US Foreclosures Up 75%!!

Hello All,

Take a look at this map of foreclosure activity in the US. It really is too bad that the bubble had to burst like it did, but I guess all good things must come to an end. As John Bogle says, "The bigger the boon, the bigger the bust." And afterall, it was a pretty big boon!

I have an uncle in Florida that has foreclosed on two homes on golf courses in the nice posh neighborhoods of West Palm Beach. It sucks to think that he lost alot of money in those potential investments, but I guess it is just the free market at work!?!?!

I digress....back to the article...

 

According to RealtyTrac the foreclosure activity in the US is up 75% since 2006. 

Top annual foreclosure rates
Nevada posted the nation’s highest state foreclosure rate for 2007, with 3.4 percent of its households entering some stage of foreclosure during the year — more than three times the national average. The state documented the highest monthly foreclosure rate in all 12 months of the year. A total of 66,316 foreclosure filings on 34,417 properties were reported in Nevada in 2007, an increase of more than 200 percent in total filings from 2006.

With more than 2 percent of its households entering some stage of foreclosure during the year, Florida documented the second highest state foreclosure rate for 2007. A total of 279,325 foreclosure filings on 165,291 properties were reported in the state during the year, more than twice the number of filings reported in 2006. The state’s foreclosure filing total in December was up 275 percent from December 2006, and its fourth quarter total was up 211 percent from the fourth quarter of 2006.                    

Michigan documented the nation’s third highest state foreclosure for 2007, with 1.9 percent of its households entering some stage of foreclosure during the year. A total of 136,205 foreclosure filings on 87,210 properties were reported in the state during the year, a 68 percent increase in total filings from 2006. Michigan foreclosure activity dipped 17 percent from the third quarter to the fourth quarter, but its December foreclosure filing total was still up more than 70 percent from December 2006.

Total Measure of Wealth

Nick over at Punny Money has a great post about Calculating your Total Measure of Wealth by using some pretty simple personal finance metrics:

• Income
• Personal Savings Rate
• Rate of Return (ROR) on your savings and investments

I would argue that there needs to be a way to weight each of these components to come out with one number to measure success against. This number could change as you enter different phases of your life like savings rate should be higher when you are in your mid-life than when you are a 20-something due to higher amounts of debt, etc.

Maybe I will work on that if Nick doesn't.

Site Sponsor:
If you are looking for a simple way to record and pay bills online, then check out recurring billing. Send and receive checks online through electronic check processing. Sign up for an ACH payment account today and all your bills will be online. Read electronic bill payment guidelines here and what to look out for.

2007 Financial Goals

Since I decided to start this blog after the new year I never had a chance to discuss my financial goals for 2007. They are (in order of importance):

• Reduce Credit Card Debt by $5,000.
  

I am in the process of transferring most of the balance of my credit cards over to 0% cards so when I make a payment all of the payment will be going towards principal. I have a couple of concerns about this like how many is too many cards to open up and what do I do with them once I have paid the balance off of the card? Do I leave them open or close them gradually. I am currently planning on paying $500 per month towards these cards. Unfortunately I am seeing a couple of kinks in this plan - roommate's bachelor party, wedding present, travel to the wedding in Michigan and a weekend trip to Tampa in May. How I plan those trips will directly impact whether or not I reach this goal.

• Bolster Emergency Fund to $2,000.
  

During the time I was unemployed, I wish I could have tapped into an emergency fund. Unfortunately there was no such fund. At my current cost structure $2,000 will last me just about a month. I plan on aggressively attacking this goal next year.

• Contribute $3,000 to my 401K.

This is definitely my stretch goal. It is going to require alot of planning and luck to achieve. Why will it be tough? Two reasons - 1. Open enrollment in my company's 401K isn't till August. 2. Any raise or bonus that I get does not go into effect till August either. Right now the initial plan is to contribute the % increase in pre-tax salary to the 401K and live off of the same "net salary" or "take-home" pay that I have now. Essentially, adjust the pre-tax 401K withholding so that I end up with the same amount of take-home pay as I enjoy right now. Unfortunately I am not expecting a bonus - it is rare that first year associates get bonuses.

If you are reading this site in a browser you will notice that I have included my 2007 goals in the top left pane of the website. This will serve as a simple dashboard to measure my progress against these goals.

Site Sponsor:
Need cash loans to pay off some of your monthly bills? Here you can apply for a payday advance when you really need it. Review the FDIC guidelines for payday loans before you sign up. There are even special circumstances where you become eligible for a cash advance when traveling.

Taxes...Check - Now What to do with the Refund

The taxes are finally done. This was the first year I have filed my taxes on my own. Previously my dad's accountant had done them due to my status as a dependent to my parents. This year my dad offered to have the accountant do them for me, but I declined realizing that it was important for me to do my own taxes. How else was I going to find every possible deduction that I could!?! Besides, my dad's accountant would have looked at me funny when I told him I wanted to deduct a bag of clothing that I donated earlier this year - that is just the kind of guy he is.

So I opened up my shiny box that contained TurboTax and went to town entering my information. I worked in five states this year that withheld taxes which made filing and understanding what was going on with my taxes a bit of a project. All said and done I should be getting back around $1,200.

I think I should have been getting more back but I could not figure out how to do this in TurboTax. I worked in 5 states this fiscal year (due to the occasional travel my job requires) and only two of them should have with held taxes (VA and PA, the two which I was a resident of). The other states I worked in were for work and between all of the with held a couple hundred dollars in taxes that they have no right to keep since I am not a resident of that state. Unfortunately, I was not able to figure out how to get the total amount back in TurboTax. After much frustration, I have decided to forgo the hassle and hire someone to prepare my taxes for me next year.

Regardless, $1,200 is alot of money to be getting back (even though it is my money!) and now I have to decide what to do with this extra cash. I have two options I am considering:

1. Allocate money to my emergency fund. This time last year, I lost my job and didn't have anything to fall back on - that in turn resulted in my fantastic credit card spending. Currently, I have only $161 in my emergency savings. I would feel much better if I was sitting on $2,000 but that will take a year or so at the current allocations.

2. Put the $1,200 towards paying the balance of my credit card that is accumulating 14%! This is one of the priorities that I have right now. This refund could go a long way to reducing my credit card debt. Actually it is only going to reduce the overall credit card debt my 1/20th.

Result - I am going to allocate $500 towards my emergency fund and the remainder will go into paying my credit card debt.