The night The Plan was conceived was either a Friday or a Saturday. Already I forget.
But my next payday was the following Wednesday, so we’ll call that the the day The Plan took effect.
Mind you, before The Plan, things were looking very bleak for me. All my credit cards were maxed out and I was regularly overdrawing my account – typically $200-300, but I’d seen it hit the $350s.
At the time The Plan was hatched I was at the reddest I’d ever seen my checking account. I didn’t even know my credit union would allow me to get that negative – around $500.
The Plan was to pay off $1000 in consumer debt per month. My paycheck was the 2nd of the month, and a third of it was gone the moment it was deposited. So my first paycheck on The Plan could not go as planned due to outstanding circumstances. But I planned to still keep my spending in check so that I wouldn’t go deeper in the red on the next go.
Spoiler alert – I still hit the red.
I’m no angel, and I won’t try to pretend that this wasn’t my fault. All the faults were mine.
A number of things:
- Forgetting overdue balances.
In my dark days, I had let a few bills go unpaid.One missed payment on 3 accounts, so it definitely could have been worse – but still. I didn’t calculate these overdue balances into my budget.
Just outrightly spending money where I didn’t need to. I bought like 6 fish tacos. Whyyyyyyyy.
- Car Registration.
Okay this one, I’m gonna say is not really my FAULT. I don’t count this one as a mistake or a miscalculation. I’m gonna say this one is just circumstantial. My registration renewal was due and I wasn’t going to NOT pay it.
In the end I overdrafted twice. Once when my insurance payment was pulled ($75 when I had $45 in my account), and again bc I needed gas. In retrospect, if I didn’t buy those fish tacos, I probably could have used the cash instead of overdrafting for the gas.
Shoulda coulda woulda.
I hope I learned a lesson here. Something along the lines of: Don’t buy 6 fish tacos.
Payday is Friday and I’m -$119. (-30 difference, -27 NSF, -35 gas, -27 NSF).
Okay so it’s not good, but it’s better.
I recently also requested a forbearance on my student loans while I get some of my shit together. I was behind 2 payments on them and I knew that paying 3 months off at once was just not going to happen.
My forbearance was granted and my payments won’t be due again until February. I’ll still be making payments on my student loan interest, but that’s only about 23% of what my typical full payment is. Admittedly, I feel a little weak having done this. But I also feel like it needed to be done. Also, having this monthly payment on hold for a bit will give me a chance to get out of this negative balance cycle.
I also realized that I misread one of my accounts and undercalculated my monthly dues by about $40. Not a huge oversight, but I had to edit some of the payments I had scheduled and it means that it will take me marginally longer to pay off my accounts. Mostly it was having to adjust my payments and my spreadsheets that was frustrating. I’m still paying off the same amount on debt every month.
I was supposed to look into consolidating my debts. I hadn’t really. I’d done a quick Google search and found that balance transfers are usually accepted up to your credit limit. All of my credit lines were maxed out so I just figured it wasn’t an option for me. After my gentleman asked me about it again, I dug a little deeper. Mission Federal has this nifty debt consolidation calculator. You enter in your current balances and interest rates, and your loan offer (or what you estimate your offer might be), so you can see whether consolidating your debt would be beneficial.
I found that if I can qualify for a loan with an interest rate lower than the interest rate on my highest balance credit card, it will be VERY WORTH IT. If I consolidated, I’d be able to pay the same amount I already plan to pay – but I’d pay it off more quickly because the overall debt would be less due to lower interest. Or I could pay it off in the same amount of time as The Plan, with a lower monthly payment that would allow me more cash flow (GROCERIES AND FUN THINGS!).
I applied online for a debt consolidation loan with my credit union. They’re also the financiers for my auto loan. I applied on Thursday.. I haven’t received a notice of denial or approval yet. I figure if I get denied, my situation remains unaffected – I stick to The Plan. But if I do get approved, I don’t think I’d take the route with more cash flow. The whole point of The Plan was to pay off my debt and pay it off quickly, so I don’t think consolidating my debt should sway me to take more time to shrink it down.
My gentleman had some other suggestions too. They include – selling my car so I can stop making auto loan payments and paying for insurance. Just to provide some perspective, I only have to commute to work 2x a week. My other 3 workdays I can work from home or really anywhere. Usually I just stay home or go to the Starbucks across the street. So this recommendation is not as outlandish as it would be for daily commuters. But I think about other times I use my car – grocery shopping, visiting family, driving to the beach. Would I really want to take an Uber for all of those other instances? My car payments aren’t exactly cheap, but they’re not expensive either. And while my new premium is significantly higher because I had a minor accident in September, I also can’t imagine not having a car.
He suggested I sell my furniture. I won’t. I financed my furniture in March and I’m still paying it off. I could sell my furniture and make some cash, and use the cash to pay off what I still owe. But it wouldn’t solve a lot of my debt problems, and I would also then be just.. more unhappy because I’d lose my couches, and I wouldn’t have a living room, and in the end, I’d buy couches AGAIN.
He also asked me if I would get a night job. My answer to that was just: No. And the reason for that is very simply and very selfish. I just don’t want to. I don’t want to come home from work and go to work. I don’t want to give up my weekends.
This post is getting a little depressing. Okay so let’s move on to some brighter things.
I allowed myself $40/week for groceries. My grocery purchase last week was $55.
BUT WAIT. Don’t strike that as a misstep. My grocery purchase was $55 but has lasted me well over 1.5 weeks. And the only thing I’m running low on is bread. So let’s just make a prediction and say that I managed to spend only $60 on my groceries for two weeks. That’s $20 underbudget and $90 under what my gentleman would have allowed (remember, he wanted to give me $75 to spend per week?!).
So I have a really positive outlook on my ability to underspend in the coming months. As long as I don’t buy 6 fish tacos, I’ll be fine.
Another good thing that’s got me excited and optimistic – I had a meeting with my VP last week and he let me in on a little secret: a raise! The secret won’t take effect until December, but it’s a good enough secret that I’m making plans for it now. It’s going to allow me to make larger payments on my debt per month, which of course drives down the amount of time it’s going to take me to pay it all off.
By my estimations, I’ll be able to pay off my 2 lowest balances by the end of December 😀
That’s almost a Christmas present in itself.