Financial Game Plan
November 16, 2010 10 Comments
After yesterdays post I’ll admit I’m still a little put off by the debt thing. But I wanted to still sit down and make a “financial game plan”.
So here is the “plan” for now.
Step 1: Funnel all “excess” money in to my E-fund until I get to $1,000. Currently this is sitting at around $300. This should take 2-3 months to get to $1,000. I’ll still be paying my minimum amounts of my cards, but nothing over.
Step 2: “Stop” contributions to my E-fund after $1,000. I put the “stop” in quotes because I’m still not to sure about abandoning the E-fund growth all together. So the way I reconciled this to myself was to continue putting in $100/month in to the E-fund, then at the end of the month if I don’t use the $100, transfer it on to my credit card. If I do need to use the E-fund then I’ll have a savings plan in place to start rebuilding and I’ll essentially have $1,100 that I can pull if an emergency arises.
Step 3: Put all money I’m currently paying on my card ($700/month) and my E-fund money ($100/month) on my credit card. With this payment plan of $800/month total I should be done paying it off without any extra push in 1 year and 10 months. This isn’t soon enough for me.
Step 3b. No soda “challenge”. The BF has given up all beverages except water and tea. I want to join him in this. I sat down and calculated how much I spend and OMG I spend about $120 on BEVERAGES a month. That money could definitely be going to a better use. Hello… $900/month on my credit card would get me debt free three months sooner!! The plan is to start this over Thanksgiving so I don’t get caffeine withdrawals while I’m teaching.
Step 4: Get more money. I know this seems obvious, but here are a few ways I plan on getting around $3,000 in the next year.
- Turn in moving reimbursement receipts – should get ~$1,200 depending on what they reimburse. The goal is to get this done within the week.
- Seasonal jobs. I’ve applied for one position. I’ve decided I’ll apply to Target, Best Buy, Old Navy, and Barnes and Noble. They are all within 2 blocks of my apartment so there would be little commute time and I can buy presents for most people on my shopping list at all these stores. Hopefully I’ll net ~$1,000 from seasonal employment.
- Summer classes. I’ve decided to sign up to teach an online general education class this summer. Depending on how many people sign up I could make between $800-3,000. Doing three units of class for $800 puts a pit in my stomach (SO LITTLE!), however, I have to look at the bigger picture of what I’m trying to accomplish.
Step 5: Pull my non-retirement stocks and mutual funds when my debt gets to $5,000. I have about $6,000 in stocks and mutual funds that I can sell to pay off debt. If I can get out of debt without using them I will. I have significant emotional attachment to this money as I received it from the life insurance of my mother and brother passing away. However, if I can make significant progress on paying down this debt now I will feel okay spending my mom’s mutual funds to get me the rest of the way. The key though is that I HAVE to make progress. No progress, no funds.
Step 6: Rewards. I think a lack of tangible rewards for myself kills the motivation. Yes, the debt should be motivation enough. But milestones should also be rewarded. I will need to think of some suitable rewards for myself. Any suggestions? I’m thinking every $5,000 in debt gone I need some fantastic “pat on the back” with an epic party when I get to ZERO debt. Maybe something simple like going to the movies or taking a weekend day trip to a nearby city? I don’t know how I feel about using a tangible item as a reward, but I’d consider it.
Thank you all for your motivation and support. I truly could not do this alone. You are all wonderful.
*sigh* Here we go again…