Almost 1-year, am I meeting my repayment goals?
I began this blog, and a budget, in Oct. ’08, but I didn’t begin paying down debt until the start of 2009. As the year comes to a close, I decided to do a check-in to see if I’ve stuck to the plan and am on track to pay off all my debt within my planned 5.5 years.
I originally planned on my debt repayment journey taking a full 6 years, but thought I could do it by my birthday in May, instead, so I shortened it to 5.5 years, as an arbitrary, but hopefully realistic goal.
If I divide my initial debt, $45,765, by 5.5 years, that comes out to $8,237 per year, or just over 18%.
It’s funny, I recently updated my No Credit Needed chart, and thought, hmm, looks like I’ve been doing pretty good so far – the pie wedge shape that is “paid” seems pretty large (it is 16.18%), which is completely opposite of how I thought I’d been doing! I had fallen off the budget bandwagon for 2 months earlier this year, so thought I was seriously behind. I’ve only paid off $7,500 so far this year and had been thinking how poorly I’ve done.
Turns out I’m pretty darn close to where I should be. I’ve done better than I had realized.
I don’t know that I can completely pay an additional $737 (the remaining balance I need to pay to meet my 18% goal) off before the end of December, but I will be very close! I could always raid some of my mini-funds/emergency fund to pay it all and reach my goal, or maybe I’ll just let it slide. There’s a chance I might actually get a small bonus from work (we’re on the edge of making it!), so I may be able to make up any lost ground in January.
I’ll do a follow-up post beginning of January to fill you all in on my progress and the final result.
Thanksgiving is Cancelled!
We decided to forego Thanksgiving this year, primarily so we can move over the 4-day weekend. Also, a close friend is working on Thanksgiving, so J wanted to move it to another night anyway. If that happens, then it would just be the 3 of us for a nice big dinner and not the typical feast with all the fixin’s. I’ll let J figure out the when.
I have to say that the big Thanksgiving meal is one of my absolute favorites. I love getting together, drinking, talking, cooking, eating, eating and eating some more. BUT! Since moving is such a big ordeal, and I’m also happy to be focused on debt paying, I’m not that unhappy this particular year.
I’m glad we’ll be saving all that extra money on not buying food (and alcohol!), and I’m also glad we have the extra 2 days off from work to accommodate moving in such a slow, leisurely fashion. I’ll miss the big meal, but I’ll make it up with a homemade pumpkin pie, a nice bottle of wine, and maybe a chicken and stuffing for dinner sometimes afterwards. Maybe I’ll do it on laundry night next week, since I will no longer have to make a 2.5 hour trek to the coin-operated laundry mat anymore!
Plus, I might be getting the house keys tonight (early)! Yeah! Can’t wait to start moving!!!
Retirement status check-in
My company uses Paychex for employee benefits and wages. They have an interesting online retirement calculator that I just discovered and began playing with. The basics to start: my age (upper 30s), annual salary (almost $50,000 including overtime), my current savings (currently $46K, a week ago it was $50K, darn it!), and my monthly savings allotment.
They have some basic pre-sets, such as annual cost of living raises, or 3%, and expected rate of return, 7%. Right now I’m in a somewhat aggressive mix of funds, since I don’t care and it will be 25-30 years before I start seeing any of this money, if not longer.
So here’s the wakeup call. To get enough in there for it to continue making money in interest, enough to live on, I would have to get about 1.6 million to retire and live at 80-85% of my current salary. So how much would I have to put in savings every month to reach that goal?
15% of my salary!
It’s funny, I started thinking what it would look like once I’m out of debt. You know the thoughts, “if I didn’t have to pay the minimums or pay extra towards the principals, what would I do with the extra money that I’m throwing away every month?” I think all the learning I’ve done by reading and joining the PF blog community has been a major education. I think I’d love to live a little less frugally, but not excessively so. I’d like to be able to save up for some vacation trips, a month for southern france, a scotch and photo tour of scotland, that kind of thing. But I think I’m finally grown up financially. I don’t think I’ll ever be as frivolous as I’ve been. I know I will never rack up debt again.
I know when this long journey is over (and I still have a long ways to go), that I’ll definitely continue budgetting and instead of debt-paying, saving. I fully expect to increase my 401K allotment significantly past the current 3% that I contribute. That’s enough right now to get an employee match (not much, but at least something). I’ll also continue to sock cash away to have at least a 6-month cushion of living expenses. I’ll also start contributing to a Roth IRA every year and begin investing.
I guess once I become debt-free, 15% won’t be that big of a deal, I think I already spend about 25-30% on debt each month.
Financial check-in & moving expenses
I’ve been taking a solid look at my moving expenses in moving from an industrial art studio to a small house. The rents will be virtually the same (the house is $5 cheaper), but there will be additional deposits, the bills will be getting larger for utilities. I’d been avoiding the idea of moving (even though I’ve desperately wanted to for some time) because I expected it would be much more expensive. However, it turns out there’s not as big a difference as I thought, and on top of that, I’m doing much better than I expected in planning for the additional fees and deposits.
I know there are typically lots of extra expenses when it comes to moving, but they’ll be pretty limited in my case. Luckily I can get a rental truck for 4 days for $25 and no mileage (vendor family discount associated with where I work). I can get all the packing materials I could ever want, including ginormous cardboard boxes to move lots of smaller crap that I don’t want to pack, plus all of my artwork (between J and I we probably have 70-80 framed works plus 20 huge empty frames. I can get all the soft packing blankets, bags of scrap foam to pack fragile things, extra boxes, straps and ropes to tie-up in the truck for free from work (and I don’t have to dispose of them afterwards, I can just return them)!
The only real expense beyond the truck rental is for gas. I’ll obviously be doing a bit more driving back and forth to load/unload. I expect it will be about a full tank, say $30.
Now we come to the extra housing fees and deposits. I have to pony up the last month’s rent, plus $750 in deposits ($250 cleaning, $250 damage, and $250 pet). Since my current rent’s last month was already paid when I moved in (first and last being due), the money I didn’t spend on rent this month will transfer over to the new place’s last month rent. In reality, I only have to come up with $750 in deposits and a $40 credit check, split over 2 months. That’s only $395 extra for the next 2 months. I’m going to try and be extra fugal, stick closely to my budget, and if needed, cut into my emergency fund to pay for it.
I’m trying extra hard not to miss my regular extra debt payments (the ones that pay off the principal), since I already missed 2 months earlier this year and am behind. I’m trying to pay an extra $400 in November and December (beyond the minimums) regardless of the extra deposits I have to shell out. It will definitely be a challenge – I don’t expect to have large paychecks between now and the end of the year, and my overtime opportunities will be very slim.
This new house is the same rent, so theoretically it shouldn’t be more expensive to live there. However, there are changes going from a studio space in a commercial area (rates are cheaper than residential) that are split up with other tenants. Here are the changes:
Studio | House
Electric: $20 | much more I’m sure, $40-60?
Water/sewage/garbage: $15 | unknown, maybe $40?
Oil: $40-$80 | probably closer to $100
Cable: $0 (unavailable) | $50/month (average)
So my bills will go up a bit, I expect them to be a total of $150-$200/month, probably an increase of $50-$100 from my current amount. Not a huge shift, so I’m less concerned than I thought I would be. If J can meet his increased rent that he has agreed to honor, that should more than cover the increase. So all in all, I’m probably not going to be paying any more money than I had been paying, and may actually save a little, once I pay the deposits (all except $175 for carpet cleaning to be refunded). A lot of it hinges on J and his spending/savings/income.
Whew! I feel better. Now if only I didn’t have to pack and schlep all our crap across town!
Frustrated with the money conversation
Does anyone else feel like a bank for their significant other? Especially when you don’t choose to be one or even have the cash for it? I’ve been in a relationship for a year and a half now and it’s not equal, and it’s not by choice. Please keep in mind that I feel like a total ass for talking about this, but there’s no one else I can talk to in my real life, and I kinda need to vent a little.
J makes less than I do ($3.50/hr less), and he works less than I do (he works a 4-day week, 32-35 hours while I typically work about 10 more than that, including some overtime). He’s not necessarily a big spender, but he does have projects he likes to do and he buys things for them all the time. He drinks a ton more booze than I do (which is not a cheap item). He also has a boat that he pays moorage fees for. This used to be his residence when I met him, and then he moved in with me. The boat is non-funtioning. It basically sits at dock so he can live there but he doesn’t currently, and it’s just a big money sink (in my mind). He has to spend quite a bit of money to clean it up, scrape the hull and reseal it, and get the motor running, before it can even run. With all that, he is supposed to pay $300 in rent to me per month (only 1/3 – I pay $600). He originally told me it was all he could afford. We’re about to move to a new house, with the same rent, and he has committed to paying me $450/month in rent. Again, it’s all he can afford, and that doesn’t include any of the utilities that will be out of my pocket, or internet, which I will also be getting.
At this moment, he owes me $420 from the past 2 months. Anytime we go shopping, unless he’s there to pay half at the time, I rarely if ever get reimbursed for his share. I will say how much it costs, and ranging from hinting “it cost x” or asking him to pay me outright, I get no response, no “I can pay you next week,” no “let me give you a post-dated check,” nothing. He completely ignores it. I have tried bringing the subject up and it just shuts him up, makes him tense, angry, and defensive. Money is his most difficult issue to deal with. He’s always been bad with it and doesn’t seem at all interested in trying to change. Gosh, I’ve certainly tried! So I’m getting stuck with the short-end of the stick.
He’s 11 years older than I am (he’s 50), he has virtually no savings (if he does it’s around the $500 mark), has the same amount of debt, owns his own car that will shortly need to be put out to pasture, and owns no significant items of worth. He seems to have settled on the idea that he will always be on the lowest strata of the working class and doesn’t seem like he wants/deserves/cares to do better. He does have job prospects. He’s about 1-2 quarters from finishing paralegal studies, but he seems to be dragging his feet on the finish and it’s been about 9 months since he took his last class. He has been avoiding the resume portion of applying for his required internship (writing is another problem, and even offers of help have not resulted in much).
To balance all of this, he has a generous spirit and is not a pennypincher unless he’s completely broke. He works hard, and he’s a super nice guy. He has worked odd jobs and made extra money lots of times when he’s been in a pinch (he went through a period of unemployment over a year ago). I’m just tired of the money inequity. At the moment, I’m trying to live frugally so that I can pay off debt, and expect to be this way for at least 3-4 more years.
Tonight, I forgot my wallet and we had to go to downtown for a company meeting (we work together). We (and a friend) decided to go out for a drink and a nosh afterwards. I said that I couldn’t pay, since I had forgotten my wallet. Not a problem. He paid our portion. He also had to buy me lunch today (supermarket fixins for sandwiches) and so I got away with him buying some of that. This has been one of the few instances where he will pay and I won’t. About 80% of the time I pay and don’t get reimbursed.
I also have to admit that bringing up the subject is also difficult for me. I don’t like discussing things that I know cause tension. I tiptoe around it and won’t bring it up. I know I need to but just haven’t found a good time and I’ve basically been avoiding it myself.
My latest strategy has actually benefitted my debt journey. Rather than just go and buy things that I think we need at the time, and have to pay for all of it myself, I’ve been avoiding shopping. If he can’t come, or doesn’t have the money at the time, then we just do without. We eat a lot out of the fridge. I eat a lot of things that I don’t otherwise want to, but it’s available, and here, and I don’t have to buy new stuff to make, so I make do (who cares that I wanted steak for dinner, we don’t have it!). I don’t offer to get him things and have him pay me back later, since I know he often won’t. This process has made me much more frugal, and I spend less because of it. We rarely go out to eat. I think we went to a movie like 6 months ago. We rarely go away, and never go for expensive entertainment. I guess that’s the silver lining – he’s a great partner while I’m living within/under my means.
I know all of you are going to urge me to have a conversation with him and I know I need to. I just needed to vent a little right now. Does anyone else have this problem? How do you deal with a money inequity in your relationship?
Gardening benefits to come
Can’t wait to move! I’m already planning to build a compost bin in the yard. Something with nice slats all the way around in a box shape, to compost and turn over. We can get all the scrap lumber imaginable from work, so it won’t cost anything. Possibly 2 bins, so I can rotate it and allow some of it to decompose nicely for gardening this summer. We’ve checked the online seed catalogs, and have already planned some of our purchases. We’ll be focusing mainly on heirloom seed varieties. I’m looking forward to a real honest herb garden. Seattle is absolutely perfect for rosemary, and chives usually winter over well. Sage can also get very large, but I don’t use that very often.
I’m planning on leeks, onions, salad galore, fava beans in the fall, nasturtium flowers (they make the greatest addition to salads), and J wants to do everything else under the sun: tomatoes, cukes, green beans, carrots, lots and lots of potatoes, garlic, melon, pumpkin, squash. I’ve been devouring a bunch of canning blogs and seeing all the luscious stuff that you can can and make, sweet and savory both! J already has a ton of canning supplies and recently bought a pressure canner for the low-acid foods.
There’s a full-size fridge at the new place (our current one is 3/4 size and we definitely notice!). However, J may want to get an extra freezer for all the stuff he wants to make. Right now, we’re limited, so there’s a lot of times we don’t cook as much as we otherwise would. I’ve been wanting to make pasta for ages, ravioli particularly. Mmmm, my mouth waters thinking about butternut squash, sage, shiitake filling, with a brown butter sauce. I also haven’t made homemade pizza in ages.
So again, can’t wait to stop throwing out all our food scraps and can’t wait to start making food from our garden! Having it directly in the backyard rather than a 5 minute drive away (as in our p-patch neighborhood shared garden space), will make me use the salads much more often. I mean, just walk outside to grab what you need?! Fantastic!
A few financial tidbits for the month
From my $450 car repair total (2 tows, a triple AAA membership and a $250 mechanic bill) $200 will come from my car fund – I had completely forgotten I had anything left in it!, and $100 will come from this month’s budget, so I will only have to deplete my emergency fund by $150!!! Not as bad as I had feared.
I can return my purchased (and unused) alternator at Napa and refund my credit card by $200.
I saved a tank of gas by not driving this past week, carpooling with J in his car (we have slightly divergent schedules, so we often don’t carpool), and using J’s car to do errands or just not go anywhere. I saved about $30-$35.
Found out that my landlord has paid the electric, water, sewage bills through the end of the year, so I don’t have to pay for December. Though once I do live in my house, these bills are paid quartly, so I may get burned when I move out (unless they prorate them with a refund at the end?).
I have to go get boxes for moving at the supermarket. I alsorealized that I can utilize a TON of used cube boxes from work, so I can pretty much start packing this weekend.
We had an unexpected transport to do last night at work, so I got a nice 4 hour overtime addition at the last minute, to my timecard. Whoo hoo! This was going to be an otherwise lean paycheck.
I also got a major deal on a rental truck from a vendor we work with. A flat $25, no mileage, for a truck for Weds night through Sunday. Can’t beat that!!! And I can get all the padded blankets, foam, boxes, straps and ratchets that I could possibly use from work.
Things aren’t looking as bad as I had thought financially. I will spend a little from my EF, but still make my debt payments this month. I don’t want to fall behind, I’ll just have to build up my EF again. There are $750 of extra deposits that I’m going to have to supply, and I may just use part of my EF for that and pay extra in savings each month until I can get it back to $1000.
$450 and a dead bug
Well, 7 days, $450 dollars, and 1 dead bug later, my truck is back in fighting trim! I recently chronicled the process of it dying on the road, having to get it towed ($100) home, and J’s multi-day process of trying to figure out the problem. Alternator? Not sure. Battery? Not sure. Post fully-charged battery? Not the battery. Alternator? Stll not sure.
1 AAA membership ($56), a pre-existing problem car tow later ($20) and 3 extra miles later ($12), I left it with a reputable mechanic near work. Luckily the tow-driver was kind enough to take me ($0) to work 3 miles away after dropping it off. The expected alternator/battery diagnostic was not sufficient (both were working properly, $75). Additional diagnostics into the electrical harness (ie, all the wiring under the hood) ended up with 1 dead wasp and an additional $175 charge.
The wasp made it through my air filter, through a barrier-protected area, through a tube and into a small bb-sized hole that ended up shorting out 2 wires on either side of his little wasp body. Those wires were part of the sensor that watches the air in and fuel into the engine. I did get some little odds and ends repaired, and found a new nut for the big bolt on the bottom of my alternator (it would eventually have failed because of it, so I saved myself a tow and more diagnostics in the future).
So, total bill? $450!!!
Oh, and did I mention that my yearly allotted budget for my car is $1200? Want to know what I’ve spent so far this year prior to now? $800. That brings me to $1250. Pretty spot on for the year. Provided nothing else happens this year! Knock on chrome.
Car drama continues…
It’s 6 days and my truck is still broke and sitting at home. We’ve talked to some local mechanics and found out that part of the problem may be that the battery is completely depleted. So today I drove it over (in J’s car, since we work together and can carpool) to get trickle-charged at the mechanic by where I work.
Tonight we will try one last time to see if we can get it working. If it starts up and remains running (it’s been dying if allowed to idle), then I’ll drive it to the mechanic in the morning. 9.5 miles away. Even with a (potentially) broken alternator, it should have enough charge to go that distance during the day with no heat, lights, or windshield wipers going. Pray for no rain tomorrow!!!
The mechanic will then run some tests and find out what the problem is – is the alternator charging the battery? Is it the battery (which I have now found out, is at the end of its life and needs to be replaced)? Is it the plus that goes into the alternator that has a wire broken and sticking out attached to nothing? Was it the belt being too loose? Was it the nut that was about to fall off the alternator bolt not putting tension on the belt?
So far I’m out a $100 tow, a potential charge by the mechanic tomorrow (they will do diagnostics and we’ll decide what to do from there), and a $200 rebuilt alternator (currently replaceable if I need to bring it back to Napa, or with a $50 rebate if I replace it and return the core).
Hmm… stay tuned to this debt channel!
Murphy & my car
So I’m moving soon, and have to pay extra deposits and such. I also made the mistake of looking at my past year’s expenses on my truck and thinking, I did good this year and I can decrease my car (truck) fund next year. I think Murphy heard me.
After driving home from looking at the new house we’re going to rent, everything died on my car and it just stopped working. Just prior the dash lights were fading, the windshield wipers were slow as molasses. The window was moving up and down like snails. Hardly any heater air was coming out, even on 3 (it was raining really hard, and the windshield was fogged up). We were halfway home. We think it’s the alternator. So now I have a broken truck out in the parking lot, I’m out $100 for the tow, and $150 on a rebuilt alternator (I had to pay $50 extra until the core gets returned afterwards). J offered to fix it, so I’m stuck until he does. If he can’t, or if the rain keeps up and he doesn’t feel like standing in a cold downpour to fix it, I will have to pay yet again, a second tow and a mechanic to fix it. And of course, there are complications – the bolt was loose, the belt was looser than it should be, and a plug that goes into the alternator has a wire sticking out, broken. Is it one of these things or something completely different? Time will tell, though I really really want a working vehicle back (it’s been broke since Thurs evening).
Ugh. My car fund is empty, so even more will be coming out of my EF savings. I just can’t win this month! And I know there will be extra expenses with moving, like renting a truck, maybe getting a wireless router for internet, various deposits for utilities and such (I’m sure).
