This week has been the start of my #forgofunforgofreetimefixfinances grind. I’ve been looking forward to working my butt off for weeks so I can finally start making a dent in my debts and despite being cancelled one day (it’s ok because I actually picked up one extra!) it’s going well so far. Working night shift has also given me ample time to think about my finances and contemplate the best way to manage them and with today being pay-day I spent all my free time last night thinking about the best way to utilize the funds. My original plan had been to follow the Dave Ramsey method which would have meant me paying off my IPad today since I already have $1000 in savings but the more I thought about it the more it felt like his pay-no-attention-to-interest-rates method is a stupid thing to do! I understand the premise of the snowball effect and how paying off a debt can instill motivation in you to keep the momentum going but I have 14 payments on my IPad and if I utilize the financing and never pay anything extra I’ll pay an addition $220 or so over the next 14 months aka I’m paying an extra $15ish a month in interest. If I don’t pay down my credit card I’m paying $420 in interest EVERY MONTH! I could buy another IPad in full with just three months of interest accumulation on my credit card alone.
That being said I’m changing my direction. Thanks for the inspiration Dave but I think I’m going to try it my way. I was able to balance transfer $2200 to a 0% APR card, so that will be managed incrementally until I pay my 26% APR card off. Over the next 6 months that will save me $286 in interest payments. I paid $684 off today (pay day $) which brought my balance down to $11,000. I’m going to use the $645 Hunter owes me towards it as well as my “emergency money” which I appreciate having but not if it’s going to cost me $420 a month. When those funds are applied I’ll have my card down to $9355! These changes alone will save me about $200 each month in interest. NEXT I’ve calculated that if I’m not cancelled tonight or tomorrow (fingers crossed please!) that I’ll bring home around $3k next Friday (depending on cancellations it will be between $1700-$3200) and the game plan is to leave myself with $500 every pay day to live on (with my budget and shopping ban this should be more than adequate to sustain me for 7 days) and to hit the card hard. Then at the end of the month if I’ve been able to save the $500 and I end up with a little more than I need in terms of living expenses and bill money I can roll over any extra towards the card once everything is paid for.
SO! New Goal this month – get my balance to $7000 by August 1st! Challenge goal – get my balance to $6000 by August 1st!!
How will I do it?
Today 6/6 – Balance $11,000. Get $645 from Hunter and $1000 from safe, deposit both and hold for payment to CC.
6/13 – PAY DAY! Options: (a) If I’m cancelled today and tomorrow night and get paid $1700 put $1200 to the card, (b) If I’m cancelled one night and get paid $2300 ish put $1800 towards card, (c) If I’m not cancelled and get paid $3000ish put $2500 towards card.
6/27 – PAY DAY! This is another 5 in a row check, WHICH if I don’t get cancelled should give me about $2700 (more day shifts than nights), but that being said there’s always a cancellation risk. The minimum I’d probably get paid would be (a) $1290, one cancel (b) $1990, (c) max $2700. If I follow my same “leave myself $500 principle” I’d be looking at:
(a) $7365 (not able to meet my $7k goal but damn still amazing progress for one month!)
(a1) $6665 (goal met)
(a2) $5955 (challenge goal met!)
(b) $6765 (goal met)
(b1) $6065 (I’d say this counts as meeting my challenge goal wouldn’t you!?)
(b2) $5355 (damn right!)
& lastly if all the stars align and I’m not cancelled at all the rest of this week & next (unlikely but you never know!):
(c2) $4655 (cue little mermaid song, ahh hh hhh ahh hh ahh ahh ahhhh ah ah ahhhhhhhhhhhhhh)
ANYWAY – clearly I had a lot of dreaming time and these are probably extraordinarily loftly goals BUT I’m serious about getting this shit under control. I’ll keep you (aka myself) posted on progress. Wish me self control and motivation!