Category Archives: General Status Updates

Progress Report: Month 1

Day 28 | $31,450 paid | $59,267 till freedom

The dust from my financial activities in fiscal September (Aug 26 – Sep 25) has settled. After month of 1 of my challenge, here’s where I stand:

  • Starting Cash: $31,116
  • Starting Student Debt: $90,717
  • Income: $7,339
  • Expenses (including regular loan payments): $4,115
  • Debt Paid Down (excluding interest): $31,450
  • Ending Debt: $59,267
  • Ending Cash: $3,500
  • Total Assets: $62,192
  • Total Liabilities: $59,267
  • Net Worth: $2,925

Predicted student debt at end of June 2012 (i.e., delta to goal): $5,453

Looking at just the $90,717 and excluding any interest that accumulated on it over the month, I put $31,450 towards that figure and brought it down to $59,267. I’m going to go ahead and file that one under “Quick Wins,” and I don’t think that file will ever be re-opened during the next nine months. I was able to pay off one third of my student debt primarily by getting rid of my savings and realizing heavy losses and liquidating $14k in stocks and $12k in an IRA. With only $3,500 in cash now, my Screw You Fund is good for about a month before I have to go hit the street corner if I get fired. That quick win comes at the cost of my sense of security, and at the cost of realizing $3k in losses since I had invested $17k in stocks in October 2008, just before the Great Recession struck.

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 cust-cutting and revenue-increasing initiatives that I laid out in Brass Tacks.

Cost-Cutting Initiatives

  1. Debt Snowball – LOSS – I was banking on an $186 extra/mo beginning in September, but this won’t actually kick in until next month. On the plus side, I’ll be adding another $53 to the snowball because I was able to pay off a $4,460 loan with the $30,840. So the $30,840 went to the $24,666 loan at $186 month and to the $4,460 loan at $53/month, and the balance will go to my federal loans. My debt snowball is now $239 starting in October.
  2. 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 September, I came in  at $501, primarily due to some heavy spending activities prior to starting my NMHD mission, but after the September fiscal month had already started in August. While on the NMHD budget, I spent a little over $100. While I’m chalking this up as a loss, it’s a heck of a lot better than $1,400/mo, and I should be able to get closer to $50/mo going forward.
  3. Stop 401k – LOSS – I was banking on an extra  $550/mo, but only got $287 this month because I wasn’t able to turn off my contribution quickly enough. I should see the full $550 next month and beyond.
  4. Groceries – WIN – I tried to trim my budget from $330/mo to $280, and $280 is exactly where I landed for September. 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.
  5. Car Fuel – WIN – I budgeted $160/mo, had been trending at $225 prior to NMHD, and somehow, magically, came in at $100 for September. That being said, I have three vehicles with fuel gauges all at E, so I’m about to spend $60 + 45 + $12 on fuel for the Murano, S2000, and bike to start October, leaving only $43 in my fuel allowance to last the rest of October. I’m in a tough spot.
  6. Electricity – LOSS – I budgeted $68/mo, and I came in at $124. The $68 is an annualized number, though, since I don’t run my AC or furnace during certain days or even weeks due to the mild wealther that sometimes occurs in Austin, and I can get my electricity bill down to as low as $40.
  7. Lunch at Work – LOSS – I budgeted for $55/mo upside, hoping to cut out out my one weekly lunch out. I spent $36 in September. Oops.
  8. Dry Cleaning – WIN – I budgeted $20/mo and had been trending at $40. I came in at $22. I had no shirts to clean since the weather is hot enough to justify waring polos to work, so I spent only $20 on dry cleaning and was still able to avoid the drudgery of ironing. Score.
  9. Automotive – WIN – I’ve budgeted $200 for a couple of oil changes and miscellaneous things, and I spent $19 on a liter of synthetic oil, windshield washer fluid, and Armor All.
  10. Medical – WIN – I’ve budgeted $10 for the next ten months to spend on a co-pay for my physical, which I haven’t gotten yet.
  11. Clothing – WIN – I’ve budgeted $0 for clothes and didn’t buy any in September.
  12. House Maintenance and Repairs – WIN – I budgeted $100 for three exeterminator appointments during the next ten months. The exterminator was at the house on Saturday, but the check hasn’t been cashed yet, so that charge will fall in October.

I did spend $64 on non-categorized items such as an update to my anti-virus software (I accidentally enrolled in the automatic update, which was my mistake), faxes, casters for my office chair, copies of the house key, and other miscellaneous items.

Revenue-Increasing Initiatives

  1. RSUs – June timeframe; no comment
  2. Raise – Budgeted a 10% rase for an extra $500/mo net of tax beginning in October. I got the new job/promotion, now I just need to transition into it, so the raise might not hit my paycheck until the middle or end of October.
  3. Tax return – April timeframe; no comment
  4. Bonus – May timeframe; no comment
  5. Pedi-cab job – LOSS – in the Brass Tacks post, I  budgeted $490/month, but I actually lost $136 in September through the purchase and return of the bike, as well as the licensing bureaucracy costs.
  6. Landscaping Biz – LOSS – I spent $50 on the site. The first  $25 was wasted on reserving a domain name that ended up not making sense for the business, so we had to reserve a second domain name for another $25. That being said, I have n’t budgeted any income from this venture–or any additional jobs, for that matter-so anything going forward will be complete upside to  bridge the $5,453 delta.
  7. Roommate – WIN – I estimated $650/mo with one roommate, but that was a bit unrealistic compared to the market, which I hadn’t analyzed prior to making that estimate. Now I have two roommates and I’ll be getting $450 + $400 from roommates 1 and 2. This month I got their first and last month’s rent plus $150 security deposit from each, and I banked it all.

October Outlook

Cost Challenges

  • Entertainment @ $50/month

I’m flying out to Ann Arbor, MI for a crew team reunion from 9/29 to 10/2. I’m extremely excited for the trip, and I’ll be crashing at my friend’s house and going to house parties during the nights, so that’s all free. I do anticipate a lot of lunches and dinners out with friends, so I’ll have to keep an eye on spending.

I’m flying out to Detroit, MI on October 21st for my cousin’s wedding. I’ll be staying at my parents’ house, so lodging will  be free. It would be nice to see if I can keep that weekend’s entertainment down to $0. Of course, I’ll want to reconnect with old friends when I’m in town, so that might be difficult.

All flights were purchased months ago, so the plane tickets won’t hit my income statement, but any expenses I incur during the trips will.

  • Electricity @ $68/month

With more 95+ degree days in Austin forecasted for October, it’ll be hard to bring down my $100+ electricity bill–especially now that I have two roommates.

  • Fuel @ $160/month

For reasons already mentioned above, I’m not in a good position to stay within budget.

Revenue Challenges
I don’t think the roommates are going anywhere, and I haven’t built into my budget any incremental revenue from any additional jobs, so there are no risks there.

The only risk is that my new salary might push out a couple of weeks.

Final Thoughts
All in all, a heck of a month. I chopped off $30k from my loan obligation, and instead of spending $1,057/mo on student loans, my new monthly obligation will be $818, a drop of $239. It was a tough and emotional first month, but I think I’m getting into the groove of being frugal and working hard to generate extra revenue, and I’ll continue to chip away at the debt. The full ten-month outlook is below. Note that you’ll probably have to click on the image below twice–once to open, a second time to zoom in.


Filed under General Status Updates

Refocus on the Debt-Paydown Roadmap

Day 13 | $24,666 paid | $66,051 till freedom

There’s been a lot of writing about pedi-cabbing, roommates, potential promotions, motorcycle issues, etc., and I just want to take a moment to try to articulate exactly how each of my cost-cutting and revenue-increasing initiatives impacts or contributes to the final goal of paying off $90k of student loans in 10 months.

The last time I talked comprehensively about my financial situation was in “Let’s Get Down to Brass Tacks” when I created a plan to overcome the hurdles that I wrote about in the post prior to that titled, “Sizing Up the Mountain.” I talked through a lot of numbers, but I never took the time to clearly summarize what it all meant, or lay it out in such a way that would show whether I was on track or not to meeting my goal.

After some thought, I’ve decided to do a debt-paydown roadmap. It’s like a pro forma income/cash flow statement with a twist, since I didn’t think a pure pro forma income statement or cash flow statement would have adequately expressed the “cut costs+increase revenue” framework that I’ve been talking about for so long. In other words, if I just look at what I’ve spent and what I’ve made, I wouldn’t have a view at what costs I cut and what revenue I made incremental to my salary–a critical view when financial behavior has to change.

On the roadmap below, my base revenue–as opposed to incremental revenue from things like the pedi-cabbing gig–is factored into the “Savings by Maintaining Initial May 2011 budget.” I created a budget in May 2011 based on my salary and budgeted expenses that predicted I would end the fiscal year at $11k in cash savings. However, at the end of August, I was actually poised to end the year lower due to not sticking to my  budget (e.g., spending $1,400/month on entertainment instead of the budgeted $850 does not help). Now, once I subtract the $700 I used from savings last week to close out the $25k loan (instead of $2,900 like I earlier predicted) that was mostly paid down with the liquidated stock and IRA, my budget predicts a $12k close. I want to use all of this but $4k to actually pay down my loans. Therefore, the $8k gets spread over the 10 months as $800/month.

Line-Item Explanations:

I already went into the details of each line item in Brass Tacks, so below is just a brief recap to jog your memory and provide a little additional color.

  • Pay off $25k loan: I will no longer be paying $186/month to the $25k loan; starts in October
  • Stop 401k contribution: from 10% to 0% salary contribution to 401k; net of tax
  • Entertainment: from $850 monthly budget to $50; save $800/month
  • Groceries: from $330 monthly budget to $280; save $50/month
  • Lunch out: from $55 monthly budget to $0; save $55/month
  • Dry cleaning: from $40 monthly budget to $20; save $20/month
  • House repairs/maintenance: $1,465 remaining in annual budget; take down to $300; save $1,165 or $116/month
  • Automotive repairs/maintenance: $935 remaining in annual budget; take down to $200; save $735 or $73/month
  • Medical: $260 remainng in annual budget; take down to $10; save $250 or $25/month
  • Clothing: $215 remaining in annual budget: take down to $0; save $215 or $21/month
  • Get tax return: fingers crossed–wild guess at this point; with the losses I realized on the IRA and stock liquidation, my extra income, property tax, etc., it’s anybody’s guess. Or a CPA’s.
  • Get bonus: fingers crossed; net of tax
  • Cash RSUs: fingers crossed; 224 shares at current stock price net of tax; June vest
  • Get raise: fingers crossed; supposed to get offer letter this coming week; net of tax
  • Pedi-cab job: spend first month paying off bike; expecting $100 a night, $200/weekend; I miss a couple of weekends in October due to travel; net of tax
  • Roommate 1: first and last month’s rent due at signing; net of tax
  • Roommate 2: yes, I have to get another one; first and last month’s rent due at signing; net of tax; pays first couple of months in September, but doesn’t move in until October, which is why October is $0
  • Monthly debt pay-off: instead of figuring out what my debt balance will be each month based on interest, I just assumed that only 70% of my debt payment will go towards principal. Hopefully that’s not too aggressive.

Key Take-Away: This is directional, but I have about $4,655 to go find, and that’s assuming I execute this somewhat aggressive plan perfectly. This is different than the surplus I originally had because I’m assuming only one job here instead of two. Oddly enough, I just haven’t been able to find extra work on the weekends as easily as I thought I’d be able to.

There is no room to mess up, and I’ll have to get creative to find additional income and/or cut costs. I want to preserve net worth so I have to avoid liquidating assets, but I have a couple of cars and a motorcycle in my backpocket if I have to use them.

By the way, I signed two roommates today. One moves in tomorrow, the other moves in at the end of the month. I took readers’ advice to suck it up and moved all of my stuff out of my office/man cave.  I’m writing this post from the desk that I moved into my bedroom. It definitely sucks, but it’s temporary. We’ll  be one big happy family here in not too long.

Enough writing, I gotta go pedi-cabbing.

Here’s the pro-forma:



Filed under General Status Updates

$24,666.06 Down

Day 11 | $24,666 paid | $66,051 till freedom

Please give me a moment; I think I’m still in shock.

I just paid $24,666.06 to close out my CitiAssist Loan and subsidized HBS loan.

Combined, the two loans started out at $25,000, payable over 15 years at a monthly payment of $186. I’ve been making payments for over 21 months, but managed to chip away at only $334 of principal during that time. If I had gone full-term with the loans, I would have paid $8,480 in interest.

That leaves me with the following balance sheet:


  • Cash: $6,300
  • Vehicles: $22,300
  • 401k: $37,500
  • House: $0 (I owe less than its value, but realtor fees would erase any potential profits from the sale)

Total Assets: $66,100


  • Student loans: $66,051
  • Credit card balance: $1,600 (to pay off at end of month)

Total Liabilities: $67,000

Net worth: ($900)

Paying off the $25k was easy–I used money that was just sitting around. The remaining $65k is going to be the challenge, as my liquid assets are basically depleted. Tonight I have pedi-cab training at 9 PM, and hopefully the roommate interview is still on for 7:30 PM–she still hasn’t confirmed.

I don’t think it’s hit me yet that my life savings of $30k are almost completely wiped out.


Filed under General Status Updates


Day 10 | $0 paid | $90,717 till freedom

Financially speaking, today could have gone a lot better.

No Saturday pedi-cabbing. I canceled three morning meetings at work to go downtown and get my chauffeur’s license so that I could ride this game-day Saturday and make up to $400. Without the license, the pedicab owner, we’ll call him Nick, wouldn’t put me on the schedule. So I texted him as soon as I got the license, and he texted back that the Saturday slots were already full and I would be the first alternate. Fail.

I got back to work at around noon and over 80 emails had accumulated in my inbox during my morning absence. I answered about ten of them before my afternoon of back-to-back meetings kicked off and put me even further behind in my inbox-clearing efforts. Fail.

Broken bike. On my way from downtown to work, I stopped to fuel up my bike. I tried to start it up after I was done filling it, but the engine kicked over only a couple of times before the battery died and the starter became inoperable. I had to get off the bike and run-start it. To run-start a bike, put it in neutral, get on the left side of the bike with both feet on the ground, squeeze the clutch lever with your left hand, grasp the right grip with your right hand, then run with the 400+ lb beast until you pick up sufficient speed, throw your right leg over the bike, sit down, shift into first gear with your left foot, let go of the clutch, and roll on the throttle. If the bike is going fast enough to start the engine, you’re good to go. If not, the bike will skid to a stop and you’ll have to repeat. Onlookers will laugh. You will not.

This problem has been rearing its ugly head ever since last week. The curious thing is that the bike starts up just fine if it’s cold, but refuses to start up if it’s warm.

I called up the shop, and the tech told me it could be one of three things: a bad battery ($170), a bad starter ($200), or a bad charging system ($400). Fail.

No promotion? I still haven’t gotten a formal offer letter for the internal promotion, and the VP just issued a hiring freeze. Fail.

No roommate? The potential roommate still hasn’t confirmed our 7:30 PM interview for tomorrow that I emailed her about 24 hours ago. I’ve already turned down four other candidates because I promised her that I would hold the room for her. Fail. I lose $15 for every day I hold this room open for her.

Net net, today was not a profitable day.

To top it all off. My city is burning and an enormous inferno is putting people out of their homes and destroying memories. Fail.

…Actually, that kind of puts my whiny little complaints into perspective, doesn’t it? This morning, my neighborhood smelled like a huge campfire and the air was thick with smoke. There was no cause for alarm, however, since some weird atmospheric phenomenon had diffused the smoke over the entire city and the fire was actually many miles away from my house. I should be safe. The same cannot be said for a lot of people, however, many who have already lost their homes, some who have lost their lives. My heart goes out to them.

Net net, I actually have a lot to be thankful for.


Filed under General Status Updates

Status Update: 9-6-11

Day 9 | $0 paid | $90,717 till freedom

Pedi-Cab Status
Get bike: complete
Get criminal background report: complete
Get driving history: complete
Take defensive driving: complete
Meet with pedi-cab company: complete
Get chauffeur’s license: Wednesday @ 8:30 AM
Train: Thursday @ 9 PM
Start pedi-cabbing: Friday @ 9 PM

Pedi-cab drivers are required to meet with a representative of the pedi-cab company they want to drive for prior to applying for their chauffeur’s license. I originally planned on meeting with the owner of the company I want to drive for tomorrow, on Wednesday evening, since I had a conference call scheduled for tonight with some colleagues in Taiwan and we had some fairly important business issues to discuss.

However, while I was on the phone with the owner trying to set up a time to meet, I asked him about scheduling availability on the upcoming Friday and Saturday nights. He said he still had a couple of slots open, but the Saturday slots probably wouldn’t last since it’s a game day and pedi-cab drivers typically make $300 to $400 on those days by working from 5PM to 2:30 AM (9.5 hours). I asked him what it would take to be guaranteed one of those slots, and he replied that I would need to train by Thursday, which would mean getting my license on Wednesday, which would mean meeting with him to sign off my paperwork tonight. Unfortunately, he could meet only at 7:45 at a location 25 minutes away from me. It was already 7:25, and my Taiwan call was at 8:00. I had to make a decision: work or pedi-cab? I analyzed it for 1.2 seconds, then told the owner I’d be right there. I emailed a note out to my workgroup telling them I had an emergency, then got on my motorcycle and raced to south Austin.

I didn’t feel good about missing the call, but I figured I could call them when I got back–at 8 PM our time, they still have their entire day ahead of them. And plus, there was $400 at stake here. 2.5 game-day Saturdays of pedi-cabbing, and I’ll pay off $1k of the $90k obligation. It might not sound like a lot, but I know it will add up. 

I arrived five minutes early and got the sign-off. Tomorrow morning I’m getting my license and I’ll be ready to train on Thursday. I got back home at 8:20 PM and took the call. All good, crisis averted, $400 almost in the bank.

My biggest priority going forward is that my second–and possibly third–job do not interfere with my career. Tonight, they definitely clashed, but I should be able to keep that to a minimum–I think I’m just experiencing some growing pains right now, and I should enter a zero-conflict steady-state schedule with this pedi-cab job starting this weekend after I get through all the bureaucracy .

My new boss (it seems really odd to say that) seems like a genuinely good guy, and we got along well during the initial meeting. He’s laid back, talked about how close he is with his family, and it sounds like he runs a really tight ship. I think it’s going to be a good arrangement. He has a JD and used to be a stockbroker, so he definitely has some smarts. I think he’s in his early 30s.

I should mention that I decided to go with a different company than the one I originally interviewed with last week. This new company has been a lot more responsive to my questions and they seem to be recruiting more actively in Austin, whereas the first company seemed fairly indifferent to my interest in working for them. Maybe it was just my slacks and polo shirt–I wore shorts and a t-shirt to today’s meeting.

Third Job Status
I’ll probably wait a couple of weeks before applying for a third job so that I can get a better idea of how lucrative (or not) this pedi-cab job is going to be and what kind of toll it’s going to take on my body. according to my new boss, pedi-cab drivers typically burn 8,000 calories per shift, and the boss man has seen his new hires lose about 20 pounds after only a few weeks of pedi-cabbing.

I’ll be biking 9.5 hours on game days, 5.5 on non-game days, and going to bed at 3:30 AM on Friday and Saturday nights. I don’t know if I can sustain that and wake up at 7 AM to work an 8 AM job. I’m not afraid to work all weekend long and am willing to sacrifice all of my free-time for ten months, but I know that I do very poorly without 7+ hours of sleep every night. I’ll need to find a third job with somewhat flexible hours.

First Job Status
As I indicated in an earlier post, I’ve been searching for a new job at work–a promotion–and I believe I might have found something. After the end of my fourth interview for the same job on Friday, the hiring manager told me he wants to move forward with an offer! I should be getting something formal from HR this week. No word on the salary bump yet, but my fingers are crossed. Everything helps, and in an earlier post, I assumed a 10% raise.

Roommate Status
I have my first roommate interview this Thursday. This is definitely my first rodeo, so I still have to get acquainted with best practices for renting out a room: where to find a good contract template online, what additional terms and conditions to add to it, the size of the deposit, whether or not I should make the last rent due at signing, etc. I talked to Sarah on the phone and she sounds completely cool. I’m hoping for the best.

IRA and Stock Liquidation Status
It required some paperwork, but the stocks have finally been liquidated at $14,100, and the IRA is pending liquidation at $12,267 less tax and penalty. Once the IRA is liquidated tomorrow or Thursday, I’ll pay off the $25k loan with these funds plus some savings.

If you are a CPA and have a spare moment, please: Do I qualify for an exception to the 10% early withdrawal penalty since I’m liquidating my IRA to pay off student loans that were used to pay my tuition?

“You can take a distribution from your IRA before you reach age 59½ and not have to pay the 10% additional tax if, for the year of the distribution, you pay qualified education expenses for yourself.”


Filed under General Status Updates