Debt Sucks

For the first time ever, I did my taxes as soon as I got all the documents I needed. There are two good reasons for this that I can think of at the moment:

1. Despite the existence of my spiffy little filing bin under my desk, things are destined to disappear. It’s like socks in the dryer. Even though the dryer door was closed, and nobody was around, you’ll still have put an even number of socks in there only to come up with an odd number when you fold them later.
2. It’s bad enough that the government got this money from me interest-free from the time I earned it. Why let them hang on to it for a few more months when I can use it now?

The damage? A $620 refund that I could’ve used most of last year for better purposes. Heck, it’s even profitable, depending on how you look at it. My total tax obligations were $351. A total of $570 was withheld from paychecks, yet I “overpaid” by $620. Neat. What I really like about TurboTax is that they give you your effective tax rate, rather than making you figure it out on your own (not like it would be that difficult). Last year, my effective rate was 2.44%, this year it’s 2.39%.

In any case, this refund (coming in 8-14 days, supposedly) won’t be going anywhere special. It’ll go in the budget just like any other income, and probably end up towards the car/truck/what-have-you savings.

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Every afternoon when I wake up, the first thing I do is read my email from bed, because I’m awesome like that. Actually, it’s a good way to get myself going before I climb out of bed. Otherwise, I risk zombification. The other day, doing exactly that, I came across an email from PayPal titled “Reciept for your payment to Match.com.”  Say WHAT? Then I opened it, saw the amount, and repeated the previous line once more, only with more gusto. $107.94 for another 6 months on a site that I hardly used during the last 6 months I paid for.

I have subscription lines in my budget in YNAB, but I completely forgot about this one. I hadn’t considered the possibility that it was set to auto-renew, or that such an event was anytime soon. I WAS doing very well with my budget this month due to my recent lifestyle/spending habit changes, but this little doozy blew it out of the water. Lesson learned: If you sign up for a subscription that you don’t plan on renewing, make sure you turn off the auto-renewal right after you sign up.

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I’ve finally decided to stop contributing to my 401(k). I say that as if I’ve been contemplating it, but I haven’t, really. It’s quite simple. I’m currently paying in 3%, and the company only matches 10% of that 3%. That’s a little over $2 per paycheck that is being matched. In my eyes, not worth it. Since I started, I’ve contributed almost $400, and my employer has thrown in a whopping 40 bucks on top of that. Wheeee…. My contribution of roughly $25 per pay right now is money that could better be used elsewhere, and I really don’t care to have my entire measly portfolio invested in the markets. By someone else. On top of that, part of the purpose of a 401(k) is to defer taxes. Are my tax rates going to be the same as they are now in 33 years? I doubt it.

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It’s already widely known that in order to control and cut down on your spending, you need to know where it’s all going in the first place. I’ve tried my darnedest to keep track of what I’m actually spending my money on since I started attacking my debt, with the use of various categories in my ClearCheckBook account. Fine and swell, but it ain’t worth a damn to just enter the information if you don’t look at the results of all that data afterwards. This is exactly why I’ve always been blowing my budget every month.

Since I started using YNAB, it finally hit me like a brick to the face (Andrew W.K. style) where my spending leaks are. It doesn’t quite make sense, as I just use a general “Misc Spending” category in YNAB for my monthly spending money, but whatever, let’s just go with it. It’s actually more to do with knowing on a regular basis how much I’ve spent for the month, what’s left, and – most importantly – calculating what my remaining cash works out to on a daily basis ($10.68/day in an ideal month).

Now that I’ve got a target number, all it takes is to think about what I spend my money on in a typical day. Queue the screeching brakes sound effect here. Every day, $4.50 or so for a pack of cigarettes (the cheap ones, too! Thanks Obama!), and pretty much every weekday, $6-$7 on lunch at work. There’s ten or eleven bucks right there, every day, which leaves quite a bit of nothing left over for spending on anything else. Gosh, gee, no wonder I bust the bank every month. Genius.

Since I’ve got a simple situation, thankfully it provides for simple solutions. As far as hitting McD’s every day at work, I’ll instead be packing. This used to entail a couple of apples, and before that, a couple of oranges, but they’re not filling. In fact, the apples always left me even hungrier a half hour later. It’s PB&J from now on (assuming I give myself enough time to actually make any before work). That’s a quick $130 or so a month in savings. It should also get me back to not clocking out for lunch, thus recouping all that lost overtime, again, like I wrote about months ago.

As far as the cigarettes, of course the obvious answer is to quit. Been there, read the book, got the shirt… sent a postcard? Lacking the willpower for that option, the next best thing is going back to making my own. I still have my old machine, so all I needed was a pound of tobacco and a box of tubes. I was expecting to spend around $40 on a pound, thanks to the wonderful $24 SCHIP tax (an increase of some 2000% or so). Well, much to my astonishment, many of the manufacturers have stopped dealing in cigarette tobacco for just that reason, and are instead promoting their pipe tobacco lines, as are the stores. Apparently this is old news, and I’ve been living under a rock. I did a double-take when the clerk rang up my order, and assumed I had been the beneficiary of somebody else’s mistake. It took a day for me to realize that I had bought a bag of pipe tobacco. Shit, fuck! Did my research, turns out the only difference is the cut (and learned, as stated above, that I’ve been living under a rock). Sweet! I still would’ve been saving money at $40/pound, but this is just… awesome.

I just ran the numbers, including the price of both the tobacco and the tubes, and assuming a pack a day I’ll be saving almost $100/month on cigarettes now. That’s $230 out of my monthly $325 that can be spent on better things, or worse things, or carried over into my debt snowball. Nitty gritty is below.

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After pounding out my budget last night, I determined that I could very much pay my grandfather the rest of the money I owed him from having my truck towed back from Philly. Not only could, but should, to make my monthly debt repayment quota. So, a check for almost $400 later, and the deed is done.

Owing money to people you live with is a tricky affair. Anytime you buy something for yourself, they always see it, and if you’ve owed the debt long enough, you might start to get questions. I didn’t have that problem, just saying, for future reference. Or rambling. Again.

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I snapped the above photo with my phone as I was leaving my mechanic’s lot. It’s probably the last I’ll ever see of my truck. I went over Friday afternoon to get anything of value out of it, and to say goodbye to my third truck. I forgot my checkbook, though, so when I went inside to tell my mechanic that, he suggested I just pay him with the truck instead. Wanting to just get it over with, and having been awake for about 30 hours by then, I agreed and signed the title over to him so he could sign it over to the salvage yard. I might have lost out on a few bucks in doing so, but oh well. I just wanted to sleep.

Being awake for 30 hours is no easy feat, but is unfortunately necessary sometimes. There was an H1N1 clinic down at the expo center on Friday, as well as a gun show, and we were needed for traffic control. I needed to be there because it’s our are, and I was the only one from our station available, which also meant being in charge. Cold. As. Balls. The only gun show traffic was vendors, so it was pretty uneventful. I eventually threw out some cones and let the signs do their job, due to the cold and wind. Saturday was a different story, as it was the actual day of the gun show, and as such, a total clusterfuck. I wasn’t in charge until a couple of hours after I got there, but when I was, boy did things go downhill. Problem here, problem there, problems problems everywhere!

Anyway, right after signing over my truck, I went straight to the insurance office to let them know. She gave me two options – suspend and keep a credit on my account til 6 months down the road when they’ll call me and ask me if I have a new vehicle yet (or apparently PennDOT will want the plate back, which sucks for them, because I don’t have it), or outright cancellation. I went with whatever, which ended up being the first option. Either way, one bill eliminated. An extra $49/mo for me. I also knocked my gas budget down from $35/mo to $10/mo as a complete guess, so even more extra money for me.

An equation has been added to my spreadsheet to find that magic number for staying on track to meet my 5 year debt elimination goal, and any extra income above that will go towards saving for a new set of wheels. I also realized that, if I’m living off of last months income in the YNAB fashion, I should be making my payments as soon as possible to be applied to the correct month, rather than still sticking to the old “pay a bunch of bills when the check comes in” business that I’ve been doing, since I don’t need to do that anymore. It’ll make for slight interest savings.

Okay, now I’m just rambling, and rambling is boring.

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From December 2 to January 1, my net worth increased an average of $51.82 per day, or $1,554.54 overall, to -$55,047.20. This is a 2.82% increase, and results in a projected zero net worth on 9/1/2014.

Despite overspending, December was a very good month. The second best I’ve had since I started tracking my net worth, apparently.

For the year, since I started tracking in May, my net worth has increased $7,879.62, or 14.31%. Not too shabby. I completely paid off three debts (Comcast, old checking account, and my sister), and reduced my total debt $7,913.48, or 12.24%. I began the year with $64,658.34 and ended it with $56,744.86 in debt. I’ve copied the sidebar for the year below, so that I can start it fresh with 2010 numbers. What is most telling is my progress on my 5 year goal of being completely debt free by May 2014. I’ve been averaging a $226.10 reduction in debt per week. Ideally, from the beginning, I’d be averaging $247.83, which means at this moment I need to average $251.24 for the remainder to meet my goal. That’s an extra $25.14/week, or $108.94/month. I’m sure I can handle that, as there are many easy ways to make up that deficit.

• Back on January 1, 2009, I outlined some goals for the year. Indeed, 2009 ended up being a hell of a lot better than 2008, making a little more forward progress than I made backwards progress that year. At the end of January, I moved out of the old apartment and in with my grandfather, who has been far too nice to me this past year. Then a couple of days later, I sunk a ton of money in to my truck.
• In mid-February, I was wrongly charged with harassment by my former neighbor, as well as sued by my landlord for unpaid rent. Debt Sucks was then linked to from one of the Wall Street Journal’s many blogs. I also finally worked out a payment plan with Capital One, which has been going swimmingly.
• I apparently didn’t do much of anything in March. Screw March.
• April was very eventful. I got an interview with my current employer, had my harassment charge dismissed to the tune of $500, and finally got a job.
• May saw me catch up on another account, set a major goal, get yelled at by a lot of people, and dropping the interest on my CapOne account to zero.
• I paid off my first debt in full in June and worked out a payment plan with Ellis College.
• The savings for this lovely computer I’m using right now started in July, and worked out pretty darn well, and then my truck thoroughly crapped out on me.
• Debt Sucks was linked to from the Philadelphia Examiner in August, and then I firmly declared that blog carnivals suck. They probably still do.
• September was another quiet one. Oh well. So was October.
• I reached my computer savings goal in November, and finally got to build it, right before paying off my sister.

In the entire year of 2009, Debt Sucks had 7,053 visits for 12,636 pageviews. Top pages were my articles about Capital One payment plans. Top non-search referrers were Punch Debt in the Face, PFblogs, Sallie’s Niece, and Early Retirement Extreme. Top search keywords were debt sucks, capital one payment plan, mint sucks, debt blog, and debt sucks blog. Top day for visitors was 78 on August 19, and top day for pageviews was February 26, with 255.

I expect good things for 2010.

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