Trial and Error : Planning for Success

          My family has a really hard time deciding what we're going to have for dinner..EVERY

NIGHT. Part of the issue that causes the inevitable fights that come every night is that everyone in

my family likes different types of foods. My dad loves Chinese, I enjoy eating Mexican, and my

mom likes to eat healthy foods. We would greatly benefit from planning out our meals for the week,

then stick to that "meal schedule" all week long. Planning for something is the best way to achieve it,

and the same is absolutely true for getting a handle on your finances. That is why Dave Ramsey puts

such a strong emphasis on creating and sticking to a written budget.

          For my first two monthly budgets, I first looked at when my paycheck would be hitting my

bank account so I would have an idea of how much income I would have to budget. Because I get

paid every other week, with a quarterly bonus when I hit my sales quota, I only counted on receiving

my base pay, and am allocating 100% of my bonus checks towards paying down my debt. After

totaling up all of my debt (a $25k car loan I took out right before I started my Total Money

Makeover (TMM), of which I have already paid off $7k, and $46k in student loan debt from my

undergrad and grad school education). Dave would probably recommend selling my car in favor of

a Hoopty, but I did the math, and if I am super aggressive in paying it down (it's the lowest amount

in my snowball, it will only take me 13-15 months (13 if I bonus every quarter, 15 if I don't make my

quotas). Since it will just take me about a year, and I am in the process of applying for a second job

(just scheduled a phone interview for this coming with the recruiter!) to up my income and

accellerate my payoff rate by several months, I'm keeping the car, and limiting myself to $100/week

in living expenses.

          By planning where I want my money to go, and being gazelle intense about paying off my

debt, I feel confident I will be debt free in 2-3 years, barring a lay-off. The good news is, the second

job I will be interviewing for next week is for a customer-facing retail mobile phones sales position,

for which I have 12 years of direct, relevant experience, so in the event that I get laid off from my

full-time inside sales gig, I shouldn't have a problem transitioning into a full-time retail sales position

there, and know that I will succeed at it until I can find another job similar to what I'm doing now

(telesales). I hope it won't come to that, but in the unlikely event that it does, at least it won't set my

debt-free journey back too far (Plus, I've got my $1000 EF, should Murphy come back around).

Murphy Shows Up...

Last week, Murphy made himaself known, BIG TIME!

It could have been a lot worse.  Someone could have died or gotten really hurt. I was driving to work in the morning, and hid the typical route-20-conga-line-of-traffic that I normally do. Waiting patiently for the morning traffic jam by the on-ramp for 95 to dissipate so I could get to work, the conga line started moving. I lightly pressed the gas, casually taking my car up to the speed of the flow of traffic, when the car in front of me suddenly slammed on his breaks. I hit my brakes down to the floor, and skidded into the trunk of the car in front of me.

I was fine, and remained calm, we both pulled over, along with a work truck that happened to be in front of the other car. The guy in the work truck blocked our cars off with the traffic cones he has on the back of his truck. I checked to make sure the driver and passenger of the other car were okay, then kept my mouth shut, I called the police to report an accident. When the cruise pulled up, two officers approached me, asking what had happened. As I started explaining how the car in front of me had stopped short, the male passenger of the other car interjected, agreeing that the driver (who had moved into the passenger seat of their car, because she was "shaken up,") had stopped short.

I got pictures of the damage to both cars (mine took the brunt of the damage, as my front end was completely smashed. Their car trunk had a dent in it causing it to pop open, but other than that, was drivable. I managed to drive my car the 1/8th of a mile to work, where I had it towed to the auto body shop. I'm not worried at all about my insurance's $500 deductible, as I have that amount and more stashed away in my starter emergency fund, and again, everybody is okay, which is WAY more important than the money.

I remember when I started following Dave Ramsey's plan, the $1000 Emergency Fund as Baby Step #1 seemed silly. But now I get it. I'm able to pay the insurance deductible in cash, without de-railing my plan to become debt free! I'm a saver, so I'll have my Emergency Fund re-loaded and ready to go the next time Murphy rears his ugly head, but I really cannot express the importance of making the saving-up of your Emergency Fund your primary goal before attacking your debt snowball, as this kind of Murphy-induced hiccup can completely be either a major set-back, or just a bump in the road on your way to becoming debt-free!

Working Through Dave Ramsey's Baby Steps : BS2 :

          My direct deposit hit my bank account this morning! So, the first thing I did was adjust my 401k contributions back. I had been contributing the max for my company's match, a whopping 14%!, but I begrudgingly cut it back to 1%. As nice as it is to log into my Schwab account and watch my balance grow every other week, it DOES make a lot more sense to pay off my debt before contributing to retirement.

          Next up, I paid off my Citi Card in FULL! My balance was a whopping $9.99! Then, according to "The Plan," I'm supposed to throw everything I can at the next lowest amount in my snowball. So, I paid the equivalent of three month's towards my car loan, as well as the minimum on my Stupid Loan from Navient. I left enough to cover my budgeted expenses for this pay period in my checking account (I find my debit card to be safer than cash, as I'm on public transportation and in the city too often to be carrying cash around with me).

          I just planned out what I should be able to afford in terms of payments, and should (barring Murphy moving into my spare bedroom), be completely debt free by September of next year! I've been on and off of the "Ramsey Train" for the last decade or so, and this is the first time I've ever really sat down and mapped out a plan for eliminating my debt completely. I highly recommend it, as I can already feel the fire I've lit under myself to just execute the plan!

***UPDATE***
          As of today (June 15, 2017) My total debts are as follows :

Auto Loan : $18,004.24

Student Loan : $45,695.16

     Keep checking back here as I post more updates on my journey to becoming 100% debt free!

Working Through Dave Ramsey's Baby Steps : Baby Step 1

It was on a trip to the public library that I discovered the book that would lead me down a ten + year rabbit hole. That rabbit hole is the one that is currently leading me to the Promised Land of living a debt-free life. 

The dual purpose of this series of blog posts is 1). To help guide you through YOUR debt-free journey, using mine as a real-world example, and 2). To help me to remain "gazelle intense" when it comes to sticking to my budget, and paying down my debts. 

Where I'm At Right Now :

I began by setting aside $1000 from my last quarterly commission check, and depositing it into a savings account at Ally Bank. I went with Ally based on recommendations from my fellow, self-proclaimed "YouTube Crazies" who hang out in the YouTube Chat while watching The Dave Ramsey Show live stream every week (Ally is an online bank offering a very competitive interest rate for their Money Market Savings Accounts). 

I got through BS1 faster than most people thanks to a good quarter, but don't feel bad if it takes you longer to build your starter emergency fund. I've found that, for me, it helps to have a bit of a built-in cushion in my main checking account from which my debit card draws, to avoid overdraft fees, so I try and keep no less that $200 in there st any given time. When I notice I'm getting close to a $200 balance, I look at what non-essentials I can save on in my EveryDollar budget, so I can cut back and remain with at least $200 in my checking account (I bank locally with Watertown Savings Bank, as they are a short walk from my house, which is very convenient for me (I can go for a walk there on nice days to make a deposit). 

When I got to BS2, I manually wrote out on a piece of paper all of my debts, from smallest to largest, irregardless of interest rates (As Chris Hogan says to anyone that suggests that the math doesn't work, "If you were doing math, you wouldn't be broke in the first place."). Because I have never really taken my debt free goal seriously, I have been on and off the plan for a few years, and am down to one credit card (Citi) card that my Netflix is on (I'll be swapping that card for my debit this afternoon).  in addition to my debit MasterCard. 

In addition, I have a car note for $20,451.98, and what remains of my bachelors and masters degrees over at Navient, consolidated, totaling $46,087.01. 

So, in short, my reason for sticking to my guns this time around, is, I am sick and tired of being sick and tired. 

I welcome you to follow me on my journey to true financial freedom!