“Budget” Archive
Dec
14
In a post from many months ago–time flies when you are paying off debt–I mentioned I would moving to a car free lifestyle, free of car payments, insurance payments and the expense of $3.50 gallons of gasoline. Well, I am happy to announce that as of December 7th, I am officially living without a car and I couldn’t be happier about it.
In terms of dollar savings, I should save close to $600 per month, net of any FlexCar usage each month:
| Expense Item (Monthly) | Amount |
| Car Payment | $464.61 |
| Insurance | $89.00 |
| Gas Purchases | $175.00 |
| FlexCar Usage | ($125.00) |
| TOTAL MONTHLY SAVINGS | $603.61 |
In addition to the ‘direct’ savings every month, I think there will be many ‘indirect’ dollars saved as a result of living car free. What I mean by ‘indirect’ is that there will be no impulse buys or overbuying at the grocery stores since I will have to carry my groceries on the bus or walk from the store; I’ll only have room for what is on my list. In addition, I expect to eat out a lot less as a result of not having a car. The bottom line is that living without a car should really jumpstart my effort to create and live on a budget, build back an emergency fund, and get current on my student loans (I had fallen a month behind or so in recent months).
I’ll be talking more about my choice to live without a car, including my thoughts about whether a car free lifestyle may be right for you and what resources are available to help you decide. In the meantime, I’ll be happily riding the bus and living a more structured life going forward.
Jun
11
Today I took a vacation day in order to get the final details of the DMP proposal to my creditors (for those accounts that are open and not already with the collection agencies, i.e. AMEX). I’m glad I had this meeting as it was both an eye opener from a budgeting perspective and somewhat of a relief to see that if the proposals are accepted, my interest rates will be knocked down dramatically. As my readers know, I was paying as much as 32% on some of these cards and now the top interest rate for a given card will be 9.9%. I’ve had prior dealings with the creditor who is charging 9.9% and in my case they knocked it all the way down to 0%, so I’m hopeful they will do this again. So, the good part is that my interest rates are lower, payments each month are only slightly lower, but the bulk of my payment will be applied to the principal. According to the DMP estimate, I will be debt free in 53 months given the current plan. This doesn’t include any additional payments I make from my side income and annual bonus, all of which can be directed to a specific creditor as long as I notify the Credit Counseling Agency how I want the money directed.
Now for the bad news. The bad news is that given my current budget and child support obligations, I have less than $100 cushion every month. This does NOT include any of side income because it hasn’t been reliable enough to include in a monthly budget worksheet at this point. I, unfortunately, have a leased car so there isn’t much I can do in terms of getting out of the lease early and avoiding those payments for the next 12 months. I have frankly cut just about everywhere I could with one exception; my current apartment.
In an earlier post, I posed the question of ‘To Move or Not to Move’, and I had decided at the time that sacrificing a quiet, stable apartment and decent neighborhood would not be a good idea, unless absolutely necessary. Well, it looks like it WILL be necessary. Rent eats up a good deal of my budget each month, and while my apartment is new and nice inside, it frankly isn’t worth what I am paying for it. I won’t go into specifics of what I pay each month, but suffice to say I can save probably $300/month by moving to an older place in a different neighborhood that might involve a longer commute. Since I plan on utilizing public transportation at least 75-80% of the time going forward, as long as there is bus access within walking distance (or a Park & Ride within 2 miles or so), I am going to move. Until I can rid myself of my car payment and have a reliable second income source, my budget is just too tight should something unexpected come up. This budgeting exercise was also a reminder of how important an emergency fund really is!
I’ll keep you updated on the search for a new apartment but given I have the day off, I think I will make good use of the time and hit some of the places TODAY!
Jun
11
As I mentioned, I hope to finalize the details of my DMP this week so I can get the ball rolling on lower interest rates, a fixed payment that fits into my budget and a truly noticeable monthly reduction in debt. The plan and my budget are all made assuming that my salary is the only source of income that I have. That said, I will have a fairly decent bonus payout come September and my side income from the blog, my travel agent bookings and another potential side job should get me another $750 per month or so. The question is, how will I use this money to eliminate my debt. I actually need to inquire how ‘extra’ payments will work with the DMP. The best idea, at least from my perspective, is to use a snowball approach with the extra side income. I just need to ensure that paying extra directly to creditors won’t mess up the details of the DMP. I would imagine it wouldn’t but I do need to check. The first step with any side income will be to find a $2500 Emergency Fund but once that is complete I do plan on using a debt snowball to accelerate the DMP. I’m actually quite excited to be so close to having a real plan in place to deal with this debt. I’m actually looking forward to using ONLY my debit card and cash for my day to day existence. I should probably look into what banks have good rewards for their debit cards since I will be using mine so much. I wonder if I could somehow use my debit card to pay my rent and get frequent flier miles in the process. Anyone know if you can buy a money order with a debit card (using it as a credit card, i.e. no PIN). I could score myself almost enough miles for a free ticket to visit my daughter if this were possible.
Anyway, stay tuned this week for the details of the DMP. Again, I wont be able to reveal all the details regarding individual balances but I will be able to provide interest rates and the monthly fixed payment amount, which from the look of things is a lot but is manageable.
