Progress Report: Month 5

Day 153 | $61,994 paid | $28,723 till freedom

I just paid the Fed $5,083 from my January income. Dollar-wise I’m at 68%, time-wise I’m at 50%.

Here’s how January played out:

  • Starting Cash:$2,500
  • Starting Student Debt:$33,601
  • Income:$7,953
  • Expenses:$2,870
  • Cash Paid to Debt: $5,083
  • Accumulated Interest: $206
  • Ending Debt:$28,723
  • Ending Cash:$2,500
  • Total Assets:$55,684
  • Total Liabilities:$28,723
  • Net Worth: $26,961

Predicted student debt at end of June: ($5,487)

In other words, I’ll have a surplus of $5.5k at the end of June at my current rate of paydown. In fact, according to the projections, I’ll be exiting May with my debt completely paid down and a surplus of $1,319. Anything can happen in five months, of course–from a smaller-than-expected bonus to an unexpected disaster–so I’m not going to bank on any of these projections for now.

High-Level Analysis
I spent $525 over my budget, but thanks to unbudgeted Craigslist sales of $345 and a new renter who paid first and last month’s rent in January, I brought in $903 of income over my budget.

While 50% timeline and 68% debt paydown seem like reassuring numbers, I can’t expect any more huge pay-off months like September where I wiped out my life savings and November where I sold my second car and motorcycle. I’m looking at a series of $4-$5k monthly paydowns, or $22,500 till the end of June. The one exception to this is my bonus, which is a huge, huge bogey. To hit my goal, it needs to be at least $6k or so after tax, and all of this hinges on not experiencing any disasters or anything else that will set me back financially.

Assessment of Expenses and Revenue
I want to take a moment to assess my spending habits on a line-item basis. Progress-to-date is detailed in the spreadsheet below. Click once to open and once to zoom.

Analysis: Expenses

  • Insurance — $0 — After months and months of $171 insurance payments, I’ve sold off my second car and took collision off the S2000, and I’ve paid enough towards the once-high premium in previous months that I slid by without owing a single dollar in the final month of the six-month policy. Yay!
  • Internet — $9 — My internet wasn’t working for a few weeks, but I was so busy at work that I had zero time to come home and be on-site for the AT&T repair guys to come and fix it. I borrowed internet from the neighbors as a stop-gap until it got fixed. I then asked AT&T to pro-rate my charges for the month, which they did.
  • Cell phone – $114 — I budgeted for $85 since my typical bill has always been $85 for unlimited data and text and 450 minutes, and I used to go under 450 minutes every month. But now that I’ve been promoted to a new role, I find myself on my cell phone a lot more and actually exceeding my minutes at 40 cents a pop, so that explains the $114 bill. The company can give me a phone, but it’ll be a dumbphone and the extra complexity it’ll bring to my life isn’t worth it. This is the third month in a row where I’ve gone well over $85, so I really need to get better at monitoring my minutes.
  • Mortgage — $1441 — Fixed and within budget
  • Haircut – $17 — God bless twelve-dollar Tuesdays @ TGF. $12 + $5 tip = $17. I have a regular haircutter now, and I feel like I get extra attention from her thanks to the 40% tip. Totally worth it. Big spender!!!
  • Energy — $32 — Same story as last month: I budgeted for $100, so this is a huge win no matter how you look at it. The past few months starting in September the bill has been $124, $97, and $89. The AC hasn’t been on in weeks, and it’s finally being reflected in the bill. It would have probably been closer to $25 or $30 without the roommates, but $32 is still super-low.
  • Water — $0 — My fiscal month ended the day before I got the bill for $62. I’ll pay this in February along with the February bill. So a gain this month, but a definite loss next month. That being said, $62 is good considering I’ve been budgeting for $100.
  • Gas — $42 — A loss relative to my $22 budget. This has gone up due to the cooler winter months and is being offset by a lower electricity bill since I haven’t been running my AC…or my furnace, for that matter.
  • Entertainment — $380 — A loss relative to my budget of $50. I’m going to dedicate a post to this soon. It sucks and I’m not proud of myself, but it is what it is. I’ll get into later. For now, I’m chalking it up to the fact that I had a week off from work full of idle time as well as the NYE festivities.
  • Groceries — $377 — A loss relative to my $280 budget. I don’t know how to hit the $280 budget. It’s not like I’m buying stuff I don’t need. I’d love some input from readers on this–is $377 a lot for a single guy in terms of groceries? This includes non-food items like new heads for my Sonicare, which cost $20 for a pack of three, as well as contact lens solution ($13?), etc.
  • Lunch at work — $0 — A win relative to my budget of $0. It seems like every other day my friends are getting together for lunch during work. I don’t have the money, but more importantly, I don’t even have the time–work has been nuts lately; meetings and email consume my lunches.
  • Fuel — $94 — A win relative to my budget of $160. But I’ll be honest, I bought about $40 of fuel at the tail-end of fiscal January that didn’t hit my credit card until the first day of fiscal February. I still would have been under, though.
  • Drycleaning – $69 — A loss relative to my budget of $20. I had some important meetings during this month and I needed to dryclean a suit and some blazers.
  • House — $95 — A loss relative to my budget of $0. This is the plumbing help I talked about here.
  • Car — $8 — A loss relative t0 my budget of $0. I had to patch the convertible top, which is better than dropping $2k for a new one.
  • Gifts — $42 — Apparently there was an issue with shipping my mom’s Christmas gift to her, so I didn’t get charged in December and I had to redo the transaction in January.
  • Unbudgeted — $150 — I had to refund John, the former roommate, his security deposit.

My expenses for the past five months averaged $3,176 while my expenses during the 15 months prior to NMHD averaged $7,754.

Analysis: Revenue

  • Salary — $6,248 for two paychecks — A win relative to my budget of $6,200. I was enjoying the paychecks I got in December that didn’t have social security tax withheld since I had already hit the income limit. Those days are gone for now.
  • Roommates — $1,360 — A win relative t0 my  budget of $850. I got a new roommate in January and he paid first and last month’s rent plus a security deposit.
  • Craiglist — $345A win relative to my budget of $0, but this was just offsetting some expenses that weren’t in my budget (e.g., entertainment, plumbing, etc.). I talked about the reason for doing the sales here and the outcome here.

February Outlook
Cost Challenge: I’ve decided I won’t be adjusting my budget for the rest of this journey. I’ve been missing my cell phone, entertainment, grocery, and drycleaning budgets like clockwork. Some of that is due to a piece of them being unrealistic to begin with. I thought I would be hardcore about eating ramen noodles, never going out with friends, and ironing my own clothes, and that’s how I’d hit the entertainment and grocery and drycleaning budgets. Well, I haven’t been able to bring myself to do any of that yet, but I don’t think I’ll try, either. If I fail in this mission, I can point to this paragraph as the reason why. My health and friendships are more important than a financial stunt, and I forgot I once ruined about five shirts when I washed them myself and the colors all bled. (That being said, I really don’t think that budget misses in these categories will be the reasons I fail, if I do.)

Revenue Challenge: My rooommate Sarah signed a six-month contract, her sixth month is February, and she has already paid her last month’s rent, so I might not get any rental income from her this month. I’ve invited her to stay on through June, when I expect to have the debt paid down, and she’s considering it. Michael and I don’t have any landscaping jobs lined up.

Final Thoughts
Halfway done time-wise, 68% done debt-wise. I have to admit it: for all of my talk about Zen Buddhism and focusing on the present and living in the moment, I’m getting extremely anxious as I cross the halfway point of this journey. I can’t stop thinking about the end, when I can publish my last post and start thinking about  building my wealth instead of reducing my debt. I also think about the bonus bogey daily. What will it be? What will it be? What will it be? I’ll find out some time in March, but that seems like forever.

Here’s the full ten-month outlook (click once to open, once to zoom):


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17 responses to “Progress Report: Month 5

  1. Kevin

    1. Can you join a Costco? Costco has great deals on contact lens solution, for example. That might be a great way of getting groceries under control. If not – how about eating less meat, more rice and beans, etc.?

    2. You can get a pre-paid Android phone from Boost mobile that would likely be much less than $85/mo. Sell your current phone to cover any early termination fees. If not, you should definitely switch to a better rate plan so you don’t get hit with overages. Or see about (if you have an iPhone or Android) making calls over Skype and using Google Voice or Kik as a text message replacement.

    • Kevin

      Also, the Sonicare heads can wait. Just get a $.99 store brand toothbrush. Works the same (at least for six months).

      • You’re right, for the typical person that would have been a good expense to defer. However, I don’t like to mess with my teeth–I got cavities once in awhile before I had the Sonicare, and ever since I’ve gotten it, I haven’t had any. A cavity and a cheap toothbrush cost more than new heads, so that’s how I’m justifying it 🙂

    • Haha, I’m reading your good ideas and it’s making me realize how set in my ways I am. I’ve been sitting here for five minutes trying to make reasonable excuses about why I shouldn’t take you up on your suggestions, and I can’t come up with anything other than: I don’t want to! I don’t want to change providers! I like my phone and I like Verizon–I’ve been using them every since I couldn’t get a signal in my dorm room at Harvard with AT&T and had to make phonecalls while standing in a snowbank outside the door. I don’t want to shop somewhere else! I always go to HEB right down the street every Friday after the gym. I don’t want to drive ten miles to Costco. It’s interesting how I’m willing to make certain sacrifices, but completely unwilling to make others. I think a part of it is being set in my ways, but it might also be due to the fact that I feel like I’ve made enough changes in my life for this ridiculous challenge–sold my second car, sold my motorcycle, sold my roadbike, I have two roommates (and I’d much prefer to live alone), I take a flask downtown on the weekends, I go on uber-cheap deates. It’s just like…enough is enough! I can’t take it anymore!!!!!!! Haha 🙂

  2. Are you really going to stop blogging after your debt is paid off? I know blogging really helps me keep my finances in order, so it may help you to keep going. You seem to be getting some value out of it and to have some loyal readers!

  3. Cheryl - no trust fund here either

    Love your posts, your discipline and tracking (slicing and dicing and making conclusions) is admirable!

  4. Sarah

    I have a few thoughts on this post:

    1. Keep up the good work, you are doing amazing so far and the end is so close!

    2. Instead of joining Costco as Kevin suggested, see if any of your friends have a membership and tag along with them. I’m guessing the 50$/yr membership is out of the budget.

    3. $377/mo on groceries doesn’t seem too bad considering you are eating all your meals at home and you are including non-food items in that figure. Without seeing one of your grocery receipts, the only advice I can give is to try to use coupons and buy generic items.

    4. Those coupon books have lots of coupons for dry cleaning. Perhaps that might help bring dry cleaning costs down.

    5. Don’t beat yourself up about going outside the entertainment budget. As Ramit says it is okay to spend on the things you love. You love being with your friends and being healthy so don’t worry about the lack of ramen in your diet.

  5. $377 seems like a lot for groceries to me. I’m a single, mid-20s guy and I spend way less than that. I don’t mind eating the same thing regularly, so my food expenses are essentially: milk/cold cereal for breakfast; ham sandwich (just bread and meat), carrots/applesauce, and a cheap dessert for lunch; and then either frozen HEB pizza, or cold cereal or a ham sandwich again for supper.

    I realize I’m atypical when it comes to meals (enjoy eating the same thing daily) but it seems like you should be able to cut out a fair bit on your budget. Mine is usually $100 or so.

    If you didn’t mind posting specifics on your grocery list I’m sure there are plenty of cooking people out here that could help you.

    • I weigh 195 pounds and am halfheartedly trying to break 200, so I don’t think that sandwiches and cereal are going to cut it. That being said, I totally hear you on eating the same thing every day. I actually do the same. 1/3 of a box of corn flakes in the morning, apple for a mid-morning snack, quarter pound of spaghetti/quarter container of parmesan cheese/quarter jar of sauce for launch (spaghetti has a surprising amount of protein in it), protein bar for mid-afternoon snack, cottage cheese after work-out, then one huge chicken breast, two baked potatoes, and steamed vegetables for dinner–every day, five days a week. Corn flakes and high-calorie TV dinners on the weekends (Hungryman, $2/each.)

      I guess it adds up?? Then throw in things like contact lens solution and whatnot…I don’t know…

      • Sarah

        Went to Costco over the weekend. Cottage cheese is $4.75/3lbs (Daisy brand).

        Also totally random but was wondering how tall you are. I know rowers are usually tall, just curious haha.

  6. Thomas Carney

    I have been following your progress since September. I have learnt a lot from reading your posts about behavioural change!

    Personally, I find that I have countless behavioural patterns that impact my spending. For example, when the bus is late, I use to not bother waiting, but hail a cab. I automatically pay for drinks first in a round at a bar (being Irish, not being overly generous with alcohol is considered taboo). Or I’d buy new and throw out the old electronics on the pretext that “I gotten value from it”.

    As you said regarding entertainment, some of these things I don’t want to change (especially the drinks part), but it is fascinating to be aware of them. And small steps at the beginning have made a huge impact (I got the idea from BJ Fogg at Stanford). By just committing to sell ONE item over Ebay only a month ago, I now automatically think whether I should keep an item or sell it over Ebay.

    Admittedly such changes won’t have a massive immediate impact on your goal of paying down your debt, but in the long term I think they add up! In any case, I wish you a successful second-half of your challenge!

    • Thomas, I agree with you–a lot of what we do in life has a monetary impact. The thing is, I’m not ready to change more of my behaviors because 1) I think I’ve reached my threshold for changing certain behavioral patterns of mine, and 2) I’m on track to pay down all of this debt within ten months, so I’m not feeling any pressure to change the remaining behavioral patterns that are not as frugal as they should be. Happy St. Patrick’s Day in advance–it might be my favorite holiday 🙂 (Christmas is way too commercialized.)

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