Digging out

With respect to the fact that my 20's were not very fiscally responsible, and I now find myself co-owner of a nice pile of debt (elephant in the room? WHERE?!), I'm trying to come up with ways of making my 5 year goals a reality. The clock is ticking, and there are only 63 months between now and New Years Eve 2017. Sure, that's a lot of time if you break it down into weeks, or even into days, but considering where I'm trying to go, I need to start acting now.

So where to begin?

First, and most obvious, would be to get my current finances in order. I need to pay off the current bills that are piling up, and set myself on a STRICT budget. When I say strict, I mean STRICT. I mean, no more pulling through Wendy's on my way home to pick up $2 worth of food, I don't care how hungry I am or quick it will be. I can wait the extra 30 minutes til I get home, and I can wait til I get something cooked at home. It's this kind of extra, un-needed spending that has caused me to put my last $13 in my gas tank this morning, and wondering how I'll get to work the rest of the week! That needs to stop NOW.

With that, paying off my current utility bills and managing how much of those resources I'm using each month will help to keep my energy bills from skyrocketing over the winter. My house is big, and it takes a lot to heat it. This is one reason why I love my electric blanket. I can move my bed to the warmest room in the house over the winter, shut out all un-needed rooms when they aren't being used, and keep my thermostat at 65. There's a reason they make sweaters after all. I don't turn my heat up to 80 constantly like some people I know, but even dropping it from 70 to 65 will be a major improvement.

We bought a digital programmable thermostat a few years ago, then never used it. I'm considering putting this into place in the house, so that when I'm not home, I can kill the heat to about 60 F. The cats, and the ferret, they have fur for a reason. They'll be fine.

So all of these are ways of consuming less, allowing me to have more to put toward myself, but that is not enough alone. I'm already using as little water as I can, and avoiding turning on the heat in the house until it's absolutely unbearable (unless there's a client over of course). I've stopped going out to shows that require spending $10 in gas to get to, and alloting myself $20 of drinking money for the night every week. That will now be a rarity for me. I've got things I'm working toward, and spending an extra $30 on a night of drinking and rock and roll, while fun as hell, will have to take a back seat for now. Besides, I've seen all the bands in Columbus several times, I don't need to see them once every couple of weeks. I don't see Metallica that often, and they are the best band in the world (though if I could, I probably would....lol)!

But aside from cutting un-needed expenses and bundling up in the winter, what can I do to really get myself ahead?

The first, and most obvious, answer is to continue my education. I start classes at Columbus State Community College tomorrow night, and I've enrolled in online courses only. I'm a full time student. The choice to continue my education has two goals in mind.

#1 - Gain the skills needed to better myself in the long term.

I've declared that my major is now Marketing. I'm not chasing a ceertain degree, however. Rather, I'm taking what I feel I need to help me take myself to the next level. I need to learn about marketing my various business ventures, from the studio, to Project DIVIDE, to my solo work. Each of those are a potential income stream, and I need to learn what I can to take those brands to the masses.

#2 - Bring in an overage check, buy my books, and stick the rest in savings.

Yeah, I realize that I'll earn interest on it, and I'll have to pay it back later, but this is more of a "security blanket" move. After all, I'm a firm believer that there's no such thing as Job Security. The needs of the company I work for could change, and I could lose my employment again. If I can keep my bills paid with the income from this job, but am only able to save 10% of my $440 weekly check, it'll take me a while to get anything saved that will keep me afloat if the job goes by the wayside again. This will be more of a security blanket, as it will help me get something saved back that I'll be earning interest on that will be there if the rug gets pulled out from under me again. This will help me sleep at night, and I'll hopefully still have it when it comes time to pay the loans off again in a few years. Who knows, by then, maybe I'll have earned some pretty good interest on it, and I'll be able to just hand the money back to them and bank all that interest! Meanwhile, I'll be adding that 10% of each $440 check to my savings to help it grow.

So it's obvious that school will play an important role in my financial growth, both in short term security and in long term sustainability and business skills. But in my explaination of point #2, I mentioned another tactic that will help. Building a savings.

Even if I didn't have my school overage to inject into my savings, if I put $44 into my savings account each week, after a year I'll have saved $2,288.00! Even though I'm earning $29,120.00-year at my day job alone ($14.00-hour X 40 hours X 52 weeks = $29,120.00), it would appear that I'm only bringing home about $22,880.00 at the day job ($440.00-week X 52 weeks = $22,880.00). So if I put 10% of my day job income into savings, I'll have a decent cusion to sit on in savings in case I need it for an emergency (a car repair, a hospital bill, a job loss, ect.)

Now let's couple that savings with my school overage. I don't yet know how much I'll be getting each quarter from school, but last year at OSU, I was bringing home about $1,100.00 each quarter. Let's subtract $300 for books (this is an estimate, not actual numbers), which would leave me with $800 each quarter that I could put into my savings. So if I were to go to school all 4 quarters of a year, earing an overage check each time, and putting $800 in my savings each time, that would be an extra $3,200.00 in savings each year ON TOP OF the $2,288.00 that I'd be saving from my personal income! So after a year, I'd have a savings of $5,488.00! That would be a great cushion to brace myself with if I lost my job, and it would be earning interest in my savings account!

"Paying Myself First" would be my first priority. Period. I'm extremely tempted to use that overage money from my first check to buy things I need, other than books, but I know that in the long term, having that money saved will be a far greater asset than reconnecting my iPhone 4 (had to turn it off when I lost the job), or buying a vaccum cleaner for the house. If I can meet those financial goals with my day job income, while still setting aside 10% for savings, that's great! If not, they aren't vital. I really REALLY want my iphone reconnected, but it's not vital in the long run.

So then we come to the issue of my credit cards. I hold 3, and the total credit limit is relatively low (about $1,600.00 between the 3). I've heard some people touting tactics of "pay off the lowest balanced one first, then snowball the payments from that into the next highest, and so on....", but with them all having about the same balance, it'd probably be a better tactic to pay off the one with the lowest APR first. That way, the one with the lowest APR will have the most money going toward the principle, and the balance will dissapear more quickly. Once it's down, I close it. Period. Then I move on to the next card in line, and apply every dime I was paying on the first one to the next card, so that it gets paid off more quickly! After all, that money is now free to be used on that card, so why not get it out of the way as quickly as I can?!

I've had these cards constantly maxed out for over 5 years! THAT'S NOT GOOD! I've paid off the cards, and then some! So what I'll need to do is make sure I can meet my payment deadlines so I don't earn any extra fees, and stick to the payment schedule as much as possible. I want out of debt, and continuing the cycle of paying the minimums only will get me somewhere as quickly as a dog chasing his own tail.

When the credit cards are paid, then it's time to roll the money I was putting into the credit cards into my car payment. There's no reason to let that ride out as long as it has to. It is, after all, basically the same thing as a credit card! It's a loan of money, through which a 3rd party is charging me interest! Once the credit cards have been paid off, I snowball everything that I was putting into the credit cards into the car payment, and I'm done with it!

The thing about admitting all of my financial problems to my blog is that it will inevitably cause me to have to mention things that I'm embarrased about. The thing is that I wasn't supposed to even HAVE a car payment anymore. I'm ashamed that I still do. My car was made possible through contributions from family members, who gave me most of the money that I needed to pay for the car. The problem is (I hope my uncle or dad NEVER read this blog) that I paid the minimum I could finance was $5000. The car was $8000, and the family gave me enough money to cover about $6500. If I had done what I was supposed to do, my car payment would be gone now. BUT, I had to finance at least $5000 to get the loan, so I decided to pay $3000 down on the car, and put the rest in savings as a backup. That way, if I lost my job, the money would be there to help me keep making my car payments. That inevitably went to other bills, as I was poor at managing my money at the time I bought the car last fall. I don't have a dime of it left, and still have a bit to pay off on the car. Imagine my panick when I DID lose my job over the summer, and didn't have that money to fall back on just in case! I hate it, I'm ashamed of it, but I have to own up to it. If I'm trying to change my habits, and change my financial situation, I have to acknowledge my shortcomings and figure out how to overcome them.

Moving on...

The next step would be to take the money I was paying to my car loan and my credit cards, and use them to pay off my portion of the credit card debt that Sarah racked up in both of our names. Technically, it's all in her name, but I'm not a major dick head, and I'm assuming 1/2 of that debt because it was acrued while we were together and were sharing finances. It's a bit of money, and I won't go into how much, but once my own credit cards are squared away, and my car payment is gone, I'll have all that extra money free'd up to put toward her debts.

There's still some debt left at that point, and that would be utility bills from previous addresses (I did say that my 20's weren't all that fiscally responsible, didn't I?....lol). Let's put it this way, there are a string of utility and minor medical bills that I've just left hanging in the ether through my 20's. I know, my credit SUCKS. But, I'm working on that, so all I can do is stop being an idiot with my finances and try to grow and learn from my mistakes.

But regarding the bills I've left around the country to various utility companies and health care providers, once my credit (which is costing interest, and therefore is a more pressing) has been tackled, I'll attack those bills with the money that I was paying on my credit cards and loans! That should help them go away pretty quickly, since they aren't exactly earning interest.

Once all of that debt has been taken care of, a large portion of my income would then be available for me to put toward building my life the way I want to live it! The entire time I've been doing this, I'll have also been saving money, so I should have a decent amount set back after a while! Once all that money is cleared to go toward my savings instead of my debts, life will finally be good! My credit will heal itself, my debts will vanish, and my savings will begin to grow! Then I'll be able to focus more of my earnings toward growing my various business ventures, and the sky is the limit!

We'll see you from space!

(Ammendment: I forgot to list my student loans, which would be snowballed as well, just like the credit cards and the car loan.)