Vanquishing My Debt

I'm 29 and trying to get a handle on my finances so that, one day, I can buy a home of my own. I've been reading personal finance blogs recently and decided to start one chronicling my own struggles and success (hopefully). I am lucky, considering the amounts of debt and tales of tragedy I've read about... but I am making some positive changes and moving in the right direction.

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Location: Los Angeles, CA

Monday, July 31, 2006

Yay! August is a 5-week month!

Since I get paid weekly, this is the equivalent of an extra paycheck this month. Happy, happy, joy, joy!

I've read a lot of blogs that talk about budgeting (haven't we all?), and it seems that most people budget each month. Since I get paid weekly, I budget for each week. Every year I buy a small purse-size calendar and keep track of my budgeting in that. That calendar lives in the file box with my checkbook, calculator and old filed statements. It mostly stays the same each month, with some minor fluctuations.

Week 1
-Stash $40 in savings (lately I've been getting impatient and sending that $40 to the credit card that I'm concentrating on paying off)
-Withdraw $60 cash, which pays for weekly gas, some groceries and a little spending money
-Pay all utilities
-Pay minimum balance on all credit cards (I currently have 4 cards I am paying... soon to be 3)
-Any leftover money goes to more groceries and household items we need

Week 2
-Stash money in savings
-Withdraw $60 cash
-Pay car payment (yeah, I know, I'm never having another car financed again)
-Send leftover money to whichever credit card I am attacking the balance of (I'm practicing the snowball technique and I love it!)

Week 3
-Stash money in savings
-Withdraw $60 cash
-Set aside half of our rent to be paid next week
-Send leftover money to whichever credit card I am attacking

Week 4
-Stash money in savings
-Withdraw $60 cash
-Set aside the second half of our rent and pay it
-Send leftover money to whichever credit card I am attacking

This plan really works for me, especially since I write out the constant, foreseeable expenses in my calendar several months ahead of time. The only problems are 1) I have almost nothing left in my checking account between paydays and 2) I need to start budgeting regular expenses like car insurance on a monthly basis, instead of when it's due several times a year.

The rare fifth paycheck a month, that Holy Grail of us people paid weekly, usually goes into my savings account to stand ready for irregular expenses that I tend to forget about, like car registration and contact lenses, as well as unexpected situations like car repairs. It's very hard not to go out and do something fun with that check, though, like buying more kitchen stuff, more clothing I don't need, or home decorating things I like. Or right now, the new DVD of Pinky and the Brain. (Yeah, I know - when I said "something fun," you thought I was going to mention going to Las Vegas and playing high-stakes poker all night, didn't you? The sad fact is that, dear reader, while in my own mind I am diva fabulous, I'm actually quite boring and mostly a homebody. But I'll deny it to the death if I'm ever cornered.)

If you get paid weekly, what do you do with your fifth paycheck?

Thursday, July 27, 2006

Changing your partner's habits

Has anyone here tried to bring their significant other along on their journey to a debt-free existence and more frugal lifestyle? Did the significant other go kicking and screaming into this new way of living? Did they flatly refuse and go shopping? Or did they take your hand and skip happily into the sunset with you?

My fiance, R, is very supportive of me trying to change my habits. He's interested in the books I've been reading and we talk a lot about the most interesting ideas I come across. He's very encouraging... we've been talking about mixing store-bought holiday gifts with homemade ones and he was pretty dang excited when I found a recipe for cheap homemade drain de-clogger and it worked. And yet...

...he seems to see these changes as something *I* am doing, not so much something *we* are doing.

Let me explain our financial situation. I have a job I've had for 8 years next month, and I've been increasingly feeling that I may be on the verge of unemployment. My department does not have a lot of work right now, due to my boss taking on the job of salesman himself. And he doesn't like making sales calls. Enough said. R is working as a temp for a nearby city department of water and power, hoping to get a permanent job there soon. Recently he was between assignments and went for 4 weeks without a paycheck, which caused quite an upheaval (and panic) in our home. R also has a small home business (I can't go into a lot of details about it because I rather like being anonymous online) which is not making any money... it's losing money every month due to website expenses. So I've taken over paying all the bills and rent while he stashes his paychecks away to pay for an upcoming convention we'll be going to for his small business. This convention is pretty much the only way to make a profit this year, so we almost have to attend and purchase a booth. This means purchasing the booth itself, liability insurance, and more merchandise to sell. Since his job is always up in the air, he is supposed to be saving all of his income and spending it only on business expenses.

Our finances are separate, althought that will change once we're married. Even though our finances are kept separate, we both still see everything as our money... keeping things separate just makes bookkeeping easier.

So... this brings us back to the dining out issue. I am trying to cut back to maybe once a week. I'm trying new recipes, cooking more often, and it's wonderful seeing the money I would've spent still in my checking account or going to a credit card payment. So when he (it's almost always him) mentions the possibility of going out to eat, I always say that we should go home and have dinner there. Because he likes my cooking, I also usually mention what we're having, just to sweeten the deal. Sometimes he'll persist and tell me that he'll pay for it. Like that changes things!

In most cases, we'll end up going home to have dinner. But it bugs me that he hasn't yet fully grasped the idea of saving money, even though he thinks he has. It bothers me because he is the one that is recovering from bankruptcy and has terribly bad credit. He should be trying just as hard as I am to adjust to this lifestyle, if not harder!

But I guess it's a different process for all of us, right?

In all honesty, I don't even see this adjustment as difficult for me. I think the most difficult thing was changing my habits... not checking out Ebay for clothing I like, not going shopping after work "just to see what's on sale," and planning meals for the week. But I certainly don't feel deprived. I love seeing my credit card balances go down, and I feel in control.

What experiences have you guys had with getting your significant other to see the light?

Spending money to save money?

I was reading recently (and I think it's mostly common sense, too) that spending money to save yourself money in the long run is a smart thing to do. I.e., buying a lawnmower so you don't pay someone else to do it, or buying craft supplies to make Christmas gifts. One of my favourite blogs, Make Love Not Debt, even talked about ponying up for a gym membership to save on medical and health costs in the future. A few weeks ago, I bought a used bread machine at the thrift store for $9.99... but it'll save me money once I start using it and making products we usually purchase. I think we all probably agree that this kind of spending makes sense.

I just realized last week that I've spending money to save money... and not in the smart way. In one of my previous posts, I talked about how we go to a lot of free movie screenings. One of the benefits of living in L.A. is that you have the opportunity to attend events and happenings that don't occur in smaller, less metropolitan cities across the country. We love free movies because we're both movie buffs and this is a great way to see 1) films we would otherwise pay to see and 2) films we'd never pay to see, but we'll go because, hey, it's free, so why not?

The spending money issue lies in the fact that we usually go to these screenings right after work... no time to go home and eat dinner. So we usually end up spending the money we'd have paid to see the film on dinner, which I can mostly stomach. Dinner and a movie for 2 people for $10-20 isn't bad, comparatively. But it adds up fast... especially weeks when we see several movies. Last week we saw two films, which means we spent about $30-40 on dining out. That's basically been my weekly grocery budget lately!

And it took me, like 2 years to realize this?!

All you money-savvy people are rubbing off on me! Thank goodness! :)

Thursday, July 13, 2006

Making donations is even better than finding cheap underwear

Yesterday we finally dropped off all of the food that we accumulated during the craziness of Vons' triple coupon days, along with some random toiletries and beverages we've bought recently. It came to more than a dozen grocery bags (!!!), including containers of milk and yogurt. It's funny, you wouldn't think it would be hard to find a charity to donate food to, but sometimes it is.

We usually donate a lot to the Downtown Womens' Center, located in downtown Los Angeles, but we don't have the time right now to drive over there. There is another shelter I like in Hollywood, run by the Los Angeles Youth Network, but we usually donate clothing and other non-edible items. I looked online and found several nearby food pantries, run by different organizations. They either didn't accept refrigerated foods or had such impossible drop-off hours that it was impossible for me to get there (I'm basically a 9 to 5er).

So we ended up donating to AIDS Project Los Angeles, that runs a program called Necessities of Life. They provide bags of groceries to low-income people and families living with HIV and AIDS. While I love this cause (I grew up in West Hollywood and watched one of the first large groups of AIDS victims pass), the primary reason we chose it was because they accepted donations until 6 pm during the week. That's all. It merely came down to their donation hours.

If you run a charity dependant on dropped off donations, please take note. If you have convenient hours, you will be guaranteed to receive more donations. People are more likely to do the right thing to help others if you make it was easy as possible for them.

That said, I love being able to make donations. I think going the extra mile in couponing is WELL worth it if it means having bags of groceries to donate to the needy.


I love finding my favourite products at a drastically reduced price - don't you? That's the thrill of thrift stores and garage sales and Craig's List... and now, the 99 Cent Store.

I was there yesterday to buy a few things and I stumbled on a hanging rack of underwear... because of my size (large and lovely), I don't usually check stuff like this. But the fabric caught my eye and I realized it was the same underwear that I had run around like a mad woman buying at Big Lots when it was $1.99 a pair. The brand is Hanes Just My Size, and they make really pretty underwear in larger sizes - it's so nice to not have to stick to plain granny panties! I'm 28, for pete's sake, not 82.

So I load up my little basket, being grateful that I found them at 99 cents a pair. Then I proceed down the aisle... where I find a cardboard container of the same underwear, but these have fallen off of their hangers and are missing the cardstock hangtag... so they've been reduced to 2 for 99 cents! Oh, happy day! I believe I danced an original Irish jig right there in the aisle, claiming myself Lady of the Dance!

Amazing how cheap pretty underwear makes one feel, isn't it?

Tuesday, July 11, 2006

A longer absence than I thought

Well, I didn't mean to go missing for almost 2 weeks, but what's that quote about life getting in the way of your plans? I've been submerged in family lately... first with my 13 year old cousin staying with us for a few days, and then greeting R's new niece, who was born on July 3rd. She is a beauty! It was a difficult pregnancy for her mother, and we're all thankful that it has ended happily and healthfully.

I have been neglecting my finances bigtime with all of this upheavel in our routine lately. I've fallen victim to lots of fast food meals eaten on the run as well as spening a larger amount than I planned for on baby shower gifts, so I'm in the hole a bit right now. But I'm aware of my hole, which shows awareness and financial progress on my part, right? :)

Another big wrench thrown into our finances was that R was unemployed for about 3 weeks. He's been working as a temp for almost 9 months in the same company, just being switched from department to department. There was a 3 week gap between departments, which was very unexpected to say the least. Luckily, it coincided nicely with his sister needing childcare for her older daughter and the birth of her newest daughter... but still... 3 weeks without any income generated quite the frayed nerves and nail-biting checkbook reconciliation.

I have tried to be diligent about our purchases and I think I've only charged one or two small items on a credit card (great Christmas gifts that were at such a low price that I felt like I couldn't pass them up). We've made a pact to curb our eating out and get back onto our healthier routine, which includes cooking at home and evening walks. I've bought some small household items, but nothing superfluous like clothing or new make-up.

I strongly believe that some things keeping me on the right path have been the books I've been reading. I finished "Rich Dad, Poor Dad" by Robert Kiyosaki and my mind was blown. I'm embarassed to say it, but the whole idea of making your money work for you instead of you working for your money really just hit me between the eyes. I've been plugging my $40 a week into my savings account, and it's a lot easier after reading that book. I plan to buy a used copy on Ebay to leaf through when I need reminding.

A book I'm reading now is the first book of 'The Tightwad Gazette" by Amy Dacyczyn. This is fascinating and keeps me on track, even though I feel that a lot of this book doesn't really apply to me and my lifestyle. Lots of great ideas for kids' Halloween costumes and parties and crafts... which will be great when we have children. A lot of the information is already known and utilized, like shopping thrift stores, trash-picking, and smart grocery shopping. But the main sentiment helps to keep me on track.

What should I read next? Leave me some suggestions if you'd like. I'm very new to this, so pretty much every book on personal finance and frugality will be new to me.