Archives for October 2011

October Goals Update

Remember my October goals?  Here is the update… I accomplished all of them!

  1. Read 4 books
    A Trick of the Light by Louise Penny on 10/3
    Dangerous to Know by Tasha Alexander on 10/6
    Fiesta of Sunset: The Peace Corps, Guatemala and a Search for Truth by Taylor Dibbert on 10/13
    The 4-Hour Workweek by Timothy Ferriss on 10/18
    The Phantom of Pemberley: A Pride and Prejudice Murder Mystery by Regina Jeffers on 10/30
  2. Reduce credit cards by 10%
    Reduced by 12.7% total as of 10/30
  3. Contribute $350 to retirement accounts
    $218 to Roth IRA and $137 to 401(k)s = $355 total
  4. Get rid of 20 items (5 items/week)
    20 items through 10/31 (made it!)
  5. Volunteer at least 2 times
    Habitat for Humanity on 10/6
    Southside Community Center on 10/13
    Food Bank Garden on 10/29

Next up… November goals!

End of 2011 Financial Diet

While running the numbers for my post on Tuesday, I managed to really terrify myself in regards to my current financial picture.  It’s much better than it was four months ago, but still… sheesh.  My specific money diet is going to be a more extreme version of No Buy Month and probably won’t be this intense for much past the new year… but it’s necessary right now.

Starting now, I will commit to the following rules:

  • Pay my needs first.  Rent, bills, laundry, car ins, gas to get to work and an oil change that is due. (Plus dog food if he needs it.)
  • I do not NEED anything else except food.  And I will only buy food from the grocery store.
  • Aside from the above, if I have to pay for it, I can’t have it.  For entertainment I have plenty of great books (and a library nearby), access to Netflix, a camera, a computer and an Xbox 360, plus plenty of free events around the city.  I will be fine.
  • All non-recurring payments will be cash.  I’ve already started my stockpile with tips, reimbursements and gifts from my parents.
  • Use what I have.  Added bonus of reducing my personal consumption.
  • Sell what I don’t use anymore.  Money in the bank!

I’ll be honest, it’s a little daunting and scary, but it’s better to start preparations now rather than continue and wait for disaster to strike to make some changes.  And at the end of it, if disaster doesn’t strike, then I’m well on my way to some major goals I want to prepare for.

Is it just me that feels a need to accomplish a LOT before the end of the year?  Do you have any major plans for the next two months?

Preparing for Job Loss

Why am I preparing for job loss?

In December 2007, I became a university graduate.  That date may or may not mean anything to you, but it is the date pinpointed as the official start of this recession.

I was unemployed through October 2008, at which point I had moved to Canada and begun working in a coffee shop.  In February 2009, my work permit expired and I moved home.  On that drive home I received news about a job opening.  Three weeks later, I moved to a new city and began working for my current company.  I was un/underemployed for 14 months and racked up huge amounts of credit card debt to cover it.

I admit I have been very, very lucky these past two and a half years.  The worry about job loss at the height of the recession didn’t faze me because I for the most part knew my job was secure.  That changed last March when the reality of my industry began to settle in.  I could very well lose my job in the next twelve months.

Which I haven’t… yet.

But I do want to talk preparing for an impending loss of job.  I did a quick search through my Google Reader and came up with three articles from one of my all time favorite blogs, Get Rich Slowly, that helped me figure out a plan of attack in case that happens sooner rather than later.  (If you’re interested, see Use a Financial Fire Drive to Prepare for the Worst BEFORE It Happens, Reader Story: Lay-Off Resistant Family Finances, and Turn Paranoia Into Plan B (Because Things Might Get Worse))

So what does my plan look like?

My current budget is broken down as follows, assuming an income of $2,200/month:

  • Needs $1,200 – rent $600, util $150, auto $175, groceries $150, health/pet/other $125
  • Wants $500 – includes dining out, clothes, cell, entertainment (major purchases have included concert tickets, books, new work shoes and a bicycle)
  • Save $180 – I can’t psychologically make myself give this up while I’m making money
  • Total = $1,800

If I lost my day job, my income would drop to $450 a month from my second job.  Luckily, that includes health insurance.  Unemployment will likely not be an option.

To decrease my expenses:

  1. Switch to cash immediately (bye bye debit card!)
  2. Cut saving
  3. Cut all wants (in fact, I started this yesterday)
  4. Chat with roommate regarding utilities/etc
  5. Ask parents if I can hold car insurance payments to them
  6. Defer my student loan for economic hardship
  7. Instant savings approximately $850

To increase my income:

  1. Find a job, any job, even minimum wage
  2. Income of approximately $600 (assuming minimum wage at 25 hrs/wk)

Which would bring me to income of $1,050 and  expenses of $1,030.

Obviously the scenario isn’t perfect and things always change in real life, but it’s a start and it’s good to have a plan.  Additionally, under this plan I have an extra 10-20 hours a week (from working 60 – 70 hrs/week down to 50 hrs/wk) that I can use for volunteering, donating plasma, selling items, creating a business plan for my own business, etc.

And now I know that even in the worst case scenario, I will be okay.  What would you do in case of job loss?  What major aspects of your life would change?

Actual Debt

I’ve kind of skirted around how much debt I actually have despite all the talk about what I’m doing to get out of it.  Well, no more.  I am very publicly admitting I am $13,756.53 in debt.

I put together this nifty spreadsheet to track my debt payoff plan and, hopefully, once I pay off my debt I will be able to use it as a way to track other major TBD savings goals (on a separate tab of course!).

Some notes on the spreadsheet…

  • Emergency Fund is artificially inflated due to an insurance payment for vehicle damages.  Most likely will be used by December.
  • Moving Fund target is $650 by March 2012.

View the full spreadsheet here.

Prioritizing and Saying No

I often find myself wanting and attempting to do it all.  I find that I get really focused on a new project or hobby (see bicycle) and then abandon it when it gets too difficult to maintain or too time consuming.  Other times I find it difficult to focus on one single project and am constantly jumping around between multiple.  This often happens with books, I have many partially read one spread out around my house.

I finished reading The 4-Hour Workweek by Timothy Ferriss last night (yea for being on track exactly for 52 in 52!) and realized that a lot of things Ferriss writes as a way to work less on meaningless tasks, I can apply in my life.  I’ve already started with trying to get other people (and myself) to be concise and telling people no.  It’s freeing.

Right now I want to spend what little precious free time I have reading, volunteering and learning French.  I spend close to 70 hours a week in an office or coffee shop, I don’t want to add any more hours to that.  I don’t want to have to redo the entire schedule for one of my weekend days, just to accommodate you when you are likely to back out at the last-minute.

I’ve been exhausted for long enough.  I’m still going to get out of debt with gazelle like intensity, but I’m done filling my free time with things that don’t benefit me or make me happier.  I feel much lighter already.

(image here)