I have been running through my budget numbers trying to figure out how much money I need each month for the basics and how much I’ll be able to apply to paying down my debt.
Ever the optimist, I am hopeful that I can sell some stuff, take a loan from my whole life insurance policy and with the remains of Maggie & Co, pay about 75% of my debt in one big whoosh over the next 6 months. I want to do my taxes before I get aggressive with my lump sum payments. Lord knows I don’t want to be in trouble with the Tax Man again! This 75% debt reduction is possible, but I have to be smart.
Right now I have $1500/month going towards debt and paying my son a small stipend. I tell myself this is all temporary and by the end of 2021 I will have that money going straight back to my bottom line. The majority should be back in my pocket by the end of 2020 with the stipend ending in 2021 as my son finishes school.
The other area I am looking at is lowering expenses. My cell phone, cable bill, car insurance all have some fat. I just got a quote that would reduce my car payment 50% from my previous insurance company. Thank you, Progressive! I’ll tackle that after my move.
I am not going to rely on side hustle income from the Hunter and a colleague who wants me to do some content writing for him. That will be just found money. I am also not holding my breath for the Hunter to come through on paying me back on his Promissory Note ($500/month for 24 months). It hasn’t been signed and I haven’t heard mention of it every since.
If I can get all of my money sorted out, debt paid off, Maggie & Co expenses cut off, I will be hunky dory. I just have to keep my eye on the ball and stay focused ….forever. I was going to write “until” but this needs to be a lifelong habit. I can never let expenses creep up on me like this ever. I have to control my money and not let it control me.
Once I have the debt paid off, it is time to focus on paying off my car and then savings. Saving for retirement, maxing out my 401k, paying back my life insurance loan to keep that healthy and have some savings allocated for things like car repairs, new car, traveL (yes, I have to have some fun), set up a clothing allowance, a fun allowance, more savings. You get the picture. I will stretch that $1500 every which way possible, plus it will grow to $2000 once my car is paid off.
For all you youngun’s, listen to old Maggie over here. Define “youngun” – anyone under 40. Feel good now? Anyway, start saving now. I started my 401K in my late 20’s/early 30’s. I should have done more, but I did enough to get the match and later slowly inched it up. Best thing I ever did financially. Is it enough? No, but it’s a heck of a lot more than most people have in their 401k.
Worse thing: credit cards. Those damn things are the bane of my existence. So easy to say, “oh, I’ll pay it off in a couple of months.” Well, if that is so, then I should just save up the money and pay cash. Just say no to debt and use the cash envelope system for optional spending.
I used retail therapy during my marriage to soothe my psyche. Bad habit. I understand why. I know why for about 8 years I spent over $12,000/year so my daughter could have a horse and go to horse shows. I know why I would throw money at any problem or situation at hand. But it was never the right answer. Money doesn’t buy happiness. It only masks the problems. I understand that now.
I also understand that the lack of money causes unbelievable stress. I read the posts by folks on various FB pages (like Dave Ramsey, YNAB, etc.) and they have so little and are trying so hard. They are working several jobs, frugal to an unbelievable degree and working so incredibly hard to fix their financial life. My hat goes off to them. I admire their tenacity and am inspired by it.
For now, I keep working my spreadsheets, making my plans and remembering that I have to take care of me first. I also have to remember that spending is optional.
Photo by Carlos Muza on Unsplash