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Archive results for “December of 2007”
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Once I have the final numbers calculated, I’ll take a final look back at our 2007 goals and see exactly how we did. It’s hard to believe that yet another year has passed, and it’s time to declare some goals for 2008.
Debt Goal - Kimberly from Alpha Consumer asked me for a financial goal. I decided that we would like to pay off at least $10,000 more of our debt in 2008. This may be tough with a looming financial shake-up. But, that shake-up should be temporary until we get our financial groove back. When that happens, we should have more income overall to go towards our debt. One step backwards…two steps forward.
The only problem with having a goal of $10,000 is that it will mean that we will have about five months to pay off $7,000 by May 2009 (our credit card payoff goal date). A date that I thought was so far away is no longer so far away.
Savings Goal - I think a nice goal for our savings account would be to fund it up to $5,000. But since we may have to use some of it for moving expenses, I am going to be conservative here and have a goal of having it back at $2,500 (or more) by this time next year.
How are we planning on achieving the above goals? The main thing is to increase our income, which we hope to do by my husband finding full-time employment in his field. I also have been keeping an eye out for extra income that I can make. It’s not just any income, though. I am looking for high return income so I don’t have to spend as much time working. That way, I can concentrate on cutting our expenses as well.
Happy New Year Everyone! Here’s to 2008!
I crunched the numbers, and we were able to increase our savings account to $2,869. Even as I write this, I keep looking back at the numbers to see if we can squeeze just a little bit more out.
Nope. I can’t do it right now. I’d be counting on too many things to go perfectly (like getting a check in the mail when it should come). I don’t like to rely on things like that too much because it causes stress.
I can be patient and add more when we can.
Like I mentioned the other day, we are going to keep contributing to our savings account for a while. Since our credit card debt is at 0% right now (and it lasts until October 2008), it won’t hurt anything by doing it. If we were paying finance charges on that balance, it would be a different ballgame.
I feel very good about the progress we have made this year. I’ll post some final numbers with my thoughts (and a recap) after I get the final interest numbers from our savings accounts.
Ok. I have a little more than a half hour left to finish writing our goals for 2008!
I’m not big on going to parties or anything for the New Year. I’m at home on my laptop crunching numbers and trying to see how much we can stash away comfortably in our savings accounts before the end of the year. While checking our balances (by the way - thank you to everyone who has used my referrals to open accounts!), I noticed something interesting:
Virtual Bank now has a lower interest rate than ING Direct. Not too long ago, it was ING Direct who had the lower rate.
I like having money in a savings account and I like having my money make money (that’s how I explain it to my son). I think another thing to put on my “To-Do” list is to shop around for a better rate at a different online bank. The bonuses to open up our Virtual Bank and ING accounts were great, but I would love to earn more interest 
After I do some research, I’ll post what I discover on here.
Now I’m off to continue crunching numbers. I don’t have too much time left to complete some transactions before the ball drops!
Right now, we are in a financial groove. I know what to expect for our income and our expenses are fairly regular. I know what stores have the best deals and I know what thrift stores have the best prices.
But things will be changing shortly.
When my husband finds a full-time job, we will end up moving to wherever that job may be. It scares the heck out of me that we will no longer have our super-cheap mortgage (less than $350/month) and I no longer will know where to get the best deals.
I’m not against change. I believe that change can be important to make things happen in your life (hopefully for the better). But it doesn’t mean that change will be easy. For me, it’s downright scary given our debt-ridden financial situation.
The one thing I am doing to try to face this fear is to start preparing for the financial shake-up. How? Well, he’s what I’ve come up with so far:
Build Up That Emergency Fund!
Our savings account is at $2,500 right now. On Monday, I will be throwing a little more into it. The goal for a while is to put our debt reduction on hold and to keep contributing to that fund. We should rename it to the “Money to Make Tricia Feel Better Fund.” We’ll beef it up as much as possible so we have it to weather some financial hardships that can come with a move.
Sell More Stuff!
I read Debt is Slavery back in August and that book opened my eyes. It’s a big reason why we sold so much stuff during our three garage sales this summer.
Get rid of the clutter and there is less to worry about in your life!
I might have some more time on my hands soon, and while the huge piles of snow in my yard deter us from having a garage sale, I really need to get on eBay and do some selling. I know I keep saying it and I keep dragging my feet. But if I soon have that time that I’m thinking I’ll have, well, there will be no excuse.
We’ll make some extra money to put in our savings account and we’ll have less to take with us when we move.
Keep Healthy!
I haven’t been in the best of health lately. In fact, I’ve been under a lot of stress and have been suffering from stress-related symptoms. At one point, I thought there was something really wrong with me and I almost went to the emergency room. I waited it out due to fear of a high hospital bill and the symptoms did go away. I began tracking my symptoms and I noticed a relationship with being stressed.
I need to reduce the stress in my life and keep healthy. When I’m not feeling well, I have a tendency to get depressed and that is not good. I need to keep optimistic during this transition and I need to keep a clear mind to keep myself together.
Conclusion
Well, that’s what I’ve come up with so far. Basically I’m going to hoard as much money as possible, get rid of as much stuff as possible, and keep myself as healthy as possible. If you have any other suggestions, I’d love to hear them.
I already feel a little better about the whole thing after writing about it. So perhaps the fourth item up there should be to talk about it with others.
Another Friday, well, Saturday now, and it’s time to share some link love. I’ve been pretty busy lately so I’d like to say thanks again to the bloggers that helped to keep things fresh on here:
Paidtwice submitted How I’m Staying Motivated Through a Setback.
Rob in Madrid submitted Dealing With Setbacks, My Two Cents Worth.
Lynnae submitted The Generosity of a Stranger.
Ryan submitted The Road to Becoming Debt Free.
Molly’s Brother submitted Steps to Achieving Your Goals.
Thanks again everyone!
Here’s a guest post from MollysBrother. He writes over at Molly’s Brother on a Budget and also has a free e-book on personal finance. Thanks MollysBrother for the guest post!
Often times, when I sit with psychotherapy clients, I try to have them identify one area of change that they would want to work on. Together, we then create and articulate goals related to that specific area of behavior change. Following a session with a client the other day, it dawned on me. Many of these same practices related to attaining goals are easily transferred to establishing and attaining financial goals. In fact, they are the same steps.
Once mired in any mount of credit card debt, it seems as though our financial situation can’t be changed. The simple fact remains, it is completely flexible. But, only you can change it. Here’s how:
Establish Attainable Goals — Articulate the broadest possible goal you have. Once you have done that, figure out a way to achieve these goals by breaking them up into smaller, more attainable tasks. Now, breakdown those goals into smaller objectives and tasks. For example, you might decide that you want to have a net worth of $1 million (dream/overall goal). To do this, you might realize that you first have to own a house (smaller goal). In order to own a house, you might have save money for a down payment (smaller task). In order to save money for a down payment, you might have to reduce your credit card debt (smallest task). Therefore, in order to reach your large goal, first concentrate on the attainable short-term goal of eliminating your credit card debt.
Start Small — As mentioned above, starting small will give you the skills, building blocks, and confidence to reach your goals. Start small and expand from there. If you have a goal of paying down X amount of money this year, but you have never paid off such a large sum before, then start small and build off your success. Pay the minimum balance. Then, each successive month, raise the payment by $5 or $10 or $25. When you feel that you can pay the balance + $25, up it $5 more. When that becomes a comfortable amount of money, raise the payment again.
Or, if you want to save money, but you have never successfully saved in the past, use this strategy. Try to set aside 1% of your paycheck. When that is a comfortable amount, up it to 5%. When that has become comfortable, raise it to 10%. Many stop at 10%, but you may want to extend it to 15-20% of your paycheck.
Work Through the Setbacks — As with most things in life, there will be setbacks. Face this fact early on and arm yourself with the necessary mindset right away. Know that these hiccups will come along the way in reaching your financial goals. Be confident that you will be able to work through the setbacks and that you will be able to keep your eyes on the prize.
If you establish goals–attainable goals–you will build the necessary habits and develop the ideal skills to make your financial dreams a reality.
Thanks MollysBrother for the guest post!
This is a guest post submitting by Ryan of Uncommon Cents. He discusses (hopefully) simple personal finance. Thanks Ryan for the guest post!
The road to becoming debt free is often a long and difficult one. As I stated in a post on Uncommon Cents, debt can be thought of on a scale, and prioritizing what debt to work on first is key in reducing your debt. Some may take the snowball approach while others may try to pay off their highest interest debts first. When I got out of graduate school, I didn’t have too much credit card debt, at least not compared to lots of my friends and coworkers, but in my mind, any was too much. I spent the first year out of graduate school doing whatever I could to pay down the $6000 or so that I owed. I also realize that my debt could have been much worse, but I was able to restrain myself in a lot of ways (what I later learned to be financial discipline) and I also worked throughout the time I was in school, which ended up helping reduce the length of my debt free journey considerably. I also tried to take the most direct route to being debt free and didn’t work on building up savings until that debt was gone. But whichever route you take, here are a few things that can help you succeed:
1) Don’t incur new debt!
I’m not saying you need to cut up your credit cards or freeze them in a Ziploc bag, but somehow, some way, you must prevent falling into the habits that got you into debt in the first place. Consider paying cash for items. Work on a spending plan that keeps you living below your means. Do whatever you need to to not run that debt up again. For me, doing a regular review of what my debts are–even when they’re ones that get paid in full every month–helps me keep my spending down.
2) Scour your existing spending for places to cut back.
Eating out is a typical expense for cutting. Sometimes more drastic measures can make a substantial difference, like terminating your landline and only keeping your cellular phone, or giving up television altogether to recoup the money spent on cable. Do you buy a Super Big Gulp or a Starbucks latte every day, sometimes more than one in a day? Think how those dollars times 365 might make a difference in next year’s bottom line.
3) Use free (or at least lower cost) services.
I’m a big reader and I have a large personal book collection at home, but in the last few years I’ve become a heavy user of the public library. Part of this is to reduce clutter (while I love books, I also love having space available on my bookshelves), part of it is to reduce spending, and part of it is environmental awareness–the less “stuff” I have, the less I affect the environment. For purposes of this blog, however, the concern is finance, and as a taxpayer, I’m already paying for the public library–I may as well use it. And the public library (at least here) doesn’t just offer books; it has a free magazine swap table, free CD borrowing, and $1 DVD/VHS rentals–for a week. Netflix is great, but it can’t compete.
4) Ask for a reduction in interest and use balance transfer offers (with caution).
Much to the surprise of many, sometimes all it takes to get a better credit card interest rate is to call and ask for one. There’s lots of competition out there and the credit card companies would rather you keep paying them at a rate that’s lower than to stop paying them at all (and pay one of their competitors). There’s also the phenomenon of balance transfers; typically a card you may be just opening will offer a limited time special, like “0% for 12 months”; sometimes cards you’ve had for awhile will offer similar rates, although not as frequently and often not quite as tempting. There’s some danger to using these, but if you are disciplined (which is an issue for most of those with credit card debt, because if they were disciplined, they’d be unlikely to be in such straits) this can be a huge help.
5) Make sure the unspent dollars from your cost cutting measures goes toward your debt.
If you’ve seriously figured out your spending plan and you are definitely spending less money, make sure those dollars actually go to paying off your debt. If you’ve managed to cut $100 a month off your monthly expenditures but you put those $100 toward two nice dinners with your lady friend, you haven’t done anything with your debt. Actually make sure the payments on your debt reflect the amount you’ve cut. If your calculations are showing that you spent $50 less on food this month, add $50 onto that credit card bill payment. It’ll help your financial situation lots more than keeping it in your checking account.
6) Find ways to increase your income.
This could be as simple as selling some of your clutter in a garage sale, or maybe on eBay. It could involve doing some contract work in your specialty, or overtime at your job. For me, extra income means a second job at night for eight hours a week. While cutting costs is typically the most effective way to improve your budget, earning more income can really help. In my case, my part time job brings in about $800 take home every month; that makes a big difference in my bottom line. While I don’t use it (any longer) to pay off debt, if I had some unsecured debt I certainly would; in my case it helps me place the maximum amount of my primary job’s income into my 403(b) plan.
Debt in and of itself is not horrible, but out of control, unsecured debt is a serious threat to the financial well being of many–credit cards being the biggest culprit. It’s very easy to fall into the debt trap. Getting out is much harder. It requires discipline, wisdom, and hard work, but in the end, being debt free is a great feeling that makes all of that sacrifice well worth it.
Thanks again Ryan for the guest post!
About This Site
Credit Card Debt
- Starting = $37,614
- Paid Off = $28,616
- Current = $8,998
- $25 ING Savings Bonus
Savings Account
- Current = $3,203
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