Feb Budget

The numbers are in... First I am updating my side bar. Every other paycheck I try to put 10% into savings. I was paid on the 15th. This means my savings is now $1209 so I have contributed 60% of my emergency fund. That is really exciting! After I have reached my goal I will start saving for my masters. I will create a bar after I have completed savings. I have a plan but I am maintaining my focus.

Budget.

I am still trying to get a handle on what we can really afford. Keeping the eating out low and the extras to a minimum makes a BIG BIG difference in our budget. Last month (February) I had an additional $341.00 left over. Now, I would put that towards debt but I also have Car insurance coming at the end of this month. I have to take care of the immediate and necessary first. With a new driver in the house it makes a world of difference to be able to know we would be sort of covered in case something happened. I have also noticed that my fiancée has been buying more groceries. That seems to make a big difference in what I am spending and what we are able to do. I also think it helped that Feb was so short. And my daughter was sick quite a bit I did not spend as much on lunches as I usually do. That should teach me to bring my lunch to work!

So there it is I actually sat down and did calculate all our spending. I have updated the budget spreadsheet and I am working on where the money really goes. It is a huge step forward in my financial maturity. I am acting like a grown up not a kid. Sigh… It’s about time.

Focus and Trust

I have some time management choices and some financial choices to make. This week I went to an information session about getting a masters degree. I have been thinking about it for a while and I wanted to be sure it was what I wanted to do. My time line was to apply for enrollment for the fall 2009 semester. I had in mind that in Sept. 2008 after my daughter goes to school I will have more time in the evenings and weekends as a result I would be able to get a second job. I would crank on my debt snowball while she is in School and I might be able to pay a large amount off before Sept 2009. The date it is currently set for. As long as I snow flake and keep going the way I have been for the last 3 months I will definitely have it paid before that.

My time line plan was to study for the next few months Take the GMATs in the fall and apply in Jan 2009 for fall of 2009. Here is the bonus... They might wave the GMAT because I have over 10 years of progressive work experience. If they were to wave the test I could probably pull the paperwork together by July and start taking classes this fall. Here is the wrinkle with that... I would not have as much time to get a second job and accelerate the debt snowball.

I read "How to Make the Time for Your Personal Goals" over on Zen Habits. I poured over it because one of my short term goals I have set is to read one hour a day. I mean to read a book for one hour per day. I seem unable to find time to accomplish this. I seem to spend A LOT of time reading blogs and not books. So as soon as I read the title I zoomed over to see if there was some insight into my life I could glean to help myself accomplish this goal. And I was brought up a little short by number one... “One goal at a time”.

It is hard for me to focus on one goal at a time. I have many balls in the air and to keep a balanced home I am always juggling something. I am also been a big fan of Dan Allen GTD. Trust in the system. If you don’t trust the system then you won’t feel confident in your minds ability to keep track of the goals. The gerbil running “gotta go… gotta go” in my head spins and spins.

I keep a running list of goals. I also track a running list of “to do” items. I use the site http://www.netvibes.com/. I make lots of little web notes into a very large list and I cut and paste based on priority. This way the list follows me where ever I go and I can jot things down before I forget them. I have so many things on my “to do” list I could not begin to get the list down to one item. I mean if you have a goal of retiring with a fully funded 401k how does someone accomplish that goal? Break it down into smaller tasks. Okay then what? Do a little bit every day or every month. But then I would have a lot of time left in a month to do other stuff if I only had one focus.

Perhaps it is a matter of while you are doing the one task stay focused on that task until you accomplish it. Don’t start doing the dishes until you have finished the blog entry. That part I can understand. I get so many interruptions per day staying on track for any given project is a real challenge. But then am I robbing myself of accomplishing my goals because I have to multi task or is it a matter of style?

There are two really big items I want to accomplish in the future. The first is getting rid of the debt I have. The second is getting a masters degree. I will not melt if I never start to read a book for one hour per day. But if I never start on the Masters I feel I will be 50 before I am finished. I will not accomplish my goals. I am determined to keep blogging about debt. I am determined to continue on the journey to be debt free. I have made Major strides in working this plan. The question is could I do both?

Ah… wait there is another factor… the cost. I have committed $ 1,000.00 of my monthly budget to pay down the debt. I cannot waiver in this commitment. I do get tuition from my employer for classes.

Evaluating the cost…

		Employer	$5,250	Me	Credits
Fall 2008	3630	$1,620			6	2
Spring 2009	3630	$1,620			6	2
Summer 2009	1815	($195)			3	1
Fall 2009	3630	($3,825)		$3,825	6	2
Spring 2010	3630	$1,620			6	2
Summer 2010	1815	($195)			3	1
Fall 2010	3630	($3,825)		$3,825	6	2
Spring 2011	3630	$1,620			6	2
Summer 2011	1815	($195)			3	1
Fall 2011	3630	($3,825)		$3,825	6	2
Spring 2012	3630	$1,620			6	2
Summer 2012	1815	($195)			3	1
Fall 2012	3630	($3,825)		$3,825	6	2
Spring 2013	1815	$3,435			3	1
Fall 2013	1815	$1,620			3	1
				$ 15,300	72	24

When I become Debt free the cost of $4000.00 per year is very manageable. It will cost over $16,000 to get the degree. BUT the average salary of someone after they complete this degree is double my salary. Getting the MBA makes it easily worth the investment of money. I would earn back the cost of school in one year.

The Challenge...

Start grad school this year? Or work for 1 year to pay off debt and then have enough progress on the snowball that would allow me to go to school.

Trust….

I trust the math. I believe in the numbers. I believe I will be debt free on or before Sept 2011. If I postpone my start of school I will be MUCH better off than if I were to start now. I came across a budget I created in 2000 to pay off a credit card. The payments were unrealistic and I remember not doing it at all. After much debate today I have come to the conclusion that I should maintain focus on debt and the degree will come next. It is the price I must pay for the poor money choices I have made in the past. And what is a year really? Time for fiancée and I to enjoy one another alone. Not a bad choice at all. Maybe if I got a job at the gym they would give me a discount. Hmmm… It is food for thought.

So In conclusion. I think short bursts of focus are good. But you have to keep balance and the big picture in mind. Of course I travel a road less traveled and so maybe my choices are not for everyone. But that has made all the difference in my life. It has made me the person who I am today.

If I could turn back time....

In my reading this week I came across this post. It made me realize that I am grateful for the knowledge and wisdom I have acquired over time. My worst financial purchase was a service called network direct. I was a senior in college and a sales guy made a presentation to us. All I remember hearing was that you could purchase jewelry directly and save a lot of money. Can you tell what I was thinking. Engagement.... Stupid girl. I was hoping that my long time boyfriend would ask me to marry him. What a poor choice that was. I still remember him taking us to the bar afterwards and buying a round. I should have suspected something then. I even tried to use the coupon clipping service when I ended up living over seas. I think I paid $1200 for the membership. And I still dont know what I got for it except bills. It was so long ago. I am so glad I was not that girl any longer.

* Getting credit cards and not understanding them

I also came across a budget I had created in 2000. I was trying to pay off my Credit card. I had the idea right but the "payoff" amount was just too large per month. I should have known right then I was drowning. I don remember realizing that if I paid as much as I could close to the $300 I would be better off. If I could tell my old self that I wonder if I would have gotten out of debt? I think it was not until we moved in 2006 that I really felt enough pain that I have resolved to be debt free and live my life that way. It is a big change for me and I am very proud of myself.

* Not being serious enough about school

This one gets me too. I was not at all interested in what my grades were in college. I was reveling in being independent from my family and happy to be away from home. I wish I would have taken my grades seriously. Or gone on for more school right out of college. I didn't know what I wanted then. I hated competing and I was afraid to allow myself to shine. I wanted people not to notice me and then I didn't understand why no one really knew me. I skated through college with minimal study time. Now I am going to go back for my masters because I really do know what I want to do.

I don't regret my past I took the road less traveled as always. :-)

Debt snowball choices

Having a greater focus on when I will be debt free is very comforting. October 2011. I have a plan. So when I received a letter from a card which has no money on it to transfer a balance I said why bother? I am on track. I have a date. I can get out of debt without them. Then I thought about the debt snowball. I thought about being out of debt sooner. 4.99% is much better then 27.99%. How much of a difference would it really make? Well, Having just used the debt snowball tool, I decided to run it again. I wanted to see if I transferred $2000.00 to another card would I get out of debt any faster?

Here is the breakdown....

Without a balance transfer I will pay $7,173.00 in interest. And I will be debt free in October 2011.
If I do transfer the money... I will pay $6,181.00 in interest. And I will be debt free in September 2011.

$7173.00
$6181.00
_______
$ 992.00

BUT don't forget the balance transfer fee. For 2000.00 It should be $60.00 or 3% of the transaction. So I actually gain $932.00 Is it worth making 6 payments instead of 5? Oh yes, for me it is. I am able to be debt free a whole month sooner. And In truth I will be cutting that time shorter and shorter because I did pay just a little extra to a few cards because I like round numbers in my payments $100 vs $94 is $6.00 that I don't have to pay interest on. I also intend to snowflake any reimbursed expenses I receive from work to the debt. I will also be applying some of my tax return towards the debt. While that does not make a huge time difference I think over the next few years it will. I have also started a what have I paid down already. My highest level of debt grew to $39,804.12. I have paid off $4097.97 as of the end of Feb. That is fantastic. I am on my way. I have also funded 50% of my emergency fund. And this month it was not a struggle to put money in there. Hooo rah. I am on the journey. I actually look forward to tallying the numbers. I no longer get the sick feeling in my stomach that something is horribly horribly wrong.

Today I have to complete my taxes so that I can apply for financial aid at my daughters school. That should be a trip. so I will be getting my refund sooner then I was expecting. And we will also be getting the financial incentive in May? That money will be applied towards the debt. I am on my way..

I am not a financial professional. If you are looking for financial advise you should seek it elsewhere. If you would like to join me on the journey, walk with me for a while and be my friend......

Murphy and being prepared

Today was a day that will live in the family lore for a very long time. I am still not over how well I was able to handle it. Really living on "No Credit Needed" and "No more debt" was put to the giant test today. I am proud to say I passed. And maybe BECAUSE I passed things turned out so well for us..... Here are the details. you decide...

This morning my daughter took her drivers test. She did not pass. It was a devastating blow for her. She was torn apart. She had been flying high all weekend. She was so excited she offered to get up at 5:00 in the morning to drive me to work. LOL Like I want to be there that early! I knew when the tester swapped spots with her on the exam course that she was going to explode. On the whole I tried to be the rock for her. I tried to have peace in my heart for my baby when really all I wanted was to go and fly swat that guy. Parallel parking did her in. Poor thing. We rescheduled the test for next Monday. She declined to drive for the ride home. (She cried the entire trip.) So I got into the drivers seat. The check engine light was on. Now you don't know me but car maintenance really stresses me out. I mean over the top you do not want to chat with me on a day I am having my car worked on. In the past a large part of that is because I know I cant afford to have anything go wrong. I can not afford a single thing to happen to that car. And I love my car. I got a very very reliable car that would have minimal maintenance issues. I have been taken advantage of by many many mechanics and I do not enjoy the ride. So As I am getting older I have begun to be just a smidgen wiser... This time I would NOT take the car to the dealer behind my home. I am taking it to the dealer where my fiancee bought his car. I called ahead to see if they would have time to work on the car today. The mechanic explained it would be a $104.00 charge to diagnose the problem. The light had been on before and my fiancee had turned it off. He is an excellent guy to have around in a pinch. We had discussed that if the light did come back on again it would need to go into the shop. So there I went. It is a intermittent problem and the dealer could not reproduce the problem. My fiancee talked to the manager and explained the day we were having. He had also just had his car there for repairs. They waved the fee to diagnose the issue. They looked at the car and could not see anything obvious wrong with the car. So..... they waved the fee.

The whole drive over to get the car looked at I just kept telling myself to be calm. I even stopped at the house to gather some relevant paperwork. I thought about putting the credit card into my purse "Just in case". But I was strong. I chose not to. I thought I will use my emergency fund if I have to this is what its there for. And God smiled on us. I did not need to use either one. Murphy has been politely asked to leave. Now if I could just catch up on all the things I need to do for my work. sigh.....

Total cost for the day $0
Effort to build up emergency fund and have it just in case... Priceless!

Finance Goals

I have a date. A get out of debt free date. Here it is.... are you ready??? October 2011. It seems so so so far away. But I am ready. My daughter will be a Senior in college and I will then be able to attack that college debt! I will be able to pay CASH for her 22 birthday. If I take a second job I will be out of debt even faster. I love having a date and hope. I love that I have hope again. If you have hope then you have it all. Oh baby, oh baby, oh baby! I just want to be out of slavery. I want to work for freedom. I want to be debt free. I can do it. We have a plan. I have a budgeted amount. Plus a few snow flakes... Hooray!!! I have hope again. I used the snowball calculator here to figure out the debt. I will be done with CC#1 Dec 2009. I am going to do my best to make that happen sooner. I hate that card with a passion. I hate that I have depended on it like a crutch. I hate paying 27.99% interest. What a sick sick sick choice I have made. But I now have a concrete plan. I have removed the card from my wallet. If I do not have the cash I do not spend money on things. It sounds easy but it is not. It is a struggle when you are surrounded by people who have stuff. But my dream is a home of my own. My dream is to buy a home of our own. And now I have hope that we'll be able to buy a home before I am 50. Hooray!

We also had some great financial news. My daughter gets her license Monday. My daughters car insurance is a LOT less then I imagined it would be. Good good news. So I am using the 2006 tax return I just rc'd to pay for the bill of ~600.00 From the 7++ return. The remaining $1++.00 will go into the emergency fund. I want it to be at least $2000 because I know my daughter will need contacts eventually too.

So... balance is the answer. To live a balanced life. To balance my dreams. Once the emergency fund is fully funded. (It will take about 7 months.) I will be setting aside the $130.00 I put away every month towards those planned expenses (Contacts and car insurance) After I budget correctly The rest will go towards Debt. Debt free by October 2011!!!
Hip Hip Hooray!