Saturday, January 23, 2010

New Year Recap

It hasn't been quite the start to the year that I expected, but things are OK. Mostly. ;-)

That said, there's a lot of room for improvement. I haven't done a financial fast, though it's still something I'm thinking about for down the road. I had a guest last weekend, and I like being a good host. So I bought a few things for brunch Sunday. And we went shopping that Saturday and I found a cute pair of cropped pants at the Neiman's outlet that fit off the rack. And a couple weeks ago I ordered a tuxedo shirt online that, unfortunately, had to be returned. (Sometimes being tall sucks. Everything is always cut too short.) I ended up ordering a plain fitted oxford from JCrew, which carries some items in tall sizes.

Which brings me to this: I'm starting to accept that I have a custom-fit body. Sadly, I have an off-the-rack budget. What I will have to do is buy quality things and, if necessary, have them altered to fit. But because I have an off-the-rack budget, everything I buy that needs to be altered has to be something I love.

In other news, I've called an agent to help with the condo search. I'm not sure I'm going to use her, though, because her reaction to my salary was ... awkward. I know I'm not in the market for a perfect place, but I can't believe there isn't something out there in my price range. Oh well. Anyway, next up is a call to the bank to get preapproved and see what I'm working with. Send good wishes.

See you Feb. 1 for the monthly update. :-)

Sunday, January 3, 2010

The Financial Fast

Michelle Singletary, a columnist for The Washington Post, has a wonderful article in today's edition. In it she suggests a 21-day financial fast. My favorite part is this paragraph right here:

The second part is eliminating the use of plastic, both credit and debit. There's a real danger in relying on credit even if you pay off your bill every month. Paying with plastic just makes buying too easy. Swipe, and within seconds you can be mired in debt. Let's consider the example of purchasing a flat-screen television. If you had to stand at a cash register and count out bill after bill after bill after bill to pay the hundreds, if not thousands, of dollars for a television, you certainly would contemplate whether the purchase made financial sense. You might even do some mental accounting to calculate what debts you could pay down or pay off instead. Plastic doesn't allow for that deliberation. (Emphasis added.)

I like the idea. And I'm considering it, although the idea of not using my debit card scares me. I know many use the envelope system, but I'm just never comfortable carrying around that much cash. And since I still use a transaction register for all my purchases, I am always mindful of what I'm spending. I do not rely on overdraft protection to bail me out. So, we'll see about that part. The part I would like to focus on, however, is the part on spending only for necessities. Anyway, we'll see.

Enjoy the article!

Friday, January 1, 2010

January 2010 Update

Happy New Year! It's always special when the monthly update is also January 1, the start of a new year. This year's January 1 update is even more special, as it is the beginning of the last year of blogging about my credit card debt.

Which brings me to this: What will become of this debt blog after the debt is paid off? I won't take it down. (I could use the reminder of where I've been.) But will I continue to post? By then, I'll be in my new place; maybe I could post about how things are going with that. We'll see.

But let's stop thinking about the future and get to the point of today's post:

The Savings: $3,749.28
The Debt: $5,755.60

The savings is up by $204.26. Historically, I'm doing better than I was in 2008 ($3,643) but not better than I was when 2009 started ($4,811).

The debt is another story altogether. It's down $1,530.69! What a difference a three-paycheck month makes. Obviously, this January 1 balance is much better than those in the past. After all, that's the point of this blog, right? Two years ago, in January 2008, I owed $19,022.04 in credit card debt. Wow -- just typing that figure ... it boggles the mind. It makes me sad to know I got myself that deeply into debt. What the heck was I doing?! But then I'm elated at the progress I've made. In two years, I've paid off more than $13,000. Whoa. Let's focus on that good part, shall we?

Christmas was a good one. My parents gave me gift cards, two of which are bank cards. Those can be used anywhere. I tend to save gift cards until a rainy day. I have to use the bank cards by June or else there's a $2.50 monthly fee, but I'm sure I'll find something to use them on between now and then. But for now? I haven't a clue. More on that later.

Other money matters: I received my paycheck for the freelance job I did back in December. I have some grocery items to buy this weekend at the organic market, so some of the check will go to that, but I also plan to sock some of it away into savings. And then there's the unexpected financial blessing that's due to come later this month. I don't know what I want to use that for, either.

Which brings me to this. I've noticed something about myself and my financial habits over the last 20 years: When I'm doing pretty good with my savings and can afford to spend a little, I get stingy. I question every purchase -- Do I really need this? What if you see something better later? I end up talking myself out of the purchase.

I think it's also because I know how easy it is for me to fall back into my old spending habits. This is not my first rodeo. Back when I was in college, I racked up about $6,000 in credit card debt. A lot of money for a student. It took quite a few years to pay that off, but I did. I still remember the first thing I charged after that. I told myself, "Go ahead. You'll pay it off next month." But then there was something else, and then something else. And now here we are, all these years later.

So that extra $700 or so I'll be getting later this month will likely go into savings. Ditto any IRS refund I get. I've been wanting to build up my savings, especially since I'm going to be shopping for a place this summer. It will be good to have that extra amount in there for incidentals when I move. I will have to pay to get my carpets cleaned when I move later this year. I have to budget for that and for the movers. Plus, I'd really like to get a nice couch and a new mattress set. Neither of those are cheap items. My rent deposit for this place would help toward all that, but deposits are not guaranteed. Even though all my semiannual inspections with the property management company have gone well, I still hesitate to rely on my full $995 being returned. (But believe me: I've saved every copy of my inspection report in case I need backup!)

So that's January 2010. It's going to be a great year. :-)