The Post Where I Eat an Entire Package of Skinny Feels: Celebrating Debt Milestones

skinny feels

Nothing tastes as good as skinny feels.

Hmmm. Really??

How about, “No shiny crap looks as good as control feels.”

I’m talking about the sense of control you feel when you, and you alone, decide how you spend the limited time you have left on this earth. That’s one of my life goals.

As of yesterday, I have paid off a tad over half of my credit card debt. Last year, my credit card debt was at an all time high of $30,340. My current balance is now $15,000.00!  Yes, this credit card is half-dead and running for it’s life.

gazelle chasing cheetah

Ha! Resistance is futile, you evil little card.

After some fits and starts last year (i.e. losing my job and being unemployed for 3-4 months, and later  after getting a new job in another state, moving into my current overpriced apartment  out of desperation), I’m finally back on track with my debt paydown.

I haven’t decided what, if anything, I’ll do to celebrate this midway milestone.

I know that in 8 months or so when this infernal credit card is finally paid off  IN FULL,  I am going to celebrate by doing the one thing I haven’t been able to justify doing in the past 10 years. I’m going to take an international trip!

Most Americans have small to medium debt loads (excluding mortgage) that can be paid off in 2-3 years of “Gazelle Intensity”. Sacrificing our wants for 2-3 years is not fun, by very doable.

freedom-from-debt

For those of us with massive debt ($100,000 +), the challenge becomes learning how to delay gratification without delaying life.

We can’t delay life for 10 years. I’m talking to those of us in our mid-30s and up. I’m 39. I can’t afford to delay life for another 10 years while I tackle this student loan debt and save for retirement. That’s a deferred life plan. I regret not using my passport for a decade. The reason was entirely financial. I’ve had too much debt, and not enough money for a long time.  I still have too much debt and not enough money, but while debt payoff is important, I’ve realized that living life is also important.  I’m learning the meaning of “balance”.

trial-balance

Minimalism is teaching me to identify the top things I value the most and to put my energy in those places. For me, travel is one of those things.  While travel is absolutely fun and fruitful at every stage of life, there are some things you can get away with, and some venues that are open to you only when you are younger (in your twenties and to a lesser extent into your thirties). I want to travel now and I want to keep traveling.

For those of you who are also deep in debt and a little ‘less young’, it is important that you plan and celebrate debt milestones by doing those precious few things that you value the most, whatever they may be.

I’ll save up and pay for my trip up front in cash of course. That almost goes without saying.  I’m about 70% decided on where I want to go, but I have a list of places I’ve been wanting to see for the past 10 years, so my first destination is not certain. However, wherever I land, it will be someplace awesome.

singapre

And you know what? They are right. Skinny Feels are freaking delicious!

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)

My Financial Goal for 2013

I have two massive debts, but only one financial goal for 2013.

As you already know from my first post, I have $110,000 in student loan debt and $30,000 in credit card debt. I’ll explain how the debt accumulated to these levels in another post. Suffice it to say that the vast majority of debt accrued in my final two years of grad school when I was unemployed or underemployed after the economy tanked. In any event, this is the debt I am facing.

My goal for 2013 is to become credit card debt free.

This debt of $30,000 will be paid off by the end of the year. It is both the smaller of the two debts, and also the one with the higher interest rate, so it makes sense for this one to die first. And die it will. It carries a 19.99% interest rate. That’s right. (They raised my rate from 13.99% to 19.99% immediately before Obama’s credit card reform went into effect. I, and millions of other Americans, have been over the proverbial barrel ever since.) It’s time for some Kill Bill revenge er, to repay Citibank for all they’ve done to for me over the years.

How will I accomplish this?  I’ll do this in a series of steps that I will explain throughout the year. In general, my plan is to cut my expenses way down and throw all of my available money at this debt.

Image

I’m implementing a 2013 spending freeze (moneyning) or spending fast (andthenwesaved).

  1. I’m moving out of my posh downtown shoebox studio apartment. I will rent a room in an old, small, three-bedroom home with two roommates in a rough neighborhood.   Savings: $1,000 per month. I took inspiration from blogger Rosetta (among many others) for getting rid of crap, renting a room, and living light.
  2. I will be starting a second job, if all goes well, in February (or March at the latest). This has the potential to bring in an extra $800 per month. I’m not going to count this as a secure income source until I’ve been in the job for a couple of months, as it appears to have a fairly high turn over rate. Note: This is in the education arena where I started putting in applications 6-8 months ago so it’s not like I just decided to get a $800 per month side job last week. The timing just happened to work out. So for now I will not include this in the repayment plan, but if it works out, it will help me to get out of debt much faster.

I bring home $3,700 per month. My goal is to live on $700 per month and throw $3,000 toward debt.  The monthly budget that I will need to stick to is ultra simple because I am single and have no dependents. Yes, it is simple, but draconian er, challenging.

$700 per month budget.

Rent: $425 per month rent (all utilities and internet included)
Phone: $65 per month (I’m looking at ways to reduce this. Yes, it is an iPhone.)
Transportation: $0  (I get a free public transit pass from my employer)
Food: $190 per month   (Don’t know if this is even possible. Look for separate posts on this.)
Clothing/Misc.: $20 per month

I know this budget may look insane to some people, but it’s what I am willing to try my best to stick to until this high interest credit card debt is gone. When the credit card debt is gone i can add a bit more padding to the budget.  And if the second job is a keeper then I will have even more to work with. Only time will tell. Rest assured that this is a means to an end. I have no plans to start dumpster diving, although I don’t judge people who do.

Well, that’s my 2013 financial goal. What is yours?

Live like no one else (now), so that later you can live like no one else.   Dave Ramsey

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“Debtor’s prison is real, and opportunity cost is a bitch.” (DDSW)