It's day 1 of 2015 -- my year to challenge myself to a Spending Fast® in order to dump my student loan debt and find financial freedom and peace. And to save for the future!
You see, there's nothing quick or fast about this approach. But it's simple: stop unnecessary spending.
My situation isn't terrible, but it's not ideal and it's not what I want. I have about $5K left on my car loan and, as of today, close to $37K left in student loan debt. I thank my lucky stars every day my mom instilled a fear of credit cards into me -- thankfully, no debt there.
When I finished graduate school in May 2012, I remember getting a statement for my student loans and staring at the number by "Total Balance". What? How could I possibly owe that much? How did this number grow so out of control in 6 years?
I turn this over and over and over in my mind. Why didn't I pay better attention to this? Why didn't I go to community college first and save money? Why didn't I start saving for college when I was still in high school? What was I thinking using a loan to help me pay for a study abroad semester in Puerto Rico? I thought I had played things right and done things right -- went to a small, public university. I worked part-time during college and full-time hours (2 jobs) during graduate school (also at a public university), 1 of which was an assistantship that helped cover a large portion of my tuition. I didn't live crazyily -- but I didn't live sparingly, either. I lived comfortably. Eating out, shopping, mindless trips to Target (resulting in at least a $50 total each time...how does Target do it!?), pedicures, no real budget, etc.
Why, why, why wasn't I smarter about all that? Why did I sign on for those loans without really looking at them and thinking about what I needed, not what I was told I would "need" by the financial aid offices? Why didn't I live simpler?
But that needs to stop. What's done is done. I have 2 undergraduate degrees and a graduate degree. I have a dependable car (knock on wood!), and a great job at a great company, thanks to my education.
And now it's time to get rid of that debt. I'm ready to pay it off and willing to take extreme measures. Even if it means living uncomfortably for a while.
I want this debt gone by time I'm 30 (approximately 31 months). But first, I'm focusing on the next 12 months. My thought (from talking to family and friends and having done most of Dave Ramsey's Financial Peace University) is to tackle the smallest debt first (car loan) and then get crackin' on the biggest debt (student loans). I'll keep making payments on my student loans, but will be aggressive with the car loan until it's gone.
I think it will be tough adjusting my spending. It's a lifestyle change. But I'm looking forward to getting creative and thrifty in several areas. I recently moved and as I was packing and unpacking was embarrassed by the amount of clothes and stuff I have. It'll be good for me to focus on what I already have!
There are several helpful posts with excellent ideas for being successful in the Spending Fast® on Newell Jones' andthenwesaved.com -- lists of things to do other than spend money, ideas for cheap meals, maintaining a social life despite cutting out eating out and happy hours, etc. I intend to check in on her site often, and test my creativity in the art of frugality.
This is going to be work -- but it will be worth it!
Just as Newell Jones did when she did her Spending Fast®, I made a list of Needs and Wants. I stick to my Needs and hold off on my Wants until I'm done. Pay my bills, eat, tuck a small portion away into an Emergency Savings each month, and then throw what's left at my debt.
There are things that are definite on my Needs and Wants lists -- they will not change. However, there are some things I'm just not sure of yet. Remember how I said I moved recently-- well, I actually bought a home! {Great timing, Chels. Buying a home and then deciding to not spend any money}. Well, to be fair, I didn't know about the Fast until after the purchase. AND -- in our community, there aren't many great rental options, and the options that are decent cost more than what our monthly mortgage is.
Anyway, some of the items on my Needs list may seem like Wants, however, they are Needs for the house and cost will be split with my Novio. We've already agreed we aren't going to buy brand new furniture -- we are both okay with second-hand. But things like a Garage Door and Garage Door Opener are best bought new. Paint is needed. All the walls are white, giving our home an institutional feel. We don't need to paint EVERY room RIGHT AWAY, but there is a definite need for color, and I hope to get the bathroom, our bedroom, and possibly the kitchen and dining room painted within the year.
Okay, enough babble. Here's the LIST:
NEEDS
Mortgage
Utilities
Cell phone
Food -- Hoping to get us on a grocery budget...I need to get better at watching for sales and planning our menu on that instead of planning our menu and buying no matter the cost.
Car Payment + Car Insurance + Car Maintenance/Oil Changes
Gas
Tennis/Gym membership - I need to be active. I am a better me when I am active. Plus, this is health. I do take advantage of reimbursement offers through my work and health insurance. I haven't invested in a gym membership yet because I've been able to work my schedule to use our work fitness center and run outside. But I do have to pay to use the indoor tennis facility, and, should I find it's stressful to work around work's fitness center hours and the weather makes it difficult to run outside, I'll get a month-to-month. In the summer, no gym or tennis membership as I can play tennis and workout outside.
Paint for the house - Like I said, our stark-white interior is institutional. Some painting coming soon.
Garage door + opener - I think we can get by for the winter and summer, but we'd like a new door and opener in Fall 2015.
Lawn Mower - With a house comes a lawn! We are going to split this cost and search for a trusty used mower. Nothing fancy.
Dog food, Dog vet bills + heartworm and tick guard, Dog grooming - I need to take care of my most loyal companion.
Medicine
Doctor copays
Running shoes and tennis shoes - I want to be running and active well into my old age. This means being equipped with quality gear. I get new runners every 6 months and will need tennis shoes sometime within the next few months.
Cleaning supplies -- Looking into making my own cleaning products out of everyday, household items. More to come on this, but if home brew doesn't work, I'll need to buy.
Tithing (Missionaries, offering at Church) -- I give regularly to a dear friend of mine and her hubby. They're missionaries in Africa and I believe in their work. We go to church at least 2x a month, and I like to put cash in the plate. My mom has always done that, and I believe in giving.
Pickleball - $5/week to play for 2 hours. This is a priority as it's an active activity and something my Novio and I enjoy doing together.
WANTS
Pedicures
Eating out
Clothes
Coffees at Caribou, Starbucks, and local coffee shop
Concerts
iTunes music
Books
Magazine subscriptions/Magazines
Vacations
Fancy hairspray
Fancy makeup + skincare products
Towels
Matching bedspreads/comforters for spare bedrooms
Movies out
Random trips to Target
Girls' Day shopping
IKEA
Giving Gifts -- I love to give presents and send cards! But I am thinking my family and friends will understand this is going to cut back and/or be more about spending quality time together/getting DIY gifts and cards.
Giving more and more and more - Once I have financial freedom, I can give more! For now, I need to focus on setting myself up for a better, more giving future.