hollykin

The last few weeks I was feeling very positive. I wrote here about thinking I was going to kill the cc debt in two months or less. I was very excited, making charts, dreaming of building my savings, maybe a nice haircut, etc. etc.

Well, then the other shoe dropped and they juggled my financial stuff around at work (I am a grad student). and now I am not getting any teaching income this semester. Which means I am cutting back my expenses and I have to readjust my debt repayment schedule! If careful, I can pay it all off by December or January. Just a few months behind schedule..but still! argh

I can’t complain too much about that. At least I have a secure position. Many people are worse off.

But… there’s always a but. a lot of work-related expenses haven’t been reimbursed yet. Due to money always being tight, I put some of them on my paid-off credit card, with the idea I could immediately pay it off once the reimbursals came through. Except… of course the business office is slow, and scattered, and it’s taking forever, and now I am going to pay interest on these expenses! and it’s a very bad APR! irritating. so. I am transferring money (several hundred) from my Emergency fund to pay that freaking thing off. Maybe I shouldn’t, maybe I will regret it, but I seriously HATE having to carry a balance on that card, which I already busted my chops to pay off once. And I can replenish the E-fund once the payment comes back (it will, eventually).

This summer has been rough (mainly due to fallout from a car accident) but in the end I resolved that (complicated, but in the end we owed about $3500, which my boyfriend paid a lot of, thankfully – I paid the difference out of my EF). The worst part was being anxious about how much it was going to set me/us back. His savings account took most of the hit, but crap like this happens in life, and we are moving on.

A few months ago I wrote about how even though I was on a budget, I still had a cash flow problem. I was tired of not having enough cushion to be solvent throughout the month, and wanted instead to save about three months of living expenses – so that I’m living on the last month’s income in the current month. I have been saving, and I do have more of a cushion, but I am getting impatient, and ready to attack my debt again. So I’m back in the game – and due to the last year of pruning my budget (and paying off smaller debts) my snowball is large – around $1000 – and right now I have $3000 in credit card debt! that means I should be out of credit card debt in a few months – as long as I stay disciplined and don’t lose focus. I never thought I’d get this close – I’m ahead of schedule, despite recent setbacks.

I still can’t get over how far I’ve come, and how much easier this has gotten. Obviously a big reason for my progress is I have been able to make more money, and sink the extra income into debt… but I also have wised up about a lot of things. Maintaining the EF is crucial. Also another thing I realized was that I could save for predictable annual and semi-annual expenses, like health insurance, renter’s insurance, car stuff, taxes, etc. by adding up the expected total, dividing by 12, and putting that amount into a special savings account each month designated for these expenses only. This is such a simple idea but wasn’t a possibility for me for me a year ago, when I didn’t have enough of a cushion, and any large, infrequent expenses had to come out of my EF.

the bad news first: I was in a car accident in Mexico a few weeks ago. I travel there for my research and have to do quite a bit of driving. This time I had a rental car, which was fairly crappy – bald tires, bad brakes, etc. The accident was caused by extremely bad weather conditions and the crappiness of the car – but in the end, it was my fault. No one was hurt, thank goodness. I had the basic car insurance I purchased from the rental car company, fortunately, but that insurance seem to be charging me a non-fixed deductible. My contract said that if the car was totaled (I don’t think it was) I needed to pay 20% of the value of the car, which was $2400. unfortunately they have so far charged me almost twice that amount with no explanation. I have called my credit card company and asked them to look into it, but it’s complicated: I had to return to the US, my Spanish isn’t that great, and I’m not sure what the damage report on the car was (if it’s not totaled, I only have to pay 10% of the repairs).

I was very naive going into this. In retrospect, it would have been better to deny the rental car company coverage and immediately call my credit card to report the accident, because they offer full coverage. But there are a lot of stipulations, and I would have had a very difficult time communicating with them after the accident (using the phone in the Mexican police station). And I didn’t look into it before my trip, not really considering my cc company as a source of “benefits”.

My best hope is I can get the charges reduced to only $2400. but it’s stressful waiting to hear what will happen, and maybe all the extra charges are actually legitimate. In any case, it is a major financial setback.

On the other hand, there is some good news. At least I know I will be able to handle the accident fallout eventually, (hopefully, even somewhat quickly with my beefed up emergency fund…) Even with all the confusion my other debt has been shrinking steadily, and I will have paid it off in the next 10 months (except for my $5000 student loan, which is currently in deferment- so between that and this current mess, I am not out of the woods yet!)

But I’m getting there.

even though I’m not a true early bird, I’ve become more consistent with my sleeping schedule and get up at at 7:45 or 8 every day of the week. Not having a sleep binge every weekend but getting regular sleep is keeping me much happier.
Of course, now I’m trying to cut back on caffeine – hope that doesn’t mess me up!

I am starting the snowball on my last CC. It feels SO GOOD to see the zero balances on my other cards. I will have this last one paid off by the end of the year. Then just finishing paying back family.
3 things that have helped me get this thing under control:

1. Working on it every day. I look at 43T or another debt blogs for inspiration every day, that helps keep me accountable to myself.

2. Yodlee money center. I entered all accounts and the grim reality of my finanical situation couldn’t be ignored. Plus it helps me make every single payment on time. And sends me an email when my checking account balance is low.

3. Getting a raise. Of course, more money is a great way to get out of debt – but most the important thing for me is that I am on top of my debt situation and on a budget, so I was able to take the extra money and put it toward my debt, instead of just expanding my lifestyle (the mistake that got me into debt in the first place).

And it was wonderful. Haven’t had a “real” vacation in a while – took a few days to really slow down and enjoy it. The Big Island had it all while I was there – fantastic weather, volcanic activity, and wonderful snorkeling.

Taxes are done. Should see a modest refund, thankfully I don’t owe like last year. I’m putting my federal refund toward next year’s estimated payments and squirreling away the state refund – more on that later. Taxes are hard because my income varies a bit from year to year depending on my fellowship/teaching income so I need to make the estimated payments just to be sure. In the past year I have learned a lot about this (the hard way).

My emergency fund is already pretty healthy – not quite $1000 but more or less there – BUT I want to save more. It’s a deviation from my plan of snowballing everything towards my debt – which I have been very strict about – but even though I am budgeting everything very carefully I still feel the squeeze every two weeks as I wait for the next payday. 2/3 of my income comes in on the 1st, and because I pay a chunk towards debt, rent, and largest bills right away sometimes there is a cash flow problem by the 15th! I’m sure someone else knows this feeling!! and I don’t want to borrow from my EF every month… it’s the same as the bad old days when I borrowed from my CC every month near the end. No, I want to do something more radical: Live off of last month’s paychecks. If I can just get ahead one month I will be budgeting and spending money I already have instead of watching my balance soar and dive to near-zero all the time. This means I need one month’s living expenses in the account at all times.

I have two months until my Discover card interest rate increases from 0% to some unacceptable number. I will pay it off entirely at that time. I have been throwing every penny toward that card for several months and only have $1000 left. After that – with my tax return as a boost – I will save up that month of expenses. It will take me some time to build it up, but I think in the long run it will make life soo much less stressful.

I know.. 8 isn’t very early. But it is earlier, and I have been getting to work earlier (I have a very flexible schedule).

One phone call and some emails. I feel better.

When I tried a few months ago (with Nvu) I didn’t have photoshop and a lot of my photos weren’t downloaded, which meant that the site couldn’t be what I wanted it to be. I finally found and downloaded The Gimp (a freeware photoshop knockoff) and learned how to use it. So over TG break I sat down, made my images from my photos, and came up with the content I wanted. Putting it together and uploading was easy, thanks to Nvu and my university’s server.

I have one page that looks funny in IE but not in Firefox. Once I get that sorted out I’ll mark this goal as done!

so we’re definitely going!

...and the only way I will get up earlier is if I go to bed earlier first!

I’m having a hard time getting to work before 9:30 or 10, which means I can’t leave until the evening. There are many problems that stem from that, from the fact that I miss my yoga class often, I get so hungry I don’t want to cook, and I stay up too late because I feel like I’ve been working all day. This needs to change!

I live in a basement with several water heaters and a laundary room on the other side of my apartment wall. I could see it flooding. And you never know what else will go wrong…

I started on 43T a year ago because I wanted to start monitoring my debt progress more closely. Before that, my finances were a mess, and even though I was dedicated to paying it off, I didn’t have a clear plan to get it done fast. Since then I have become obsessed with my budget and I have managed to pay off around $4500, which is over 20% of my total debt. I have moved my debt from high interest cards to low interest loans and cards, stopped adding debt (except for IRS fiasco) and am now steadily snowballing everything I can at the beginning of each month. I have a tidy emergency fund (despite the hit this month when my truck was towed- the city put out an “emergency order” for street sweeping – posted the signs the evening before and towed my truck at 8:00 the next morning. It was $200 – Oy!)

I feel like I have accomplished a lot on this goal this year. I’m crossing my fingers that I can keep it up and pay even more in 2008. It should be possible because this year most of my visible progress has been since September, when I got a raise, and also because I hope this year I have paid Uncle Sam enough as I go along – I may even get some money back from taxes for 07! wouldn’t that be nice.

I also am setting aside money each month for a vacation once my partner finishes his PhD in a few months. This is money that otherwise would be going to the snowball, so keeping it feels a little funny. But in a few years, probably we won’t be able to take the time off as easily… Not to mention it is a real achievement for him. I feel like if I can pay for my part upfront in cash, it’s okay.

No, I’m not suggesting you wrap presents IN garbage bags. But here are two recent things that I have come across that are in line with this goal:

First, wrap presents in fabric. Yes, we are seeking to minimize wasteful holiday consumption (for me, especially gifts that I only give out of guilt, not from love). But I do still give a few presents, and I wrap them in fabric. I have scraps from things I’ve sewn over the years, and occasionally I will cut up old clothes (recently my worn black velvet pants saw new life as giftwrap). Also, many fabric stores sell “fat quarters” – squares of quilting fabric that are colorful and often holiday- or other- themed, just like new wrapping paper. If you’re handy with the sewing machine you can sew panels together into larger pieces, or sew drawstring bags that eliminate tape/ribbon issues.
Once you have your fabric, you can fold it to the right size. Tape doesn’t hold as well as it does on paper, so I try to use ribbon/yarn/twine to reinforce. So far I haven’t perfected the system, but it’s getting better each year. The best part is, you can reuse and reuse this wrapping fabric. My family gives the fabric back and forth to each other every year.

The second thing I am working on is finding biodegradable garbage bags for the kitchen. I’m ordering some from http://www.ecoproducts.com/Home/home_biobags/home_index_biobags.htm I think this makes a lot of sense, even if the out-of-pocket costs are higher. Once source I read even said that non-biodegradable plastic garbage bags even slow down the decay of kitchen waste (as well as taking forever to decay themselves).

I’m putting together my first budget for December. It’s the first because I will probably adjust it a few times as the bills come in.. but I like to start early. It’s like a game – how much can a pare off of this expense? And this one?

This month I’m trying to keep Christmas expenses to a minimum – should be easy since my family and friends are minimalists. I also am saving a little extra for a vacation this spring when my boyfriend defends his PhD dissertation (it’s worth celebrating).
I’m still making debt progress.
I paid off the IRS with November’s first paycheck… so that money gets snowballed to my next smallest debt in December! I am very excited because now that I can focus on that debt (Discover) I will pay it OFF in April 2008, which coincidentally is the month my 0% interest rate expires!!! Instead of transferring the balance at that point I will just pay it off. Oh this makes me so happy. The only trick is to not let anything eat away at this snowball payment – it has to remain at its current size in order to pay off the Discover balance (~$2500) on time.

If you do the math you can see I will be throwing ~500/month at Discover…the rest of my minimum payments add up to about $330/month. About 30% of my total income is going to debt. And I still have a long way to go. But I have to keep focusing on the positive.

I want to be smarter about money. I’m in debt, in school, no retirement fund, minimum benefits. Of course I’m young, no kids, I’ll have a PhD soon, I know I’ll get a good job some day … but in the meantime that doesn’t mean I should ignore investments. Something low risk to start…like a money market. I have to start small since I’m totally focused on getting out of debt right now. But, I might as well learn something in the meantime.

Boyfriend is finishing his PhD thesis this spring. I think if there ever is a time to visit Hawaii, this is it! We have a flexible schedule and minimal commitments, which won’t always be the case. Hawaii has been a dream for a long time… National Parks, sun, sea, sand.

There are 2 National Parks there and some Historic Sites and a Memorial I can check out. Can’t wait!

Salsa isn’t ballroom, but it IS dancing. My (wonderfully tall) boyfriend and I have a DVD and have practiced in our living room. This is only a baby step but it is a lot of fun!

I’ve always wanted to be able to dance with a partner without feeling awkward and clumsy. I definitely need to practice more! Someday we’ll join a class.