Gotta get serious again
I think I’m getting lazy and resting on my laurels a little too much lately. I’ve recently posted about a bunch of big purchases ($200-$600) that I’ve needed; those I don’t regret purchasing. But I’ve noticed that I’ve been easing off the debt/budget bandwagon and spending more than I ought to. I haven’t been getting serious about prepping food in advance for when I need meals outside of home. I’ve been splurging too much at restaurants. I’m buying more stuff than I need when I go to the grocery store.
My budget for the past 2 months definitely reflect that. I’m over, not a ton, but enough where it impacts how much extra I put towards debt, probably about $100 or so. A comment on a recent post about being ok taking 5 years to pay off my debt chided me for not needing quite that long, and ya know, they’re right!
If I think about every day, no, I didn’t have to buy that $4.75 (tip included) mocha when I got up late and didn’t have time to make coffee at home – I could have sucked up the semi-bad (but free) drip coffee at work and dealt with it. No, I didn’t have to go pick up a fast food burger and fry. I could have had something small, carried it with me, gone to my photo lab assistance gig and come home at 9:30 and had a late dinner.
I’ve got to tighten up my minor spending habits – I’m doing ok on the bigger stuff, but the small stuff, yes, I need to sweat it more than I do! I think this is going to be my biggest hurdle in following a budget – I don’t really. I use it as a rule of thumb and then oh well, I’m over this month. That has to change. It will be hard, and I guarantee you’ll be reading more about this in the future.
Am I on track?
How much do I need to pay towards my debt each month to reach my payoff goal of May 2014? I tallied up the number of months. If I started making payments in December 2008, that will be 66 months of payments. My total starting debt was $45,117. So I will need to pay $684 per month to stay on track.
My monthly budget is:
$150 for SBA (all interest, plus a ‘lil extra for an annual fee)
$200 for Personal Line (interest currently $70/month)
$100 for Discover (0% interest)
—————————–
$450 total paid – $170 in interest payments = 280 paid towards principal in my budget.
I would need to pay $684 – $280 already paid = $404 monthly extra to stay on track.
I am currently paying about $400 a month. I have been wondering and thinking of increasing my payments, since I think I can, to $500 monthly extra.
As I continue to pay down my loans, my interest rates will continue to diminish and more of my budgeted debt payments will go towards the principal and thus help pay it down faster.
Let’s see how I’ve been doing so far… I’ve been paying down my debt since December. That’s 5 months including April. I should have paid $3,420 to be on track. I have currently paid off $3,357 – that’s $63 short! Not bad! I can still contribute additional money this month, too, as the month is not yet over.
I feel pretty good about this. I have saved my emergency fund, I continue to save up for larger yearly expenses every month, and I have bought some dearly needed larger ticket items in the last few months that I couldn’t put off any longer. Even with my restaurant overspending, I’m still doing quite well. I know that if I tighten the belt I can pay it down ever faster! My budget is pretty accurate and my spending is within my means. My debt payoff plan is on track, established, and maintainable. Things are looking good! It could be the spring weather, but it’s always good to check in and see how plans are progressing.
Have a great weekend all!
Kitty-shaped bank found!
As you may or may not know, I have a piggybank collection for saving mini-funds in various catagories (see my previous post here). For example, my xmas present fund is in a piggy with antlers (he’s a christmas pig). Well, I had one that I have been missing until very recently – an emergency fund for my 2 kittens.
In the unfortunate situation that there is a big vet bill, I want to have something put away for them. I previously had a dog that got hit by a car and the surgery was $3200! Well, last month I finally found a small cute bank in the shape of a cat!!! 99 cents later and with a lot of elbow grease and paint remover, I cleaned off the nauseating pile of mixed paint all over it and I have a cute white, purrfect kitten bank! I’ve already saved up $120 for them. This completes my little collection nicely.
A small thing, but it makes me happy when I get to put money in the little “piggies” every month and save extra money for larger expenses down the road.
Marathon, not a sprint (my extra monthly spending)
I have bought things in the past few months that I haven’t budgetted for. Really, it’s not surprising. Prior to starting my debt payoff journey in October, I had spent most of last year denying myself things and saying I couldn’t possibly afford to buy things. So I didn’t!
Since December, however, along with thinking carefully about my spending habits, and being so focused on spending and saving, I realized that even though I was trying to save, there were things I really did need to purchase. So I spent lots of time researching how to extend my buying power, which is something I never used to do.
Almost every month I’ve spent an extra $200-600. In December I finally replaced my 5+ year old clunky half-broken computer ($615). In February I bought a used road bike ($200). Last month I signed up for an art class to help push my photography in new directions (tuition cost: $0 – I am doing work trade for the $630 cost). The class materials will be very high, so I expect to spend $250-300 by the time the class is over.
Mixed in with that, my art show spending has been significant. Framing costs for a show in March ($200), postcards ($50), and an upcoming show, $330 (I overspent this month due to an unexpected 15% coupon for custom framing – I’m buying everything I expected to buy during the summer now to maximize my savings) for matting for some frames I’ll be using this year. I expect this will continue to be a high expense and I have recently upped my budget to $100/month for photo spending. I should probably make it $200.
Yesterday I finally bit the bullet and ordered Photoshop CS3 for my new computer. I have a really old version, but I can’t load it on my new computer, since the OS is too fancy. I had been avoiding the purchase, since a new copy costs about $650, but now that CS4 is out, there are deals to be had. I bought a copy for $146! This is on my credit card, since I purchased it on the internet and I refuse to use a debit card there. That expense will hit the May budget.
As for future spending, the only thing I can foresee is a trip to Alaska ($300-400 max), but I’m trying not to do that to save the money (I’d like to go, but it’s more my bf’s family obligation).
Is my spending out of control? I don’t think so. I guess I look at this debt payoff journey as a long, maintainable system, rather than a sacrifice everything and live on the minimal edge to pay off debt as quickly as possible. You know, a marathon, not a sprint. I am still paying $400 extra a month on debt, beyond the minimum payments. I am going to try and bump it up to $500 this month and going forward. I still think I will beat my deadline of May 2014, but I won’t sweat it if I do it slowly.
Emergency fund: milestone reached!
Today I hit the $1,000 emergency fund milestone! I now have a sizeable stash of cash in the bank available for last minute emergencies. I can stop contributing $100 per month for the fund and can instead send that towards paying down my debt!! Whoo hoo!
This month will also see me reach past the 50% paid off amount on my personal line of credit – by the time of my next paycheck on May 5, I will have more unused credit available on my personal loan than what I owe. That will be a nice side to be on!
My job continues to be extremely secure (really, no chance of that changing unless the company goes under, and that is highly highly improbably, we’re definitely head, shoulders, and waist, possibly even knees, above water even in this economy). At this time, I have no plans to save up a 3-6 month EF in case of job loss or illness.
Changes to WA state chapter 7 bankruptcy
I’ve mentioned my impetus for starting a blog and starting the debt-free journey before. Well this week I got an interesting email regarding changes to Washington state’s bankruptcy laws. Apparently the income cut-off point for Chapter 7 bankruptcy, which I previously did not qualify for, has been raised:
"Effective March 15, the new median income figures for Washington are: $50,656 for one, $63,521 for two, $69,577 for three and $82,445 for four."
This means that even with my recent raise and with my overtime, I would easily qualify for Chapter 7. Previously I only qualified for Chapter 13. While I don’t know a ton about it, I know that on the latter path, you are put on a govt-mandated budget. No thanks, I can do that myself.
While I am not planning on doing bankruptcy, it does make me wonder – would it be easier to just do it? I could just save up money and pay things for cash, ie, save up for a house in total before buying one (if I ever do), and all that.
When I first started looking at blogs, I was trying to find people’s stories about living during bankruptcy and to find out how it really works. I never did find any good sources, instead I found PF blogs and how to do it myself. So anyway, does anyone have any good info/stores/leads? I’m still curious about the process of how it works and particulars of logistics.
Thanks!
Second art show scheduled!
Craigslist is always a crapshoot, but occasionally it does work out finding venues to show art. I just connected with a local boutique book store that loves my work and wants to show it this fall. Yeah! That’s two venues for the year so far. I’m halfway to my goal of 4 shows for 2009. I’m not counting my group show at a satellite location of the company I work for, since I don’t really expect it to be successful or have a large influx of people walking through (though they are proven art lovers). We’ll see.
My current show is up, and looks quite good. There are 9 pieces up, and I’ve gotten quite a few responses from friends that have stopped by to see it (it is in a prominent business with fabulous gourmet coffee in downtown seattle, and it’s NOT a Starbucks!). I don’t know if anything will sell; my work isn’t cheap, and everything up is in a limited edition, so it may be too steep for this economy. Again, we’ll see.
This is exciting! Now that the sun is finally peeking out here in Seattle I’m feeling more inclined to go out and shoot; I haven’t taken a photo in like 5 months. Unfortunately, it is supposed to rain both days this weekend. Boo! Maybe I’ll finally get over the time change that has been sucking my soul away getting up in the dark every morning.
New posts coming
I have had a busy week getting ready for my art show. I also lost internet access at home, so haven’t had any time to do any posts this week. I’ll have time this weekend to do a bunch, so more to come soon, including some posts on my February budget, and my new road bike purchase.
Thanks!
$1000 free on BoA credit card & blog updates!!!
You will not believe this story. I haven’t heard anything like it yet. I was chatting with the small coffee shop owner down the street from where I work today about business, money, the economy, and credit cards (we were talking about AmEx mostly). He mentioned that he has $3,000 on a bank of america credit card. They told him that if he paid off $2000, they would clear the card. In other words, pay $2K and they will eat $1K. I guess they just want some money right now, very very badly. Is it the Merril Lynch purchase?
Egads, I wish *my* bank would do that for me!!!!!!!
Now, let me mention that I was there dropping off post cards for my upcoming art show next week. I haven’t been buying coffee at all anywhere lately, but I couldn’t go in, drop off some post cards for my upcoming art show without at least buying a coffee, so I did. I am still under my coffee budget this month; I’ve been doing quite well and am proud of myself (the eating out budget however, is a much different story, grr).
Sorry for the lack of posts lately; I haven’t been much inspired and I no longer have internet access at home (the router that we were borrowing had its password changed).
I did recently pay $400 towards my debt - I couldn’t help it that I couldn’t wait until my March 5th paycheck. I already knew I’d have enough. I still have an extra $800 leftover too. Debt stats are updated, and my EF is chugging along. Hopefully more to say tomorrow. I have to unexpectedly go in to work for 4 hours of overtime on Saturday, which will give me some internet time to catch up.
Don’t you all wish you had BoA debts right now???? Anyone else with a similar story?
