To see all entries in the on-going saga of My Financial Situation, click here.
My Current Financial Situation
Okay, so in an attempt to put my money where my mouth is, I thought I would spell out every little detail about my financial situation at this time. This will allow me to track my progress and to look back and see how far I have come, providing inspiration and motiviation down the line.
Recent Financial Changes
Recently, I just went another $6,000 in debt with the purchase of a 2005 Dodge Dakota. This seems like a bad thing, except when considering that the plan is to sell my current vehicle, a 2007 Honda Civic Si, which I owe around $13,700 on. Once sold, assuming I get out of it only what I owe, I’ll be saving $7700.
Once the Honda is sold, I’ll have the $6,000 to pay off on the truck, and $2300 on my Discover credit card, for a grand total of $8,300 worth of debt. Luckily, I’ve come into a bit of extra cash lately, and I predict that I will be able to pay off that entire amount within 3 months.
But, until the Honda sells and I pay off the truck and the credit card, my monthly budget looks a little something like this…
Current Budget
I’m making it, but there certainly is room for a lot of improvement. Currently I live on 72.41% of my income, leaving me with $883.00 dollars a month to save and invest. Now obviously this amount fluctuates a bit every month, especially when the once-a-year expenses crop up, such as vehicle registration, maintenance, college books, holiday and birthday gifts, and other not too common expenses, but typically I do okay.
I currently have every penny I’ve spent within the past 7 months recorded, and what I plan on doing after having one complete year of expenses recorded is average out the expenses that don’t occur on a monthly basis to figure out how much to stash away every month for these things, but that’s another topic altogether.
The Future Budget
Here’s where it gets fun (for us financial nerds anyway). The whole goal of my financial life right now is to trim down that budget as much as humanly possible, which means like I mentioned before, selling the Honda and paying off the credit card mainly. This alone would save me $413 a month, plus the amount that my insurance would drop with having only one car on my policy. Sure, the truck is less gas efficient than the Honda, but my insurance will be lower overall than it was with just the Honda on my policy, and it’ll be nice to have a pick-up to move the occasional couch around.
The Projected Budget
This is what my budget will look like after the Honda is sold, the Dodge is paid off, my insurance drops, my credit card is payed off, and I get rid of my YMCA membership that I don’t use (I have a 24-hour gym at work). I could even go furthur and eliminate another $150 a month by not buying any supplements (in addition to a finance nerd, I’m a borderline body-builder, and as such, I require lots and lots of protein powder…).
Basically, I’ll have no bills, and even after all of the actual mandatory bills (bills that I consider mandatory because they come in the mail, or online, with a definite, set amount), subjective bills (bills that I have at least some control over the amount of), and entertainment, I’m still going to have around $1,600.00 a month to save and invest. Once again, that number will fluctuate, but $1,600 looks a lot better than $883.00.
Anyway, I know this is pretty basic, but it's a starting point, and I’ll post updates in the future as to where I am on my journey from my current budget to the projected one.