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!