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!

.

“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

.

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