I need order. When I was always broke it did not seem to matter that I sort of tracked expenses on random scraps of paper or haphazardly in my head. I already knew there was not going to be enough money so why bother getting more organized? I tried setting up a budget many times and always failed. I would get frustrated that every single penny had to go somewhere and never anywhere fun. Then I would get more frustrated by the never ending emergencies that threw the whole budget out of whack. It was suffocating and eventually I could not take it anymore and would ignore what my budget said and do whatever I wanted. This of course created bigger problems.
Suze Orman says budgets are like diets, which we all know are strict and not fun. Instead of budgeting she suggests just tracking your expenses because that will tell us if we are living within or above our means. Considering how frequently I use cash and either do not ask for or lose receipts this will not be easy, but I am determined to try. I have found a simple spreadsheet (courtesy of SquawkFox) that I was able to modify to my expenses and another for tracking debt repayments (courtesy of Vertex) via snowball, avalanche, snowflake, or a custom method. December will be kind of a practice run to not only get into the habit of using them, but also to make sure I modified them correctly for my needs.
So here is what else I have done to develop my financial plan:
-Pulled all 3 credit reports. Admittedly I only read one of them and then got tired, but I will get to the others.
-Got my credit score from VantageScore and laughed because in the last 4 years it has gone up 5 points.
-Signed up to have 9% of my income go into my retirement account at work (this is the minimum for the company match).
-Decided to use the avalanche method for debt repayment until my title loan is paid off, hopefully by the end of the year. A number of my debts are under 2k and no longer on monthly repayment schedules so it may make sense to continue avalanching, but just pay each one in full.
-Caught up on 2 household bills, with 3 still behind.
-Signed both of my student loans up for Income Based Repayment and they were approved for monthly payments of $0 (consolidating them would actually cost me money in the long run so I declined to do that). I have decided to not fixate on these for a few months while I focus my attention on the worse debts/household bills and an EF.
-Decided to start with the Dave Ramsey 1k EF because I might be able to swing that before the new year.
There are still a lot of things left to do, but I at least feel like I have started. I figure this month may be a little hectic as I adjust my goals, gain more information about my situation, and just keep learning.
Planning and Preparing
December 2nd, 2014 at 04:42 am
December 2nd, 2014 at 06:52 am 1417503146
Suggest you list bills by basic like rent, utilities [heat/water/electric], food, cell, transportation, insurance, bank charges. 2nd group list what you owe from oldest to newest and check out what the dates of limitations are in your state. Get all spending entered int your spreadsheet, you need to know where every dollar goest, for the short term.
It will take time to get your credit score to the numbers you desire but with a small amount of short term forfeiture I see light. Would you be willing to have a holiday season that relies mostly on free, community type entertainment like children's school concerts, carolling, helping at the Food Bank and walking around to admire decorations? Brown bag lunches, home cooked dinner & snacks makes a huge difference in spending and usually much healthier.
Remember, we're always here to cheer you on and support your progress......
December 2nd, 2014 at 12:40 pm 1417524012
December 2nd, 2014 at 05:08 pm 1417540093
My expenses spreadsheet may actually be a bit too elaborate right now, but I was trying to think of anything I might spend money on since my goal is to track everything. I'll make another entry going into more detail about its different sections. As for my credit score, I really don't have a goal in mind of what I'd like it to be yet. I know it needs to go up and that will happen as I continue down this path.
Having a frugal holiday season is not a problem since I actually don't like this time of year. I buy maybe 1-2 inexpensive gifts, attend 1-2 holiday parties, don't prepare a feast for anyone, don't send holiday cards, and do not cover my house in themed decor. I think it helps that holiday related entertainment tends to make me grouchy and none of it is aimed at singles. In fact most holidays I spend home alone watching some tv show or movie marathon and eating takeout.
Year round I maintain several volunteer projects and am always on the hunt for free or low cost entertainment so yep I can continue that. I seriously have to get back into cooking and bringing my lunch regularly. My schedule has been very chaotic the last year with grad school, multiple jobs, and long commutes so I just got lazy. No more lazy!
December 4th, 2014 at 11:56 pm 1417737369
December 4th, 2014 at 11:56 pm 1417737410
December 5th, 2014 at 02:16 am 1417745767
But you can also consider reading this article about financial freedom http://reflectandreshape.com/self-esteem-classes/