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.
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.
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.
Keeping on track
I updated my No Credit Needed chart, and with a really small recent payment of $54, saw a small change in my debt percentage (in a tenth of a percent point). I was curious to see what that meant in the larger scheme of things. Basically, I need to pay 1.34 % of my total debt or $627 per month to discharge my entire debt within 6 year goal (even though I’m hoping and planning for 5.5 years).
Is that doable? For those of you in debt, how much do you put towards debt per month, on average? I had a big expected (but not saved for) expense recently, after just starting budgetting for the first time. I also just got a pay increase, $2K per year, not including overtime. With overtime, that’s about $4-5K extra.
I guess we all fall off the wagon sometimes – I just have to make up for it right afterwards. Now that I have my ducks in a row – my 0% discover card just opened with money transferred, my big looming computer purchase finally out of the way and paid for, and my raise in place, and my budget in fairly good shape after 3 months of fine-tuning, I think I should do ok in February.
Scheduled my first art show of the year
I’m that much closer to meeting one of my goals for the year: I’ve just set my first art show for 2009, and possibly a second. I’ll have a show at a fairly upscale coffeehouse in March. It’ll be part of the downtown Seattle’s first thursday art walk. They’ll be making up postcards for the show, and it will run for 1 month. It gets a lot of foot traffic, my best friend works immediatley next door, and they have an opening for the show. Have I mentioned that they get a LOT of business?
I’m going to have to get 2 works professionally framed, which will be expensive, about $225-$250 plus some money for the prints (luckily I do them myself and can defray a lot of that expense with my work trade at the lab where I do my printing). I have all the other works they were interested in already framed, but there are 2 that weren’t, so I have to buck up and do that. I don’t mind – I had wanted more work framed for the particular series of work that I’ll be showing. I guess I shouldn’t feel that bad - one of the works that I have to frame I had sold the previous framed version of.
The upfront costs are always high (the bad part of photography – it always needs to be framed), but in the end, it’s easy to do shows with finished works. I currently have 27 framed works to show, that’s a few thousand in professional framing, not to mention the money I’ve spent on making the prints. Once done, it’s easily recycled from show to show.
The second bad thing is that they charge a 30% commission; not unexpected, but sometimes there isn’t any (which is always preferable). At least they make up postcards for the show, which I’ll be splitting the costs on; I believe they cost about $50/500 cards. Great to have and then I can use it for promo material later on with the leftovers.
If anyone is interested in bright, bold, well-composed fine art photography, send me your address to debtmaven at live dot come and I’ll mail you a postcard!
I may also have a second show the same month at a frameshop in downtown Seattle – it’s a division of the company I work for, and they started doing employee art shows last year. I think my boyfriend and I will be doing a group show (don’t think I’ve mentioned it before, but we work together and we both do photography). I may try and push this to April. Doing 2 shows back to back the same month is a little much. I am trying to do new work for this show, so I better get my butt in gear and start scanning photos and printing!
It’s going to be an expensive photo month, so, wish me financial good luck all!
2009 Goals (art & financial)
I’m not much into setting new year’s resolutions – I don’t think they really work. However, I’ve compiled some goals for my financial progress in 2009. I don’t consider these resolutions so much as things I’ve been working towards and plan on continuing to do. You’ll notice a lot of them are art based. I can sell art and make a profit, if I push it!
Pay down my personal line of credit to below $7,000. This will soon have about $5,000 moved over to a new 0% discover card, but in my head the personal loan will be comprised of the loan itself (whatever amount remains in that account) PLUS the discover card balance. Discover has informed me that if I don’t make purchases on the card, they are going to set the payments at 4%, which will be $2,00 that I will have to pay each month, but at least it will be on a balance that doesn’t acrue interest!!
Schedule at least 4 art shows for 2009. In order to get my work seen, and to sell more, I have to be more visible. I’ve already had a nibble for a March show, and I’ve gotten responses from 3 others that liked my work and are adding me to their art file. Time for round two of the email solicitations. I’m going to give it another week before I follow-up on the emails I previously sent out, due to all the holidays/snow closures. I’m sure a lot of people have been on holiday, or not dealing with day-to-day business.
Submit more work to the local museum’s rental and sales gallery. Unfortunately, they aren’t looking for new art, since their storage areas are full, but I am going to keep trying, monthly, and call and see if that’s changing. I may just send something in unsolicited in 2 months anyway. I’m already part of their stable of artists, so they may at least look even if they aren’t actively seeking more work.
Review art submissions regularly. I was really spotty on this in the past year or two. I’d look every so often, but not follow-up with the calls for arts nationally that had really good jurors (people that had excellent galleries or were the curators for a major museum). Can’t continue to grow, or get into shows or collections unless I push the envelope. I hate having to pay $25-40 for a submission, but gotta get my work seen!
Build my mailing list. I have to be a lot more agressive than I have been. I only have about 70 people on my list, and a lot of those are friends and family. Not only that, but I have to religiously contact everyone everytime I have an event. Often I wait until the evening before, which is usually too late to get much of a response.
Save a $1K Emergency Fund. I think I’ll have this met by March. I am starting to really think about getting it up to $2500. But that’s a decision for later. I’m going to deposit savings as much as I can stand until I get the $1,000, and then I may slow down and pay less per month but keep building it up higher (maybe $100/month?).
Snowflake $1200 for the year. $100/month? I think I can handle that. I’ve already found a bunch of things in storage that I can try and sell. Most of this will be from ebay/craigslist sales or from selling art.
Oh, and since this blog is about 2 months old, I’d also like to increase how many visitors I get. Stop by, say hi! Do you have a PF or frugality blog? Tell me who you are and maybe we can swap blog links.
December Goals
Ok, I had my first full complete month on a budget. I’ve made some tweaks to it. I’ve also realized some areas that I could use some improvement, and some things I’d like to start doing.
Equal Treatment
I buy most of the groceries for myself and my boyfriend. He doesn’t always come with me. I often don’t have money from him when I go. I need to start having him pay his share. This means I have to ask, buck up and not feel guilty about it, and ask again if he doesn’t respond (a common occurance).
Contribute to Emergency Savings
I’ve decided that it’s a good idea. I’m shooting for $1000 to start. I’m going to use mine when i don’t have enough to cover any unexpected large expenses that I didn’t budget for. Not sure if I should use this for a new laptop that I’ve been putting off most of this year, or if I should save separately for that.
Open an ING savings account
Get that free $25 bonus. Get a high-yield rate of return on my savings way beyond my bank’s rate. I’m going to open it before the end of the year.
