Posted on April 26th, 2011
My Current Financial Situation
Okay, so in an attempt to put my money where my mouth is, and considering this is the beginning of a new blog, I thought I would spell out every little detail about my financial situation at this time. This will allow me to track my progress and to look back and see how far I have come, providing inspiration and motivation down the line.
Recent Financial Changes
Recently, I just went another $6,000 in debt with the purchase of a 2005 Dodge Dakota. This seems like a bad thing, except when considering that the plan is to sell my current vehicle, a 2007 Honda Civic Si, which I owe around $13,700 on. Once sold, assuming I get out of it only what I owe, I’ll be saving $7700.
Once the Honda is sold, I’ll have the $6,000 to pay off on the truck, and $2300 on my Discover credit card, for a grand total of $8,300 worth of debt. Luckily, I’ve come into a bit of extra cash lately, and I predict that I will be able to pay off that entire amount within 3 months.
But, until the Honda sells and I pay off the truck and the credit card, my monthly budget looks a little something like this
I’m making it, but there’s room for improvement. Currently I live on 72.41% of my income, leaving me with $883.00 dollars a month to save and invest. This amount fluctuates a bit every month, especially when the once-a-year expenses crop up, such as vehicle registration, maintenance, college books, holiday and birthday gifts, and other not too common expenses, but typically I do okay.
I currently have every penny I’ve spent within the past 7 months recorded, and what I plan on doing after having one complete year of expenses recorded is average out the expenses that don’t occur on a monthly basis to figure out how much to stash away every month for these things, but that’s another topic altogether.
The Future Budget
Here’s where it gets fun (for us financial nerds anyway). The whole goal of my financial life right now is to trim down that budget as much as humanly possible, which means like I mentioned before, selling the Honda and paying off the credit card mainly. This alone would save me $413 a month, plus the amount that my insurance would drop with having only one car on my policy. Sure, the truck is less gas efficient than the Honda, but my insurance will be lower overall than it was with just the Honda on my policy, and it’ll be nice to have a pick-up to move the occasional couch around.
The Projected Budget
This is what my budget will look like after the Honda is sold, the Dodge is paid off, my insurance drops, my credit card is paid off, and I get rid of my YMCA membership that I don’t use (I have a 24-hour gym at work). I could even go further and eliminate another $150 a month by not buying any supplements (in addition to a finance nerd, I’m a borderline body-builder, and as such, I require lots and lots of protein powder…).
Basically, I’ll have no bills, and even after all of the actual “mandatory” bills (bills that I consider mandatory because they come in the mail, or online, with a definite, set amount), subjective bills (bills that I have at least some control over the amount of), and entertainment, I’m still going to have around $1,600.00 a month to save and invest. Once again, that number will fluctuate, but $1,600 looks a lot better than $883.00.
Anyway, I’ll post updates in the future as to where I am on my journey from my current budget to this future budget, as well as a new budget based on the 7 months or so of recorded spending data.
No more little red rice-burner! (That’s a reference to a Honda, for those unlucky enough to not be nerds).
Yup, it’s been sold to a lady out of Ponca City, Oklahoma. As such, it’s time to update my Current Financial Situation. Below you’ll find my new monthly budget. The highlighted fields are the ones that have been affected by the sale.
That’s right, R.I.P. Honda Civic Si Payment.
So obviously the major change here is the elimination of $363.00 worth of monthly car payments. As an added bonus, my monthly car insurance bill went down from $130.00 a month to $80.00, resulting in a gain of an extra $50.00 a month.
Now, I do have to keep in mind that I did buy a truck. The amount I budgeted for gas hasn’t changed because I had never really spent $200 a month on gas before, it really only came out to about $150 or so. Of course, gas has gone up a bit since then, and I know $200 is going to be a little on the low side for this truck, so I figure about another $60-$70 a month in gas. We’ll see how much I actually spend in gas driving only this truck every day a month from now.
As far as my overall progression to the “Projected Budget” goes, I’m closer to my ideal “Percentage of Income Required,” of 49.91% than I was, but I still have about 9.59% to go. I have two things to do to get there; Pay off the Dodge Dakota ($6,000), and pay off the Credit Card ($2300).
I should be able to drop about $5,000 on the truck this coming Monday, leaving me with the paltry sum of $3300 of debt to pay off. At the end of May it looks like I should be able to put down another $1,000 on the truck, thus sending it to the Burning Pit of Death, Horror, and Debt Elimination (I have no idea what that is… it just sounded descriptive), which will free up another $212 a month.
Then, after 2 more months, at the end of July, I should have enough to pay off the credit card. Then again, this is all in a perfect world where nothing unexpected comes up, and where people who write blogs like Go Be Rich have perfect discipline (It’s pretty darn good, but I wouldn’t say perfect).
Updates to come real soon.
Current Financial Situation Update: Saturday, June 5th, 2011.
Current Financial Situation Update: Saturday, June 5th, 2011.
Well, I did it, the last major hurdle I needed to jump to be debt-free has been jumped. No more vehicle loan.
That's right, on May 28th I strutted through those bank doors, looked the teller right in the eye and said, "You feelin' lucky punk?", to which the teller replied with a pathetic whimper and immediately proceeded to wet himself. This caused the cute girl behind the "Loan Officer" desk to swoon with immediate feelings of immense attraction towards me and my anti-debt attitude, which is what prompted her to ride off with me into the sunset… in my paid-off truck, of course.
Okay, I know that didn't make sense, nor did that actually happen, but it sounds slightly more dramatic than, "Hi, I'm here to pay off my loan, can I get the entire payoff amount please?"
Although I gotta admit, it was kind of exciting to write a $6,178.10 check. That's by far the largest check I've ever written. Below is my updated budget, with the parts that have changed highlighted in yellow.
Okay, so the first obvious change: no Dodge Dakota Payment, as indicated by the Rest In Peace. There have been some other budgetary changes however, that have nothing to do with me paying off any debt. The first one is the return of the internet bill. I inadvertently paid off about 6 month's worth of payments to my telecommunications company, and for a while there I had forgot that I actually would have to ever start paying it again. I was reminded pretty quick when a bill came in the mail (it's ironic that a company that provides internet service doesn't have an option to pay online).
The next change is in the Entertainment category. for a few months I had been coming very close to, or going a bit over, my old limit of $250.00, so I've increased it to $350.00 a month. Plus it's kind of hard to keep entertainment costs way down when you decide to break up with a girlfriend who likes to stay at home, rent redbox movies, and generally not spend money. Being on the prowl again isn't cheap (no, i'm not the kind of guy that actually talks like that. Really). Besides, I started to feel a little… cut off from the world, due to all of the events and gossip that my circle of friends engage in that I would choose to opt out of.
Seriously thinking about cancelling the YMCA membership, considering I haven't been there in about a month. It's just far to convenient to work out at work for free, and now that I'm back on second shift it'll be even easier to work out at work, considering I won't have to try and motivate myself to do so in the middle of the night anymore.
After all these budget changes, I went from requiring 59.50% of my income to live to 57.41%. It's only a drop of 2.09%, but that extra $100 a month is worth at least that meager of a drop to me, and there's not much I can do about the internet bill. I suppose I could get the cheapest plan they have and drop it down to only $30 a month, but that really is barebones internet service, and considering I have a blog and do so much on the internet, that would just be too slow for me.
The Future Budget
The only thing left now to pay off is the credit card. Between that and ending my YMCA membership, I have about $90 to trim from my budget. I could cut out the supplements and save a total of $240, but I'm not ready to do that yet. Everything else in my budget I'm pretty happy with. Now, if I could only find a way to eliminate that rent payment…