One thing I’ve been struggling with as of late is how exactly to budget for savings. My emergency fund currently stands at $70, enough to avoid any unexpected overdrafts or the like, but that’s pretty much. I’ve settled on a good base of 3 months that I want to save up for right off the bat – Dave Ramsey’s $1000 won’t go far if I lose my job (especially considering how paltry my unemployment benefits were). This comes to $2500.
I’m also planning on building a new computer. The parts I selected will cost an estimated $700, so I’m budgeting $800 for the build. It’s something that I’m really, really excited for, but is also approaching the point of it’s own little emergency (in my mind anyway). My current laptop is a 4 year old, sluggish, wildly overheating bastard of a thing that really, really needs replaced, badly. Building a new box is also an investment in the future, of sorts, as boxes are easily upgradeable, rather than having to replace them every few years for the latest hardware (as is the case with laptops).
The real question is how to prioritize and budget for these two savings goals. Throwing them into my spreadsheets as debts results in a new computer in September, but the emergency fund being pretty empty until February through June of next year. I’ve tried budgeting them in smaller amounts into my paycheck allocation shedule (the awesome name I gave my budget), but that also ends up long and drawn out.
I’m realizing that my real problem here is the desire not to knock out a bunch of debts and attain savings goals all at once, because it’s long, drawn out, and BORING. I want to be able to tackle one at a time, and instantly see huge leaps in progress. To be perfectly honest, I’m completely fine with that, because I know that’s how I am – it’s in my personality. Hell, if I could, I’d stop making all my regular monthly payments and apply my big chunk of change to only one debt at a time.
I’m also looking in to using the avalanche method instead (highest interest first, that being Capital One and it’s awesome 23% default rate that I’m assuming I’m being charged), which would save me over $5,000 in interest over the next 5 years. Hell, I’ve even toyed with spreading my snowball evenly across all debts equally. And proportionally (which would theoretically result in everything being paid off all at once, 5 years from now).
The other thing that irks me is how long it’ll take me to get rid of my personal debts (Comcast, my sister, Met-Ed, my landlord, my investor) and start paying on real loans.
I am a terribly impatient, indecisive person, and I suspect that constantly playing with the numbers while waiting for the next paycheck is driving me mad. On top of growing increasingly depressed from the rampant singleness.
Popularity: 11%
I’ve been following your blog for a while…I’m not sure if I’ve ever commented, but I just feeled compelled to say something after this last posting. Here goes:
YOU’RE THINKING OF BUILDING A NEW COMPUTER?!?!? YOU MUST BE OUT OF YOUR MIND!!!
It seems like every time you make a tiny little bit of progress you decide that you need to go out and buy something. My friend, you are almost $65k in debt. As Suze Orman would say: You Can’t Afford It! You Are Denied!
I’m sure you can justify that purchase nine ways from Sunday, but the simple truth is that you need to figure out how to do without it. How about committing to finishing one single savings or debt pay-off goal before your next major purchase?
I agree with Reid in that you seem to sabotage yourself on a regular basis. Whenever you get going in the right direction, you do something that f***s everything up.
Doesnt Ramsey say 1st step….a $1,000 emergency fund. 2nd step….paying off debt? The $1,000 is just a baby emergency fund to help you avoid using credit cards in the future. If you put $167 a month into a savings account, you could have that $1000 in 6 months. In the meantime, you could concentrate on paying back your family asap while also paying the minimum on your other debts. Paying the minimum is a big step in the right direction, how long has it been since you did that on a consistent basis? I agree with you that its hard to wait for things to happen. But think how long it took you to get into this much debt. It wont go away overnight. If I were you, I would set everything up (savings, debt payments, etc.) on autopay and forget about it. Then you can start to work on your depressing “rampant singleness”.
As far as a new computer goes, wouldnt you feel bad building a new computer when you owe your family all that money? Can’t you make the old one work for a few more months? Obviously, you’re the only one that can decide what your priorities are.
Whatever you decide, I’m rooting for you!
One of my purposes when starting this blog almost a year ago was to hold myself accountable, and allow others to hold me accountable. You two are doing a hell of a job at that. Thank you.
oy. I’m sorry if I was too harsh. Its only advice and of course you can disregard every bit of it if you want. I hope you know that I was only trying to help. Whatever you decide to do, good luck.
Hey, sometimes you just gotta tell it like it is.
theres a great article on msn about persistance in paying off debt. i thought of you when i read it.
http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/the-real-key-to-being-debt-free.aspx
Thanks the1chery – I’ve read it twice now.
You really need to get a blog of your own. You’ve been a mysterious figure around this site for quite a while now. Like a phantom.
mysterious figure, I like that.
think of me as your blog groupie.
[...] of a 0% interest offer. She was immediately blasted by some of her readers for it, just as you guys had flipped out on me in your ever caring way (remember, that’s why I post such things here before I do anything). [...]