Debt $ense

Thanks to both my debt repayment and an improvement in my 401(k) balance, I’m less than $5,000 in the red overall!

I have to say, it feels good to be able to say that. I won’t be in the black until the end of October, assuming I get at least some return on my 401(k), but that’s a whole lot closer than it seems.

I hope it also will be a kick in the butt to remind me why I’m scrimping and saving and encourage me to save as much as possible, not treat my weekly money as something I have to spend. I was doing well for several weeks, but have slipped back into my habit of running around the corner at night for dinner rather than bringing it from home. I haven’t gone outside the bounds of my budget as yet, but only because I haven’t been spending money on nonfood items, something that isn’t sustainable long term.

I’m trying to come up with some sort of sustainable incentive plan to reward me for coming in below budget on my household expenses, but haven’t come up with one yet. Something to muse on through the weekend, I suppose.

You remember the fable about the tortise and the hare, right? I’ve got a friend who’s taken that approach to her house, and this weekend was a great example of how well it’s worked.

She moved into the house in April 2005, and started by painting and recarpeting the top floor. Until she did, she kept her bed in the second-floor living room, along with any furniture. Only when they were ready did she move things up there.

Last weekend, she finally got to stage two of the fixing-up - painting the kitchen and living room, along with ripping up the living room carpet to prepare for putting hardwood floors in. (Six-year-old townhouse, so of course the floors are plywood.) She didn’t do any of that until she had saved the money from her second job to pay for the supplies and flooring. As a result, we were able to go out Monday and pick out and order the flooring, which was on sale.

It’s been a slow process, and since she’s a fellow booklover, leaving the bulk of her massive library in boxes in the garage until she can get the living room floor in and bookcases set up has been a challenge. But after seeing how nice everything looked once it was painted and imagining the floor in that space, it’s definitely going to be worth the wait - even if we’ll be sitting on the floor. Why? Because bookcases are next on the list (more to match the ones she has), and then furniture. She’s done the same thing with things like paint and fixtures - waiting until she’s sure what she wants and can afford to buy - with cash - the good stuff.

Her logic is she would rather wait, do without and do it right then buy something cheap to make do and then replace it later. As I’ve watched the transformation of the house, I’ve become convinced that she’s taking the right approach - and it’s an approach I’ll be following when I buy a house late next year. But that’s the subject of another post…

In summary: Take your time, do it right and wait until you can pay cash.

I’ve returned from my weekend helping a friend with home repair-type projects, and gained much fodder for the blog in the process. For now, the brief update is I will be able to put an extra payment of $400 toward my CC later this week - once a check for the bulk of that amount clears - which will drop my balance below $7,000. (Go me!) That’s even with dental bills, etc.

I should be back later today with a longer post, but I wanted to at least update those interested in my progress.

Sorry for the brief hiatus - things got a bit crazy around here. Posting also will be light this weekend because I’m taking a few days off to help a friend with some home repair/DIY projects.

In PF news, my CC balance is temporarily up because of some annual/quarterly charges I put on there to avoid possible cash-flow issues with my debit card. All will be resolved in a couple weeks, at which point I’ll be under $7,000 for the first time in a couple years. (Yay!)

Meanwhile, I’m looking for creative ways to find extra money to get the balance down as soon as possible. I need to stop procrastinating and actually get some decluttering done so I can convert as much of it into cash as possible. I also need to get card samples done so I can pitch the idea of a class to parks and rec. Procrastination has definitely been an issue the last few weeks, and I need to break the habit.

Summer always reminds me how lucky I am to live in my small town. There’s tons of free entertainment options, plus the nice weather makes my apartment complex pool and the city parks great options for hanging out.

One of my favorite summer activities is checking out the NCAA-sanctioned summer baseball league. We have one of eight teams in the league, and local businesses sponsor each home game. You can pick up free tickets at those businesses in the days leading up to the game, which eliminates the $5 admission. Oh, and a hotdog and pretzel will run you a whopping $2.25. For that I get three hours at the ballpark and dinner.

Tomorrow night is a home game and I’m not scheduled to work, so I picked up a free ticket today. I’ll be spending my Sunday night at the ballpark - for free.

As cheesy as the MasterCard commercials are, I have to admit they do have a point. Sometimes counting the dollars and cents cost misses the intangible benefits of an experience.

I was thinking about this today because I have my Red Sox uniform-style jersey on. (Schilling, for the curious, because they were out of Wake and Varitek.) I bought the jersey - yes, putting it on my MasterCard - in October 2004 when I drove up to Boston for the World Series victory parade.

I’ve never been a big one for spending excessive amounts of money on any one clothing item (except running sneakers), and I’m usually content with the less-expensive T-shirts. In fact, on that same trip, I picked up an official WS champions T-shirt. But I’ve always wanted a game jersey and in the euphoria of the once-in-a-lifetime victory, I decided to go for it.

I wore it under my jacket on that drizzly October Saturday when my sister and I woke up in the middle of the night to take the T into Boston and get good spots for the parade. I had it on when the duck boats rolled past, each carrying a few players and coaches. And every time I’ve worn it since then, I remember not only those memories, but the moments at the end of Game 4 when I sat in the newsroom, watching the game on TV and finally realizing my beloved Sox weren’t going to blow it this time. I was speechless after the last out, a condition those who know me will tell you I’m rarely if ever in. Instead of jumping around, cheering and screaming like I always thought I would, I just stood there in shock, watching the players celebrate on the field. When my boss (who had been looking for his camera to capture my reaction at the time they made the last out) asked me how they won, I had to search my brain for the words.

It’s a moment I’ll never forget, and slipping the jersey on never fails to remind me of it.

A lot of my credit card debt is for truly stupid stuff, stuff I had no business buying if I didn’t have the cash. But there are a few things that were worth every penny of interest, and the jersey is one of them.

I sorted/counted coins last night, and was able to roll one of each type, giving me $17.50. Adding that to the other money I have stashed for this month’s extra payment puts me in good shape to make a nice dent in my CC balance. It will definitely cover the dental bills, which gives me more a cushion in my savings.

I also recalulated my monthly expenses and realized I could increase my weekly CC payments by $5 more than I thought when my raise kicks in.

The combination of the two news bits means I have a little more breathing room to hit my year-end target. If I stick to my plan of paying $100 extra each month, I’ll make it with a couple of weeks to spare.

How many other people have decided it’s much less painful to stop thinking about 401(k) performance for the time being?

I just keep reminding myself I have 40 years until retirement and I’m buying more shares now while the price is lower that will help boost my portfolio value once the stock market improves. And then I try to remember not to look.

I finally took some time today to work on one of my extra income plans. I took various components in different papers and designed four basic holiday cards. I’m going to assemble one of each in the next few days, then pitch city and county parks and rec departments on teaching a fall class on the topic. Based on past experience, one class should net me between $50 and $250 depending on the number of students. If I can score two classes, that should take care of two months’ extra payments, possibly more.

My other plan, editing and proofing college papers, is waiting for me to design the flyer and distribute it on campus. I started last week, but haven’t had time at work to finish it. I don’t know if I will this week, but should on the weekend - it’s my turn to work. I’m not sure what kind of income to expect from that, especially for a summer session.

My third plan relates to the first one, and that’s selling Christmas cards I make. I’m hoping the classes will help with word of mouth. I’m not sure how crazy I want to go with this, for several reasons, so that’s why it’s third.

I got some more information about my extra income potential for the month in the last couple of days, and once I plugged that in, my projections for the rest of the year make it highly likely that I’ll meet my Dec. 31 goal. I actually have about a two-week cushion *knocks on wood* barring any major car repairs or other expenses.

Fortunately, the low interest rate I have runs into January, which means even if I get hit with the idiotic two-cycle billing, I’ll have enough to cover the whole $5 in charges.

One thing that will help in the upcoming months is some additional driving for work. My car gets really good gas milage, so driving 1/4 of the miles in a tank gets me enough money to pay for about 3/4 of the tank. I’m hoping to use that to contribute to my extra monthly payment, provided I don’t need it to cover the increasing cost of gas.

I’ll also be putting my various money-making plans into action during the next two weeks - more about that in a later post. Those, plus the milage, should net me enough each month to hit my $100 extra payment goal. I’d like to increase it to $210 - equal to a weekly payment - but I don’t know if that will be possible.