At the end of July I made a huge-ish final payment to my next smallest student loan, getting rid of it completely. It was AWESOME. At the same time, I knew I was letting my checking account cut closer to $0 than it had in a long time, really since starting this aggressive debt payoff journey at all. I budgeted it out though, and thought, ‘No problem, I can swing this, I just have to spend far less than I have been the last few months.’
It worked on paper, not so much in practice.
Did I not give myself enough slack? Probably. Yet, I’ve worked with the budget I made for myself this month before, and succeeded, plenty of times. After I saw those couple ‘Overdraft Protection Notice’ emails, my heart sank.
What was I spending all the money on? Restaurants. Expensive groceries. Entertainment. My ‘cutting back’ wasn’t cutting out very much at all. It was really just a lot of me saying I was going to this month, and not doing anything.
So, I feel horrible that money is being wasted on bank fees right now, and I need to wait till my next paycheck to sort this all out. If I’m going to find any good in this month’s situation though, it will be this: the feeling again of stress from when I was truly living paycheck-to-paycheck, every month, has put me back into extreme saving mode. Hopefully this sticks around for awhile too.
So what’s my plan of action?
- Pay off my CC with my next paycheck by paying the minimum due on my car payment, which is only a quarter of what it used to be because I’ve been paying ahead for so long.
- A freelance check is due sometime this month — and hopefully it’s not late — which will go into my checking account and sit there as a cash buffer, as well as punishment by not going towards a nice extra payment on a loan.
- Be extremely frugal this month to avoid any more debt.
- Spend less than I saved up for my vacation in a few weeks. I have $1000 saved up, which I’m not touching to resolve this situation quite yet. We’ll see how much I truly have left over and put that back into a cash buffer. The flight, car, and stay is already paid for, so I think I’ll have plenty. The cash is a buffer in itself.
- Next month with my first paycheck, I’ll pay myself back into my emergency fund the $200 or so I borrowed these last couple weeks, then make a double car payment and resume project attack debt!
Long time no post! I’ve been working away and just recently paid off my next smallest student loan! My minimum is now $100 less than before, and that much more excess in my budget to reallocate to the next! I feel as though I’m finally in a good position to start really going after my highest-interest loan with the highest principal. I’ve been delaying in fear of my minimum payments getting to high, but now I think I’ll be able to manage after the third increase on the graduate plan — an exciting time indeed — the time where I begin to see the light at the end of the tunnel!
Wouldn’t it be great if someone else was helping me raise the money too though? Like, as in crowdfunding?
There are a few other crowdfunding sites out there that allow you to do this, but they all seem to be a ‘popularity contest’, as this website I just discovered points out. Those with the biggest social networks, families, and not-so-financially-unfortunate friends get the most money. Other than that, there’s not a lot of traction in student debt crowdfunding.
A newer site, StudentLoanDiary.org, has caught my attention though. They see the problem and want to attack it in a far more communal approach. No embarrassing begging or need for wealthy friends or family? That’s my style. The site is a student debt crowdfunding site with a first-come first serve mindset.
What I also like about them, they keep it simple: you only need to donate a dollar and nothing more. They appreciate a dollar and a social media share more than anything — their larger goal is to raise awareness about the rising student debt problem in the United States.
So, here’s my 2 cents (financial blog pun intended), a genuine blog post share for a great cause in addition to the dollar I already donated. Visit StudentLoanDiary.org and donate a dollar yourself — you can either get on the list to receive student debt donations, or just donate to a good cause. For someone drowning in debt for an education, what’s a dollar to you?
Often times I think about where my money would go if I didn’t have debt repayments. What would I do today if my primary goal didn’t have to be paying off my loans (or conversely, what will I immediately begin doing once out of debt)? A few thoughts have been circling my lately — the eventual cost of a house, wedding, dream vacations, and other investments or purchases that I know I will eventually be in my future, even though it is 100% indeterminate at this point of when I will even need to begin to think of these things. I think many of us, including myself, are guilty of something — even those of us who consider ourselves financially literate. I think it may be a problem with the way society actually views saving behavior. A few examples include:
- Waiting till a car starts to get old (or wait till to point where it is already needing a lot of repairs) before starting to save for a new one.
- Waiting till we’ve met our significant other, our certain of it, and gotten engaged before ever even thinking about saving for a wedding/reception/honeymoon.
- Waiting till a vacation is decided on and planned to begin coming up with ways to fund it.
- Waiting until actively making the decision to purchase a home, and a timeframe to save up for a 20% downpayment.
I started thinking of these things, and these are generally best-case scenarios. This is what financially well-rounded people do. They save up for downpayments or save up in full ahead of time. They make a goal for a purchase and save for it, then buy it after their savings goal is met. However, I think it could be even easier. A few assumptions:
- I know I’m going to need a new car someday, even though I plan on driving this one to the ground and even though this one will probably last me another 10 years.
- I’m more than likely going to get married someday, and at an average of $20k wedding/reception/honeymoon costs in my area, that’s a huge hunk of doe to save up for in and average of one year’s timespan.
- It’s not like I’m never going to travel again.
- I’m more than likely going to purchase a home in my lifetime, and it is a goal of mine.
So what on Earth is stopping me from saving up for these things years in advance? Of course all of you know — for me it’s my debt. Let’s view this question more generically though — what on Earth is stopping anyone from saving up for these things years in advance, instead of shorter term plans?
I’ll drive my car for 10 more years, probably
But I’ll need a new one, certainly. Here’s how it would go for a typical money-savvy person: the car is getting old, and may need to replace it in 1-2 years: start saving for a new one. Possibly use savings as a downpayment and get something nicer, or pay for the entire thing in cash. For that savings timeframe, a huge chunk of the budget is the ‘new car savings.’ Or, I could budget $100 per month for 10 years. $12,000 saved up right there. Fast forward: my cars getting old, in later years of my car’s life, maybe I’ll bump up that contribution, and have more than $12,000 saved. The point is — with the tiniest amount of effort and hardly any scrimping and saving, I have a huge chunk of change for a new car, basically saved on autopilot.
Am I a crazy lady for already funding my future wedding?
Most people will get married. If it’s something you want to do with your life when you’ve found the right person, don’t wait for the question to be popped. Just save up for the life event you’re very likely going to have — even if you’re single now. Never get married by chance, or have a significantly smaller cost than you had originally anticipated? Whatever, now you have more savings to re-allocate to and emergency fund, or future replacement car! It’s not obsessive or crazy, it’s spanning savings over several years instead of just one or two — which may lead to the event of your dreams, and at least far more peace of mind during the planning process.
I decided already to go to Vegas this year — instantly I had $400 to start from
I have a mini travel fund that I’ll put some cash into every now and then from random freelance work. Sometimes I have more, but I’ll go on a weekend trip or something. It’s so nice to be able to plan something for yourself, and not worry about where the cash is coming from. Where it does come from is from times when I have extra cash on me. When the larger trip to Vegas came up, I can now save up less bit by bit to achieve my goal because I already have a starting point. When I’m out of debt, I’m sure I’ll contribute to this regularly as part of my budget!
20% home downpayment is good, but it’s not that great
Why not start saving up for a future home now, even if you’re not immediately planning on buying one in the next few years? Why not start now, even if it could be 10+ years down the line, or not even on your radar at this point? With extra time and a more relaxed savings plan, you could possibly get up to the 20% down payment rule — or do far better and pay significantly less in interest and monthly payments when the time to buy a home does come. Either way, it’s win-win. As long as I have my debt, I’ll be making my debt repayment a top priority, and not saving for more of these things this far in advance, but it’s surely something to think about for when I am out of debt. I may be single — but I’ll start saving for a future wedding. I may have a reliable car — but I’ll start saving up for my next one asap. Stop waiting for the plans to be finalized before saving for future needs and goals!
Sorry to bore everyone, but you get to read yet another post full of new 2014 goals! This time, though, they’re mine.
2013 treated me well. According to Mint, I had a net worth increase of $11,995. Not bad, especially considering what an unorganized mess I was with finances at the year’s starting point.
I didn’t buy a single Xmas gift for anybody this year. Social taboo, or a smart financial move?
(Ok fine, I bought some Greenies for may cat; they were on sale.)
I’ve gotten to the point where I’m absolutely sick of commercialized Christmas (and most other holidays). Will I be getting gifts? More than likely. However, I told everyone I didn’t want anything. Did they listen? No.
For those that I knew were going to buy me something anyway — because that’s just the way they are — I told them a few cheap things I wanted/needed, as to particularly deter them from getting me something more expensive. I asked for a coffee mug with a lid. A cheap long-sleeved shirt for my cold office.
For years I felt pressured to buy gifts for the pure sake of society’s standards. I’ve felt for so long — I don’t really appreciate half the stuff I get, even though I pretend like I do. It’s more junk for my apartment that I may not even use, or hardly use. It’s more to clean around. It’s usually in the brands I don’t feel comfortable using for a variety of moral reasons. But I need to appreciate them because ‘it’s the thought the counts.’
It’s a social pressure that slows my financial goals, spends money I don’t really have, makes me budget and save to buy other people more junk they don’t need and will probably not appreciate too much either. It’s not about being selfish — but really — how much does my mom need another candle or snowman figurine? How much does my dad need a new pair of pants? How much do my kid cousins need more toys that require more batteries?
They don’t, and the holidays weren’t like this decades ago. It’s not selfish, it’s honest. I’m really quite tired of inconveniencing myself for traditions so skewed.
For the sake of the holidays and my budget, I don’t care about breaking a social taboo — I’m not buying gifts anymore.
Call me selfish, but I don’t consider it that. I don’t want to take but then not give. I don’t want the materialistic crap that are the vast majority of my gifts. My mom doesn’t want another candle she needs to find a place for and my dad already has too many pairs of jeans to wash and store. I’d rather call it boycotting what has become a waste of everyone’s money and time.
Instead, I come home for Christmas. I drive hours to do so. Sometimes I bake cookies and share time. Families get together, some families celebrate in a much stronger religious sense and are together for that.
I see so many posts about cheap holiday finds and sales, and I can’t help to think — you know how you can really save money this holiday season? Don’t give into the marketing like everyone else. Bring back the real reason for the season, whether for your family that’s religion, or just getting together and spending time.
Little improvement is better than no improvement! I have my reasons though, and I’ve actually quite successfully cut back on spending in order to make up for some needed expsnes this month.
When I read Mom and Dad Money’s post on Why Net Worth is Misleading, I of course quickly applied it to my own situation. I haven’t in a while read a post that has inspired me to change my way of thinking more, and I think I’d like to add my own two cents based on my current situation.
I broke -$90k! I never thought I’d say that with such joy, but it does feel good.
The last month has been a good one, with plenty of additional freelance income coming in, and a nice $2000 check from my mom to go towards my biggest student loan (which I will be paying her back after my debts are paid off)! Even though I went into the red August and September because of vacation, since my last update I still made an $8,399 increase in net worth! Not to toot my own horn, but impressive huh?
In the past, if I had a few extra hundred dollars in my account, especially if it was additional income than I would have otherwise had, I spent. A lot. Even to this day, if I get a nice big freelance check in, I’ll splurge on a little something — going out to a place to eat I otherwise wouldn’t waste money on, or buying a nicer version of something that I was on my to-do list to purchase.
However, this is when I had extra money in my account, when most of the time ‘my normal’ was to have close to none. As I’ve started building a cash buffer now though, among countless other benefits, I’ve noticed I spend less. I also spend more intelligently.
I think the explanation is two-fold:
- Psychological. There’s been a lot of effort to build up my cash buffer, and to keep in there. I don’t want to waste all that effort. Also, every time I get my paycheck, freelance income, or any other unexpected cash coming in, it doesn’t seem like such a grandiose amount anymore. I’m not broke, and I know I have cash for food and bills. My head is on a bit straighter and I want to do the right thing with that extra money. I no longer see it as, ‘this may be the only extra cash I have for a while,’ and just wait for desperation-derived decisions to settle in.
- Logical. I don’t spend money on overdraft fees. I don’t spend money on credit card interest. If I’m hungry, I have the money for an efficient and smart grocery run that will last me several seeks — I don’t have to grab pizza because I can only spend $10, and I don’t have $50 for a lump sum of groceries. I buy quality when I need something that will last, opposed to being forced into buying the cheapest option that I’ll have to replace in a few months. In other words, it’s true what they say: It’s expensive to be poor.
I’ve come to notice that I spend better, but also have far less stress, and better quality things. I buy more groceries instead of eating out as a quick fix to my hunger because I have no groceries. Therefore, I’m healthier and have saved money. I also get to enjoy higher quality groceries.
I spent a bit more ($45) on a nicer pair of workout pants that I use every single day and now I know I won’t have to replace the $15 pair I always used to grab at Wal-Mart every few months because they rip. One $45 pair will likely now last me years. I also can better decipher when to go frugal and when to buy quality in order to save more in the long-run.
I also don’t feel as much of a need to pay down my smallest loans just to keep freeing up more cash. I’m still going to pay off my car first to get that big payment off of my monthly bills, but when I pay extra towards a student loan, it goes to my largest, highest interest loan — the comfort of knowing I won’t be broke in a few years has helped me save more in the long-term as well.
When you begin to save more, and you begin to have more cash in the bank, do you also feel as though you spend less and spend more efficiently?
If you’ve been following my blog for awhile, you know that I have a problem with holding onto cash. For the most part, I do the semi-responsible thing and have it go towards my loans, but I’ve known for a while via my personal finance research and journey, that I need more liquid cash on me.
I’m used to going paycheck to paycheck, sometimes racking up my credit card from time to time on unexpected expenses — or just because I don’t budget correctly for that month, even if I am still paying extra towards my debts. I have the resources to pay off both extra on my debt and build a cash reserve, but up until now, I’ve not done that. Why? Because that’s how my parents have always done things.
Ah yes, if you’ve followed my posts in the past, you’ll know that since I got my beautiful Prius back last May, it’s gotten vandalized, hit by a hit-and-run drunk driver, had a few other minor hit and runs, and towed from my own apartment complex and then scratched.
Why can’t I catch a break?!
Well this time fortunately it’s not too major, and more maintenance issues than anything else. The bottom piece of my car started falling down, which fortunately was fixed for free under warranty. It sure wasn’t fun driving the last 2 miles home yesterday with it obnoxiously scraping against the concrete road though!
So that happened yesterday, and not one, but both of my headlights went out. I figured it was a fuse since they both came out at the same time — but nope, both bulbs had burnt out. So that’s three, completely random problems with my car, all hit me on the same day. Talk about a shitty coincidence.
So getting both bulbs replaced, the bottom piece put back up (free, thank God), and a few other maintenance things I was due for anyway, like transmission stuff-kind-of-stuff. (What the hell, I don’t know I’m a girl): $400.
I suppose all of it is maintenance that I’m actually having to pay for, it just really sucks that it all gets thrown at me at once. I hate coincidences like this.
Again, I don’t have enough in my e-fund/buffer in my checking, so it may be going on my credit card. Once I get this big freelance check coming in though, I’ll pay off my card.
Hopefully, I can pick up just enough freelance work to make an additional $400 this month as to keep with my tight budget.
My original plan was to do this once a month, but I have an excuse: I’m really lazy. Now that we’re past that, let’s look at my current situation, nearing the end of September. This is also not including my last paycheck which I’ll get tomorrow, of which a good amount will go to rent/utilities/student loan payments anyway.
So last time I did an update like this, I was super excited because I had just reached the $100,000 threshold; I was at: –$99,193.13. Now at nearly three months later, I’m at -$96,592.22. Yay!
Best of all, is I haven’t gotten two big freelance checks yet (they’re in the mail), totaling $4,670. Not even counting my next paychecks, that’ll put me down to -$91,922.22. Hopefully I can keep frugal enough and with my next two paychecks, break that $90k ceiling! Wouldn’t that be awesome? Increasing my net worth by almost $10k in just four months?
I am in a constant struggle in my head. And I mean constant. I’m always looking for new ideas to make money, but at the same time I’m always looking for more free time. Should I do more to earn? Or should I save more time for life?
Now let me be clear here, with a few exceptions, I don’t have an overall problem with YOLO moments where I spend all my cash. (Although I have more than I’d like, I’m working on it.) But I’ve been thinking lately, maybe the best course of action is not to get another job. Maybe it’s not to take on more freelance work than I already do.
Maybe my goal should be to do less, in order to accomplish more.
I feel like I’m constantly just spinning wheels — and never getting anywhere. Not with my debt, but with my personal progress as a human being. As far as my debt goes, I have a plan and am getting closer to the blue, even though it will be a long while before I get there. I want to speed up the process, but perhaps there’s a limit to where that speed should go. For God sakes, I’m already improving my net worth by about $1200 each month on average!
I must say, not bad for a 24 year old — and I’m expected to get a raise soon. I also do better freelance work when I do less; when I’m less stressed. I can get more projects that I can charge more for. I save more when I’m less stressed. I also do smarter things with the money that does come in when I’m less stressed.
I also eat better with less anxiety, get to the gym more — at which I earn ~$0.40 per workout with the GymPact app anyway, ha — and my relationships get better. Most importantly, I feel better and am happier.
Maybe the best course of action is to stop the daily grind of financial worry, and to instead just stick with what I’ve already got going on. Keep a steady pay-off plan going, and enjoy life a bit more. Save more, steadily pay off debt, and stop worrying about the amount of debt I currently have.
I’ll call this the financially-responsible YOLO moment — the moment when I stop over-worrying about my debt, and instead just keep going what I’ve been doing, which is what I’m responsibly supposed to be doing. I need to remind myself, I AM on the right track. I am on the right track. …I am on the right track.
I burnt out this last time, and feel as though I lost some connections with my paid blogging gigs. I know I could get them back easily; I just need to reach out. If I can just do two posts a month — that’s $200 a month extra. Such a little investment. It just gets hard when blogging in my industry when I do it every day, all day. I love what I do, but I also love work in moderation — as we all do!
Any tips for not burning out with blogging? I have to generally stick to the topic of web design or development, so it gets easy to do.