We are into a new year! I’ll be posting my annual review for 2015 and my plan for 2016 in about a week.
Last Month’s Review
Overall, December was a pretty typical month. There were a few things that happened that I was less than prepared for, but it’s getting better. I’m establishing a weekly review to plan for the upcoming week and to also keep better tabs on my spending. Some notable events that happened over the course of December were:
- Ebay auction winner for my cell phone failed to pay, so I had to file a dispute and relist the phone. The new auction closing $94 lower than the original auction.
- Underestimating how much Christmas would cost. I had budgeted about $150 for it but it ended up costing about $250-$300.
- My divorce finalized on the 18th.
- I had to dispute a fraudulent charge to get back $43.79. If you don’t do it already, CHECK YOUR STATEMENTS EACH WEEK FOR FRAUDULENT CHARGES!
- Unexpected income in the form of Christmas gifts.
- I’m still throwing away money for unplanned expenses.
Net Worth Recap
Here’s where my net worth is at as of January 7th, 2016:
- Assets: $44,250.90
- Bank Accounts: $4,302.50
- Investment Accounts: $35,099.40
- Rollover IRA: $14,849.19
- Roth IRA: $15,400.29
- 529 Plan: $4,849.92
- Car: $4,849.00
- Debts: -$107,745.21
- Student Loans: -$72,795.72
- Chase Credit Card: -$19,644.84
- Barclay Credit Card: -$3,389.22
- Personal Loan: -$5,718.05
- Ex-wife’s Attorney: -$4,950.00
- American Express: $1,197.38
- Net Worth: -$63,494.31
Net worth took a hard hit this month. Investment accounts are down, my car value is lower, and I’m tracking a new debt account: American Express.
Around the start of the genesis of the idea to pay off my debt, I signed up for an American Express card. Stupid move, I know. When I bought the new phone in November and did some car maintenance on the girlfriend’s car, I used the American Express card for that. Over time, I’ve just had a few purchases here on there and although I’ve paid the balance off every month, it hasn’t helped me actually pay down this debt. I’ve listed that account in the list above because it is debt and does need to be tracked. I’m also taking steps to make sure I don’t use the card again, which will consist of cutting up the card and closing out the account.
Now that the divorce is finalized, I’ll be able to force the transfer of Investment assets, which will cause a large drop in my Net Worth when the transfer takes place. I expect that to most likely actually happen in February as my ex-wife has been historically slow on getting around to things.
Also, I’m using a different method than before to calculate my car’s value. Instead of trusting what Mint figured to be my car’s value, I’m using Kelly Blue Book. I think this will be a better indication of value each month as Mint doesn’t seem to update that information on a regular basis.
One thing I’m going to highly advocate going forward is to keep track of who has what payment information. Maybe you noticed that the Chase Credit Card balance went up by $204 this month compared to last month. That’s because I forgot to change the payment information for a annual payment to SurveyMonkey.
If you pay with or store the information for a credit or debit card online, write down the information for that merchant. If you have a direct transfer to/from your checking or savings account, write down the information for that merchant as well. Make sure and include the type of payment it is (one-time, monthly, quarterly, annually, etc.) This will help in a few ways:
- If you get a replacement card, you’ll know everywhere you need to update that information.
- If you decide to get out of debt, you’ll know everywhere you need to remove that information from.
- If you have a bill that comes up infrequently (quarterly, semi-annually, annually, etc.), this will help you figure that information out sooner so that you don’t get extra charges on a card you are trying to pay down.
This Month’s Budget
This should be the first month I’m able to follow a Zero-Based Budget. I’m pretty excited about that. Here’s what I’ve got going on with the budget:
- Income: $6,706.16
- Day Job: $6,056.16
- Christmas gifts from friends and family: $650.00
- Expenses: $6,790.73
- Rent: $500
- Deposit: $500
- Internet: $84.13
- Car Insurance: $74.42
- Student Loans: $1,253.00
- Chase Credit Card: $446.00
- Barclay Credit Card: $128.21
- Personal Loan: $197.95
- American Express: $679.75
- AWeber: $10.00
- WPEngine: $24.16
- Alimony: $2,000.00
- Ex-Wife’s Attorney’s Fees: $50.00
- Food: $200.00
- Gas: $100.00
- Replenishing Emergency Fund: $543.11
- Difference: -$84.57
My ex-wife’s attorney reached out to me about starting to pay her fees. I offered to pay $50/month. She countered with $250/month towards that bill. I felt like I couldn’t afford that much of a payment at a gut level. I didn’t know what the actual budget numbers were, but I just felt like I couldn’t make that work. So, as my usual ritual, I ran the numbers.
I’m pulling in a little over $6,000 take home each month that I can “reliably” count on and I’m paying nearly $5,000 this month in minimum payments on debt and alimony this month.
I’m not even going to beat around the bush when I saw this. I cried, hard. When this sunk in, I hurt. I was ashamed. I felt so guilty. I wanted to crawl in a hole and die. I can’t live like this anymore.
I’m absolutely pissed off with my debt.
I’m so pissed off, I’m challenging myself to pay off my Barclay and American Express cards by the end of February 2016. I’m throwing nearly everything I got money-wise for Christmas at this debt ($550 of the $650 I received). I also had a little of the personal loan balance that I hadn’t spend, so I threw that at the Barclay card as well. I figure that I can sell enough stuff that I can get the funds together to bring the balances to zero. I’ll also be driving for Lyft/Uber to knock this out as well. I’ll be doing whatever I can and whatever it takes to get rid of that debt in two months. I’ve embarked on a warpath and I’m not going to put up with this bullshit anymore.
I’ve sworn to myself that I will not be under this mountain of stress anymore. I’m going to live like no one else so that I can live like no one else, as Dave Ramsey says.
In other news, I found a place to live everything included for $750/month. I still have an internet payment because the contract with Comcast stipulated I had to give at least 60 days notice and pay an Early Termination Fee before we could close the account, so that’s how I have an internet subscription still.
Improvements to the Budget
The Aweber email lists have been brought down low enough that I don’t have to pay the monthly fee anymore, but I’ll still need to pay the annual subscription (I’ll need to account for that at some point in the future).
Also, I’m eating most of my meals at the office because they have some basic free food, so that’s helping me keep my food expenses low, even though I’m having to eat out from time to time. I’ve spoken with the girlfriend and she’s OK’d me batch cooking at her house on the weekend so I have some other types of food available as well, but I probably won’t need to do that as I have a room of my own elsewhere.
Overall, things are moving along. Some days I get a bit discouraged, but I’m making progress. Three steps forward, one step back, I suppose.