Progress Report: Month 3

Day 88 | $50,944 paid | $39,773 till freedom

The dust from my financial activities in fiscal October (Oct 26 — Nov 24) has settled, and here’s where I stand:

  • Starting Cash: $3,500
  • Starting Student Debt: $55,634
  • Income: $19,722
  • Expenses (including regular loan payments): $4,238
  • Debt Paid Down (excluding interest): $15,861
  • Ending Debt: $39,773
  • Ending Cash: $3,500
  • Total Assets: $47,925
  • Total Liabilities: $39,773
  • Net Worth: $11,652

Predicted student debt at end of June 2012 (i.e., delta to goal): ($4,056)

In other words, I will be ending June with a $4k surplus. I’m on track to hit my goal!

First Thoughts
Results this month were mixed. I sold off the Murano and the motorcycle for $9,500, and dollar-wise, I’m past the halfway point of my debt paydown. However, I overspent by $921 across several categories: cell phone, entertainment, groceries, lunches at work, dry cleaning, electricity, auto repairs, and house maintenance. If I continue to overspend by almost $1k each month, the impact of the sale of the Murano and CBR on my debt paydown plan will be almost completely diluted when, in fact, it should be responsible for pulling in my timeline.

The bottom line is that I need to get more disciplined with my spending.

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. Progress to date is detailed in the spreadsheet below. Click once to open and once to zoom.

 Cost-Cutting Initiatives

  • 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 November, I came in at $336. Even considering the $178 I spent at my friends’ wedding, this number is completely out of profile, and I need to get much more disciplined here.
  • Stop 401k – WIN — I stopped my 10% contribution and I’m seeing a healthy bump in my paycheck.
  • Groceries – LOSS – I tried to trim my budget from $330/mo to $280, and $340 is where I landed for November. As I’ve mentioned in previous posts, I haven’t changed my shopping behavior, and the only way I was able to land on-budget in this category for the past two months was by delaying “big” non-monthly purchases like contact lens solution. Well, this month I had to stop delaying the purchases of certain things like mouthwash and conditioner. I bought them in economy size for maximum savings, but the overall price is still high and makes a noticeable dent on the grocery budget when they’re purchased.
  • Car Fuel – WIN – I budgeted $160/mo, had been trending at $225 prior to NMHD, and I came in at $147 for November. I think that because I’m working more hours during the week, I’m not driving around and doing as much as I typically do, so I’m seeing a decrease in my fuel consumption. I’ve gotten rid of the Murano at roughly 19 MPG, but I’ve also gotten rid of the bike which was my daily driver and got about 40 MPG.
  • Electricity – WIN – I was budgeting $68/mo, then I changed it to $100/mo because the bills were regularly coming in at around that level due to the roommates, and this past month I came in at $88. The cooler weather is definitely helping here.
  • Lunch at Work – LOSS – I budgeted for $0/mo, hoping to cut out my one weekly lunch out. I spent $33 in November to have four lunches with old co-workers and friends that I haven’t seen in awhile. I think that going forward, I’ll change up these lunches to coffees, even though I don’t drink coffee. I’ll just get something else.
  • Dry Cleaning – LOSS– I budgeted $20/mo and had been trending at $40 before NMHD. I came in at $0 in October and $38 this month because my slacks weren’t passing the sniff test anymore, and I had some shirts and a blazer to dryclean. I was initially planning on ironing my own shirts when I started this mission, but then I remembered that I ruined several shirts when the dyes ran together in the washing machine. I’m going to leave it to the experts because I’ll save a lot more money that way in the long run.
  • Automotive – LOSS – I’ve budgeted $200 for a couple of oil changes and miscellaneous things, but I spent $682 getting the S2000 repaired. The overall spend here is closer to $400, though, because I got some money back when I canceled my motorcycle insurance.
  • Medical – WIN – I’ve budgeted $10 for the next ten months to spend on a co-pay for my physical, and I’ve spent $0 on medical-related things this month.
  • Clothing – WIN – I’ve budgeted $0 for clothes and didn’t buy any in November.
  • House Maintenance and Repairs – LOSS – I budgeted $100 for three exterminator appointments during the next ten months, but I spent $121 installing soaker hoses to water my foundation during the drought. $121 now, or thousands for foundation repairs later. The original soaker installation estimate was $75, but that didn’t include topsoil. I also bought a chair mat for my room which I’m including in my house maintenance category.
  • Water — LOSS — This was not a cost-cutting initiative, and I budgeted $55/month at the beginning of NMHD. I changed it to $105/month in October due to the drought and my roommates, and I came in at $121 in November. I’ve since turned off the sprinklers as we head into the winter, so I should start seeing a decline here.


 Revenue-Increasing Initiatives

  • RSUs – June timeframe; no comment
  • Raise – WIN — The 6% raise is coming through on my paycheck.
  • Tax Return – April timeframe; no comment
  • Bonus – May timeframe; no comment
  • Landscaping Biz – NEUTRAL –  I was expecting $0 income from this business, and I got none. We do have a very small job lined up for Saturday morning.
  • Roommate – WIN – I estimated $450/mo for Sarah and $0 for John since he was planning on leaving at the end of November and he already paid the month as part of his first month/last month initial rent payment.

I want to take a minute to explain why my post-tax salary at around $10k is so high this month. I receive 26 paychecks per year, but I balance my books every month. Ten months out of the year I’ll get two pay checks each for 20 paychecks, and two months out of the year I’ll get three each to make up the total of 26. November happened to be a month with three paychecks. Between my job, the vehicle sales, and my roommate, I took in just shy of $20k this month, and with that, I was able to pay down almost $16k in debt.

Thanks to a very decent bonus I got earlier this year, I recently hit the $107k cap for social security contributions in CY2011. So that’s an extra $160 or so that I’ll be seeing on the next few paychecks for the remainder of the year, which is pretty awesome.

December Outlook

Cost Challenges

  • Entertainment @ $50/month

This will be a challenge every single month just by virtue of its small size. Since entertainment is 100% discretionary, however, I’m going to leave it as a stretch goal because it really could be $50 if I simply chose to make it $50–nobody has a gun to my head forcing me to pay more than $50 in entertainment per month.

I’m going to need new tires for the S2000 since I’ll be driving it in the rain and the current tires are pretty much bald. That’ll be about $200.

I didn’t budget for Christmas gifts fo my sister and parents. I’m not sure how much I’m going to spend here. I typically spend around $75 to $100 each, but I think I might Scrooge it up a little this year. It’s not like I’ll be there to see the disappointed looks on their faces as they open up my crappy gifts for them! (Mom and Dad, I’m just joking! Sort of…)

On the flipside, I didn’t budget for receiving any Christmas money,  but I’ll probably get something from my grandparents.

By the way, this is one of the perks of being single–no need to buy any crazy expensive gifts for the GF.

Revenue Challenges
There are no revenue challenges in December. The roommates are staying on in December, my 401k contribution remains zeroed out, and there is no expected revenue associated with the landscaping business.

Final Thoughts
According to my ten-month outlook (3 months of actuals, 7 months forecasted), I will exit May owing $1,176 on my debt in June, and I can contribute up to $4,659 in June. So, I should be done with my debt somewhere during the first week of June. Exciting stuff!

The next few months, however, will see pay-offs closer to the October scale of $3k rather than the September payment of $30k or this month’s payment of $16k. The next big bump won’t come until May when I get my end-of-year bonus. So for these next five months, I’m going to have to hunker down, instill some strict spending discipline, and focus.

The full ten-month outlook is below and located on Google docs here. Note that you’ll probably have to click twice on the image below–once to open, a second time to zoom in.

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