sneezing, coughing, and had a runny nose all last week, but he’s 99% back to normal now. We’re very happy about that!

The neutering and vet bills totaled $400, which was a small setback, but we love animals and didn’t hesitate to get my cats properly taken care of.

We’ve also continued to list a bunch of items on eBay to keep that extra money coming in. We’ve sold more designer handbags, designer shoes, CDs, and old vinyl records. I also sold my iPhone 3G. We still have a lot more items to go! We’re making great progress with the credit card debt and are definitely keeping the momentum going. Our savings accounts are steadily growing, too. We’re very serious about reaching our goal and so far, we’re on track.

As a small reward to ourselves for working so diligently and making such good progress, we’ve set aside a couple hundred dollars to take an inexpensive two-day road trip. We’re driving to Pennsylvania – using hypermiling techniques, of course – to see a concert and also just to briefly get away from our daily grind. It’ll be a fun, romantic escape and our first trip together. We can’t wait!

In the meantime, we’re still bringing our lunches to work instead of going out and buying food and we’ve only gone out for brunch and dinner two times, total. I’m also considering canceling my cable TV and DVR entirely and just watching shows online via Hulu, TBS, ABC, and other web sites like that. I’d be putting roughly an extra $55 in my savings account every month, or roughly $660 every year. It’s tempting! I’m still thinking about it. What do you suggest?

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I sold my car several years ago and rely mainly on walking and public transportation to get around, but for those of you who still drive a car every day, you can increase your car’s gas mileage up to 37% by making a few simple tweaks to the way you drive. People often refer to this as hypermiling.

According to the Energy Information Administration’s web site, the average price of gasoline in the U.S. is currently $2.75, so you could give yourself up to a $1.02 discount per gallon! Here are some easy ways to improve your car’s fuel efficiency, taken from hypermiling.com, edmunds.com, and this article about traffic waves:

1. Slow down and coast! If you leave a big enough buffer between you and the car in front of you – at least 2 seconds or more – there will be more time to coast before putting on the brakes. Coasting uses less fuel than accelerating. Be a calm, defensive driver and coast as often as you can to conserve fuel.

2. Reduce the amount of time your car is idle. If you speed up to a red light, then jam on the brakes, you’re stuck sitting at the red light longer. Guess how many miles per gallon your car gets when you’re sitting at a red light? The answer is ZERO mpg when you’re stopped at a red light, or any other time you’re stuck in traffic and not moving.

Minimize the time you spend with your car stopped- take your foot off the gas the instant you see a red light up ahead. By coasting to a red light, you converse fuel by not accelerating…and because coasting took you a little longer to get to the red light than accelerating, you’ll spend less time idling at the red light, thus conserving even more fuel!

3. Don’t compete with other drivers in a traffic jam. Being stuck in bumper-to-bumper traffic is frustrating, but stay calm and leave plenty of space in front of you. When you speed up, then hit the brakes, speed up again, then hit the brakes again, you’re burning more fuel than if you just coasted slowly at the average rate of everyone else. Again, be a calm, defensive driver and save money!

4. Accelerate slowly after a complete stop. You use the most gas when you accelerate. For example, to get to a certain speed in 3 seconds, you’ll use more fuel than you would to reach that same speed in 4 seconds. When you start moving after a red light or stop sign and you’re driving a car with automatic transmission, give an extra second from when you release the brake pedal to when you press the gas pedal. (Don’t do this with manual transmissions or you could cause an accident.)

A car with automatic transmission will start moving slowly on its own with no brake applied. Use this to your advantage as a form of starting out slowly from a stop, even if you only do it for a second. Then, once your car is in motion – however slowly it may be going – you can start accelerating with the gas pedal.

Why this helps: It takes a LOT more energy getting a stationary object to move vs. getting a slow moving object to move faster. Letting an automatic transmission car start moving slowly on its own – even just for a second – means you’ll start accelerating while the car is already in motion.

Keep in mind, this doesn’t work uphill, only on flat roads or downhill.

5. Use cruise control. Your car accelerates more slowly and evenly using its internal computer system than you do when you press the gas pedal. If you see a red light or traffic up ahead, press the “cancel” button to start coasting as soon as you can. Practice using your car’s cruise control effectively to conserve more fuel.

Basically, by driving less aggressively (slow down!) and using physics to your advantage (coast more), you’ll spend 7% to 37% less on gas. Again, why not give yourself a $0.19 to $1.02 discount per gallon? If your car gets 30 miles per gallon and you drive 12,000 miles per year, you could put an extra $400 in your bank account every year.

How’s your driving? Do you have any gas-saving tips of your own?

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My girlfriend and I have been going through our closets, drawers, and storage containers looking for things we can sell on eBay. We’re determined to achieve our goal of saving up for a down payment on a house by February 2012, even if it means parting with formerly prized possessions.

I use the word “formerly” because during the last few months, we’ve realized that saving up for our future together is far more important than owning any mass produced product. We’re aching for a house so badly, we don’t care about video games, designer handbags, or DVDs anymore. We just want to move in together so we can finally settle in and start our family. Plus, we make each other happier than any of those things ever did.

Of course, we’re not selling necessities, like clothes we wear every week or furniture we use every day. We’re selling things we haven’t used, touched, or looked at in more than a year. The way we see it, if these things were important enough to keep, they wouldn’t be sitting in a closet or basement collecting dust.

So far, we’ve accumulated an entire closet full of eBay-worthy items and have already sold several of them, including designer handbags (Chanel, Coach, Juicy Couture, BCBG, Kate Spade, and LeSportsac), DVDs (Grey’s Anatomy, Futurama, The Transformers, Crash, The Hills, etc.), video games (Tiger Woods PGA Tour 10 for the Nintendo Wii), old toys (Gobots and Rock Lords), and gadgets (iPhone 3G). We’re really proud of the progress we’re making and have enough items to keep the extra money coming in for at least six months.

Once everything is sold, we’ll be a few extra steps closer to our goal. Every little bit adds up! We’re also thinking that when the time finally comes to move into a house together, we’ll have much less to pack and bring with us. We’re simplifying to save up money and to minimize our clutter. It feels good!

Do you have things in your closet, basement, or attic you never use? Have you thought about selling them at a yard sale or on eBay? Depending on what you have, that could be an extra $1,000 or more in your bank account!

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