Debt $ense

I deposited $67 in the bank today, but I’m not going to send off an extra CC payment just yet. I have a root canal scheduled for Monday and I don’t know what the payment schedule for that will be like, so I want a bit of a cushion above my pinch-point account, just to be on the safe side.

Also, I was scheduled to go on vacation later this month, but had forgotten about a prior commitment. I was going to go in late June - and still have those days scheduled for vacation at work - but instead of moving the reservation, I canceled it. That means I’ll get a $160 credit on my CC this week, since I wasn’t really thinking and used that instead of my debit card. I might decide to go in June, or I might wait until the fall when the leaves are turning. Either way, if I can’t pay from my checking account, I won’t go.

So that’s $227 “extra” this week toward my CC. I also have $20 stashed for running sneakers, and $5 for yarn for a project I want to work on later this year over and above that amount. It’s amazing how much money you can find when you start looking for it.

After my healthy eating class the other day, I sat down to plan out my shopping for this paycheck. One of the things they stressed was planning meals so you eat healthy foods rather than be so stressed you grab take-out. So we talked about picking two meals that could stretch multiple days, plus one or two meals a week that are completely different for variety.

As a single person, almost any recipe means I’ve got six or eight meals if I stick with correct portion sizes. So I looked at the sales flyers and my new healthy recipes and decided on chicken cacciatore; pasta with turkey sausage, peppers, mushrooms, spinach and tomatoes; and enough vegetables to mix with grilled chicken strips in whole wheat wraps for lunches.

As you can tell, chicken was on sale. I got the three-pound bags of frozen boneless, skinless tenderloins for $5.99, each with 11 servings of chicken. The cacciatore recipe serves six, but since it doesn’t include pasta as part of it, I’m dividing it into 12 servings. The pasta also will make the sausage dish stretch for 12 servings. And I have enough wrap fixings to last me two weeks. By the time I’m done cooking Monday, I’ll have two balanced meals a day for the next two weeks (and a very full freezer).

I also picked up a flavored pork tenderloin on sale for $6.99, which had an instant savings $2 coupon on the outside, knocking my cost down to $4.99. The canned tomatoes for the two dishes were in the dented bin, so I got the big can for 79 cents. Frozen spinach was part of Kroger’s 10 for $10 sale, so I got two pounds for $2. Same with cucumbers. Pre-sliced portobello mushrooms were on sale for $2.50 and peppers for $1.29.

Oh yes, and I got a loaf of 100 percent whole wheat bread for $2 and generic egg beaters for $1.50 per pack, with each pack equal to six eggs. Those are in the freezer because I have real eggs in the refrigerator.

My total cost for all that food? $45.45. In addition to being fairly healthy, it was pretty inexpensive when you figure I’ll get at least three weeks of good meals out of all that food, possibly more. Some of it, like the eggs and spinach, are just good staples I can keep on hand for future meals. That should mean savings continue down the line. And I already have some food at home (like bulk oatmeal for breakfast) that will take up some meals.

If I can continue this trend, that will cut my grocery budget in half for the rest of this year, plus improve my health because the food is better for me. Sounds like a win-win situation!

I’m still on the lookout for more ways to trim my budget. My next big expense is my auto/renter’s insurance payment in late July. I’m headed to my insurance agent Monday to ask them to increase my deductible to $1,000 for everything on the car. I had upped it to $500 last year, but at this point, any body damage less than $500 wouldn’t be worth fixing, so increasing to $1,000 makes more sense. It should also save me some money.I don’t know if they’ll refund any of the money on this policy, but at least it will be on record for next year’s policy.

I’m also going to call my credit card company and ask them to cut my interest rate. I’m almost at the point where I would only need one, maybe two balance transfers to get my debt paid off. But that’s a hassle, and prone to sneaky tricks. I would rather call the company I’ve had a card with since college and convince them to make me a deal.

Likewise, I’m going to call Adelphia and see if I can convince them to cut my internet rate down to something more manageable. I can think of better uses for $50 a month than internet, especially with the availability of free wi-fi in town. If they can make me a good deal, I’ll keep it, at least for now. If not, I’ll drop it.

My CC interest is running about $105 a month at 12.9 percent. If I can get it down under 8 percent, that should save me about $40 a month. I’m hoping to pick up either $25 a month on internet or $50 (from dropping it). That’s another $16-$23 a week toward my card.

I should also be able to add at least that much to my weekly payments in July after my raise, since I expect it will be comparable to the ones I’ve gotten the last few years. That will get my monthly payments up in the $700-$800 range. (For comparison, that’s about 45 percent of my take-home pay.) That’s $4,500 for the second half of the year. As you saw in my last post, that will make a substantial inroad into my CC debt.

That’s my April net worth. My assets include an average of $550 in checking throughout the month (according to my bank), $7,800 in my 401(k) and a car worth about $1,200.

My debts include about $7,300 in student loans and $8,312 in CC debt.

May goals: I want to knock the CC down to $7,600, and think the 401(k) will be up about $8,000 by the end of May. That, plus a student loan payment, should get my net worth close to -$5,000.

For comparison, when I put my information into NetworthIQ at the beginning of April, I was at about -$6,900. Some of the increase is because of my 401(k), but a lot is from paying down debt!

Aside from an odd look from the bank teller yesterday morning, the $5 bills and pocket box budgeting is going well. I tweaked my initial ratios among the categories and that seems to be helping.

Not only that, but when I pulled it out to get money at the coffee shop while talking to a job candidate today, she asked about it. When I (briefly) explained, she thought it was a cool idea.

For those who didn’t come here from my personal blog, a brief explanation is probably in order:

A few weeks back, I decided to try a new way of handling my money so less of it “disappeared,” as cash has a tendency to do. I get my $100 for two weeks out in $5 bills, and divide them up into six categories: food, vacation, savings, fund, crafts and household. Food gets half the money, and then I divide up the rest. To keep it organized, I spent $1.39 on an index card holder from Target with six section. The bills are the perfect length to fit in and the “box” is only about 1 1/2 inches thick, so it fits in my purse fine.

In case you’re confused, the savings pocket isn’t for my weekly transfers from checking, but a place to stash “extra” money so I can collect it and put it toward an extra CC payment each month. It also holds checks waiting for deposit and deposit slips so I always have those handy.

Now that everybody knows what my “pocket” system is, here’s the rest of the update.

I’m not always keeping my spending exactly from the pockets it’s supposed to come from, but the categories are making me think a lot more about not only what I spend my money on, but also if I even should spend it. This is especially true in the food category because eating out has to come from there and makes me realize what a big impact that has on my cash flow. ($100 for two weeks, not including gas, has to stretch pretty far.)

Purely from making me think and consider my spending, it’s a success. It’s also making it much easier to save smaller amounts from my weekly money, which I hope will translate into paying my credit card off faster. It also has made me think about where money for things like running sneakers will come from, so I’ve started envelopes at home to stash money into from its category so that’s “off-limits” when I’m in a store.

I was checking my various accounts online last night and realized I’m just a few weeks away from getting my CC balance under $8,000. In the grand scheme of things, this is still a lot of debt, but it means I’ve managed to knock about a third of my balance off in the last few months. It’s been a long time since that balance has started with a 7, and I’m looking forward to the day when it does. It will be a day to celebrate.

Why?

Not because it means I’m done, or I’m in good shape. But because it’s a milestone, a point at which I’ve made noticeable progress. Round numbers are good for marking progress because they’re “pretty.” So even though it’s no more progress than any other month, it’s something I can point to. Dropping below $10,000 and staying there was one milestone for me, as was $9,000.

Breaking $5,000 on my 401(k) was a milestone. I’m about to break $8,000 (going to other way) on that account, and I’ll be ready to celebrate that too. Not only will it mean I’ve passed a round number, but also that I will have saved more than I owe.

$7,750 on my CC is another milestone because it means I’m below the 50 percent mark against my CC limit. I’m on track to hit that in early June.

Other milestones I hope to celebrate this year:

mid-July: less than $7K on my CC
late August: more than $9K on my 401(k)
early September: less than $6K on my CC
late November: less than $4K on my CC and more than $10K on my 401(k)
Year-end: My net worth finally becomes positive!

I don’t know what I’m going to do for these milestones to celebrate. It might be as simple as giving myself a free day without work or chores or any responsibility. Maybe a trip to the coffee shop instead of making my own tea. Or maybe a ball of the cool yarn I’ve wanted to try. As long as it doesn’t undo the progress I’m celebrating, the sky’s the limit. All that matters is I reward myself in some small way for taking enough bites to swallow a noticeable portion of that elephant so I remember I’m that much closer to the day I can make that last CC payment and celebrate my freedom from “bad” debt.

Now that will be a milestone worth noting!