BUT, I definitely have not fallen off the face of the earth in terms of paying off my high rate credit cards!  I have been working like crazy, taking advantage of any easy side cash, and cutting corners (almost) anywhere possible.

I will be posting a end of August net worth update soon (I know it’s way late), but I am proud of what it will show.

As you can see I have changed the template for the design of the site.  It needs a few custom adjustments which I haven’t made the time to take care of yet, but those are on their way too.

Time to get back in the swing of things…

Here is my plan for this month considering my starting point of $4850 in cash on hand.

• Pay regular monthly expenses: $2350 (also includes my food budget which is still under review).
• Pay my parents this month’s loan payment: $350.
• Pay CC1 off in full in 2 installments over the month $448 on 8/10 and $400 on 8/31. I am using two payments this month because I do not have an emergency fund set up yet and so I need to keep some cash on hand until my next paycheck (9/1).
• Pay minimum payments on CC2, CC3, CC4, and RCC2 on 8/31. Total: $90.
• Use half of the remaining $1200 on RCC1 on 8/31: $600.
• Use half of the new remaining to start an Emergency Fund (in a high yield savings account) on 8/31: $300.
• Use the rest as the beginning of my Roth IRA on 8/31: $300.

I pretty much just decided this off the top of my head, so if anyone has any suggestions on how to better manage my situation, please comment!

My thought process behind this plan is to:

1. Pay off regular monthly expenses (rent, utilities, auto, food).
2. Attack the highest interest rate credit account.
3. Not miss any payments on the lowest interest rate credit accounts. Here is where I get a bit unsure of my decisions…
4. Attack next highest interest rate credit accounts and start my savings process. (HELP! Is this right??)

Here goes nothing…

Alas, the image below shows very nearly exact amounts and interest rates on my credit cards (CC), retail credit cards (RCC), and loans.

If you do the math, my net worth comes out to be ($20,898.12). This was actually a pleasantly surprising number for me! Prior to doing the math, my feelings were that my credit card debt was much more serious. While I won’t be able to knock them all out this month, I certainly will be able to make progress.

Only one way to go from here!

To get $20:

1. Be qualified (have ebay feedback score of 10 or higher OR have had an ebay account for 1yr or longer), and have a Paypal account.
2. Register at UnwiredBuyer.com
3. Find an item on ebay that you will bid on. The key here is that you don’t have to win the auction to claim your $20.
4. Set your ebay account to “watch this auction.”
5. Wait for UnwiredBuyer.com to call your phone, and place a bid. I bid $100 on a car that had no minimum and surely had a reserve. Sure enough, the auction ended and I was $12,000 off the top bid (actually it would have been kinda nice to score a new ride for $100), but alas, I’ll take the $20.
6. Less than one hour later I got an email from Paypal saying $20 had been deposited into my account by UnwiredBuyer.com.

Enjoy.

I’m sure that you’re thinking I let the checking account drain completely empty and thus being caught off guard by the failed auto pay.  That’s the stupid part of it.  I knew damn good and well that I needed to deposit $10 into the account before the 4th of the month so that there would be enough.  But no, being as financially immature as ever, I counted on an expected Paypal auto deposit (More info here: FREE $20!!!) to clear in time to cover the credit card payment.
Sure enough, the Paypal deposit took one day too long, my credit card payment hit my checking account and sent me into overdraft, and the bank assessed a $33 overdraft fee.

Well, to be a bit more specific, I work as a consultant. Basically what I do all day is call out people’s bullshit excuses for why things are the way they are at the client company.

This really got me thinking today, and I realized that all I am doing is making a bullshit excuse for why I spend so much money eating out.

No more.

While I am not ready to start forcing myself to keep a small grocery supply in my hotel room all week I am ready to address the issue. From now on I am committing to not spending more than $8 on any lunch or $12 on any dinner during the week (while away). No excuses!

Another thing that I have gotten out of my job is the way variances to plan are handled. When a client fails to meet a goal or deviates from a plan, we create a corrective action plan. And yup, that is what I am going to do every time I breach my limits… Like today…

Eating Out Variance Corrective Action Plan

Planned Limit : $8 per lunch

Spent Today : $9.66 + $2.34tip = $12.00

Variance to Plan : $4.00

Root Cause : Failed to plan ahead for lunch which caused me to tag along with co-workers to sit down lunch restaurant (Stone Creek).

Corrective Action:

• Reduce spending limits of each meal on Monday and Tuesday of next week by $1 each to make up $4.00.
• Plan meals ahead of time, and avoid more expensive sit down restauants that require tipping.

My plan is to log my spending down to every last cent. Based on this I will set a real budget and strive to minimize careless spending.

One thing you may notice pretty quickly is that I eat out a lot. I know that this is the expensive way to go, and trust me I would rather save the money. Unfortunately my job requires that I travel basically 100% of the time and while staying at a hotel I don’t exactly have easy access to a grocery store or kitchen.

On the flip side of that, my company provides a $35 per diem for every night that I stay in a hotel (regardless of how much I actually spend on food). So except on holiday weeks I am in the hotel five nights per week, totalling $175 per week. Further, the boss picks up the tab for at least one dinner per week, and the client will throw down for a lunch or two per month.

This spend tracking should start to get pretty interesting on the weekends. I really have no clue how much I typically spend on the weekend, but my gut often tells me it is too much.

1. Create a challenging but realistic budget, and stick to it.
   • Track my spending as accurately as possible. WORKING ON IT!
   • Use my spending information to reduce unnecessary expenses.
2. Pay off credit cards (intelligently and as quickly as possible).
   • Pay off cards with the highest interest rates first.
   • Try to negotiate lower rates with all cards.
   • Try to re-open cards that were closed while I was in college due to missed payments. This will lower my ratio of used credit to authorized credit… BECAUSE I WILL NOT BE SPENDING ON CREDIT AGAIN!
   • Repair my credit score / record.
3. Put together an emergency fund.
   • I don’t really know how much I’ll need, but the general word is about 3 months worth of living costs. I guess that means about $5000?
   • I need to really get a grip on how I am going to decide when to save and when to pay down debt.
4. Start saving for retirement in a Roth IRA (my employer does not offer 401k).
5. Start saving / investing in other mediums that fit my financial situation.
   • Sharebuilder?

Okay, hopefully that will be a good start and I can start addressing each of these rather quickly!

As an absolute baseline snapshot, I’m going to keep it very vague, but starting at month end it is all out in the open.

• SALARY: $50,000 per year paid monthly, $5,000 bonus with very high likelyhood that I will earn all of it and paid 25% at the end of each project ~ once per quarter, and $35 per diem for every night that I stay in a hotel which will usually equal out to 20 nights per month. Based on 33% tax rate, my monthly bring home should be ~$3,475 (not including any bonus). (However, since I started my job in late May, I may be able to get in on the 15% tax bracket if I work it right… any ideas?)
• I have about $750 in checking.
• I have about $125 in savings.
• I have 4 credit cards with a total balance of ~$2.700.
• I have 2 retail credit cards with a total balance of $1,400.
• I owe $18,220 on a federal student loan.
• I owe $3,500 on a retail bank student loan.
• I owe my parents ~$1,600.
• I have fixed monthly expenses not including payment on any of the above totaling ~$1,900 (although I’m currently trying to figure out how accurate this number is, and do know that starting in August this number will drop a fair amount).
• For those keeping track, we’re looking at about ~$27,420 in debt, ~$1,900 in fixed monthly expenses, and ~$3,475 in monthly bring home (not including any bonus).

Wow, that hurts. At least I am starting to really get a picture of where I am and what work needs to be done.  I am excited nervous anxious to do my first end of month net worth analysis / update.

I knew that I didn’t have the money to pay them. I knew that I would only make the minimum payment, often on the very last possible day or even late, and often only when they called to collect.

During high school I got off to a great start using my credit card with discipline and paying it off completely every month. I was quickly rewarded with higher credit limits, more credit card offers, and retail credit card offers (i.e. Sears, Best Buy, Robinson’s May). Then sure enough, just as quickly as the offers had started coming in, they stopped. Before long they turned in to collection telephone calls, and my credit suffered accordingly.

I guess that’s pretty much why I’m here. Luckily, it seems that I have accepted my fear, and I am certainly making strides in overcoming it.