New approach
Ya'll - I'm getting frustrated. I started this journey about 2 months ago to eliminate my debt and have the money in savings I need for unexpected expenses. Well, it's not going so well, as you can see.
If you noticed - I changed my starting debt amount. Well over $21,000. This does not include the house.
I also changed the savings goal to $1000 instead of $5000. I had fully planned on using my Stock payout and my taxes to fund this $5000. It didn't work out.
It bears repeating that I like to shop. If I see something I like, I will purchase it. What have I purchased so far this year? A Kirby, new furniture for my living room and a Litter Robot. All purchased on credit. So, adding to my debt. I still have not purchased what I need to remodel my bathroom.
I'm hitting the restart button. A hard restart, if you will.
I am still waiting for my federal tax refund to come in. It is delayed because of the Earned Income Credit and the Child Tax Credit I claim. Looks like it may come beginning of next week. I hope. I will be getting back about $1700 from federal after you take out the fees from Turbo Tax.
$1000 immediately goes into savings. You'll notice I already have $405.54. That may or may not be there once the refund hits. I'll explain further down.
I am going to be using the Dave Ramsey method of money management. For those who don't know him, he is a money management guru and a lot of his stuff makes sense. So, I will be following his baby steps. https://www.daveramsey.com/dave-ramsey-7-baby-steps
First, get the $1000 into an emergency fund. This is to handle any extra/unexpected expenses.
Second - create a budget that includes the minimum payments on your debts. Any and all money outside of the budget goes towards your debt.
This the part I've been struggling with. I can make the minimum payments, but when I budget for my paycheck, I always keep out an extra bit of money just in case. Not going to do that anymore. That's what the $1000 is for. I can replenish that when it dips below $1000, and I'll still be putting aside $25 every paycheck plus whatever I put aside for Stash Your Cash.
So, when I get paid, pay my bills. Anything extra goes to my lowest dollar amount debt. Right now, that's the Line of Credit I have with my Credit Union. Amount owed: $173.89. It gets a minimum monthly payment of $15.
Once that's paid off, the $15 minimum payment gets added to the minimum payment of the next lowest bill - my Torrid credit card. That minimum payment is $35.00. So, $15 + $35 is $50. Plus anything extra.
The next bill is Credit One with a minimum payment of $30. So $15 (LOC) + $35 (Torrid) + $30 (credit one) = $80.
You see where I'm going? This concept is not new. This concept has been around forever - as long as people have had debt and have been trying to pay it off. I had planned on using this method once I got the $5000 in the savings account. But that seems like such an unattainable goal right now, and all the while I'm spending my minimum payments just to pay the interest on some of these bills.
Now, we all know I like to spend. I'm trying to curb those spending habits, but I do need to make sure my clothes are not ratty and full of holes for work, and I need to pay for gas now that I will be commuting twice as far for work and there are things I need to purchase for the house. Yes, I'm justifying my spending. Plus I have my son's graduation party to worry about and getting all the food for that. So it is reasonable to say that I may use my credit card to pay for those, but I'm going to try and keep the spending to a minimum and spread it out. Like purchase some of the hamburger for the sloppy joes every paycheck. Buy flour and jello and shortening (non perishables) for the jello cookies and store it. But, after he graduates and moves to his dad's, I'll be able to cut down my grocery budget and save even more money. Theoretically.
Okay - so what am I going to do with the $405.54 currently in my savings account. Well, going to try and keep as much of it as I can, but I'm also going to be putting it towards next month's mortgage payment and the tiles I need for the bathroom remodel.
So, that's the plan. Fingers crossed it works! I will be updating more often, I hope, once I can get back to selling things. I had a large order that I was working on for 2 weeks that I finished on Sunday, and got paid for.
If I've learned anything - I've got to be flexible and go with the flow.
If you noticed - I changed my starting debt amount. Well over $21,000. This does not include the house.
I also changed the savings goal to $1000 instead of $5000. I had fully planned on using my Stock payout and my taxes to fund this $5000. It didn't work out.
It bears repeating that I like to shop. If I see something I like, I will purchase it. What have I purchased so far this year? A Kirby, new furniture for my living room and a Litter Robot. All purchased on credit. So, adding to my debt. I still have not purchased what I need to remodel my bathroom.
I'm hitting the restart button. A hard restart, if you will.
I am still waiting for my federal tax refund to come in. It is delayed because of the Earned Income Credit and the Child Tax Credit I claim. Looks like it may come beginning of next week. I hope. I will be getting back about $1700 from federal after you take out the fees from Turbo Tax.
$1000 immediately goes into savings. You'll notice I already have $405.54. That may or may not be there once the refund hits. I'll explain further down.
I am going to be using the Dave Ramsey method of money management. For those who don't know him, he is a money management guru and a lot of his stuff makes sense. So, I will be following his baby steps. https://www.daveramsey.com/dave-ramsey-7-baby-steps
First, get the $1000 into an emergency fund. This is to handle any extra/unexpected expenses.
Second - create a budget that includes the minimum payments on your debts. Any and all money outside of the budget goes towards your debt.
This the part I've been struggling with. I can make the minimum payments, but when I budget for my paycheck, I always keep out an extra bit of money just in case. Not going to do that anymore. That's what the $1000 is for. I can replenish that when it dips below $1000, and I'll still be putting aside $25 every paycheck plus whatever I put aside for Stash Your Cash.
So, when I get paid, pay my bills. Anything extra goes to my lowest dollar amount debt. Right now, that's the Line of Credit I have with my Credit Union. Amount owed: $173.89. It gets a minimum monthly payment of $15.
Once that's paid off, the $15 minimum payment gets added to the minimum payment of the next lowest bill - my Torrid credit card. That minimum payment is $35.00. So, $15 + $35 is $50. Plus anything extra.
The next bill is Credit One with a minimum payment of $30. So $15 (LOC) + $35 (Torrid) + $30 (credit one) = $80.
You see where I'm going? This concept is not new. This concept has been around forever - as long as people have had debt and have been trying to pay it off. I had planned on using this method once I got the $5000 in the savings account. But that seems like such an unattainable goal right now, and all the while I'm spending my minimum payments just to pay the interest on some of these bills.
Now, we all know I like to spend. I'm trying to curb those spending habits, but I do need to make sure my clothes are not ratty and full of holes for work, and I need to pay for gas now that I will be commuting twice as far for work and there are things I need to purchase for the house. Yes, I'm justifying my spending. Plus I have my son's graduation party to worry about and getting all the food for that. So it is reasonable to say that I may use my credit card to pay for those, but I'm going to try and keep the spending to a minimum and spread it out. Like purchase some of the hamburger for the sloppy joes every paycheck. Buy flour and jello and shortening (non perishables) for the jello cookies and store it. But, after he graduates and moves to his dad's, I'll be able to cut down my grocery budget and save even more money. Theoretically.
Okay - so what am I going to do with the $405.54 currently in my savings account. Well, going to try and keep as much of it as I can, but I'm also going to be putting it towards next month's mortgage payment and the tiles I need for the bathroom remodel.
So, that's the plan. Fingers crossed it works! I will be updating more often, I hope, once I can get back to selling things. I had a large order that I was working on for 2 weeks that I finished on Sunday, and got paid for.
If I've learned anything - I've got to be flexible and go with the flow.
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