I’ve been reading personal finance blogs for a few years now, and even knowing what I should be doing, it doesn’t help when the majority of the PF (personal finance) blogs talk about living off of one income.
I’m single – I only have one income, and I’m living paycheck to paycheck.
I currently have $6,100 in debt – two credit cards. I’ve had debt since 1995, when I started to go to science fiction conventions. I’d meet up with friends I’d met online, and we’d share a room (once, we had 6 people in one double room). I traveled across the US, and made it to Vancouver, Canada and London, England. When I was buying that $485 plane ticket to England, I said to myself, “I’m taking these trips now while I can, with friends to share the experience with, and I’ll pay off the debt later.”
Well, ‘later’ has stretched into 2010 and I’m tired of carrying credit card debt.
Now that I’ve started trying to calculate how much I pay toward the debt per year, I realize that even one trip cancels out what I’ve been paying. The cost of the trip isn’t just the plane ticket – food and souvenirs/goodies I want to purchase can easily add on another $100 per trip depending on the location and duration of my stay. That $300-$400 adds to the balance that I’ve paid down of $600 each year. No wonder I haven’t gotten very far in fifteen years!
Now I’m determined to pay off the credit cards in less than three years. The budgeting calculators and the snowball effect and other advice I’ve been reading makes it seem possible – but is it realistic for a single person? The advice I’ve read hasn’t been all that helpful for someone who lives relatively simply already:
- Cut out Starbucks? I rarely bought one outside of an airport.
- Cancel your gym membership? Like I ever had one.
- Cut cable and internet – I have the cheapest DSL and bundle that with my home phone. I have a dish and pay for basic services.
- Call and negotiate to reduce your credit card APR? One of my cards is “frozen” – I refused the APR increase so when it’s paid off, it automatically closes. I tried calling that card to see if they’d reinstate it if I moved $4,000 to that card’s balance and they said no. The same thing happened with the retention department. I’d have to reapply for a new card and move both balances to it, and they couldn’t get me a better rate than what I was getting!
- Get a house you can afford? I bought a condo four years ago, with the mortgage, escrow and HOA fees well within my monthly budget.
- Refinance? I don’t have enough equity, and according to the calculations I’ve done, I’d be back where I started four years ago with the full mortgage amount!
- Don’t use the dryer. I only dry my “whites” – dark clothes get hung on racks to dry.
- I do my own home repair when I can.
- I don’t have a dishwasher.
- I have a programmable thermostat for the a/c. I have baseboard heating.
- I don’t have an iAnything. I have a two-year old cell phone on my sister’s family plan.
- I don’t have many CDs or DVDs and usually buy one of each a year.
- I don’t have Netflix.
- My desktop PC is 6 years old and has 256 RAM (unupgradable).
- I have a 9 year old car. I drive 30 miles roundtrip to work.
- I don’t go out and buy new clothes/shoes/makeup/jewelry. I loathe clothes shopping and I’ve found one good shoe store that sells the shoes I like for work.
- I eat take out for most of my lunches and dinners, but I also suffer from depression, so cooking a meal for one isn’t very appealing to me. Some days I “forget” to eat dinner, then make some popcorn or eat some cereal just before bed.
- I get a family discount on car repair/oil changes/free tire rotation.
- I’m an environmentalist and don’t buy cleaning supplies other than white vinegar and baking soda. No paper towels except the napkins I get with my take out, but I do use them.
- I have a cat companion, who does eat me out of house and home because I spoiled him.
- I have a whopping $300 in an emergency fund.
- I have no other savings.
So, my question is: where am I supposed to cut spending in order to pay more toward my debt? The only place that I spend without being consciously aware is food. I have to counter-balance spending money on groceries without ever knowing if I’ll have a ‘good’ or ‘bad’ day, and have the energy to cook at home. I have tossed out unused and spoiled food, which is just as much of a waste as eating out. Some days, it’s all I can do to get out of bed in the morning and drive to work. Getting home is a major accomplishment at the end of the day, and the absolute last thing I want to think about is boiling water. One of my favorite frozen pizzas is almost always on sale 10/$10, and I’ve stocked up on them. Cereal is good, too, when I have milk. I’m not a fan of soup, but I have heated some up for dinner. Grilled cheese sandwiches made in the toaster are also a staple. My mom and sis have rescued me on occasion with offers to go out to dinner, and I’ll usually have leftovers for lunch the next day. Or I’ll order a large pizza and have half for lunch or dinner the next day, so that $14 is split into $7 per meal.
I’ve been having some luck on eBay selling stuff I don’t need anymore – DVDs, CDs, books and some of the freebies I collected at those science fiction conventions I’m so fond of attending. It’s not steady income, and it’s not much.
I’d be willing to do proofreading/editing as a side job, but I’m not sure where to advertise. I’m also a wiz at organizing/filing and would be willing to spend a Saturday helping out an office for $50/day. Since the end-of-year holiday mess is approaching fast, I applied at a Halloween store. Once I find out if I have a job there, I’m giving serious thought to applying for Christmas help at a toy store. I was a cashier for two months eons ago when I was laid off, and it wasn’t bad. I also got paid slightly more because I could work until midnight or 1am since I was over the curfew age. But again, I have to be realistic. What if I have a bad day and can barely get out of bed? Part time, seasonal work doesn’t care if you’re sick or depressed; they just want you there. While I’m not counting on it to be a permanent job, I’d hate to lose out on the extra money. Losing a PT job wouldn’t help with my depression, either.
So I guess it all boils down to: what do I want to do? Do I want to continue with one trip a year and continue to carry my debt, or do I forgo real vacations for two or three (or more) years and live even more frugally than I do now? I can’t imagine being able to stay sane and only worry about the debt. Then I have to deal with the guilt of going on a trip while the money could have gone toward the debt. I HATE DEBT and you should to. I think the motivation, the real motivation and actually doing something instead of planning, is that I got fed up. With the credit card reforms coming through, I’m terrified my credit line is going to be slashed, or my APRs hiked. I’ve already been hit with the higher minimum payments and that was another motivator. I pay my bills on time and I pay more than the minimum, but it isn’t enough.
I’ve had enough with debt, and I intend to keep you updated on how my motivation is sticking and how I’m doing with my repayments.