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I have this handy line in my goals table that tells me how far on or off track I am from hitting my 5 year goal. For quite a while, I’ve been behind. I’ve been wondering for months what I can do to bring it back in balance, if not get ahead. The only thoughts that really came to mind was to hope for some random windfall (bonus at work, hit the lottery, the usual) to throw at my debt and get those numbers lined up. And then it hit me the other day – I’m doing it wrong. Or backwards, to be more specific.
The bottom line is the one we're looking at. Do note that I don't really have $35 in an emergency fund, it's actually zero, that's just there to prevent errors...
Backwards, you say? Well, since this is a time based goal, as well as a necessary one, my debt repayment should be the primary, rigid category in my budget, not the flexible one. All this time, I’ve kept all my spending the same (increased it, even) and adjusted my debt repayment based on “what’s left.” This is the completely, utterly wrong way to go about it. It would, however, be the appropriate method for saving for “want” goals, such as when I was saving up to build my computer. Instead, my discretionary spending should be the variable category, adjusting as need be to still meet my debt goals.
Obviously, there must be limits. I can’t just plan to spend no more money this month and expect it to work, because that would just be setting myself up for failure, which is the result of all unreasonable expectations. Right now, the difference between those two numbers in that table is $80.06. However, it’s not even the middle of the month and that table automagically updates itself every day. The real benchmark is where that number is at the end of the month, before I start making all my payments. If I pretend that today is May 31st, it goes up to $146.66. However, since we’ll then be halfway through the year, I’m pretty sure I’d have to double that amount in debt payments to bring myself back up to par by the end of the year. $293.32 in extra debt payments every month is a pretty tough goal, considering my discretionary spending budget right now each month is $325.
Maybe I’ve been a very bad boy, and haven’t noticed. If anything, I wish I would have realized this much sooner, but better now than later. Without working out some sort of crazy math, I think I’m going to just shoot for $50 or $100 extra every month for now, and see how that number changes. I also need to keep track of where it’s at at the end of every month, to see what sort of progress I’m making in getting back on track. Another thing I’ll be doing is changing the setting in YNAB so that when I blow my miscellaneous spending budget, it automatically reduces my budget for the next month, rather than letting me get away with murder.
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Lacking employment for a full calendar year, my taxes didn’t really tell me how much money I make. My 26th paycheck sure helps with that. Over the course of a little over a year, I made about $25,500, and took home about $19, 500. Knowing this generates an obvious goal to make more money, but that’s a goal I honestly don’t feel like setting or tracking. Sorry! To appease the masses, I’ve generated this handy graph below to pore over and entertain your visual senses. A graph in which I completely forgot to adjust the y axis on (one of my pet peeves).
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Late last month, I got a call from Global Credit & Collections offering to settle the balance on my Capital One debt. They termed it a “debt reduction,” but same thing. Based on my $6000 balance at the time of the call, they were offering to reduce it to $4800 if I could pay half of it on the spot, and then we would work out a payment plan for the remainder. I turned it down.
I knew this call was coming, and I knew I should have been saving for the day, but that just wasn’t happening, just like pulling $2400 out of my ass wasn’t happening. In the grand scheme of things, even if I had that much money in my account for other things, I’m not sure if a $1200 savings on an interest-free debt would have been worth screwing myself over for a few months. I’d basically be starting over from scratch.
I also nearly agreed to increase my monthly payment from $200 to $500. I had my budget open during the negotiations, so I knew I might be able to swing it, but would I really want to? Probably not. I finally told the guy that we should probably just forget the call ever happened, and to stick with my current payment arrangements for now.
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From April 3 to May 1, my net worth increased an average of $28.51 per day, or $798.27 overall, to -$51,221.81. This is a 1.56% increase, and results in a projected zero net worth on 9/9/2014.
This included scooter tire replacement and kickstand repair, so I’ll take it. More to talk about soon (oh boy!), and remember, patience is a virtue.
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From March 3 to April 3, my net worth increased an average of $28.92 per day, or $896.52 overall, to -$52,020.08. This is a 1.72% increase, and results in a projected zero net worth on 8/22/2014.
As recently discussed in last month’s comments, my financial situation is pretty damn stable right now, hence the lack of posts. I’m running on autopilot, and instead of staring at numbers and fiddling with things every day, I just don’t think about money much anymore. Which leaves little to write about. That’s a good thing, right?
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