How am I doing -- February and March 2008

Happy Easter to everyone!!!!!

It's interesting how life changes. It seems that it was not long ago that our Easters were filled with visiting relatives, Sunday morning church service, Easter baskets and an Easter egg hunt, and of course, the big Easter dinner.

Both of my children work in food service. My son is a server at senior living facility and my daugter works at an upscale restaurant nearby. That means neither of them will be home today. The restaurant where my daugter works serves brunch, so my husband and I decided we will have brunch there today.

Anyway, I really want to talk about my finances during the last two months. February was a bittersweet month. I did mange to pay $835 on my credit card, which I am totally thrilled about. The sidebar includes the payments I've made in March too. I paid $1,370 to my credit card debt in February and March. I'm happy to say that my balance is in the single digits! On the other hand, I increased my overall debt by $3995, which is the amount of the loan I got to finance my car. That payment will be $97 per month.

My husband and I spent a lot of time on the weekends in February looking for a car. That means we spent a lot of time eating out. We probably spent $50-$60 every weekend eating out. Sometimes that would include bringing food home for C2 to eat. What's different is that we would pay cash--that's right, no credit card usage for dinners out.

My credit card paydown is my major definite purpose right now. My secondary goal is to be debt free by June 30, 2009. I'm a little off track of my goals right now. Especially with the addition of the car loan. My credit card has a variable rate, which right now is very low. I used the Bankrate calculator to help me figure out when it will be paid down to zero, based on my current interest rate. If I continue to pay $800 per month at the current interest rate, I'll have the credit card paid off in 13 months.

There are additional funds I could use to pay it down sooner, but we have a vacation planned. Rationally, I'd like to say to the family, no vacation, I'm paying down my debt. Emotionally, I think we should go on vacation because we haven't had a vacation in three years, and I think that a change of scenery will be a source of rejuvenation. It will also be interesting to see if we can go on vacation and stay on a cash basis. I think that when we return, I can add those funds to my debt reduction plan. I just increased the vacation fund to $150 per month. We're planning to go away at the beginning of August.

That's how I'm doing so far. Let's see what April brings.

To Quit or Not to Quit

Since my husband started his new job, he's been trying to encourage me to quit my snowflaking job. He believes that I am having too many meltdowns. He's probably right. It is challenging to work 40 hours Monday through Friday and then 16 more on the weekends. But I do it in the name of debt freedom! Anyway, his thought was that since he has an income again, we could meet our financial goals without me spending my weekends working.

So a couple of Saturdays ago I showed up at my snowflaking job, knocked on the door, and the manager let me in. As soon as I walked in, I told her that I was giving my two-week notice. She was not happy. I explained that working seven days a week was becoming a bit overwhelming. She said she understood.

I went into the back room to put my stuff away and get ready to go out onto the floor. When I came out of the back room, she asked, "Would you be willing to work one Sunday a month?" Now, I've known the manager for many years. She used to buy baskets from me when I sold Longaberger. We had lost touch until she became the store manager, and she has always been someone that I admired and respected.

I told her I would stay on and work one Sunday a month. Doing this actually serves two purposes. One is that I still get the employee discount. The second is that I still have a few snowflakes to sprinkle on my credit card debt. As you know, on December 31, 2008, the balance on my credit card will be $2,000!

The Ten-Year Plan

Now that I've told you the "woulda, shoulda, coulda", I'm going to share what I plan to make happen over the next 10 years.

1. Within the next 6-12 months I'm going to take the personal trainer examination so that I can become certified. I just need to study. Would someone give me a swift kick of motivation, please?

2. Pay off all debt for my husband and me within the next three years. My credit card will be paid off by this time next year. Then the focus will be on my husband's debt. In addition, I'm probably going to take on a $4K loan this year, but more on that later.

3. Go back to school for dietetics and nutrition within the next 1-2 years. Getting into the health and wellness business now will allow me to start my side business and work at something I enjoy when I retire from my day job.

4. Turbo save and turbo invest. I'm only putting 1% of my income into my 401K because debt reduction is my immediate priority. As the debt comes down, I want to increase my savings by the amount that I'm reducing the debt and more, if possible.

5. Increase the emergency fund to 3-6 months worth of income. My plan is to make a deposit equal to one month's debt reduction amount each time I pay a debt to zero balance.

6. 5-10 years down the road I would like to buy a condo in an active senior community in a warm climate state. I'm thinking North Carolina, South Carolina, Florida, Arizona, Hawaii--a state like that. My husband and I could rent it out until we retire. Once we retire, we'll have a place to live.

7. Retire from my day job on or before December 31, 2017.

This is my official record of my 10-year plan. I think it will be fun to look back at this from time to time to see how I am doing. No more "woulda, shoulda, coulda". Now it's just make it happen!

A Health and Wellness Goal

One of the things I've been thinking about since I set my personal financial goal is a health and wellness goal. I'm embarrassed to say that initially I thought I didn't need one. But that's not true. Everyone needs a health goal. Even someone who is very healthy could have a plan for staying very healthy.

I think it's easy to set a health goal of losing weight. I'm not saying it's simple, but it is easy to write down this goal: I will lose 25 pounds in 12 weeks. Then list the action steps. As we all know, the challenge is in working the plan.

Over the last two years, my health and wellness plan focused on competing in amateur natural bodybuilding competitions. One day I'm going to blog about it. It was the most fun I've had in my life to date other than going to Disney. My goal was to compete. My plan was weight training, cardio, supplements, water, eat clean, and pose, pose, pose.

My question is: How should I define my health and wellness goal now that I'm not competing?

All this Talk of Retirement...

All this talk of retirement got me thinking. What would I need to do to retire from my day job in 10 years? Let's say, by December 31, 2017. What exactly would I need to do?

The thought of retiring in 10 years really gets me excited! I know I've mentioned many times before that I would like to become a personal trainer and nutritionist and start my own business. Just think, I could have a nutrition blog. I could blog about healthy eating habits and moving more. I could have clients come to my studio. I could help people stay healthy and active. Wouldn't it be great if I could accomplish this and have my business in Hawaii?

When I first got this new job, my first thought was that I would stay with this company for 16-20 years. But after reading the retirement posts at the Carnival of Financial Goals and reading about JD at Get Rich Slowly retiring this year and then My Wealth Builder retiring a couple of months ago, I thought, "I don't have to stay at my day job for 16-20 more years."

So here is basically what I need to do to retire in 10 years.

First, I need to get out of debt. My debt consists of my credit card. I plan to be debt free by June 30, 2009.

Second, I need to help my husband get out of debt. He has two credit cards and a car loan. If we work together, I estimate those could be paid down by end of 2011 or the first half of 2012.

Third, I need to turbo build the emergency fund to at least six months worth of expenses. As I continue working on budgeting (I'm embarassed to say it's a new experience for me) I'll figure out what that will have to be.

Finally, when all of the debt is gone (except the mortgage) turbo, turbo, turbo build the retirement fund by investing the maximum amounts into our 401ks and Roth IRAs.

It's an aggressive plan. But I've got to at least work towards this. One thing I always know for sure is that if I don't work towards this it won't happen at all. If I work towards this goal, I just might achieve it.

One Carnival, So Many Goals

Today was the first edition of the Carnival of Financial Goals. I want to thank Patrick for putting together a brilliant carnival and, of course, including my post. Thanks, Patrick!

The carnival is laid out very cleverly. I say that because whenever I think of financial goals, the first one that comes to mind is debt reduction--probably because I have so much of it,and I've carried it for so long. But this carnival includes 14 financial goals categories.

As much as I enjoyed all of the articles, the Retirement category is my favorite. The Digerati Life and A Renaissance Canuck blog about retiring. The Digerati Life reminds us that life is short and is reassessing her plans to retire as a result of a coworker passing away. A Renaissance Canuck would also like to retire from day job to activities that make her happy. Finally Free from Broke is stepping up his retirement savings next year by planning to make full contributions to his and his wife's Roth IRAs.

With my 50th birthday 40 days away, I often think of retirement. I want to be in control of my next 50 years. That's why I need to free myself from these debt shackles, so that I can move on to saving and investing more. When I'm 80 and I'm sitting on my deck in Hawaii overlooking the Pacific Ocean, I want to look back and have happy thoughts and no regrets.

Wealthy_1's 2008 Financial Resolution

As I've surfed the blogosphere this weekend, I've become energized! Why? Well, Patrick at CashMoneyforLife has announced the Carnival of Financial Goals. Many inspiring bloggers such as BripBlap, Mrs. Micah, and Iowahippiechick have jumped on the bandwagon, so I'm hopping on too!

My primary financial goal for 2008 is to reduce by credit card balance from $11,000 to $2,000 by December 31, 2008. I will do this by increasing my payments from $300 per month to $425 per month from January to June. Then from $425 per month to $1,125 per month from July to December.

I chose this goal because it will help me achieve a longer term goal of becoming debt free by June 30, 2009. I will achieve my goal by stopping my 401K contribution of $110 per month and my financial freedom contribution of $50 per month in January and applying those funds to my credit card balance. Then in June after I purchase the car I'm saving for, I will apply that $700 per month towards credit card.

This financial goal setting got me to thinking. We should set our health goals now too! Why wait until January 1? Let's take the time now to focus on how we become healthier in the new year.

Like fine wine...I'm aging

Last year about this time I received an official-looking letter from the Social Security Administration. It was my Social Security Statement. I opened it up and glanced over it. I asked my spouse (because he's received several of these over the last few years) if I needed to keep it. Since he said that it wasn't really a big deal, I tossed it in the trash.



On Friday, I received another one. This time I decided to review it. It looks like a newsletter and has a lot of explanation about what Social Security means to me and my future. There are two charts in it that totally intrigued me. One is my earnings record. This chart lists my taxed Social Security earnings and my Medicare earnings every year since I started working. The second chart is my estimated benefits. It lists how much income I would receive if I stop working at age 62, age 66 & 8 months (full retirement age), and age 70. Of course, the longer I work, the more I'll make. Believe me when I say that the amount I would receive per month at age 70 is pocket change. It certainly is not enough to maintain my current standard of living even with my new philosophy of spend less than you earn.



I look at this as another wake up call for me. I'm really going to have to put retirement savings on turbo charge!



So here's the plan.



First, the company that I'm going to work for automatically enrolls you in their 401K immediately at a contribution rate of 3%. Thank Goodness for that. I figure they must know my savings track record. :-) I'm going to commit to increasing my contribution to 6% by this time next year. That's the maximum they'll match. Also, I'm going to rollover my profit sharing funds from the firm I work at now into my 401K.



Second, on July 1, 2009 (the day after my complete shackle release) I will begin making the maximum yearly contribution to my Roth IRA.



What a wake-up call. How many do you think I need?

PS I was just talking to my spouse. He's advised me to put my profit sharing in a traditional IRA. He said I'll have more investment options.

My Snowflaking Job

At the beginning of October I started my snowflaking job. The purpose of the income from this job is to help release my debt shackles. The job is at a women's clothing store. I love clothes and I love to shop. So as you can imagine, working in this store is synonymous to my having chocolate chip cookies in my house. I used to buy them and say they were for my family, but I would always eat the bulk of them. I love chocolate chip cookies!

One of the things that I don't like about my snowflaking job is that to get the employee discount you have to have the store credit card and put the purchase on that card. So I think to myself, "No problem." Then I mentally remind myself of the purpose of this income.

Anyway, after the second weekend I decided that I needed two pairs of pants that I could wear with flat comfortable shoes because my feet hurt so bad after standing on them in heels all day on Saturday and Sunday. With my employee discount of 50% off each pair, I put $100 on that card. Do I have the cash in hand to pay it off right away? Of course not! The very next thought I had was that this is dangerous. I'm falling into my same old habits and behaviors! I definitely need to make some rules about using my employee discount. Especially since I have to use the store credit card in order to take advantage of it. Also, I think it makes sense to set aside 10-20% of my weekly income to use as a clothing allowance.

I guess I really need to focus on setting up a budget. Oh, all right. I'll make the commitment right now. I am going to set up a draft budget by the end of this weekend. Wish me luck!

Job Interview

I have a dead end job. I like where I work. It's close to home. I get three weeks vacation and 15 sick days per year. Three of those sick days I can use as personal days every year. We have all the holidays off including the day after Thanksgiving, and we get 2-3 floating holidays a year depending on what days Christmas and New Year's fall on. For example, this year Christmas is on a Tuesday so we only get to choose 2 floating holidays because we automatically get Christmas Eve as a floating holiday. Plus the salary is all right. It's probably average for this market. But the position is dead end. There is no where to go--no opportunity.

What I would really like to do is train to become a nutritionist and personal trainer. Then I would like to get my master's degree and become a registered dietician. It fascinates me that people can literally transform their lives and reduce many ailments through nutrition and exercise. I'm in the process of studying for the personal trainer's certification as we speak. It requires focus and discipline. Almost as much as the discipline and focus that is required on my finances so that I can release these constricting debt shackles.

What does all of this have to do with a job interview? Well, on Friday I had an interview at a major insurance company! If I am offered the job, it would be like getting a promotion--wrong--it would be a promotion. It sounds great, and I thougt the interview went well. I met with two people: the supervisor and another individual whose opinion the supervisor values. The supervisor said that I should hear back either way within the next week or two. She said if I'm the right candidate that I would have to interview with her boss. She said that she really liked my resume; it's what they are looking for. Best of all because it is a large corporation--there's opportunity there!

Patience, patience, patience

I am waitng for the one of the credit card companies to post the interest on my debt so that I can update my numbers. Hopefully that will happen tonight.

One of my goals was to start a part-time job, which I did a couple of weekends ago. I can't wait to get paid so that I can put apply that money to my debt. Mentally, I have to keep reminding myself that the part-time job pay is for debt reduction because I start thinking of other things I can do with the money other than reduce the debt.

Maybe my mantra should be:

My part-time pay is for debt reduction. Debt reduction means loosening the debt shackles. Loosening the debt shackles means financial freedom!!!!!!!!!!!!!!

I guess I'm just impatient.

I started working at a women's clothing store. It's fun especially compared to my full-time job. It will be challenging because I love clothes, and I love to shop. As a matter of fact, that's how I got in this situation (at least one of the reasons). I work every Saturday and Sunday. My plan is to put at least $100 per week towards my debt.

How do I get beyond these shackles?

In order to move beyond the shackles of debt by June 30, 2009, I need a plan. Actually, I 've already started working on my plan. Here are some of the things I've started or plan to do within the next 30 days to move me towards freedom.

1. Stop using my credit cards completely. I have not made a credit card purchase since July 19, 2007. That's 81 days! Yes. I am keeping score. Each day that goes by that I don't use a credit card to make a purchase I mark that day on the calendar. I got this idea from Trent at thesimpledollar.com. In July he wrote about applying Jerry Seinfeld's "chain" concept to personal finance. So I have my non credit card use chain. I've got to keep the chain going.

2. Get a part-time job.

3. Sell some stuff.

4. Start blogging.

I'll tallk about the last three and some of the other things I'm doing to loosen these debt shackles.

The Shackles

My goal is to free myself from my debt shackles by June 30, 2009. I picked that date because my son (whom I'll call C2) will graduate from high school in June of 2009. He is C2 because there is a C1. She's 21 and still at home.

Anyway, as of October 4, 2007, these are the shackles.

$11,730 Credit Card #1
$11,921 Credit Card #2
$ 4,720 Medical expense
$ 1,965 Car loan balance
Grand Total: $30,336