I’ve Paid For This Twice Already…

Archive for the ‘goals’ Category

Making every dollar work for me.

I’ve said it before, I know I will say it again, and I can’t say it enough. Being aware of every dollar we take in and send out, every single dollar, has made an enormous difference in our financial lives. Understanding where and why we spend and what we spend on, and taking control of that instead of frittering aimlessly, has lead to more money being freed up for debt reduction than I ever imagined. It is a great feeling, rather empowering, actually.

Spend less than you earn is very important, of course, but we’d been doing that for over three years and still not making much progress. We were spending less than we earned, but how much less? Not much. I’m not sure exactly, because we never kept exact track. But from how much was left over when we started this focused budgeting, we couldn’t have been spending much less than we earned. The biggest problem was anytime I “felt” like we had “extra” money, I would “catch up” all the things I had been denying myself or the family. Not extravagant things by any means, but also not always necessary things. But now…. every dollar has a purpose. Every dollar has a job, assigned at the beginning of the month, and every dollar is working hard for me.

No more money slipping through the cracks on useless clutter!

Make every dollar work for you. Know that every dollar has a job, be it to provide (food, shelter, utilities), reduce (debt), grow (savings)… whatever it is, know each dollar’s purpose. You can find dollars you never knew you had. Tracking each dollar spent and earned makes it much harder to lose them without knowing it.

Track those dollars. Give them jobs. Make them work for you. It is a wonderful feeling. And I sleep better at night.

When the kids don’t wake me up at least.

~J

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A lot of the time, my focus when talking about debt is on big financial goals like “Get out of debt”. But maybe I should stop calling those goals and start calling them dreams. Make no mistake, debt elimination is still my goal, but reframing it as a dream may make it feel less like a daily struggle (for it isn’t going to happen anytime soon) and more like an achievement to strive for. A dream can become reality through the implementation of many small goals and successes stacked upon each other, which is what my debt reduction journey is made out of.

Most of the time, in my actual day to day life, I think about small things, parts of the debt reduction puzzle that together will eventually add up to big things. I earn small amounts of extra money to apply to debt. I plan for one day at a time of not spending any money. I save small amounts of money shopping for the best deal. And all these small things do add up. When I look at my overall payments to my credit card in a billing cycle, for example, even though I only make one large payment and a dozen small (sometimes very small) payments, by the end of the cycle it has all added up to a much larger amount than my original large payment by itself was. I don’t think I have been so excited about such small amounts of money since I was a small child and a found nickel seemed like a fortune of possibilities. Every little bit I earn selling something or doing a survey, no matter how small, seems really powerful and significant, and every dollar milestone in debt reduction seems empowering. I can’t imagine how excited I will be when the total debt number drops below the $30K mark, since even drops into different hundreds right now get me all giddy inside.

I think small. But I dream big. And those big dreams are becoming reality, one small snowflake at a time. I may have only snowflaked $22.69 last week, but that is $22.69 I am now done paying interest on for the rest of my life, and $22.69 closer to the goal of being debt-free.  And that’s a powerful thing.

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I decided it was time to publicly set some firm interim debt reduction goals for our family. We still have the overall goal of eliminating our credit card, student loan, and car loan debt by December 2010, but I wanted to set some goals for December 2007, 2008, and 2009 on the blog to help monitor our progress a little more and keep us on track.

I’ve revised the number I think we can pay to debt each month. My past calculations were based on $975/month to debt, but I think we can manage $1025. It will be a little bit more of a stretch, but that is my new goal number. It actually would have us out of debt in October of 2010 but I am not going to revise that date yet.

I also am going to at the end of 2007, look at the actual numbers we paid to debt each month and see what on average from July to December that number is. At that point, I am going to print another calculation based on the snowball calculator and start tracking our actual debt totals vs the projected totals according to the snowball sheet from month to month. I think at this point, it would end up revised too often to be useful since we are still figuring out what a reasonable yet ambitious number to pay to debt actually is for us. By December we will have 6 months of data to look at so I think that will give us enough to work with to make good assumptions.

And of course I’ll be posting and discussing that data here.

Without further ado, on to the goals!

Goals by end of 2007:

-transfer credit card balance to 0% interest offer (ASAP - hopefully done by Labor Day)

-credit card balance under $4000 (snowball calculator projects $3980 lol)

Goals by end of 2008:

-credit card paid off (target August 2008)

-spouse student loan under $10000 (calculator projects $10030)

Goals by end of 2009:

-car paid off (expected March 2009)

-spouse student loan paid off (calculator projects December)

-my student loan under $10000 (calculator projects $10120)

So, the goals are ambitious (I used $1025 as my monthly payment number and that is slightly more than we have hit it July or August) but I think reasonable and attainable. Barring anything unforseen… and of course there will be a few of those I am sure! But we can always readjust. As long as we keep focused on moving forward.

~J

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