The end of another quarter

The end of another quarter is here which means it's time to tally up my efforts and see how well I did for the past three months.  I know a lot of other debt reduction bloggers that I follow seem to update their numbers more frequently but for me every three months is already a lot to handle.  Even though I am tackling the debt and am always happy to see the amounts I have paid off, I still don't like to look at my bloated account balances.  I'm hoping the residual dread will wear off the longer I keep at this and the lower my balances get.  

Plus, when I totaled my debts this quarter, I realized that I am super close to having paid off $10k since last October!  A year ago I would have thought that kind of debt pay-off was impossible and I'm still a little dazed that I've come this far already.  I can't wait to post that I've hit the $10k mark which should be very soon!  Here's looking forward to the next three months!

And the grand total is:
 

Student Loan: $37,172

Car Loan: $9,942

Credit Card 1: $3,908

Credit Card 2: $4,693

Credit Card 3: $0

Parents: $0

Total: $55,715

Here’s my starting point back in October 2011:

Student Loan: $38,339

Car Loan: $11,684

Credit Card 1: $10,577

Credit Card 2: $3,635

Credit Card 3: $0

Parents: $600

Total: $64,835

Paid off to date:

4th Q 2011: $5,051 + $0 in savings

1st Q 2012: $1,298 + $150 in savings

2nd Q 2012: $2,771 + $506 in savings

Success to share

A few weeks ago I made a goal for myself to spend the last bit of April using all my newly developed debt reduction skills together.  While I can't say I've been 100% successful everyday with every skill, I can say that on a couple fronts I've completely exceeded my own expectations... my etsy shop and taking on new sewing jobs!  

During the past three weeks I've doubled up my efforts at listing items in my shop plus did some outreach to one of the craft galleries I have my work displayed at.  The extra effort paid off... the gallery sold some of my work so they cut me a check plus ordered a bunch of new items and would like me to be a bigger contributor to their gallery!  The big winner though was selling a $200 commission work on my etsy site plus a couple little orders!

To top it off, before I even had a chance to re-advertise for sewing jobs, a lady that I've done work for in the past contacted me for more work for her AND for her daughter... so there's another $150 coming my way!

This all may just be a fluke incident or maybe just plain luck but I'd like to think that at least a portion of it comes from my own hard work, that my efforts to change my ways and focus on my financial world are paying off.  In any case I can't wait to put all that extra cash towards my debt!

My net worth

Something that I’ve been doing along with tracking my debt and debt reduction progress, is tracking my net worth.  What prompted me to do it in the first place was this desire to prove that my huge amount of debt had actually bought me something.  What I ended up proving to myself was that I had wasted a ton of money on nothing.  I’m young in my career so I don’t have much set aside in retirement and my personal savings was at $0.  I owe as much on my car as it is worth and my personal items don’t amount to much when compared to my huge debt.  My net worth was 10’s of thousands of dollars in the negative.  I was worthless…. actually I was worse than worthless.   

When I started this process I was so ashamed of where I was that I never shared with any friends or family my financial situation.  That included not telling anyone that I had started a real plan of debt pay-off and a blog to record my progress.  The biggest reason I didn’t want to share this information was not because I was worried they would judge me based on the amount of debt I had racked up, it was because I was worried what they would think if I completely failed to keep whittling away at my debt… I have a history of jumping gung-ho into a project, be it tangible or self-improvement and then giving up when things get tough or just losing interest altogether when something new comes along.

But given that I have been sticking to this goal and gaining steam every step of the way, I decided it was time to start sharing my efforts with those closest to me.  It felt great to admit to people that I had been struggling and was not proud of my past debt-ing ways but was overcoming my debt and really accomplishing something.  I didn’t really give too much detail about the actual numbers and the only person I gave the blog address to was my middle sister who is similarly trying to dig her way out of debt but it still felt great to get it out there. 

When I was talking to my mom about it I told her that I was looking forward to the day that my net worth would break even, that I would officially be worth nothing financially speaking and we got a good laugh at that.  She, of course, assured me that I would never be “worthless” but it was just so freeing to be able to talk openly about my debt problems and my attempt to overcome the debt with someone so close to me.  And now that I’m out in the open to my friends and family it gives me the added push to stay on track!  

Summer finally hit Boston

I knew it was only a matter of time before the summer finally reached New England but after such a mild winter I was hoping that perhaps the summer would also be kind to my utility bills.  No such luck... after weeks of cool 60's the heat wave finally hit yesterday sending me running for the a/c and it's not expected to cool down any time soon.  


All winter I was able to endure slightly frostier temperatures in the house setting my thermostat on 60 in the name a savings.  I bundled up, cuddled close to S and the pets for warmth, and survived just fine.  The summer heat though is a completely different type of torture.  If it were just me I could get by with the thermostat set on 78 and a fan on at night to keep the air moving.  S, however, is miserable once the temperature passes 70 degrees and would probably set the a/c at 68 if it were only up to him.  


I expect that that 10 degree difference in our comfort zones will cause some problems between us this summer especially since I am on the cut costs/ reduce debt mission and he is on the I finally have money again and am going to spend, spend, spend mission.  Hopefully, we can reach a reasonable compromise...  I'm wondering if the answer is to get one of those programmable thermostats so that we can only have the air running when we are going to be there to benefit from it.  I'll have to check into those and see if the landlord would be ok with us installing one.

Time to challenge myself

I've been on this mission for 8 months now and expect to have paid off around $8,500 by the end of the month which is something that I'm very happy about.  However, I think I can do better... some of the changes I've made have been easy like making a better meal plan, reducing energy consumption, and hunting for better deals on the stuff I have to buy.  Other changes have been tougher, like curbing my creative/ crafting/ home improvement spending and reducing the amount of meals and snacks I eat out.  I am consistently being more conscious about what I spend money on and how much it costs and I've come a long way but I've yet to "put it all together".

In other words, I still don't think I've pulled off a significant number of days in a row where I use ALL of my new found skills.  Some weeks I bargain hunt, some weeks I don't.  Some weeks I'm better at saying no to myself when I want to start a new project, most weeks I'm not.  And I don't think there has been even one whole week were I ate every meal from home.  So it's time for me to challenge myself.  For the rest of June (all 19 days of it) I will be adhering to the following:

• Every meal must be from home (or from the office if someone brings something in) and this includes all snacks and drinks!  
• Make a thrifty meal plan and bargain hunt for savings, use coupons
• All errands done either on the way home from work or in a group... no single stop errand trips.
• Hang all laundry to dry
• Shorter, cooler showers
• No new home improvement or crafts projects 
• Take on a new sewing job or two
• Push the Etsy shop

I'm sure I will think of other things to add to the list but for now it looks challenging enough, the first one on the list alone will be a huge challenge for me!  Wish me luck...

To invest in my 401(k) or not...

Tomorrow will officially mark my one year anniversary at my new job which means that besides having been in this roller coaster of a stressful job for a whole year, I am now eligible for company 401(k) matching.  The big question is "should I go for it?"  The company matches up to 4% if I contribute 5% which is probably the only way I'm going to get any more money out of this company given everything that has gone on lately.


According to Dave Ramsey I am better off putting all of my financial resources towards paying off my debt in as short amount a time as possible.  And I can really understand why that advice makes sense.  However, I have not been able to contribute to a retirement plan for almost 4 years: three because of constant pay cuts at my last job that sent me re-arranging my finances ever couple months to stay above water and the last year because I wasn't yet eligible to participate.  If I stick to my current debt pay-off plan it will be another 5 years before I'll be debt-free and that doesn't take into account all the "what-ifs" that could happen in that amount of time... like me or S losing a job or starting a family.


So that makes almost a decade of no retirement savings which I think even Dave Ramsey would say is too long to put off planning for retirement.  Perhaps I need to look at my debt in terms of "good" debt vs. "bad" debt: http://money.cnn.com/magazines/moneymag/money101/lesson9/index2.htm.  My "good" debt is my student loan, it's the bulk of my debt but it's at a really low interest rate and it helped me get the jobs that will eventually pay it off.  My "bad" debt includes my credit cards with their high interest rates and my car loan even though the interest rate on that is low.


I should be able to pay off the "bad" debt within the next two years.  That seems like an amount of time to continue putting off saving for retirement that I can feel comfortable with.  


What would you do?  Push off saving until all debt is paid?  Start saving now regardless of debt?  Or split the difference and pay off the "bad" debt before saving?