Weekly Spending Update

(462 days left...)

I've started keeping track of what I spend each week on "incidentals" (i.e. things that aren't regular budgeted expenses like bills, the once a month grocery shop, etc.). Mostly I'm doing this to keep myself accountable, but also to watch and see if there is any other place I could cut back a bit. I'm honestly not sure if I really can cut back much more - I already walk to work, and make all my own food, but, I figure it's worth looking. (Oh and just a note - when I spend cash for an item I round up to the nearest dollar - then put the change in a large cup to be used for a future bill payment... that's why a lot of the items listed have whole dollar amounts next to them).

So, here goes:

Friday 3/16/07 - $0
Saturday 3/17/07 - $7 on pizza (was at a party and ordered with a friend)
Sunday 3/18/07 - $8 cab ride (got my car stuck in the snow when going to special event)
Monday 3/19/07 - $7 cab ride (to car to try to get in unstuck), $6 for breakfast while trying to get unstuck, and $5 at bookstore for pen & paper.
Tuesday 3/20/07 - $7 cab ride (to car - finally got it unstuck!)
Wednesday 3/21/07 - $4 at Dunkin Donuts for coffee to treat a girl who volunteers with our center, $22.o5 for GRE prep book.
Thursday 3/22/07 - $0

Total: $66.05

And so, that's the number to beat for next week. I have a feeling that since it's unlikely I'll get my car stuck again this week, and the GRE book was a one-time purchase, that next week should *definitely* be a lot better!

Tax Refund = Credit Card Payment

(482 days left...)

I got my tax refund today. $619 dollars worth, to be exact. I thought I'd had it figured out so that I wouldn't be getting anything back (or would be paying just a little) but obviously that didn't work out. I just don't know enough about taxes to be able to figure it out more closely that that, I guess.

But, while it might have been an interest-free loan for the government at least I didn't piddle it away. It's now been converted into a credit card payment - and brings the evil credit card (yes, there is one that is particularly more evil than others) under $3,000. Considering it was up to $8,000 or so, I'm feeling pretty good about that. A minor victory for today.

Emergency Fund vs. Paying Off High-Interest Credit Card Debt

(484 days left...)

Lately I've been lamenting the fact that I don't have an emergency fund. I've read the articles, and I agree that it's a wonderful, great idea. However, the closest I've been able to come is to save up my paychecks each month to pay for the next month's expenses... thereby giving me a small cushion. But, in reality, I crave the peace of mind that I know having "3-6 months worth of expenses" tucked away would give. I also crave getting my credit card debt paid off as soon as possible. Now how in the world does one balance these two?

In the end, having looked hard at my particular situation, I think I'm going to either completely forgo the emergency fund for now... or just put away one month's worth of expenses.

Why, you ask, if I know how important an emergency fund is, am I deciding to forgo one? Because I looked over my risks of having a major life emergency... and how one would effect me if I did, and have decided that my risks do not yet warrant forgoing paying off my high interest debt to sock money away in an account that pays substantially less in interest than I am paying for the interest on said debt.

Am I crazy? Well, let me lay out the particulars... and then I would love to hear your feedback! Below are the things that in an emergency I would use my fund for - and my explanation for why at this point in my life I can wait a bit for the emergency fund.

• Car - I have one, but I don't use it to get to work (I walk). If it broke down or worse, completely died, it would suck, but I could live without it.
• Apartment - I'm in the process of signing up for renter's insurance, so my "stuff" will be covered. If the place burned down it would definitely not be good... but I have people to crash with and I could find a place in my area relatively quickly.
• Health - I have excellent health benefits - if my health takes a turn for the worse, I'm covered.
  
• Disability - I have both short term and long term disability coverage.
  
• Computer - yes, this one gets it's own category :) If my computer died on me, I would be devastated. But, I have access to computers at work, and my roommate has a computer so I could live until I saved enough to replace it.
• Job - yes, if I lost my job I would be in a bit of a bind without an emergency fund. However, the risk of me losing my job is relatively low. I work in a staff position in a university setting.. and my job is not dependent on grant money. That being said, if the worst did happen I have discussed my "going to wait on the emergency fund" choice with certain key people in my life (i.e. immediate family) and they have agreed that if I did in fact lose my job they would help me out.
  
• Cat - if my cat needed any expensive surgery, etc. I would in fact be screwed. This is actually the only reason I will probably opt for a "1 month" emergency fund rather than literally no emergency fund. However, as you can usually work out a payment plan for services I think the 1 month fund should be sufficient for this.

So, all that being said, I feel pretty confident in my choice to throw all of my money at my debt and wait until after most or all of it is paid off to build up an emergency fund. I look forward to hearing everyone else's opinion though!

March Budget

(489 days left...)

I have no emergency fund. I know, I know, this post says "March Budget." Don't worry, I'll get to that. But, as I was saying, I have no emergency fund. I have however managed to at least get to the point where each month I put away my paychecks in a savings fund for the following month. This means that in February I have been living off of my January paychecks and all of the paychecks I received have gone into my savings account to wait for the March bills. It's not as good as having 3-6 months of expenses saved up (something I hope to accomplish someday) but at least it gives me a little bit of a cushion.

That being said, since this is the last Friday of the month, I now have all my bill/spending money for March. Ahh, see, there it is... I promised we'd get around to my March Budget :) This system makes it a little bit easier for me to stick to my budget because it literally gives me a lump of money that is supposed to last me for a month. I don't know, I just find that easier to work with.

Each week I take home $335.35 (after taxes, health insurance, retirement contribution, and my gym fee). Not as much as I hoped to be making, but it's doable. So, each month I have a lump sum of $1,341.40 to do something with. So, here's my budget for this month (I live with a roommate, so each number listed is just my portion):

Rent: $695
Electricity: $75
Gas: $6
Cable: $60
Internet: $19
Cell: $100
VoIP Phone $18
Online Billpay $5
Medicine: $15
CC Debt: $200
Living: $148.40
(includes cat, food & "going out" expenses)

There you have it, my March Budget. Any money that's leftover at the end of each month goes towards debt.

Goal: Debt Free by 25

I'm told that having goals is a good thing. Goals provide direction and motivation; they let you set your sights on something so that all the work you do in between can be meaningful and have a purpose. Most importantly, they help you keep to the task when things get a little rough.

After looking at my net worth yesterday (and admittedly feeling a little down), I decided that today I needed to start setting some goals for myself in order to help me stay focused.

So, my new goal is to be debt free by the time I'm 25.

Yes, it'll require a lot of work and lifestyle changes on my part... but looking at the numbers, I really believe it's doable. It'll make me push myself... but 25 seems like such a good number for this goal, so 25 it is!

As part of this blog, I'll be counting down the days to help keep things in perspective and keep myself on track. I guess it'll also help you readers out there follow along and see if I can do it or not! So, in order to make it official:

490 Days and counting!

Well, that's depressing...

Well, I just updated my net worth after about 8 months of not looking at it. How depressing that I'm more in debt. Now, I know why it's like that, and I knew it was going to happen, but it's still a bit of a downer.

I recently took a vacation with my immediate family members and all the plane tickets went on my card. Plus, I also used one of my other cards while on vacation. Now, my family members are good for paying me back, and my tax refund is going to pay of a significant portion of what I spent, but it's still depressing to see the snapshot right at this moment.

Why did I take this expensive vacation even when I'm trying to get out of debt? Well, this vacation was planned a year and a half in advance - at the time I figured I'd have the money. By the time I knew I couldn't afford it, I figured it was a once in a lifetime opportunity and that some of my family members may not be around for that much longer so I should enjoy their company while I can.

In the long run, it may not have been the smartest of financial moves, but when push comes to shove I believe it was worth it to follow through with the plans. Family has always been more important for me than money, and sharing this experience with them was definitely a good thing.

Plus, not much I can do about it now. I just have to put my nose to the grindstone and dig myself out of the hole I'm in now. I've started cutting all the "extras," I walk to work instead of talking the bus, I brown bag it every day and I try to work at least a few hours of overtime every week. Hopefully I'll start seeing the monetary results from these positive choices over the next few months. *crosses fingers*

Canceling Simply Audiobooks

In a past post, I wrote about how I had added to my monthly bills by subscribing to Simply Audiobooks. Well, I'm back to say that I have just canceled my subscription to them. It wasn't easy, it was a good service and I really liked using it. It let me listen to the wonderful Harry Potter audiobooks (well done and very highly recommended!) as well as countless other titles.

But, as with Netflix, I've just finally decided that I need to put more money toward my debt and that someday I will subscribe to them again - only then it'll be guilt free because I'll be out of debt and truly able to afford them :)

Savings = $24.95 per month, or $299.40

So, total savings so far for all my little "projects" (i.e. canceling Netflix and Simply Audiobooks) = 426.48 a year.