Financial Friday-Making the Hard Decisions

I took some big steps towards cutting back on non-necessities this week.  The biggest is canceling…wait for it…Amazon Prime.  The truth is, I’m not shopping enough online with my current budget to warrant spending $100 for free shipping and to stream free TV for an hour or two a month on the Roku.  

 

I already had the Roku for streaming and haven’t had cable since I downsized the rental back in September.  I share a Hulu account with my old roommate from Louisiana and I pay for my own Netflix.  I know that some people get rid of everything including Netflix but to me it’s worth $8 for movies.  Otherwise I would likely be spending more money on entertainment.  And since internet is included in my rent whether I use or want it or not, I feel Netflix isn’t that much of an indulgence.

What an indulgence looks like.

The second smaller, but still significant, change I made was a budget cut.  I cut $60 out my monthly grocery/commodity budget, $50 in my monthly personal spending budget, and $20 in my monthly gas budget.  I’m not prepared to allot myself less blow money simply because things like professional haircuts are important to me.  Eventually I would like to get my monthly grocery/commodity budget down to $150, which will be half of what it was originally.  To see if I can actually get it down that low I’m sticking to a very organized menu planning system that I learned from OCD Much? on YouTube.  Seriously, if you’re trying to live on a budget, get motivated to keep a tidy house, or how to schedule your life, that chick is the one you want to watch.  And she manages to not be sanctimonious or ask for Go Fund Me donations.

Another first is I actually had money left over this week!!!  I was left with $24 this week which is being rolled into my BANKED envelope for travel  and emergencies that aren’t emergency fund emergencies if you know what I mean.

I hope everyone had a Merry Christmas and has a fantastic New Year!

Financial Friday

I know I completely flipped the script yesterday but I definitely hit my breaking point when I saw my biggest debt growing every month despite being paid down.  So what steps am I changing?  Well, like I said, I’m going full Dave Ramsey on my debt.  Next week I will hit Baby Step 1 by having $1,000 emergency fund in savings.  Then I will start Baby Step 2 ~THE DEBT SNOWBALL~ by hammering each debt from smallest to largest regardless of interest rate. 

According to my very rudimentary calculations (meaning I don’t have my pie chart ready yet) I will have:

• My first (small balance) credit card paid off by the end of January 2015
• My second (larger balance) credit card paid off by the end of March 2015                                        
• My first (smaller) student loan with the variable rate paid off by the end of June 201
• My second, significantly more expensive, student loan with the fixed rate paid off by August 2017

Of course, these are very general predictions.  I also threw in my two “extra” checks that I get a year since I get 26 paychecks but budget using 2 paychecks per month with an estimated $800 income tax return from each year.  Of course, this could change but I was just looking at a good average idea.  This projection was made considering that my basic costs don’t increase, especially rent.  That might not be exactly true though.

Only a slight exaggeration

 

I moved to my current place, which is super cramped and doesn’t even have a bathtub or parking space, with the plan that it’d only be for 8-14 months.  There’s no way I can still stick to that timetable, pay down debt, and buy a house.  I’m still toying with the idea of buying a house before paying ALL of my debt off though.  My goal is to at least pay off my three smaller debts before making a decision on which way I want to go.  I could still theoretically buy a house at the beginning of 2016 like I thought, but I wouldn’t have much of a down payment at all.  I’m just going to not look ahead for the next year or so and pay my dues and then see how things go.  BUT, I might also look at upgrading my housing slightly in the meantime.  Nothing major, but possibly moving a one bedroom further away from work just to have a bit more space.  And a bathtub.  My current lease is at the end of April, when my landlord comes back from Thailand (He winters in Thailand.  Is that weird to anybody else?).  Normally, he prefers not to have tenants over the summer in my unit so we’ll see if I even get a choice in the matter.

Stay tuned for more drastic life changes made on a whim!

A Woman's Perogative

I missed Money Monday because my work schedule has been nuts.  On top of that I feel like I’m going through a financial midlife crisis and I’ve only been on a budget for a 4 weeks!  So much has changed in such a short amount of time that I honestly feel dizzy!  For starters, in 4 weeks I’ve managed to put $800 in my savings account.  I’m not sure how I managed to not only spend that $800 every month but dip into savings pretty regularly too.  I don’t feel as though I’m super deprived.  I am able to pay all of my bills, grab a burger every once and a while with friends, prepare healthy whole meals to eat on all week, and still have some cash in my pocket for fun stuff.  

My outlook has changed significantly.  Originally, the main reason I put myself on a budget was to buy a house.  Only now, I just really want to see zero balances on my cards and loans.  What finally made me turn a corner into full on Dave Ramsey mode was the fact that my variable rate student loan just hit 10% interest.  Up until now it had always been the same rate as my federal loan so it didn’t seem like that big of a deal.  Then I sort of fell down the student loan rabbit hole and discovered that I’m not even paying the monthly interest on my federal student loans!  Every month $30 or so dollars has been added to my overall debt.  

How did I not realize this before now?  I seriously berated myself.  I SHOULD have been more on top of my balance.  I SHOULD have educated myself and became more knowledgeable about where all my money had been going.  I think a lot of my issues came back to denial.  I didn’t want to be almost $50,000 dollars in debt so I fooled myself into thinking I only owed so and so much a month.  I perpetuated the myth that everyone has student loans and everyone pays on them for the rest of their life and there wasn’t a problem with it.  NO BIG DEAL!!!  Except now it is a big deal.  

Another reason that I didn’t realize what was going on?  Trying to get a real monetary number online from lenders is a real headache.  I can never actually get anybody on the phone.  Finally I was able to get one page up that showed how much interest I accrued on my larger loan.  At first I thought it was super reasonable!  Until I pulled up my taxes last year and figured out that the tiny number right under my gross owed wasn’t my yearly interest owed.   IT WAS MY MONTHLY!!!  And it was $30+ more a month than what I was paying!  I take full responsibility for not being as smart about things as I should have but I feel like most people aren’t going to put in the amount of time I spent researching to try and get an actual breakdown of monthly carrying expenses of the loan.   And the loan companies want that because the longer we pay on a loan, the more money they make off of us.

So, long story short, I drank the Kool-Aid.  Pass the envelopes, please.

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Did your goals change on your way to being debt free?  It’s entirely possible that my debt journey could change from what I’m considering now but probably not until my minimum payment would cover any interest along with a hefty hit to the principal.

Anybody have any ideas for a side hustle to help knock this debt out?  I specialize in employment law compliance and writing poorly on the internet.  That’s got to be a money maker, right?!

Financial Friday

The budget has gone well.  I have $1 left over in my envelopes.  I only used my credit card one time and the same went for my debit card.  After work today I am going to head to the bank. I already have my check made out to cash and a sticky note with the denominations in need.

I’ve been looking on YouTube for budgeting vlogs and using Google to help find blogs geared towards saving.  Here are some things that I’ve learned that I’m putting to use as of today:

1.       Make a menu plan and then grocery shop based on that menu plan.  It also helps to have a list of 30 to 40 go-to recipes that can be made easily and cheaply for reference in case you get cook’s block.  OCD Much?  on YouTube just did an entire video about how she menu plans and grocery shops and it was a huge help!

2.       Getting the bills you need at the bank so you don’t have to make change later on.  I mean, I’ll already be at the bank so I might as well take advantage.

3.       Separating envelopes by week.  Last pay check I put two weeks’ worth of money in each envelope.  While that was great the first week, it was getting close the second.  So when I figured out what bills to ask for, I made sure that it would work for week by week.  The difference is I’m getting significantly more tens and fives than I did last paycheck.

4.       Really start to evaluate what is a necessity, a want, or a luxury.  Without all the purchases on my account that I would normally be making with my debit card, it was super obvious when money was being taken out of my account.  It really made me think, do I really need a deluxe perfume sample sent to me for $15 a month?  No, I don’t because that’s a luxury.  My cell phone bill is super expensive and I really would like to lower it.  However, because I travel in town significantly for my job, I have to have service that will work everywhere.  And I can’t get rid of data because I really need the map and GPS features in case I get lost.  For me, my cell phone is a necessity so it’s staying.  I am trying to keep some balance with the want category though.  Do I want some snacks at home to grab while watching TV?  Yes.  I’d prefer cheesecake but caramel corn was on sale, so caramel corn it was.  I also debated getting rid of my credit monitoring service.  However, I decided that, while definitely not a necessity, it’s worth the $12/month for peace of mind.

What are some luxuries or wants that you just refuse to get rid of?  My Netflix ain’t going notwhere!

Money Monday

Just a quick update on how I’m doing on the budget.  I did end up going $40 over on groceries for this past weekend.  I still have around $10 in my personal budget and $9 in my gas budget.  This should be plenty to get me through the week. 

Over the weekend I was fairly well behaved money -wise.  I did have to buy some essentials (toilet paper and dish washing liquid) that I subtracted from my personal budget to ease my conscience a little since I’m still bummed I had to put that $30 on my credit card.  However, I ended up contacting customer service at the store I bought the clothes from after seeing that the pants went on sale a few days later.  They ended up letting me “exchange” the same pair of pants and I did get an $8 credit back on my card.

I’ve also been thinking about what I can do in the future to better budget for things that may come up.  I’ve already decided to start a holiday fund envelope starting on my first paycheck in January.  A few of my grocery purchases and restaurant trips were holiday related and I think it might be a smart idea to have a fund to go to for that sort of thing.  Plus my work tends to have several potlucks or happy hours throughout the year for holidays or events that I don’t want to have to skip because my main envelopes are running low.  I’m thinking $5/paycheck is reasonable without taking too much from my other envelopes.

I’m also paying more attention to the stores I shop at and coupons.  I know for sure that if I had been going to Aldi instead Byerly’s my grocery costs would have been cut drastically.  When making lists of non-grocery items, I need to first see what I can get at the Dollar Tree or on sale at CVS (I always have a 25% off coupon there) or if there are coupons online or in the paper.  I think the next two or so weeks will really give me some insight on how to live comfortably on a budget without sacrificing too, too much.

Do you have any money saving tricks that you didn’t come up with until after you put yourself on a budget?