Progress Report: Month 5
Day 153 | $61,994 paid | $28,723 till freedom
I just paid the Fed $5,083 from my January income. Dollar-wise I'm at 68%, time-wise I'm at 50%.
Here's how January played out:
Starting Cash:$2,500
Starting Student Debt:$33,601
Income:$7,953
Expenses:$2,870
Cash Paid to Debt: $5,083
Accumulated Interest: $206
Ending Debt:$28,723
Ending Cash:$2,500
Total Assets:$55,684
Total Liabilities:$28,723
Net Worth: $26,961
Predicted student debt at end of June: ($5,487)
In other words, I’ll have a surplus of $5.5k at the end of June at my current rate of paydown. In fact, according to the projections, I'll be exiting May with my debt completely paid down and a surplus of $1,319. Anything can happen in five months, of course--from a smaller-than-expected bonus to an unexpected disaster--so I’m not going to bank on any of these projections for now.
High-Level Analysis
I spent $525 over my budget, but thanks to unbudgeted Craigslist sales of $345 and a new renter who paid first and last month's rent in January, I brought in $903 of income over my budget.
While 50% timeline and 68% debt paydown seem like reassuring numbers, I can't expect any more huge pay-off months like September where I wiped out my life savings and November where I sold my second car and motorcycle. I'm looking at a series of $4-$5k monthly paydowns, or $22,500 till the end of June. The one exception to this is my bonus, which is a huge, huge bogey. To hit my goal, it needs to be at least $6k or so after tax, and all of this hinges on not experiencing any disasters or anything else that will set me back financially.
Assessment of Expenses and Revenue
I want to take a moment to assess my spending habits on a line-item basis. Progress-to-date is detailed in the spreadsheet below. Click once to open and once to zoom.
Analysis: Expenses
Insurance -- $0 — After months and months of $171 insurance payments, I've sold off my second car and took collision off the S2000, and I've paid enough towards the once-high premium in previous months that I slid by without owing a single dollar in the final month of the six-month policy. Yay!
Internet — $9 — My internet wasn't working for a few weeks, but I was so busy at work that I had zero time to come home and be on-site for the AT&T repair guys to come and fix it. I borrowed internet from the neighbors as a stop-gap until it got fixed. I then asked AT&T to pro-rate my charges for the month, which they did.
Cell phone – $114 — I budgeted for $85 since my typical bill has always been $85 for unlimited data and text and 450 minutes, and I used to go under 450 minutes every month. But now that I’ve been promoted to a new role, I find myself on my cell phone a lot more and actually exceeding my minutes at 40 cents a pop, so that explains the $114 bill. The company can give me a phone, but it’ll be a dumbphone and the extra complexity it’ll bring to my life isn’t worth it. This is the third month in a row where I've gone well over $85, so I really need to get better at monitoring my minutes.
Mortgage — $1441 — Fixed and within budget
Haircut – $17 — God bless twelve-dollar Tuesdays @ TGF. $12 + $5 tip = $17. I have a regular haircutter now, and I feel like I get extra attention from her thanks to the 40% tip. Totally worth it. Big spender!!!
Energy — $32 — Same story as last month: I budgeted for $100, so this is a huge win no matter how you look at it. The past few months starting in September the bill has been $124, $97, and $89. The AC hasn’t been on in weeks, and it’s finally being reflected in the bill. It would have probably been closer to $25 or $30 without the roommates, but $32 is still super-low.
Water — $0 — My fiscal month ended the day before I got the bill for $62. I'll pay this in February along with the February bill. So a gain this month, but a definite loss next month. That being said, $62 is good considering I've been budgeting for $100.
Gas — $42 — A loss relative to my $22 budget. This has gone up due to the cooler winter months and is being offset by a lower electricity bill since I haven't been running my AC...or my furnace, for that matter.
Entertainment — $380 — A loss relative to my budget of $50. I'm going to dedicate a post to this soon. It sucks and I'm not proud of myself, but it is what it is. I'll get into later. For now, I'm chalking it up to the fact that I had a week off from work full of idle time as well as the NYE festivities.
Groceries — $377 — A loss relative to my $280 budget. I don't know how to hit the $280 budget. It's not like I'm buying stuff I don't need. I'd love some input from readers on this--is $377 a lot for a single guy in terms of groceries? This includes non-food items like new heads for my Sonicare, which cost $20 for a pack of three, as well as contact lens solution ($13?), etc.
Lunch at work — $0 — A win relative to my budget of $0. It seems like every other day my friends are getting together for lunch during work. I don't have the money, but more importantly, I don't even have the time--work has been nuts lately; meetings and email consume my lunches.
Fuel — $94 — A win relative to my budget of $160. But I'll be honest, I bought about $40 of fuel at the tail-end of fiscal January that didn't hit my credit card until the first day of fiscal February. I still would have been under, though.
Drycleaning – $69 — A loss relative to my budget of $20. I had some important meetings during this month and I needed to dryclean a suit and some blazers.
House — $95 — A loss relative to my budget of $0. This is the plumbing help I talked about here.
Car -- $8 — A loss relative t0 my budget of $0. I had to patch the convertible top, which is better than dropping $2k for a new one.
Gifts — $42 — Apparently there was an issue with shipping my mom's Christmas gift to her, so I didn't get charged in December and I had to redo the transaction in January.
Unbudgeted -- $150 -- I had to refund John, the former roommate, his security deposit.
My expenses for the past five months averaged $3,176 while my expenses during the 15 months prior to NMHD averaged $7,754.
Analysis: Revenue
Salary -- $6,248 for two paychecks -- A win relative to my budget of $6,200. I was enjoying the paychecks I got in December that didn't have social security tax withheld since I had already hit the income limit. Those days are gone for now.
Roommates -- $1,360 -- A win relative t0 my budget of $850. I got a new roommate in January and he paid first and last month's rent plus a security deposit.
Craiglist -- $345 -- A win relative to my budget of $0, but this was just offsetting some expenses that weren't in my budget (e.g., entertainment, plumbing, etc.).
February Outlook
Cost Challenge: I've decided I won't be adjusting my budget for the rest of this journey. I've been missing my cell phone, entertainment, grocery, and drycleaning budgets like clockwork. Some of that is due to a piece of them being unrealistic to begin with. I thought I would be hardcore about eating ramen noodles, never going out with friends, and ironing my own clothes, and that's how I'd hit the entertainment and grocery and drycleaning budgets. Well, I haven't been able to bring myself to do any of that yet, but I don't think I'll try, either. If I fail in this mission, I can point to this paragraph as the reason why. My health and friendships are more important than a financial stunt, and I forgot I once ruined about five shirts when I washed them myself and the colors all bled. (That being said, I really don't think that budget misses in these categories will be the reasons I fail, if I do.)
Revenue Challenge: My rooommate Sarah signed a six-month contract, her sixth month is February, and she has already paid her last month's rent, so I might not get any rental income from her this month. I've invited her to stay on through June, when I expect to have the debt paid down, and she's considering it. Michael and I don't have any landscaping jobs lined up.
Final Thoughts
Halfway done time-wise, 68% done debt-wise. I have to admit it: for all of my talk about Zen Buddhism and focusing on the present and living in the moment, I'm getting extremely anxious as I cross the halfway point of this journey. I can't stop thinking about the end, when I can publish my last post and start thinking about building my wealth instead of reducing my debt. I also think about the bonus bogey daily. What will it be? What will it be? What will it be? I'll find out some time in March, but that seems like forever.
Here’s the full ten-month outlook (click once to open, once to zoom):
