Saturday, December 31, 2005

Things I Learned From 2005 & The Years Accomplishments

What did 2005 teach me?

1) Determination can accomplish anything.

You cannot be crippled by overwhelming situations. The only way to change things is to take a deep breath, develop a plan, and stick with it. It's been hard; it's been a pain but that will make it way more satisfying when I am finally debt-free.

2) Support makes the journey more bearable.

I want to thank each and every one of you who visit this site and offer words of encouragement and advice. Before I started this blog I felt all alone. My debt was a dirty secret that I didn't want people to know about and the loved ones that did know about it couldn't relate. It has been great to read about people going through similar situations and learning from them as well as being held accountable for my own progress.

3) Keeping track of your finances electronically only works if you keep a back-up.

After my laptop died in July, I lost all of my financial info that I saved in Quicken. Oops! I learned you need to keep a copy somewhere other than your hard drive. I wanted to be able to do a year in review but I'll have to make due with what I have.

4) Don't expect to get the raise you deserve without asking.

I posted here before about my 4% raise but I didn't post about how they increased my raise to 9% when they feared me leaving for another job. I was a bit jaded along with a few other employees; word got around and well they increased my raise. I wasn't happy with how it happened. I should have told them straight up that I thought I deserved a bigger raise without all the drama that ensued from me not speaking up. It wasn't a monumental raise but it was easier than finding a new job. Lesson learned.

5) Consolidate student loans early.

I didn't look into consolidating my student loans until after it was too late. I thought since I only had one payment that I didn't need to worry about it. Alas, I was wrong and if I had consolidated just a few weeks earlier I could have locked in a smaller interest rate.

6) Commuting is a waste of time and money.

I am so glad I made the decision to move closer to work. I don't have as much money to pay back towards my debt but I am able to make it worth it by cutting down automotive related expenses (gas, maintenance, depreciation), working more overtime, and being able to go back to school to increase my earning potential. Plus, eventually I would probably eventually run up lots of medical bills with stress related illnesses.

7) PPO is not the right option for me.

Some people really like having a PPO. It is nice to be able to go to almost any doctor you want, when you want until you have a major medical catastrophe and you are responsible for 20% of your medical expenses. I never knew how much X-rays, diagnostics tests and hospital stays could cost until I had to pay 20% of them. As soon as I was able to, I switched to an HMO.

2005 was a good year for me. Here is what I was able to accomplish:

1) Since the beginning of the year I have paid off more than $13,000 of credit card debt. I wasn't able to create a comprehensive graph showing the progress but I found this old graph from one of my first posts:

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and a new graph that shows my progress from July 2005:

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The spike in the first graph comes from when I transferred my car loan to my credit card using a low interest balance transfer check. So in 2005 I consolidated my credit card and auto loans and reduced the amount of interest I was paying every month while making it easy to aggressively pay down the debt.

2) Paid off $1,250 of my student loan debt. Not a huge amount because I was focusing most of my energy to the credit card.

3) Saved nearly $2,000 for retirement in my 401k. Again, not a lot but it is something. Next year I will be 20% vested in my company's matching so I will have even more.

4) Weathered a major medical expense without having to rely on credit cards. Who knew that having an appendix taken out could result in more than $2,000 in medical expenses? No more PPO for me.

5) Moved out of the family home and got my own apartment. Bought furniture and all the other comforts of home without having to put a single dime on my credit card.

All in all this year has been most productive and I feel it can only get better in the future. Here are my New Year's Resolutions for 2006:

1) Pay off credit card by September 1, 2006.
This will require me to pay a little more than $1,000 towards my debt every month. Right now I have been having a slightly difficult time finding the $1000 to pay every month but I think I can do it if I try harder.

2) Continue to save for retirement and stay at my job until I have at least reached the 20% vested mark.

3) Go back to school and complete at least two courses that I think would be interesting and beneficial for my future.

4) Once the credit card is paid off, focus on the student loans with as much intensity as the credit card.

5) Learn more about investing.

6) Increase savings in both savings account and CDs.

I find it almost therapeutic to look back on the year, both at what went wrong and what went right. It's by learning from our past mistakes that we grow to be better in the future! Hope everyone has a safe and prosperous 2006!

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Wednesday, December 28, 2005

The Grocery Game

I was recently reading an article on CNN Money that discussed how to Shave $150 a week off of your grocery bill. I was intrigued. Who would be able to cut that much money out of their weekly grocery bill? I probably don't spend $150 a month on groceries, let alone $150 per week. The gist of the article was to plan ahead and only buy what you need and cook meals with ingredients that overlap. Not a bad idea but nothing revolutionary. One of their suggestions though, did pique my interest. They suggested to make a game out of grocery shopping and reference a website called The Grocery Game. I had to check this out.

Basically, The Grocery Game is an online subscription service that provides weekly lists of items on sale in your local area. The list is broken down into color coded items; green are free items, blue are the "best deals for stockpiling", and black are items you should buy only if you need them.

It sounds like a good idea but I'm hesitant to try it. It would save a lot of time on cutting coupons (I don't really use coupons anyways) but it also seems pointless to spend money to save money. The subscription is $10 every 8 weeks...working out to be $1.25/week. That is not a huge amount of money but would it ultimately be worth it?

The problem I find with grocery coupons is that name-brand items with coupons work out to be just slightly less (if not more) than generic store brands. Why spend time and effort to buy name-brand items at a discounted price when you can buy the generics, which are basically the same thing, at a lower price without the coupons?

I'd love to hear what others think. Are you a coupon-clipper? A faithful consumer of generic products? Or maybe a little of both?

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Monday, December 26, 2005

2006 - The Year to be Debt Free

Looks like 2006 will be the year that I finally become credit card free. It's hard to imagine a life without credit card debt hanging over my head. It has been nearly 5 years since I got myself into this mess; practically my entire adult life has been spent with a credit card bill. Let's just say that it will not be missed.

I've finally got the debt to under $10,000. Losing a digit feels awfully nice. Since May when I started this blog I have almost cut my debt in half! Not too shabby for 7 months of hard work.

As the new year approaches, many of us will be thinking of our New Year's resolutions. Here are ways to make sure that we stay on track to achieving our goals (Source).

Constantly Evaluate Your Progress
Having an action plan is not enough. The captain will have to constantly evaluate his progress in order to be sure he is on target. Unforeseen obstacles are sure to arise, such as a hailstorm, or increased southerly winds. As a result, he may have to increase his speed or guide the boat in a more westerly direction. In other words, notice what is working and what is not. If an approach is not working, don’t waste your time with it. Change your approach.

Never Lose Sight of Your Goal
Take the time to review your goals every morning when you get up and every night before you go to bed. This will keep them fresh in your mind. If you think reviewing your goals twice a day is too much to ask, maybe you should reevaluate what it is you want. Ask yourself, “How important is it to me that I attain my goals?”

Don’t Procrastinate
Procrastination is a “silent killer”. Understand that the only way to achieve your goals is to take action! Knowledge means nothing if you don’t apply it. How many people have you come across with an unbelievable amount of education working a mediocre job? The world is full of people who don’t apply their knowledge. On the other hand, chances are you know of people with less educational background who apply everything they learn. These people are usually the ones who are most successful in all areas of their lives. Do something right now that will help you to achieve your goals. There is no time like the present! Get the ball rolling. Each step you take brings you one step closer to the life you want. Remember the motto, “The road to Someday, leads to the town of Nowhere”. Someday is today!

Finally, you ought to have your key goals in front of you on a regular basis. You should look at them at least weekly to ensure you are making progress and to see if you need to modify your plans in anyway.

I hope everyone is having a safe and fun holiday!

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Wednesday, December 21, 2005

Move on Up or Move on Out

Today was just one of those days. I had one of those moments when I was able to step back from my life and look at it objectively from someone else's point of view. When I thought about it, I really had to ask myself, "WTF are you doing?" You know its never a good feeling when you have one of those moments.

I have to admit that my job is not terrible and I am not paid terribly. I could continue working there forever living this mundane existence and getting by with modest salary raises. A job is a job; it pays my credit card bill and the rent. I could try to look for another job but I feel like that would be just trading in old problems for new problems. I've looked around at job postings online and I just feel like I'm not qualified for any of them. How could I have gone to college and graduated with a degree, had a high GPA and still not be qualified for any of these jobs that I know I could do in my sleep. Where are the jobs that require a degree in Anthropology!

Better question, why did I think that getting a degree in Anthropology would be a good idea? I thought I could be a professor, until of course that I realized that I am terrible at explaining things, hate talking in public and despise "academia". Anthropology would have been a great idea if someone would just pay me to read books, contemplate life and maybe one day, write a great book.

So after a day of nearly quitting my job, coming home and looking at jobs and becoming thoroughly discouraged at my prospects, I decided that it was due time for me to sign up for classes to gain some real skills (mad skills if you will). I've been thinking about it and procrastinating for a while. Today was the last straw and I am on my way. I am going to take an intro class in Accounting just to see if I like it. I have always thought that accounting would be really boring, but after starting this blog and pouring over my finances, I realized that it really might just be the thing for me. Plus, when I buy my chateau and have my B&B I will keep awesome track of the books. If I end up realizing that it truly is boring, what the heck. At least I can then scratch it off my list of possibilities.

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Friday, December 09, 2005

Change of Address

Little did I know that merely updating my address would save me $57 a year! I have changed my address pretty much everywhere except my auto insurance company. I knew I had to do it but it was one of those things I kept putting off and then forgetting to do. So today I sat down and called the company and updated my address and the rep told me that it would save me $57 a year. The rest of my payment for this policy term will be prorated so I will pay less for the next 3 months! Sweet. I'm mad at myself that I didn't do this sooner because I could have been saving money months ago!

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Monday, December 05, 2005

No luck in Vegas

Well I made it back from Vegas in one piece. Too bad I can't say that same for my wallet. My dreams of winning the jackpot and paying off my credit card in one fell swoop were never realized. I actually came back -$100 from gambling. At one point I was up about $75; I should have called it quits while I was ahead, but you know it never works that way. It was just too easy to sit down at a machine and lose $20 in the blink of an eye. I would look at the other people gambling that had sat at the same machine for goodness knows how long and wonder how much money they were losing by the minute. So depressing to see all that money and have none of it be yours!

We did eat lots of good food, saw a cool show and had a great time. So all in all it was a good trip and I'm glad we went. Hopefully, I will have that bug out of my system and can go back to focusing on paying off my debt. I learned on Friday before I left for Vegas that they were going to increase my bonus so I don't feel so guilty for going anymore.

Christmas is coming up so I'm a little worried about that eating up money for my credit card. This year, my family decided to do a secret santa gift exchange in the place of buying a Christmas present for everyone. That is a great relief because not only is it stressful to try to find that perfect gift for everyone in the family but it is expensive too! I feel that gifts should come from the heart throughout the year when you can afford it, and not just from obligation because it is Christmas. I'm hoping I will be able to find that one special gift for someone that they will truly appreciate!

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