A Journey Towards Being Debt Free: Part Deux

Part Two: Small sacrifices for long-term benefits

Here and there I’ve written about my thoughts on the future and what I’m “supposed” to do next in my life. Back in the post Bills aka Looming Cloud of Annoyance, I wrote about how I feel like my debt is holding me back from pursuing some of the adventure that I feel I’m missing in my life. A conversation (a few actually) with a friend helped me to put things into perspective in terms of small sacrifices for long-term benefits. I have totaled all of my debt, eliminated all superfluous bills, and have allotted my allowance per month to cover everything else. The debt that is going to be addressed is a hospital bill (good ol’ appendicitis), my undergrad and graduate loans, a credit card I had to live on for several months while in school, and a car loan. These are the big ones and they equal $77,345.10 as of 5/30/12. Yes, that is a lot of debt, but it was virtual money well spent. I drive a safe car that hasn’t exploded on the freeway (yes that happened once), I am still alive and my blood is not septic, I was able to eat and pay bills while in school when my lame ex chose not to, and I have a graduate degree in a field I am passionate about.

The monthly bills that I have to keep around for now include car insurance (required at the highest amount until I outright own my car) $80, cell phone bill (I’m grandfathered in for the unlimited data plan and $40 dollars of my bill is reimbursed by my work) $85, and then $300 in cash to be spent on the other items. This will include gas, hygiene products, coffee, dining out, drinks, clothes etc. I’ve allotted $35 for gas just for good measure and to round up my total monthly bills to $500. I am more realistically spending around $75 dollars on gas a month (at $4.15 a gallonL), but I am reimbursed the IRS rate for all of my mileage driven for work so I actually make money (probably around $300-$350 or so a month) on this reimbursement. So I’m going to still pay for gas out of that $300, and that separate reimbursement check is going into my savings account (which is currently at $1,060).

Okay. So I’ve done all of this on a spread sheet as well, but I’m not totally ready for full self-disclosure about my salary. If you wanted to, you could figure it out but probably don’t care enough to get back into algebra.

So take my monthly income after taxes, subtract $500 on monthly bills. The remainder/surplus income will be applied towards paying off my debt at an increased rate every month. Then total debt divided by my surplus income available every month equals how many months it will take me to pay it off.

Oh yeah, that extra $300 reimbursement check I get a month x 36.38 months + current savings of $1.060 = $11,974.17

This is all depending on the stability of my income, my sanity, and of course my desire to be debt free. My brother and his wife really want me to move out to Manhattan and to be honest, I do too. So I’m setting a date to re-evaluate the plan that will coincide with the elimination of my car payment, hospital bill, and credit card. The countdown is on the right of this page.

I’m posting all of this to be accountable to the universe. Feel free to ask me how it’s going, what I’m going without, or what art work is for sale to help speed up the process.

Dreams do come true, if we only wish hard enough. You can have anything in life if you will sacrifice everything else for it. James M. Barrie

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