Day 59 | $35,083 paid | $55,634 till freedom
The dust from my financial activities in fiscal October (Sep 26 — Oct 25) has settled, and here’s where I stand:
- Starting Cash: $3,500
- Starting Student Debt: $59,267
- Income: $6,698
- Expenses (including regular loan payments): $3,698
- Debt Paid Down (excluding interest): $3,633
- Ending Debt: $55,634
- Ending Cash: $3,500
- Total Assets: $63,885
- Total Liabilities: $55,634
- Net Worth: $8,251
Predicted student debt at end of June 2012 (i.e., delta to goal): $5,759
I contributed $3,633 to debt in October, equivalent to 54% of my income. This was done through sacrifice. This was done by saying NO.
Quite frankly, I was frustrated and disappointed by all of the comments I got on my last post from people encouraging me to fly out to Michigan for Christmas and to attend my friends’ wedding in Chicago.
I know the commentors meant well and had only my best interests at heart, but dammit, people, this is exactly what got the country into the current debt crisis. We don’t know how to say no. We don’t know how to sacrifice. We don’t know how to suffer a little. As Mad Magazine once said, “The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.” I can think of 101 reasons to go home for Christmas and to go to my friends’ wedding, and the comments captured many of those reasons: “ten months is an arbitrary timeline”, “once-in-a-life-time event”, “can be done on the cheap,” etc.
The bottom line is that I set a goal, and unlike the complete idiots illustrated by the chart below, I will do the needful, and to a large extent, I’ll do it no matter what, as long as it’s legal/ethical/moral. I will not be swayed by an over-commercialized holiday or the Hallmark-generated hoopla of nuptials.
And for those of you who still don’t understand me, let me throw you a bone: this mission I’m on is not rational to begin with, so don’t expect completely rational decisions from me. Expect focus–maniacal, and maybe even admittedly myopic focus.
Assessment of Cost and Revenue Initiatives
I want to take a moment to assess–in terms of wins and losses–how I’m tracking to my cost-cutting and revenue-increasing initiatives that I laid out in Brass Tacks.
- Debt Snowball – WIN — I’m down to one loan at $818 a month. I have $239 ($53 + $186) in my debt snowball.
- Entertainment - LOSS – I budgeted $50/mo and had been trending at $1,400/mo in entertainment at a time when I was budgeted for $850/mo prior to NMHD. For October, I came in at $157, which is not bad considering $100 of it included a four-day trip to Ann Arbor and a three-day trip to Rochester, MI.
- Stop 401k – WIN – I was banking on an extra $550/mo, and I got $575 in October.
- Groceries – WIN – I tried to trim my budget from $330/mo to $280, and $276 is where I landed for October. Once again, I didn’t actually change my shopping behavior to make this happen, so it was probably just a function of not buying any non-regular items like razor blade cartridges or contact lens solution that tend to inflate the grocery bill.
- Car Fuel – WIN – I budgeted $160/mo, had been trending at $225 prior to NMHD, and I came in at $160 for October. I’m using more discretion when it comes to taking long trips, and since my cars were parked for two weekends while I was out of town, I naturally used less gas.
- Electricity – LOSS – I budgeted $68/mo, and I came in at $97. I have since updated the budget to spend $100 per month since the roommates are adding to the energy consumption and that won’t be changing in the future.
- Lunch at Work – WIN – I budgeted for $0/mo, hoping to cut out out my one weekly lunch out. I spent $0 in October. My suppliers at work paid for a couple of lunches out, which was great.
- Dry Cleaning – WIN – I budgeted $20/mo and had been trending at $40. I came in at $0. My slacks didn’t get too wrinkled this month, and they passed the sniff test.
- Automotive – WIN – I’ve budgeted $200 for a couple of oil changes and miscellaneous things, and I spent $0 in October.
- Medical – LOSS – I’ve budgeted $10 for the next ten months to spend on a co-pay for my physical, but I forgot to budget $10 for a flu shot, which I got in October.
- Clothing – WIN – I’ve budgeted $0 for clothes and didn’t buy any in October.
- House Maintenance and Repairs – WIN – I budgeted $100 for three exterminator appointments during the next ten months. I spent $103 on the exterminator in October.
I did spend $135 on non-categorized, non-budgeted items, but this was primarily for the $132 driving surcharge.
Water — LOSS — This was not a cost-cutting initiative, and I budgeted $55/month. However, I’ve been spending around $105/month due to the drought and my roommates. Like I did with electricity, I’ve updated the budget to $100/month since I don’t see this cost declining in the future.
- RSUs – June timeframe; no comment
- Raise – LOSS — I originally budgeted a 10% raise for an extra $500/mo net of tax beginning in October. I got the new job/promotion but at only a 6% raise. I have adjusted the budget to reflect a $330 upside in October and beyond, but due to administrative delays, this raise has not hit my paycheck yet.
- Tax Return – April timeframe; no comment
- Bonus – May timeframe; no comment
- Landscaping Biz – WIN – I netted $379 for the landscaping job Michael and I did in October. I was expecting $0 income, and I’m continuing to expect $0/month–all revenue from this biz will be pure upside and will go to working the ~$6k delta to goal down.
- Roommate – WIN – I estimated $450/mo for Sarah and $0 for John since he’s leaving at the end of November and he already paid the month as part of his first month/last month initial rent payment.
- Entertainment @ $50/month
I’m flying out to Ashville, NC for a wedding and will be gone Friday through Sunday. The hotel will be free and so will the open bar and dinner at the wedding, but that’s about it. I’m giving a gift of $50.
I’ll need to find a replacement roommate in November for December onwards. All revenue from the landscaping business is incremental, so it’s not a challenge by definition.
All in, I spent $458 more than I should have (primarily due to entertainment, driving surcharge, electricity, and water), and I made $48 more than I expected thanks to the landscaping job, so I paid down $419 less than I wanted to in October.
Because of over-spending in September and October, I am $1,070 behind my original debt pay-down plan.
After adjusting the projected budget for $100/month of electricity and $100/month of water through the remaining eight months, as well as the removal of my $600 Christmas travel budget, I am looking at a gap to my debt pay-off in June of $5,759. To put that in perspective, it was $5,453 at the end of September. Despite the sacrifices, I’m going in the wrong direction.
The full ten-month outlook is below and located here. Note that you’ll probably have to click on the image below twice–once to open, a second time to zoom in.