Wednesday, January 21, 2009

Costly week

This week has been hectic for me, between classes, working at my revenue producing job, working my internship at the radio station, church, and the children/house activities.

With this, I have spent $45 in eating out so far this week. Not having a plan for the weeks that are this hectic costs me money that I could be sending in towards debt repayments.

I sincerely do not have the time the rest of this week to do anything about my oversight. However, I do not have work or school on Sunday and I plan on cooking some things that I can freeze (Spaghetti, for instance) so in the event that I am entirely too busy to stand in the kitchen and actually cook dinner I have something already pre-made at home that doesn't take a considerable amount of time.

Thursday, January 15, 2009

2009 Goals

Part of my problem is that I never had any written goals or direction. To be quite honest, for the better part of the last 6 years I have been kinda going with the flow, doing whatever I felt like doing at the time. While this may be considered a good thing (my 40 things to do before I turn 40 list only has three things left on the list to be crossed off and I just turned 30 last October) it has not aided my financial security. This year I am prepared to change the tide of my easy come/easy go mentality and be more, ah, grown up regarding my finances.

2009 Goals

Of course, this is a no brainer. I have paid cards off before only to have the balances back because I never stopped using the cards. There is nothing I need a credit card for. If I can not afford it with cash, I will just have to wait until I have the money available to purchase it.

For the last two years, I have had a budget. The problem is that I have been back budgeting. After I spent money, I would ensure that I recorded it properly so I knew how much money I had. Well, let's face it, I was basically using my budget as a checking account register and not much else. This year I have changed my budget into weekly columns. Each expense that I have is entered into the appropriate week it is due. I am in tip based employment, so it is imperitive that I track my earnings each week. It is a bit harder to budget without a set income, but it is not impossible.

Instead of living week to week off of tips, I instead want to have a month's worth of expenses already in my checking account on the first of each month. This will mean that I will be living on the previous month's income, which also means that everything I make in the current month I have to save for the next month. This will be quite helpful for me because I will know exactly how much money I have available after paying expenses each month and I do not have to hope and pray that I make enough money in any certain week to cover my expenses. It also means that I will know how much extra money I have to apply towards debts at the first of each month. My snowball may not be consistent, but at least I will know exactly where it is that I stand.

There are things that I know I have to pay for that are not monthly expenses. Clothing, oil changes, tag fees, school supplies, birthdays, tuition, and Christmas gifts are just a few examples of these items for me. I have in the past not seen the forest for the trees, paying every dime I had available towards debt only to take out the card and charge for these types of things. Having sinking funds set up will alleviate the "need" of using credit cards, which I am not allowed to do anyway because of goal one.

5. PAY $10,000 WORTH OF DEBT OFF IN 2009
This includes minimum payments. I believe that this goal is doable considering my income situation and other financial obligations, but it will take my paying attention to the pennies.

Target Visa/end of February 2009
HSBC/end of April 2009
Mohawk/end of June 2009

The reason I bumped HSBC before Mohawk even though I owe less on Mohawk (baby steps, anyone? :) ) is because I have 0% intro rates on those debts. HSBC's intro rate expires at the end of April and Mohawk expires at the end of June. The amounts are not overly large, but I really do not want to pay 23% interest when the rates reset. I know it seems kind of illogical considering I have the Providian card past $10,000 which does accrue interest and paying that card down faster would amount to less interest paid, but I am looking for the "victories" to keep my motivation on the upswing.

Again, another expense that probably should not be taken on while I am getting myself out of debt. I do not expect anyone else to understand my justification for this expense. I will give a back story for why I want and will go, however. I spent ten years in the military and have what I consider best friends who live all around the globe. Once every two years we all get together somewhere to reunite (with the exception of those who are deployed at the time). We rent a house in the location we chose and all stay in the same place. We split the total cost between 15 people, which makes it more affordable for everyone. With two wars going on, I will not miss a chance to see my friends only to have something happen and regret not seeing them when I had the opportunity. I will, however, cash flow my trip.

This will not only help my bottom line, it will also open up the creative side of my brain. There are zillion of things to do that are free or low cost. This may interfere with number 40 on the list, go to Tahiti, but I still have 10 more years to accomplish that goal.

Those are my financial goals for 2009. I believe they meet the SMART criteria. As long as I stay focused and diligent, there is no reason why I should not be able to meet all of these.

A year for change

For years, I have been telling myself that I need to get out of debt. I have paid down quite a bit of credit card debt, only to accumulate it all back. The last 6 months, I have been working quite hard to change my mindset about money and more importantly, the accumulation of things.

Understanding why I spend money, I believe, was the first step in changing my financial outlook. Of course I buy things I need, but I also bought because I wanted (instant gratification syndrome), because I was trying to impress people (keeping up with the Jones'), and because of depression (shop therapy).

I am really tired of the cycle. I am tired of being so wrapped up in what other people think of me. I am tired of worrying if I am going to have enough money to pay my bills, feed my children, and still somehow provide the quality of life I want for my family. I understand that my spending now and paying later behavior has impacted the quality of life for my family now. The only way I can ensure that our future is secure is by making the sacrifices necessary short term for the long term benefit.

The following list comprises all of my credit card debt. This does not include my auto loan or mortgage.

Providian: 10,561
Discover: 4,993
Chase: 2,658
Capital 1: 1,980
HSBC: 1,332
Mohawk: 960
Target Visa: 819

TOTAL: $23,303