I’m Back!

Not that anyone actually noticed I was gone, lol. I have a few favorite blogs, like Fabulous Financials and BankerGirl that have provided me with a little entertainment as well as good personal finance info. When they don’t post (Where ARE you BankerGirl???), I am actually disappointed! Luckily I don’t have very many any readers yet.

Update: I actually have a little money in my emergency fund! Yaay! I am halfway there. I have also paid off more than $2,200 in debt. It has been SO hard not to use my credit cards. I actually cut up two of them and I will apparently need to cut up two more. I plan to keep the Capital One because it has the highest limit and I earn cash back.

I have started tracking my expenses several times and I would do fine for a while, then get lazy. I almost lasted the full month of January. I still don’t have budgeting down and I admittedly haven’t attempted to perfect my budget for a while. I am getting my personal finance energy back, so I will start working on it again.

One thing I have noticed since really focusing on my finances is that it irritates me to see people talk about not having money and having so many bills while wasting lots of money and taking no steps to change their habits and get out of their situations. My new Personal Growth challenge is going to be keeping my mouth shut and ending THAT conversation as soon as possible.

That’s all for now! Back to reading Frugal Dad. More great information!

I Want This So Bad!

I know it is not good to lust after things, but I have been lusting after this 50″ TV!

“My name is Ms. Ona Mission and I am a sinner.”

I have spent the last 30 minutes or so comparing prices on big screen TVs while I watch Criminal Minds on DVD on my 27″. The funny thing is, I don’t have cable and I about 35% want it, 65% don’t. I want it for the movies I can watch on various channels and for the ability to record them on the DVR. I LOVE movies and thankfully I discovered the ability to borrow them from the library. I get movies, educational DVDs, and full seasons of TV shows that I like - such as Criminal Minds! Can you tell I love this show? But I digress. . .

With work, college classes, socializing, errands, and just life in general, I don’t spend a lot of time watching TV anymore. I love to kick back some weekends and watch movies and I like them on a BIG SCREEN. As good as I am at putting a spin on things to justify what I want, even I can’t justify purchasing a big screen TV at this time while I still have so much debt. BUT, I spend too much time working to deprive myself of something that I enjoy so much. Why shouldn’t I have what I want? Everybody has their thing that they must have, right? For many women, it is shopping. I’m not a big shopper all the time; I have short spurts. I can go for many months without purchasing a single piece of clothing, jewelry, etc. But I do have my things.

Sooo, here’s my plan: I will designate my ing savings account as my Big Screen TV account. I will continue paying down my debt and (get started on) living by my budget, while sending deposits of any “extra” money (outside of my emergency fund) to my ing account. I am making a promise to myself that I will only pay full cash for a Big Screen TV. I will NOT use credit and I will only use the cash that accrues in the savings account I have designated for my Big Screen TV. (Don’t ask me why I keep capitalizing like it’s a proper noun, lol.)

Debt Payoff Update

I have been wasting money lately and I haven’t been keeping track of my spending at all. Right now I’m feeling a little disappointed in myself because of my spending and eating out. Tonight I updated my Debt Payoff spreadsheet and my spirits are definitely lifted. As of today, I have paid off $1032.43 since 10/22/08. This motivates me! I am surprised that I have paid that much. I won’t dwell on the fact that I could have paid more if I hadn’t been spending frivolously. I’ll just move forward and do better. New debt payoff total (excluding mortgage): $58,920.48.

Budget Troubles

I have always thought of budgeting as something that is very easy to do. So easy in fact that I could just do it in my head; no need to write it down, right? Wrong! So once I finally admitted that I need to write down a budget, I started Quicken, Microsoft Money, used several downloads and calculators, even a Microsoft Works spreadsheet. I honestly haven’t made much of an effort to keep any of them updated. Sigh. . .

It seems like I get started, then get overwhelmed with what category to put everything in, how to include semi-annual expenses, variable expenses, etc. so I just quit. Not good. What I HAVE been doing is updating my debt payoff balances on an Excel spreadsheet I created. Since I have been successful with this, I will work on creating my own Budget spreadsheet in Excel.

Lack of self-discipline is a major problem for me. My goal this week is to work on time management and actually start scheduling in time to work on my finances. I need to get used to doing things a little at a time instead of just quitting if I can’t get it ALL done in one sitting. This attitude carries over into more areas of my life than I care to admit. My goal is still to have a budget completed by the end of the year.

Counting Blessings

When I think of my financial goals and where I want to be vs. where I am right now, it is easy to get discouraged. So whenever I start feeling like I have set out to climb Mt. Everest with no food, equipment, oxygen, first aid kit, etc., I marinate for a while on what is GOOD with my finances. Here goes:

• No 30-day lates in more than 3 years. You just have to know my financial history to understand what a big deal this is.
• I am a homeowner (okay, a homebuyer). I did A LOT of research before buying AND I was blessed to find a good, honest mortgage broker. My interest rate is fair, payments are more than affordable, and I have not been touched by the current crisis.
• I have a stable job and my income will double within the next month – allowing me to pay down my debt much quicker than I thought was possible.
• I am resourceful. I have a couple of little (legal) side hustles that bring in supplemental income. I plan for this to increase as I become more organized and focused.

Thank God for the power of positive thinking! I have just never been one to focus on the negative for long. It is too draining. Give me an evening to sulk, then I’m up the next morning with a PLAN!

Saving for Retirement vs. Paying Off Debt

This has been an ongoing personal dilemma for me: contribute to my 401K or focus on paying off my debt. In previous years, my employer matched up to 6 percent of my contributions, so I contributed that much for the free money match. My current employer does not contribute at all. At one point, I actually stopped all 401K contributions with the intention of putting all the “extra money” toward paying off my debt. My thinking was that what I was earning on my retirement account was less than the interest I was paying on my credit card debt, so it made more sense to knock out the debt first.

Fast forward to today when I have paid off and run up the same debt a couple of times over, I now believe that I need to contribute something to my retirement account regardless. The contributions are also pre-tax, so not contributing was not leaving me with as much “extra money” as it would seem. So I now contribute 5% to my 401K. As I pay down my debt and establish a decent emergency savings, I plan to gradually increase my contributions to 10%.

My employer also offers a Roth 401K. Although I’ve read up on it a little, I still can’t quote the difference between a Roth IRA that I might open at my bank or somewhere and the Roth 401K. I used a calculator online and, based on my age (35) and a few other variables, it was determined that the 401K would be slightly more beneficial to me – meaning at retirement age, I would have more money in my 401K account than in my Roth 401K account – and even with being taxed (in the lower tax bracket), I would have more 401K funds.

I plan to start a Roth IRA in January 2009. When shopping insurance quotes recently, I met a State Farm agent I liked and, although I decided against State Farm for my home & auto insurance, I am considering them for my Life and a Roth IRA. Between now and then, I will continue to research. I have SO much to learn!

A Lesson Learned

I’m still not totally back on the wagon yet, but today I’m not feeling so bad about it. In hindsight, I believe my initial plan was too strict. To go from spending money whenever I wanted on whatever I wanted to spending NO money at all – except for absolute necessities was . . . I suppose like a crash diet. So I’m living and learning. I need to gradually transition to a healthy financial lifestyle that will last – instead of trying to go cold turkey, then crashing. January 1, 2009 is the new deadline to have my plan tweaked and new, reasonable goals set.

I read several personal finance blogs, but have yet to find one where the blogger started in a situation as bad as mine. If anyone is aware of one, please send me a link. I need the motivation!

Stupid Tax – I Have Fallen Off the Wagon

I have had a major setback. Several little setbacks actually over the last week or so, but I’ll roll them all up into one and call it a major setback. For starters, I stopped writing down every purchase. At first I figured I would just put the receipts in my wallet and write everything down later. At some point, I bought some fast food (setback #1) and didn’t get a receipt (setback #2) and forgot the amount so I didn’t write it down (setback #3). It was downhill from there. I’ve eaten out several times over the last week, plus I have bought (and eaten) a lot of junk food. (setback #s 4 – 10). Still PMSing? I dunno. The colder it gets outside, the more comfort food I seem to want.

I allowed my checking account balance to get down to $3.27. I figured it would be okay since payday was in a couple of days. Well a check came in that I wrote months ago when I sent off for my birth certificate and forgot about. What’s so bad is that the check was for $10.00. Cost me $36.00. No excuse here. I don’t write everything down in my register, I just check my bank accounts to make sure everything has cleared online every day. I am SO mad at myself for paying this STUPID TAX! Even worse is that I had money in other accounts! (I know… I know.)

Did I not recently write a post listing tips on how to start getting out of debt??? I’ve got to get myself back on the wagon. I can’t even continue with this post. I don’t want to spend any more time thinking about the dumb things I’ve been doing lately.

10 Steps To Begin Your Rise Out of Debt

I am writing this as much for myself as for anyone else who might find it helpful. I fully intend to read over the list regularly as a way to stay on track.

• Make a list of EVERY debt you owe. Credit cards, medical bills, loans, mortgage company, people. . . EVERY bill! It may be ugly, but if you’re serious about getting out of debt, you need to know exactly how much debt you’re in.
• Create a budget, a spending plan, or whatever you prefer to call it. You basically plan how your income will be spent. Fail to plan and you plan to fail – I believe it. I have told myself for years that a budget is not really necessary; that I pretty much had it all in my head. I didn’t want to be limited to a number I had down on a piece of paper for each category. I am a spontaneous free spirit! I can’t confine my spending to a box! Well fast forward to thousands of dollars in debt later and the wonderful scent of coffee is drifting up and tickling my olfactory senses. The dreaded budget allowed me to see that my outgoing was several hundred dollars more than my incoming. How in the world have I been making it? My side hustles, taking more than I needed for student loans, monetary gifts from my parents, and robbing Peter to pay Paul. If you’re not in debt with a long list of creditors, you may not need a budget, but my opinion is that those of us who are still in debt DO.
• Track your spending – every penny! This is the first time I have actually stuck with it and it really does help to see where my money is going and show me where I can cut back. Also, if your first budget looks like mine and your money runs out before the month does, writing down every little purchase will also help you to change your mind about making some of those purchases!
• Don’t carry credit cards in your wallet. You know why.
• Cut up and discard all but one credit card. It is too tempting to use the cards once you start paying the balances down. I kept my card with the highest limit. Now I am sure some people will disagree with this, but with no emergency fund, unfortunately that one card IS the emergency fund until my financial situation improves. The important thing is not to carry it and use it for any non-emergency.
• Try to avoid temptation. If you know you are a shopaholic, then don’t agree to meet your friends at the mall – unless you can stick to spending only what you’ve already budgeted for this.
• Shop with a list. Whether you’re going shopping at the grocery store or at Home Depot. Go in with a list and stick to buying only what is on your list.
• Look around to see where you can shave costs. For instance, when I look around my living room right now a few of the things I see are my cell phone, TV, and books I purchased recently. I have already examined my cell phone plan to make sure I’ve got the least expensive for what I need. I cut the cable off and don’t miss it. I purchased books that I could have – and SHOULD have – borrowed from the library. I love books and like to add to my collection as part of my home decor. Well, the decor is just gonna have to wait until I get my debt under control. No more buying books for a while!
• Take your lunch to work. Right now I find this much easier said than done, but I also believe that the longer I do it, the more planning and preparing my lunch at home will become habit.
• Set mini goals. Having something to strive for gives us motivation. Having a realistic mini goal helps keep us from getting discouraged because we can actually see the light at the end of the tunnel. One of my mini goals is to save $1,000 to begin an emergency fund. Another is to pay off a credit card that has a balance under $300.

Once I feel that I have mastered these baby steps, I will delve into areas such as my 401K, Roth IRA, insurance, investing, etc.

Personal Finance Frenzy

Since I decided to reinvent my financial self, I have become almost addicted to personal finance blogs, books, news, websites, and pretty much anything on the subject. Little by little, I have listed each and every one of my debts, balances, interest rates, etc. I even opened a new bank account for a new beginning and have almost completed listing all of my bills in the online billpay. I must say it feels great to organize my financial mess.

As I entered my bills into online billpay, I also created an Excel spreadsheet with all of my monthly bills and creditors, including names, addresses, account numbers phone numbers, websites, logins. I now realize how frenzied I’ve been while trying to keep up with it all over the years. Having it organized is freeing. I don’t believe having more money makes some people happier because they can have more “things,” but because they feel less stress and lack of control.

It feels great to have shredded the pile of invoices and statements after entering the information on my computer. After I pay each bill and enter the amount on my spreadsheet, the formulas I set automatically adjust all of my balances so I can watch my total debt decrease.

The more I learn, the more I want to learn. Knowledge really IS power! As I continue to track my spending, actually seeing how much money I spend on certain things is the surest way to get me to stop throwing away so much of my hard earned money!