Where is my CTRL+ALT+DELETE button? Craigslist season opens again.

ctrl_alt_del_life_by_j0hnnyr0tt0n-d5vm4um
Credit: John Ackerly

I know I’ve been M.I.A for a while. My job is causing me all kinds of stress.  It then takes me all weekend to build the strength to string two thoughts together, let alone write a partially coherent blog post. My new manager is still scary. Every time she requests a meeting with me I panic that I’m going to get reprimanded and put on the short list for a PIP (the pre-firing “performance improvement plan”).

I’ve slowed down my debt pay off. This has been hard for me to do because I’m getting so close to being in four digits of credit card debt instead of five. It will be such a boost to be under $10,000.  Why am I slowing down my credit card murder payoff? I need to move.  My lease will be ending within the next couple of months and I want to find someplace much cheaper to live. I also want to be able to see what kitchen counters look like again (messy packrat roommate). Soooo, I will need to save 2X – 3X rent to move into a new place. I’m sure this housing hunt will earn another post. If you’ve ever competed for housing on Craigslist in a large city with a housing shortage, you’ll understand.

Craigslist roommate listings. You either get:

1. The overly specific poster with a long list of random requirements. It’s easier to join the cast of Big Brother, than get a room in their apartment. O.M.G.!  “Must play french horn with us every Tuesday evening and speak Swahili to our three 10 year old triplet Bengal cats”.  NEXT! Sigh…

The Most Insane Roommate Ad

2. The poster with weird habits that don’t match your weird habits.  A lot of ads have this kind of “kicker” at the bottom of the ad. Everything sounds great until you get to the last paragraph. “Oh, by the way all 5 of the other roommates will have to go through your room to get to the kitchen. The last tenant didn’t mind”. (Really? Well, you should get him/her back.) I’ve started reading the last paragraph first to save time. Sigh…  “NEXT!”

The Most

3. The poster who wants your money, but doesn’t want you.

These posters will do things like spend several sentences bragging about the gourmet grocery stores within walking distance. In the last paragraph they inform you that there are no kitchen privileges. WTH?!  Am I supposed to feed myself by cooking out in the backyard on a hot rock? Oh, wait, I won’t have backyard privileges either…   Sigh… NEXT!

The Most Insane Roommate Ads Ever Posted On Craigslist   Cry For Help   Happy Place

You know what? I’ll confess. If I ever had a room to rent, I’d be likely to write one like #3…  There, I’m guilty.  But that shouldn’t be surprising considering that I REALLY want my own place.

Ha!

Craigslist weirdness, big city weirdness, and hell, even my weirdness (We all have a bit. Yes you too – don’t deny it 😉 ) are making for good times… NOT!  I’ve already told you about what happened to me last year and how I ended up in my current housing situation…  In any event, my goal is to rent a cheap room for a year, kill off any remaining credit card debt and save some money before I even think about getting my own place.

Assuming I find a decent room, what will I do with said anticipated saved money (~$3k – 8k)? I haven’t decided yet. Should I keep it as an emergency fund? I’m not convinced that my job is secure.  Should I put it in my high deductible HSA (health savings account)? My health issues will have to be addressed at some point. Should I use it to fund travel? Should I open a 401k with my employer and send it there? Should I just throw it at the $100k of student loan debt? I need to work through identifying and re-evaluating what my financial goals are.

Another year of renting a room means that next year I’ll be 40 and still homeless. Not literally of course, but for me, not having my own apartment feels like a form of homelessness. Is renting a room one step up from couch-surfing? Sometimes I wish I had a CTRL+ALT+DELETE reboot command for life. I wish life problems could be solved that easily…  Short of having that, it IS within our ability to launch our own personal life ‘task manager’. I can’t start over, but I can decide what I prioritize and spend time / money on going forward.  I can decide what activities/goals I shut down/drop from my life.

Decisions, decisions…

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

Mid-March 2013 Debt Balance Update

credit card

In January my credit card debt was maxed out at an all-time high of $30,340 on one card. How can someone still in school (grad school) with no assets or collateral be given a limit of over $30,000? That’s a good question. Someone should call Citibank and ask them.

As of March 16, my current credit card debt now stands at $24,998.  I’ve been throwing all the money I make from selling my stuff at the balance as well. Now that I now longer have to subsidize the rent on my old apartment, I should be able to really throw everything at this debt. It feels as though the debt is being reduced so slowly. With a balance this high and a 19.99 interest rate* I’m paying over $500 per month in interest alone. As I get more principal paid down, my interest paid will be lower each month as well. More and more money will go to principal and my debt snowball will be at full speed.

*I’ve never been late or missed a payment in all these years. My rate is so high because just before the Obama Administration passed the Credit CARD Act, banking institutions everywhere jacked up interest rates preemptively.  Those of us with high balances who could not pay them off or move them elsewhere were stuck with these inflated rates. Not that missing a payment means much to me now. I’m done being a good little profit center, making minimum payments and making rich people richer.

I got my annual reminder that my Amazon Prime account was going to automatically renew. The old me would have approved it, but the ‘Get Out of Debt’ me quickly blocked it. I used to buy something from Amazon once or twice a week, but this year I’ve only bought a few things that I needed like ink and paper for my printer.

My second job starts next week. I’ll keep you updated and let you know how it goes.

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

Is Extreme Frugality for You?

frug coneslayer

When I talk about extreme frugality, I’m not talking about ‘Extreme Cheapskates’ who take risks with their health and safety.

I define Extreme Saving or Extreme Frugality as living on 20 to 40% of one’s take home income. I am practicing extreme frugality, living on 25% of my net income, not as a lifestyle, but out of necessity.  When I am out of debt, I will always retain a frugal mindset, although I will not practice it so extremely.

Are you the extreme type?  Here’s how to tell if you are ready for extreme frugality to get out of debt. You are are ready if the following principles resonate with you.

1. You Can’t Outearn Stupidity

Dave Ramsey is fond of warning anyone who will listen that when you are in debt, you have to change your lifestyle. You can’t simply get two or three jobs without making adjustments in how you think about money and how you manage it. In other words, you can’t outearn stupidity.

2. You Are Not Your Crap

You must be willing to give up materialistic things and stand on your own with out them. This doesn’t have to be forever or for all things, however you need to know who you are without them. You need to learn what you mean to people without them. You have to break the  consumerist, materialistic mentality that got you into debt in the first place. You need to really know that you can live without any of it. You are not the labels on your clothes or the hood ornament on your car. You need to give it all up for a period of time. You are not your crap.

I always thought that I was not materialistic, but now I can see that I was, at least somewhat. Digging out of debt is teaching me to be very conscious and very selective about the things that I want to buy when I’m out of debt and what they will mean to me. I’ve also learned that I’m more interested in experiences than stuff.

3. You Need to Live the Lesson

burner

You are the type of person who needs to experience something in order to truly understand it. You need to feel the pain of the consequences of your past bad decisions. Most of us have learned the lesson of our financial mistakes mathematically, but there is more to learning a lesson than just math for some of us. For some of us, we need to LIVE the lesson. Some of us need to metaphorically feel the pain of the hot stove on our hand, to learn at a deep visceral and permanent level not to ever make the same mistake.  We need to live through the consequences of being financially illiterate, gullible, and uneducated about personal finance.

Everyday when I wake up and go out into the world, I am keenly aware of the gulf between where I am and how I present myself, and where I feel I should be and how I’d like to present myself.  It’s depressing.  When I’m down, I remind myself of why I’m living this way and what got me here. When I’m taking crap at work I remind myself that my poor decisions with money, and resulting debts, have trapped me in this situation. I am living my lesson, thoroughly. And once I am out of debt, this is a lesson that will NEVER be repeated. EVER.

4. You Need to Get On with Life

By being an extreme saver, you get out of debt faster. You are ready to rip the bandage off quickly, to live with more discomfort, but for a shorter period of time.

I don’t want to pay this debt for 30 years and into my old age. Even the 10 year repayment plan for my student loans is too long. I’d like to save money and live abroad for a year. I don’t want to be in my 50’s before I can afford to do that. Debt carries too much risk for me. At any point in a 10 year or 20 year repayment plan, I could become injured or ill or unemployed and we know what happens to people who default on student loans. Life becomes a living hell. My goal is to be out of $140,000 debt in 3 to  5 years, depending on how much money I can make and save. I’ll be in my early 40’s by that point and still young enough to let my hair down and have a good time while I save for retirement.

well travel

These are just a few reasons that attracted me to temporary extreme frugality. It is not for everyone, nor should it be. Is extreme frugality right for you?

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

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Photo credits:

Frugality – ConeSlayer @ Flickr

Well Traveled – Andy Barrow @ Flickr

Burner – Muffet @ Flickr

And here comes the real world…

I’ve moved into my new digs – a 10ft X 10ft room in an older home out in the boondocks. It’s a big change from living in the heart of downtown, but I don’t miss the fancy apartment nearly as much as I thought I would. There is a bus stop right across the street from my new place which takes me to town and to my workplace. (I have no car, so this is awesome). Even though very few people my age would be willing to do what I’m doing and live how I’m living, I wake up every morning thinking of how much money I’m saving each month and it makes it all worthwhile.

My family, of course, thinks I’ve gone off the deep end.  Giving up a great apartment, selling everything. They talk to me with concern in their voices. They know that I have debt, but they have no idea how much. And I’d like to keep it that way for the time being.

So far my Citibank credit card balance is down from $30,340.oo to $28, 469.02. Not bad, but not on target. Why?

And here comes the real world…

Reason 1:  Expiration of Social Security tax cuts. I now have $100 less in each paycheck. That is, my monthly pay is now $200 less. I have lost $2,400.00 a year just like that. So, that’s is almost one month’s payment to Citibank that the government is taking back.

Reason 2: I’m experimenting with starting a side business (a third job)  that may be another stream of income, but it will take time and upfront investment. Not a huge investment, but one or two Citibank payments worth. If it works, it will pay for itself and generate a small profit over time.

Good News

The good news is that my second job started last week. We have a training / orientation stage for the next few weeks and then we are on our own.

I also got another student loan forbearance approved for the next six months. My goal is too get a big chunk of this credit card down before the student loans kick in. I cannot wait for this credit card debt to die. I will have a little celebration when that balance is finally zero. If the card weren’t full of toxic chemicals I would toss it into the first bonfire I come across and then dance like a madwoman. The people already there may call the cops, but hey, it would be worth it. Hmmm, on second thought, I will likely just cut it up and treat myself to a nice dinner.

The Not So Good

One thing that I am already experiencing is a lack of time. Yeah, surprising huh? Who knew that three jobs makes you crazy busy.  I will have to pace myself to avoid burnout.

Another thing that I am experiencing is lack of focus. It is difficult for me to stay focused at my first (primary full-time office) job or my second job (part-time) because I can’t stop thinking about my side venture (3rd job).

Working for myself and making my own money excites me. As I get older, I’m starting to dislike taking orders from and working for others. I’m no longer interested in advancing someone else’s agenda. I want to advance my own agenda. In the distant future, when I am financially more secure, I would like to work entirely for myself.

Keeping Perspective and Holding On

I keep these goals in my mind as I wait in the dark and freezing cold after work for my bus, which is chronically late during the afternoon rush hour commute home. Not 10 minutes late.  About 25 – 45 minutes late. If the bus is already full, as it often is during rush hour, it doesn’t stop to pick up anyone else so I must wait for the next bus. Even when I’m standing there with my fingers and toes frozen and  hurting from early stage frostbite, and feeling poor and pissed off, I have to cope with the situation. I keep the big picture in mind. Not only my personal debt freedom, but that in the grand scheme of things, my temporary discomfort is nothing compared to what others are going through around the world.

As I get ready for another week of work times three, I have to keep in mind how important it is to have a clear picture of what you want and the reasons why it matters to you. For me, I want freedom and control. I want to be in total control over how I spend what’s left of the limited time that we all have on this earth.

What do you want in life? Are you ready for the real world? I say, bring it on!

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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.

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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)