June 2012 Debt Update: This Is Really Happening!!
My goal for the June 2012 Debt Update was to be under $31,000 in debt. Drumroll please….
Total Debt Update:
June 2012: $30,999
% Change from May: 3.7% Decrease
Yeah, I totally made a last minute payment just to meet my goal! But I also could have made a larger payment, but am really embracing the value of having a $200 buffer in my checking account (something that used to be unheard of before). I also made some progress on my Discover card…
Smallest Debt (May 2012): $4,269
Smallest Debt (June 2012): $3,600
I really want to get the Discover card PAID this summer. So instead of an overall debt goal for July, my goal for next month is to be at $2,500 on the Discover balance. I will probably also be under $30,000 in debt if that happens, which will really help me see the light at the end of the tunnel.
Remember how in Groundhog Day Bill Murray’s character finally realized that February 2nd was on a loop and he began to take full advantage of that fact? There was a brief sweet spot where he exploited being in the loop before he had had his fill and realized how thoroughly depressing it was to be living the same day over and over again (couldn’t that be a commentary on how we live our lives if we aren’t mindful?). Well, I think I am in that sweet spot with my debt repayment. I am not doing anything particularly different, and my income hasn’t increased significantly, but I am doing enough of the same actions to FINALLY start seeing a difference. I know the grind of paying off debt will continue to pop up at random moments, but right now, I feel good. This is the first time where I am excited to keep going and to continue to cut back on luxuries and entertainment (and that is tough in the summer when I have family visiting and friends whose social calendars are always full) and make better progress every month.
I also want to talk about savings. I’ve mentioned before that I have never been good at saving. Saving was always a temporary action and whatever I had would usually end up being spent for one reason or another. I opened my ING Direct Account in September, and this past month, I also finally opened several different accounts to begin differentiating my savings goals. So I now have 4 different savings accounts:
- Personal Savings (AKA Go to Hell Money)
- Business Capital fund (for future small businesses I plan to own)
- Real Estate Investments (House down payment/slush fund for home maintenance, rental properties, etc)
- Travel and Toys (Everything fun that used to be what I spent all my money on)
I opened my savings account in September 2011 with $25. I now have over $700 in my accounts and my goal is to continue to divert 10% of everything into the accounts. BUT. And this is a big BUT (no pun intended)– I am not going to put money in savings when I think it might end up coming out! I’ve done that too many times and my main goal is to have something that is set aside and continues to grow. I want this money to be used for assets and investments I understand. I am now truly understanding the meaning of Warren Buffet’s number one rule, and that has been guiding my finances a lot. Yeah, I’d love to have 5 large in savings by the end of the year, but I’d also be stupid not to pay off debt with that money. So my savings will continue to grow slowly and I’ll try to pay down debt more and more rapidly.
If you are currently paying off debt, I want to encourage you to not give up. I honestly felt hopeless and drowning in debt one year ago. I’ve only paid about $10,000 off and I still have a ton of debt left to pay off. I’ve probably paid more in interest fees than I ever want to sit down and calculate. If I were to compare myself to any of my fellow bloggers who also put their finances out there, I would neatly calculate that I am a loser. But I won’t do that and you shouldn’t either. We all have totally different lives and situations to deal with. We all learn our way on our own time. Some of us (ahem, looking at myself here) take a little longer than others and make progress a little more slowly. That’s OK. I’m still focused on it and excited about getting my finances in order. Even these little things like having 3-figure savings and $200 in my checking account after my bills are paid are keeping me motivated.
So don’t worry about the dude who paid off $90K in 7 months. Don’t worry about him. He’s doing his thing, you’re doing yours. You can learn from him, just don’t spite him for having the ability to quickly accomplish what make take a few years for someone else to accomplish.