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The 2018 Budget: How I Plan to Slay my Debt

The 2018 Budget: How I Plan to Slay my Debt

I had some pretty big expenses in 2017. Most notable, I spent about $3,000 in car repairs. I had to replace my catalytic converter and water pump, among some other lesser things. (Maybe they were broken, maybe they weren’t. I just assume I’m being screwed over both because I’m a woman and I was at my car’s dealership and go on with my life.) So next year will be the year I try and recoup as much of that as I can. (It does not help that my one credit card has charges from way back in 2014 that I’m still paying off. I need to buckle down and pay off that credit card.)

But first, the rules:

  • Round down the amount of pay you take home.
  • Round up the amount of expenses you are paying for.

So, if your take-home pay is usually around $950 each paycheck, then round down to $900. If you pay $545 for rent, then round up a little to $550. Not everyone does this but I find it’s the best way to make sure you have a little extra left over at the end of the month.

Secondly, the break down:

  • Rent
  • Utilities
  • Credit card
  • Food
  • Gas
  • TV/Internet
  • Cell phone
  • Other

Some people may have a car payment or medical bills or what-have-you. Add what expenses you need to. The biggest expense is going to be rent or mortgage payment. (If you don’t have either, then you are a lucky person.) For me, utilities include gas and electric payments. Water, trash, and sewer are included in my rent. I separate the TV/Internet from other utilities so I can get a better handle on how much it is. Food is food; toilet paper and soap and such comes out of Other.

Third, the calculations:

Add your biweekly pay, or however often you get paid, together to get a monthly total. For me that’s:

 $900 + $900 = $1800

I rounded my pay down a little in my calculations. So, $1800 is my total budget. Now to add up expenses.

$550 rent +
$135 utilities +
$250 food +
$60 gas +
$160 TV/internet +
$40 cell phone +
$150 other =
$1345

You can see I left out the credit card. Since the credit card is something I want to pay off quickly, I’m going to subtract the rest of my expenses from the total pay and see how much is left and how much I can comfortable put toward the credit card bill. Now subtract expenses from total pay. I rounded my expenses up. My rent is actually $545, the utilities are $125, etc. Give yourself a little extra padding by rounding expenses up and income down a bit.

Forth, the end total:

$1800 – $1345 = $455

So at the end of the month, if I stay on budget and nothing else comes up or there are no emergencies (just had a good laugh at that), I will have $455 left at the end of the month. I’m going to round down, and say that there is $400 left, to give myself a good cushion. This cushion is for emergencies and other surprises.

My credit card bill stands at a little more than $3,000. If I am able to pay the full $400 each month, that means I will completely pay off the credit card in 8 months. (7.5 months.) All that rounding up and down also leaves me extra, which will stay in the bank account as emergency money. Hopefully, no emergencies big enough to completely ruin that month’s budget but one can only hope.

Can I do it? To be honest, probably not. Something is going to happen, either to something I own, my cat, or myself. The world is a unpredictable place and trouble finds me when I least need it. But this is the plan. I’m not depriving myself. I can survive comfortably on this and have a couple luxuries. (Candy, mostly. A geeky, fun item or two.) This is doable.

Remember, you are never going to follow a budget that is completely restrictive. Or at least you are not going to follow it for very long. Create a budget that has space for fun. My Other budget includes money for a meal or two out and maybe a movie or something. Luckily, I only have myself and my cat to worry about.

If you are a two person income household, add both incomes and round down before subtracting your expenses. Give your household a larger Other budget, for things like kids shoes, field trips at school, and emergency trips to the doctor for when your kid brings home the plague from school. You are more likely to have an emergency expense involving a child than anything else.

So that’s my budget plan for 2018. I’m going to try and keep to it all year and then reevaluate in the New Year. Hopefully, I’ll have no more credit card debt and will begin to start saving more and more money. (My big dream is to have enough to take a vacation to Europe for my 40th birthday.)

Fingers crossed! Happy New Year, everybody!

Thank you for reading!

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The Art of Getting in over your Head.

getinginoveroyrhead

Moving out of my parents’ house was a big deal for me. It was easy to save money while living under their roof because everything was taken care of for me from food and clothing to normal everyday stuff. You are really not all that aware of how much acne face wash costs when you’re not the one paying for it. I had savings, and when I moved out of the house, those savings were pretty nice. But slowly over the years of living on my own, those savings have been whittled down. Poor impulse control and some big money events helped with that but I was doing okay. Then there was a series of events that just drained me financially the last half a year. This is how people get in over their heads.

screenbeanslump

Before I took my vacation back in September 2014 to Colorado, there were a couple of things I wanted to take care of before I left. I wanted new glasses for one thing. I wanted to be able to see the mountains when I went there. Of course, I needed sunglasses too. Getting glasses has always been expensive but it was a cost I accepted because I really have no choice. Without glasses, I can’t see clearly past a foot in front of my face. So, there went about $800. This is actually about $200 more than I usually spend because I went to a new place closer to work. I have to tell you, that was the first and last time I’m going there.

Then I wanted to take care of my TMJ. Now, TMJ is jaw problems. Temporomandibular joint dysfunction. Basically, my jaw doesn’t sit right in my head. My bite is off and I grind my teeth. Migraines are a common symptom of TMJ. It is also something that a regular orthodontist can’t treat. They have to specialize in it. My regular dentist knew nothing about it besides the acronym. So, I went off to find an orthodontist that treated it and promptly discovering insurance won’t pay a dime of the treatment. I had to move money from my savings to my checking account to pay for it. How much you ask? $4,000. Yeah. Thousands.

After that, came the actual vacation. Did I mention I have poor impulse control? I can’t resist something if I see it. I’m like a magpie. I must have the sparkly. So, I spent more than I meant to on my vacation on top of the money I forked over for hotels. My travel companion took care of the plane tickets by using her family’s travel miles. Lucky girl. So, bye bye to that money.

rant smallThat was ok. It was a lot of money and my credit card was fat and bloated but I was going to pay it off. For about a month I was good and stuck to a budget and managed to put a few hundred dollars toward the credit card. Then I broke my elbow. This had the duel effect of giving me medical bills while cutting my income while I was on short term disability and healing. I went back to work just after Christmas. But the ER bill and surgery bill were nothing compared to the physical therapy bills that hit me after the New Years.

The ER and surgery bills were probably $500. Ouch but not horrible. Two months of physical therapy twice a week and then one month of physical therapy once a week? Over $1,000. Then in the middle of February I took my car in because the check engine light was on and it was giving me error messages on my radio about the air bag and tire monitor. It needed a new battery. At the same time I had them do the oil change and agreed to some transmission cleaning or some such shit. Stupid me. Of course they then found I needed new front brakes. All told? $550.

So here I sit, the middle of April, completely broke. I loaned a friend $100 a couple weeks ago because she has the worst fucking luck and I’m a soft touch. I shouldn’t have done that because I discovered last week that I had completely drained my checking account after paying rent and the beginning of the month bills by -26¢. I moved a couple hundred from my savings account to my checking account. In the four years since I moved out of my parents’ house, I’ve lost half of my savings. I got paid on Friday but I’m terrified to spend any of it in case something else fucking happens. I only have a couple of hundred dollars left on my credit card before it maxes out. I just did my taxes and I’m getting back $400 but all of that is going toward medical bills.

monopoly_money

People don’t get in over their heads in big explosions. They get in over their heads in small steps, in mini disasters that slowly chip away at your safety net. I’m sure it’s even worse if you are a person who doesn’t actually have a safety net. I know a couple of people like that. I’m thinking of getting rid of my cable. TV is my biggest expense, which it just ridiculous. I promised myself I would stop spending money on things I didn’t 100% need and would shop for food only at ALDI. (ALDI = a discount grocery store in America.) In May, my car insurance renews. I have no idea where that money is coming from. I’m only making the minimum payment on my credit card.

Now I need to buckle down and plug up my money leaks.

  • Get rid of subscriptions you don’t really use. This includes an anime streaming subscription I only use infrequently and a subscription to Amazon Kindle. I already dropped my Amazon Prime membership.
  • Cut back on the food spending. Only shop at ALDI. Their food is fine and I don’t absolutely need anything else.
  • Meal planning. Figure out what I’m going to make for meals that week and buy only those ingredients. Do not waste food.
  • No fast food. No eating out.
  • No browsing antique shops or consignment stores. This is where the whole impulse control comes in. If I’m there, I’m going to see something I want and I’m not going to be able to stop myself from spending money. So, staying away from those places all together is the only option.
  • Call AT&T and either get my cable bill down or cancel it completely. I used to only have Netflix and Hulu through my Roku box and paid maybe $40 a month for both. I can do it again. (Even if I will miss the DVR.)

Anybody else have suggestions on how to save money and pay off bills?

Thank you for reading!

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