|
Thanks to some very helpful people in the newbie thread I've got the merest start, the initial skeleton, of an idea on how to tackle my stupid debt and the decisions that have created it! Things as they stand today Mar 10 2016: Debts: $464 on an AmEx Blue with a rude 17.49% APR $13,810 on a Bofa Visa with a medium rare 12.49% APR $13,900 from a Patelco Auto Loan with a 1.99% APR Totaling about $14,250 or so in unsecured debt and then like 14k in a car loan that I'm paying off slowly (60 month loan) I'm 30, I make on average $4k a month in take home, my rent is cheap since I live with a roommate, my FICO score is good and I have no spouse or dependents be they human or animal. I have a Simple IRA with like a few bucks in it that my company switched away from a year after I got hired and then a PCRA Trust which my company contributes to in a fixed amount that I forget, regardless of what I contribute (currently 0) My stated goal is to clear the unsecured debt at the mildly aggressive pace of $1200 a month which should see the deed done in like a year. I'm also trying to put aside $200 a mo as an emergency fund. I keep a grand in my checking account to avoid over drafts and stuff like that and have like 4-5k in cash for real immediate emergencies. I have like 13 grand as a safety net in an account in my moms name so that I don't steal it to buy stupid things, which is a repeated pattern throughout my life that I'm hoping to break. Basically I've always spent beyond my means. To give some idea of my average day to day foolishness, here's a mint.com thing of February:  The big category there is the car which needed a $1500 service I could have predicted and planned for but was instead surprised by. The underlying issues are spending like $700 in Feb on eating out and delivery and then also a retail therapy depression combatting shopping habit that is not really healthy emotionally or especially financially! I'm in therapy too to try to deal with underlying issues there, without getting too E/N hopefully (covered by health insurance). So here's my budget for March, which I created in the second week of march having already blown like $120 on restaurants in the first week (lol)  I could be taking this more seriously - I read that money mustache guys ideas, but honestly I'm pretty sure if I tried to go all in immediately and like cut down on eating out 10 times a week to 0 times a week, I would get the depression and have to eat 10 $50 pizzas in a row to cure it. Instead I'm hoping to take an approach similar to how I focused on losing weight last year, another hangup for me. I started at like 240lbs about a year ago and I'm down to 185 or so now mostly just by making rules about when I can eat fast food (only with friends, most of whom hate fast food and only once a week at most) and learning to make and eat salads like 3 times a week. Plus an extremely modest exercise regime. Anyway digression over, I like to be gradual and easy on myself because I know I'm lame and my willpower snaps easily like the driest of twigs. So yeah! I wanted to make this thread, mostly to stop cluttering up the newbie thread with my dumb posts, and also as a place to try and hold myself accountable to my goals. And also to solicit advice from the people of this forum who have already given me some great ideas on how to go forward. Namely, transfer my current out-standing debt to a Chase Slate card or similar with 0% APR for 15mo and $0 on balance transfers for 60 days. Before I jump on that idea I wanted to use the rest of March as a trial, to make sure I have a hope of actually living within or close to a budget, so I don't end up a year from now with $14k on a Chase card at 18.9% APR (after introductory rate) and another 10k on the current Visa. Anyway I feel like this is getting super long so I'll wrap up by saying I want to keep using my credit card, for now, since it allows mint to keep track of my actions and also because, hopefully starting next month, I'll no longer be carrying a balance month to month except on the 0% APR card. And also I made a salad and brought it to work yesterday and it was incredibly terrible. I need to get a thing to keep the dressing separate until the moment I'm ready to eat lol EDIT: Added in goals so that I can try and make myself accountable: My goals right now are pretty simple: Pay off credit card debt by end of April 2017 In that same time period, save $2400 in an emergency savings account, on the internet April 1, 2016 - successfully live under a budget for most of a month, open a 0% APR card and transfer remaining credit card debt to it. ZenMastaT fucked around with this message at 22:24 on Mar 12, 2016 |
#
?
Mar 10, 2016 21:53
|
|
|
|
| # ? Apr 19, 2024 06:52 |
|
|
Why not use some or all of that safety net cash to directly pay off your debt? Then you can't be in danger of accidentally spending it recklessly... it will all go from making 0.1-1.0% in deposit interest to combating 12.49-17.49% in credit card interest and leave you credit card debt free within one month (once you add in your stated $1200 from paychecks to debt repayment). If you're worried about that kind of cash outlay, take half of it out for credit card repayment and leave half in. That will keep you from adding so much risk when doing a balance transfer to a 0% card (i.e., severe accumulated back interest charged if you're not able to pay the transferred balance off by the end of the promotional period).
|
|
#
?
Mar 10, 2016 22:31
|
|
|
That's definitely an option! My worry is that it basically represents my only real safety net. I did think about the idea of using it to pay off the chase card if it looks like I'm going to run up against the deadline, though just as a last resort. The other thing I was thinking about was that this period of paying off the debt and limiting spending will hopefully teach me the life skills to stop being an enormous baby. If I just pay it off in one shot I'm afraid I won't learn that.
|
|
#
?
Mar 10, 2016 23:01
|
|
|
Hey good job confronting this. I get what you're saying about not wanting to do a balance transfer and then run the balance back up, but pull your last CC statement and check out how much interest you were charged for carrying a five figure balance on a 12% APR card.
|
|
#
?
Mar 10, 2016 23:50
|
|
|
Even if you double your food budget, you still have a good amount of money left over. How did you incur so much consumer debt? Any pictures of your cool toys? As long as you can control that, the food stuff is secondary. Your credit cards are your safety net. Like they're supposed to be. If you feel like looking at a low balance makes you want to spend, then freeze them in a block of ice or something.
|
|
#
?
Mar 10, 2016 23:57
|
|
|
I'd at least pay off the Amex with your savings, that interest rate is brutal, the debt there is small enough that it won't take away that much from your emergency fund, and that makes your financials a bit less complicated to manage.
|
|
#
?
Mar 11, 2016 00:04
|
|
|
I get paid tomorrow and the Amex debt will be gone along with probably like 1000 of the Visa with it. The Amex never usually carries a balance - I basically use it as the safety net for the Visa when that card approaches its limit lol I had to put the 1500 from the car service on it in February but this is the last little payment on that, otherwise I only use it for like recurring monthly fees, most of which are reimbursable so they get paid off more or less the minute they hit the card. As far as how I got into this mess, I was a gun collector for a long time although I'm kind of done with that now, but I was pretty good about keeping gun money separate. I was not pretty good about keeping ammunition money and range fees and travel expenses for going shooting in far away places separate tho. Plus the whole idea of the credit card as safety net is one I definitely employed - spill water on laptop, have to buy a new one for work before next shift tomorrow morning? No problem! $7k in extraneous repairs on the car in a year? (The car before this one) No problem! Of course the piece of the puzzle I was lacking was the whole oh I just blew 2 grand on life this month, that means I should cut back on the $14 sandwiches every day! Problem. So that's what I'm trying to learn! And if I can prove to myself over the next 2 or so weeks that I can actually remember to make a lunch for work every day and not hate it so much I want to blubber into my turkey sandwich, then I'll do the 0% APR thing and - with a little luck that will be the final moment I pay Visa or Mastercard or Amex a cent of interest. That's the plan anyway! If it helps the thread to see photographs of conspicuous consumption, here's the height of my pistol collection in like 2013:  I only have 6 of those left now but I guess in a way the rest of my gun collection is also sort of a non-liquid asset, albeit one it would take a long time to move and one I'd like to hold onto unless things get really dire.
|
|
#
?
Mar 11, 2016 01:26
|
|
|
As a non-gun guy- what does one even do with 30 pistols or whatever the count in that photo is? My uneducated guess is there's a significant amount of upkeep on that many guns. Plus safely storing them, registering them, etc?
|
|
#
?
Mar 11, 2016 08:28
|
|
|
You should combine the never touch Mom money and some of your other cash on hand and pay off your credit cards. If poo poo really hit the fan, you could sell the car and live very modestly if necessary. When you pay off the cards, cut them up, remove them from any online shopping sites you may have them saved on (amazon.com/etc) and use only debit/cash. You should be able to continue to use mint and have it interface with your bank, or use some sort of an export/import function. At worst you might need to switch to a different bank. I think you might be a very good candidate for using a cash envelope method of budgeting. Instead of depending on mint to look backward at your past purchases (this is not really budgeting - it's reconciliation). You can pre set the amounts of money you will spend in each category very easily - aka have a budget. I do not see anything about retirement in this thread, do you have any plans in place? You should be starting yesterday if you do not have a plan.
|
|
#
?
Mar 11, 2016 15:53
|
|
|
IllegallySober posted:As a non-gun guy- what does one even do with 30 pistols or whatever the count in that photo is? It depends on his location and other factors, is the short answer. Once you get past the up front cost, most places have no requirements on storage or safe keeping of firearms. As for upkeep, it's a towel, a ten dollar bottle of gun oil and maybe two hours out of your life. If they haven't been fired. And as for registration, Hawaii is the only state, that I know of, that keeps a registry of firearms.
|
|
#
?
Mar 11, 2016 17:35
|
|
|
Guns are cool, all those guns shoot differently or have different mechanical processes and parts which are interesting. It's like collecting anything, really. Not about utility. Plus, firearms hold value pretty well for the most part. I would recommend that you limit either a) the # of guns you have or b) the $ value of guns you have. if you have a horrible gun collecting habit.
|
|
#
?
Mar 11, 2016 17:56
|
|
|
California, where I live, has a long gun and handgun registry now too. It doesn't cost anything outside the upfront cost when you buy a gun though. And like was said above, guns have basically 0 upkeep if you don't actually shoot them, which I basically don't anymore. I've been lucky enough to generally break even or make a profit whenever I bother to sell any, but I haven't bought or sold anything in almost a year - basically I've put this hobby on ice for the time being. My newer thing is clothes at the moment, which is why I gave it a separate line item in the budget. I could of course crush that to 0 but, like the cash envelope system, I really feel like doing something that drastic, especially at this early stage where I haven't even given myself the chance to fail yet, would be more likely to push me into abandoning the attempt entirely. Unfortunately I do need my car (or a car at least) to be able to do my job, so things would have to be pretty severe indeed if I ended up in a position of having to sell it. I guess what I'm failing to understand is, is there any particular danger in doing the 0% APR balance transfer, trying to live on a budget even if it isn't one rigidly enforced by literally running out of money in envelopes, and then in the event of failure, using my emergency savings and other assets to pay off the debts before APR starts to kick in again? I like to imagine I'm capable of not eating out for a whole month (gasp!) if I actually do max out the restaurant budget early in the month, like seems likely this month for example. Of course what's likely to happen is another "emergency" car repair or other unavoidable purchase which starts the whole debt ball rolling again. But I'd still need a credit card or an emergency fund around to take care of that, wouldn't I? And yeah, for retirement I made scant mention because there isn't a whole lot to say. I've got that Simple IRA and PCRA Trust which I think I put in the OP but I'm contributing 0 to them currently. My company doesn't do matching so I'm not leaving free money on the barrel head but to my mind taking care of the unsecured debt seemed a higher priority. The idea being basically, if I can learn to live on a budget reduced by ~1200 a month for the whole year it will take to pay off the cards, then I can reliably use that money to build up emergency funds or save for retirement once the debt is paid off. An argument can of course be made for paying off the debts with my assets now so that I can begin saving immediately, but I feel like the net effect of that will be little savings for retirement anyway as I hurriedly try to repay my emergency funds - but with the added disadvantage of having the situation seem less dire to my reptile brain since, currently, that 13k is off somewhere I can't touch it and I basically forget about it for reckoning with my finances. Basically building it back up would likely seem less urgent to me than paying down a similar $13k 0% APR loan that has a known deadline. Hopefully that all makes sense to you guys! I definitely do appreciate the different perspectives and, of course if it turns out I'm way more pathetic than I hope I am, and I can't stick to a self imposed budget at all, I will have to consider creating artificial barriers like a cash envelope system, or destroying the cards or similar. ZenMastaT fucked around with this message at 21:24 on Mar 11, 2016 |
|
#
?
Mar 11, 2016 21:21
|
|
|
A lot of helpful tips have been given. The main thing you are asking about is credit cards so I have the following comments. Be clear on the conditions on a 0% card as your goal is to pay it off completely and a lot of cards slam you with all the interest at a high rate if it's not all paid off. If it's 15 months interest free maybe target 12 months worth of payments to allow for any cash flow problems. I have seen people get 0% cards and find that they added another minimum payment that made their cash flow even worse. You need to be sure that you can actually pay back money (otherwise you need to stop using credit cards). If you are on track for reduced spending then that's great but I'd rather see your budget performance after a whole month. A credit card is not an emergency fund, it is credit with a high interest rate. Saving an emergency fund so you have a cash buffer against "unexpected" expenses. If you are constantly reducing your debts a set back from an emergency expense doesn't hurt as much. So if you can manage to have $1200 to pay off debt or save each month that's great. Then you should target the highest interest rate card first. With respect to the car loan the interest rate is low so it's not going to save much paying it off faster so it is not worth it but it does stick you with a minimum payment each month. quote:Things as they stand today Mar 10 2016: That balance on the amex should be paid off immediately as the balance is so small. You need to leave the balance at $0 for at least a day to make sure no further interest charges go on it. The way credit on a credit card works is that the current expenses that go on the card are interest free for 55 days in the case of amex. However when you pay off the card the interest free portion is paid off first, then the interest bearing portion. So if you are using a card for regular expenses and it carries a balance then you are repaying it in the slowest way possible. So in relation to listing credit card debts only the carried balance matters for understanding how much interest you are paying. In short you need to stop using the visa immediately and only make repayments to it. If you can manage this we should see some progress. Just consider that we have seen a lot of people with best intentions. Some have done well, some have derailed completely and others have slowly made changes but ended up a lot better off.
|
|
#
?
Mar 11, 2016 22:17
|
|
|
To give you an idea of what the Chase Slate card is like, I have six more months of 0% interest after transferring over a large card balance, and with $1800 on the card my minimum monthly payment is $26. I probably won't be able to pay it off in the next six months (I've made good progress on it though) and will likely transfer it to another card before the introductory period is over.
|
|
#
?
Mar 11, 2016 22:26
|
|
|
That's good to know about the interest hitting all at once. Makes the situation much more clear cut and non-negotiable. I too would like to see my performance after a month of budgeting, just to make sure this plan is at all feasible! At the moment I'm planning to hold off applying for a Chase Slate or anything else until April 1, just so I can see how I do the rest of March trying to live within my means. The Amex is paid off as of today since my paycheck came in, and the Visa is "down" to 12,800 as well. I could potentially switch to using a debit card for the rest of the month, just to avoid increasing the balance on the Visa at all before I try to balance transfer. Although then I'd be a tad worried of eating into my normal $1k emergency checking account buffer before my next paycheck comes in in two weeks. As an aside, is there a particular downside to opening two simultaneous 0% APR cards, in the scenario that Chase won't let me transfer the whole balance over? It's also been proposed that, in that case, I should just pay off the rest of the Visa with my emergency fund but I'd really love to be able to hold onto that fund for another 6mo or so just to be sure I'm not going to screw up in some colossal way. Or in case of an actual emergency haha
|
|
#
?
Mar 11, 2016 22:54
|
|
|
ZenMastaT posted:California, where I live, has a long gun and handgun registry now too. It doesn't cost anything outside the upfront cost when you buy a gun though. And like was said above, guns have basically 0 upkeep if you don't actually shoot them, which I basically don't anymore. I've been lucky enough to generally break even or make a profit whenever I bother to sell any, but I haven't bought or sold anything in almost a year - basically I've put this hobby on ice for the time being. I would suggest coming up with a hard $ limit that you have tied up into the hobby. I use the same ~$4000 on every motorcycle I buy (basically). quote:Unfortunately I do need my car (or a car at least) to be able to do my job, so things would have to be pretty severe indeed if I ended up in a position of having to sell it. quote:I guess what I'm failing to understand is, is there any particular danger in doing the 0% APR balance transfer, trying to live on a budget even if it isn't one rigidly enforced by literally running out of money in envelopes, and then in the event of failure, using my emergency savings and other assets to pay off the debts before APR starts to kick in again? I like to imagine I'm capable of not eating out for a whole month (gasp!) if I actually do max out the restaurant budget early in the month, like seems likely this month for example. quote:Of course what's likely to happen is another "emergency" car repair or other unavoidable purchase which starts the whole debt ball rolling again. But I'd still need a credit card or an emergency fund around to take care of that, wouldn't I? Put it back on a credit card if you don't have the money for an unknown future expense. I'd wager if you take care of whatever your ~14k car is, it'd be pretty strange to have a major mechanical failure. Getting rid of debts now > unknown nebulous future expense that probably won't happen. quote:And yeah, for retirement I made scant mention because there isn't a whole lot to say. I've got that Simple IRA and PCRA Trust which I think I put in the OP but I'm contributing 0 to them currently. My company doesn't do matching so I'm not leaving free money on the barrel head but to my mind taking care of the unsecured debt seemed a higher priority. The idea being basically, if I can learn to live on a budget reduced by ~1200 a month for the whole year it will take to pay off the cards, then I can reliably use that money to build up emergency funds or save for retirement once the debt is paid off. An argument can of course be made for paying off the debts with my assets now so that I can begin saving immediately, but I feel like the net effect of that will be little savings for retirement anyway as I hurriedly try to repay my emergency funds - but with the added disadvantage of having the situation seem less dire to my reptile brain since, currently, that 13k is off somewhere I can't touch it and I basically forget about it for reckoning with my finances. Basically building it back up would likely seem less urgent to me than paying down a similar $13k 0% APR loan that has a known deadline.  https://www.creditkarma.com/calculators/debtrepayment This is how much it will cost you to pay your debt over the span of a year. If you're OK with that lesson costing $900 I guess that's up to you. How on earth is a cash envelope system drastic? Once you decide on the amounts, it would probably take you all of 10 minutes a month to set this up. You've wracked up a pretty decent chunk of debt given the methods you have used in the past. What is so hard about using cash? It seems far easier/simpler than using cards and trying to categorize your spending throughout the month and using Mint (which can be flawed) to associate purchases with correct categories.
|
|
#
?
Mar 11, 2016 23:08
|
|
|
I'm certainly not trying to denigrate the idea, it definitely has a lot of merit and I absolutely will consider it! As far as my current methods of course, they're only a week old. I basically have not tried in any way to get out of debt in the last 5 years, no limits on spending, no tracking of expenses, no attempts at a budget whatsoever. This whole thread is sort of dedicated to my first real attempt at resolving this issue. As far as my job goes, it's pretty secure I believe. One of my coworkers recently left so we're short staffed at the moment and trying to hire back up. I've been here for 8 years and the company has been around for 30. It's small but I get along with my bosses fairly well and the startup costs for licensing and training up a new employee are prohibitive so they usually try to hang on to people except in cases of gross negligence &c. I'd also like to think I could find another job fairly easily, since I'm already licensed and so on. And sorry if I'm not understanding something but won't transferring my debt to a 0% card as I plan to do actually mean the lesson costs me nothing? I mean basically I'm trying to create the exact situation you're describing with the cash envelopes and the immediate debt repayment except with a more 'soft' limit to the whole thing. Maybe I'm just not understanding how cash envelopes work? I assume it would be like withdraw $250 at the beginning of the month for restaurants, $250 for groceries, $600 for rent, $165 for car insurance, whatever the number categories are that I'm using on mint right now? Or do you like draw proportionally from each paycheck? Maybe it's a lot simpler than that and I'm simply misinformed. Right now of course, using credit cards and mint is as simple as possible since everything is already set up. I guess I just don't see the point in scrapping this budget system before I've given it even a 1 week trial? Of course if I do end up a dismal failure, then I'll have to reconsider.
|
|
#
?
Mar 11, 2016 23:24
|
|
|
Hold onto the emergency fund. In relation to using a debit card it sounds like a great idea. If the idea of only living on that $1k for two weeks is scary then good. Watching the balance and restricting your spending because there isn't money is a great way of budgeting and not accumulating debt. It's what everyone else has to do. If there's no money left for spending then you can't afford to spend. In the event you can't do a whole balance transfer just apply for another 0% card. If you gently caress up on paying the cards off completely then tap the emergency fund to pay the remainder.
|
|
#
?
Mar 11, 2016 23:32
|
|
|
ZenMastaT posted:Maybe I'm just not understanding how cash envelopes work? I assume it would be like withdraw $250 at the beginning of the month for restaurants, $250 for groceries, $600 for rent, $165 for car insurance, whatever the number categories are that I'm using on mint right now? Or do you like draw proportionally from each paycheck? Maybe it's a lot simpler than that and I'm simply misinformed. Right now of course, using credit cards and mint is as simple as possible since everything is already set up. I guess I just don't see the point in scrapping this budget system before I've given it even a 1 week trial? Of course if I do end up a dismal failure, then I'll have to reconsider. The cash envelope system is a physical budgeting method. Literally the money for each budget section gets put into a separate envelope. It imposes the same restriction as checking your balance balance except if there's no cash in the envelope you can't spend. e: really you need to decide what actions you are taking. Making a post stating what you are planning on doing and set a deadline so progress can be checked. Devian666 fucked around with this message at 23:40 on Mar 11, 2016 |
|
#
?
Mar 11, 2016 23:38
|
|
|
ZenMastaT posted:Maybe I'm just not understanding how cash envelopes work? I assume it would be like withdraw $250 at the beginning of the month for restaurants, $250 for groceries, $600 for rent, $165 for car insurance, whatever the number categories are that I'm using on mint right now? Or do you like draw proportionally from each paycheck? Maybe it's a lot simpler than that and I'm simply misinformed. Right now of course, using credit cards and mint is as simple as possible since everything is already set up. I guess I just don't see the point in scrapping this budget system before I've given it even a 1 week trial? Of course if I do end up a dismal failure, then I'll have to reconsider. You do not pay cash for recurring monthly expenses like rent / insurance / power / etc. Stuff like groceries / fuel / clothing / 'fun money' / etc all get their own envelope with a predetermined amount of money. You're using cash, which has been well documented helps people spend less, and you've got a very obvious built in limit. Once your grocery envelope is empty for the month, you're done grocery shopping.
|
|
#
?
Mar 11, 2016 23:53
|
|
|
Sure making a post consolidating goals sounds like a good idea! My goals right now are pretty simple: Pay off credit card debt by end of April 2017 In that same time period, save $2400 in an emergency savings account, on the internet April 1, 2016 - successfully live under a budget for most of a month, open a 0% APR card and transfer remaining credit card debt to it. My budget is in the OP, current for yesterday I think. I'm going to close out March using the same payment methods I've been using for the last few years, namely dumping the first paycheck of the month entirely into credit cards and the second paycheck covers rent for the next month, car payment and maybe some more credit. The difference being I should hopefully manage to avoid increasing the balance on my credit card for the rest of the month, which has historically not been true. EDIT: One other thing I'd love some clarification on: As far as budgeting goes, how important is it to create like a solid limit per category per month, presuming the important parts of the budget remain inflexible (rent/debt repayment/car stuff &c) Like is it vitally important that I not exceed my $250 grocery budget by taking money out of the $250 restaurant budget? I understand the idea is to help build personal discipline which is certainly a life skill I need help with? I ask because I foresee needing to make tweaks to the actual budgetary amounts in the sub-categories as I live on the budget for the first little while. ZenMastaT fucked around with this message at 23:59 on Mar 11, 2016 |
|
#
?
Mar 11, 2016 23:54
|
|
|
Sometimes we don't go through how a budget is supposed to work and it often ends up training as you go. When it comes to a spending category there are often overspending and underspending. This leads to budget adjustments over time. If you are over budget by a long way and blow out all your spending you will get a lot of angry posts. Given that you seriously need to stop your overspending as it's heading towards being a serious emergency you need to treat those limits as hard limits for the next month. This is where it's tough but that's a way of changing your habits. You need to build in the thing that makes you decide not to purchase something. You may find that something just doesn't work out and you may need to spend but you can always ask here if you want another perspective. Devian666 fucked around with this message at 03:18 on Mar 12, 2016 |
|
#
?
Mar 12, 2016 03:15
|
|
|
Alright thanks! That all makes perfect sense to me, so now I just need to put it into implementation. I have high hope for myself (lol) since I've successfully lived within a budget before, all the way back when I was in college. Not like an actual itemized budget but I mean I lived within my means without overspending every month. I just somehow got in the habit of spending my entire paycheck whenever I'd get it and then any unexpected expense would push me into debt. And for whatever reason it never really clicked that I absolutely needed to do anything about it. One of these days I'll have to calculate how much I've actually paid to Visa by carrying this 5 figure balance for like the last 9 years or so.
|
|
#
?
Mar 12, 2016 05:36
|
|
|
Nothing more to add but I am rooting for you and I hope you stick with enough self discipline to get your debts all paid off. The deep cuts won't make you feel depressed if you achieve a bigger target goal. You can do it!
|
|
#
?
Mar 12, 2016 21:45
|
|
|
Yeah, just chiming in to repeat that the cash system isn't hard or bad at all. I use it for my discretionary stuff and it just means that I go to the ATM once a week and sometimes have to check my wallet to see if I can really afford another drink or if I should go to the grocery store instead of a restaurant for dinner.
|
|
#
?
Mar 13, 2016 00:05
|
|
|
Thanks for the support guys! I did go out to eat today but it was only like ten bucks and it was with friends so I shouldn't need to repeat it until next week. Do you just sort of remember how much money you have left in each envelope since I assume you're not keeping envelopes in your wallet? Or do they like all get pooled or something?
|
|
#
?
Mar 13, 2016 05:09
|
|
|
You can get as granular as you want. Personally I don't use envelopes, but I just have a fun money slush fund and if I run out I don't have any more discretionary spending for the month.
|
|
#
?
Mar 13, 2016 06:22
|
|
|
That seems very sensible to me and doing that in cash makes a ton of sense too. I'll probably try that out if I run into trouble.
|
|
#
?
Mar 13, 2016 20:50
|
|
|
So I'm about halfway through the month and the budget looks like this: This is gonna be hard haha Despite the fact that the disposables are already maxed out I think I can avoid causing them to actually go over budget. However I realized while I was in the shower this morning that marking things like bridge toll as "reimbursable" on mint, which causes them to disappear from the budget entirely, is pretty stupid when the actual reimbursement is just added on to my normal biweekly paycheck. I don't know what my pay averages out to when reimbursables aren't counted in it, but the $4k estimate I've been using is definitely based on having them in there. So that's why the "Everything Else" category is $80 over already and I wouldn't be surprised by another $60 to show up there near the end of the month as well. Of course if I make more next pay period then I may end up being able to cover it anyway, but it's at least the first semi-unexpected regular expense that I didn't budget for. If I really want this to work out I'm going to have to cut even more fat out of eating out and shopping, the only really flexible categories, and because I'm so spoiled it's going to be tough haha
|
|
#
?
Mar 15, 2016 02:53
|
|
|
You could shop for cheaper car insurance. I don't see any phone related stuff, but you could go to a cheaper plan. You could start using a cheaper mode of transportation to get to work. You could sell the car, and buy a car that doesn't require such expensive insurance. You've got lots of other areas you could work on, but you are correct that 'shopping' and the 'clothing' line items are not good. Similar to the gun thing, if you're really into clothes you can start ebaying / thrifting clothes and probably not losing much money on your habit. You just need to be careful to use a budget and not let clothes that you aren't wearing pile up.
|
|
#
?
Mar 15, 2016 16:17
|
|
|
The OP uses the car on the daily for work. Probably needs it for sure. Might not be able to roll in a beater either. Shop around for insurance though.
|
|
#
?
Mar 15, 2016 18:44
|
|
|
Yeah this car is already the replacement for the much more expensive car of two years ago. Unfortunately where I live insurance is generally high due to auto theft and stuff like that, and conversely rent is low. I think it overall works out to being a savings. Just for reference and because it's kind of funny, I used to pay like $430 a month in car payments and my insurance was $230 a month, and on a slightly lower income. And that car racked up $7k in repairs in one year like not related to those expenses or accidents or anything. I still miss it all the time tho  I'm going to limp through the rest of March, I don't expect to keep to the budget exactly at this point but I'm hoping to avoid too many other stress points. Phone stuff is taken care of through work thankfully. Next month I should have a better shot since I won't be handicapped by a week of unbudgeted spending like I was this time around. And yeah I'm really bad about selling stuff I don't use anymore, except for guns for whatever reason. With guns I put a bunch of effort in, write up an ad, lots of pictures and so I usually get my money back out. But with clothes I end up just cleaning out the dresser every so often and donating everything instead. Bad habits! EDIT: Since I was curious, I went and got an insurance quote aggregate or whatever you call it:  The only one cheaper than the group I'm paying now is esurance and they're known to be pretty garbage. Because I do so much driving I do end up having to make claims somewhat regularly, got hit twice in one month last year for example. So far it's always been declared the other drivers fault so I haven't noticed any rate hikes in particular but yeah, people are always kinda surprised by how much I pay for insurance when they find out! Thanks for the idea though! ZenMastaT fucked around with this message at 21:09 on Mar 15, 2016 |
|
#
?
Mar 15, 2016 20:52
|
|
|
I've recently climbed out from under a mountain of student loan debt, and along the way I've struggled with spending too much on unnecessary toys, eating out, etc. Here's a little psychological trick that worked for me, hopefully you find it helpful to keep you on track. Whenever I was tempted to buy some unnecessary gadget, or to eat out for lunch, or to blow money on whatever, I tried to remember that I wasn't just broke, I was beyond broke. I didn't want to move even further in that direction, I wanted to move towards not being broke. Keeping in mind that buying this thing, whether it's a gun, computer, burger, or whatever now, will make it harder to buy one of those in the future. As long as that debt is there, I can't afford it. I just kept saying to myself "I'm not just broke, I'm less than broke" The trick is to catch yourself before you make that purchase, and remember you can't afford it.
|
|
#
?
Mar 19, 2016 19:32
|
|
|
That sounds like a neat trick! I've always had trouble with self discipline, somehow I always manage to rationalize or weasel my way into deciding "Actually, the thing I want to do that I didn't budget for is fine - and good to do" I'm slowly trying to take that habit and turn it around. So far I've been mostly been able to keep to the budget categories I set, although I went $5 over on groceries. Unfortunately though I've racked up about $250 in extra expenses this month that I failed to account for in the budget. Some of them are hopefully unlikely to repeat in coming months (like the $134 finance charge for carrying a credit card balance) but with the way things are set now, I don't know if I can comfortably find $250 in the budget without sacrificing something I really don't care to sacrifice. I'm going to try to make Tuesdays the day where I actually keep my accounting with the thread, posting an updated budget so I can follow my own progress and hopefully spot any worrying trends.
|
|
#
?
Mar 20, 2016 17:53
|
|
|
Alright it's Tuesday so here's an updated budget summary for the month: Things continue to get out of hand in the catch all category, $330 odd dollars over budget down there. $120 of that is reimbursable bridge tolls at least, plus a $134 finance charge that shouldn't repeat. I got advanced notice of my paycheck due this Friday and it is about $350 more than the last one due to all the over time I've been working, plus reimbursements so I should hopefully end up breaking even on the month itself. For April I guess I'm going to discount the finance charge and then try to find at least $100 in the budget for bridge tolls and then increase the catch all budget by another $100 for just in case stuff. I also want to bump groceries to $250 or $300. To do that I think I'm going to pull another $50 out of restaurants and shopping each and then, probably, abandon the goal of saving $200 a month for the time being while the debt thing is taken in hand. If I can handle paying off the debt in time then I can focus on building up a more significant savings account once it's done. I don't know if that is faulty reasoning - I sure hope not at least!! 
|
|
#
?
Mar 22, 2016 17:24
|
|
|
The $100 increase in the catch all budget seems appropriate. Have I understood correctly that with that budget you have managed to set aside roughly $1900 in the last month for debt repayment or emergency fund? Devian666 fucked around with this message at 19:55 on Mar 22, 2016 |
|
#
?
Mar 22, 2016 19:53
|
|
|
I'm only setting aside $1200 a month for debt repayment and I didn't actually put that into effect this month really. Or maybe I did I don't know I get easily confused by all this lol I mean basically the way I've always done things is, get paycheck, immediately spend it on paying down credit card debts with a set amount set aside for rent at the end of the month, car payment and car insurance. Starting next month I guess my plan will be to try and mentally divide the paychecks up and cover my expenses that way? I'm actually not super sure how I should best implement paying for things and budgeting them. So I want to transfer my ~13k visa debt to a 0% APR solution. Then dedicate $1200 a month to paying that off, fixed expense. Maybe pay $600 out of each paycheck to break it up? I also have fixed expenses of $600 rent, $338 auto payment and $165 car insurance. Eventually I'd like to bulk pay off the car insurance in 6 or 12mo increments to save money but I don't really have the ready cash for that at the moment. Other recurring expenses are Netflix at a whopping $8, bridge tolls at around $60-120 a month, gas which I think averages out to $100 a month depending on what jobs I work, utilities also around $100 a month and medical stuff at around $100. Most of those are set to autobill either the AmEx or the current Visa which seems fine to me as long as the balance is paid off before the end of the month. For all incidentals like groceries, shopping, restaurants etc I plan to switch to using my debit card since I watch my balance pretty carefully and that should also create added pressure not to be overtly foolish with my money. Do most of you guys pay all your bills in one day at the end of the month or pay incrementally as you receive each paycheck? Or is there a better way of handling it?
|
|
#
?
Mar 22, 2016 20:06
|
|
|
We're just trying to get an accurate picture of your spending. Budgeting by paying expenses as soon as you are paid is fine. It means the money is going where it needs to. The main thing is if you can consistently allocate $1200 to paying off the credit card debt that is good. Even if you have some unexpected expenses you should be able to cope while still paying it off. For bill paying I recommend keeping the tasks as simple as possible. People get themselves in trouble over payment dates whether for bills, loans or whatever. I do bill payments paying on or close to the due date, that I can only manage by keeping a list on Trello with payment amounts and dates. One of my clients swears by paying bills as soon as they come in. His method will avoid any forgetful mistakes, versus my method of tracking every bill. I don't recommend my method and you may be better off paying bills all in one go on one day. Of course that works if you aren't living from pay to pay, and you may want to handle things differently.
|
|
#
?
Mar 22, 2016 21:35
|
|
|
One thing I would chime in with is to not fall into an "I paid off my debt first, so I'm fine!" mentality. Before I sat down and created a real honest-to-god budget and started tracking every expense daily (I'm a YNAB convert), I would do what you're doing--pay down debt big with my paychecks, first thing, but then kind of not really pay attention to what I did the rest of the month. Somehow, every single month, my debt never decreased by the amount I was paying it down. I always ended up spending more money on whatever credit card I had. (Usually because of mental tricks like "oh I can just pay it off next month") It looks like you're doing a pretty good job of setting and sticking to your goals though, so good on you for that, keeping it up is the path to long term success. As far as bills, I'm a set up autopay kind of guy. The only bill that I have to manually pay is my daily-use credit card. Everything else is set up to happen automatically, either to that card or to checking. I realize that's not always an option but I like it. If it's something that can't be automated, I would say pay day-of-receiving the bill.
|
|
#
?
Mar 22, 2016 22:18
|
|
|
|
| # ? Apr 19, 2024 06:52 |
|
|
Alright I guess I'll see how it goes next month, whether pay as bills are received or pay as I receive money makes more sense. All I need to do now is to avoid anymore surprise expenses! And hopefully the groceries I bought hold out until next month haha
|
|
#
?
Mar 23, 2016 01:47
|
|