Breaking Emotional Spending: I didn’t charge $3,000+ on my credit card…

with money that I didn’t have in the first place and I feel like crap for it.

I should feel great for not spending $3,000 that I could not cover. But I don’t feel great. I feel like crap. Crud. Wallowing in my self-pity.

Other titles running through my mind:

  • Being an adult is hard sometimes
  • Super bummed but didn’t charge  $3,000+
  • Feel such guilt. But hey I didn’t blow it!
  • Not spending $3,000+ I didn’t have
  • Listened to my gut. Didn’t succumb to spending $3,000 on my Credit Card

See, I got this great last minute idea to go here:

Salem, MA

Salem, Massachusetts  – Halloween Capital of the World. 

I made the decision based on quite a few valid personal reasons like a significant birthday, child’s final year in high school, and other great personal reasons to remain private (but they were really valid reasons to me). < All part of the somewhat irrational brain (cuz I wanted to spend $ I didn’t have) rationalizing the situation to make it okay.

(I’m really good at rationalizing anything)

However, what comes with a last-minute hyped up holiday trip is exorbitant prices.

  • The flight, reasonable.
  • Added luxuries I desire for a long flight, costly.
  • Then there is parking my car at the airport fee.
  • The accommodations, expensive  Although, I was pretty lucky to score such a place.
  • Then the 11% room fee.
  • Shuttle or Lyft to and from the airport, okay. But getting back to the airport would have cost extra due to an very early morning flight out.
  • The tarot card reading, the seance, the Witch Pix photo shoot, the entrance fees to everything we wanted to do, the Haunted and Essex street fairs, the psychic fairs.
  • The eating.

The trip would have easily costs me $3,500 – $4,000. I mean Salem, MA during Halloween is a hyper-consumer place. Spend, spend, spend!

 

How it went down:

The emotions…

Called a gazillion places. Staying in a historical place was important to me.

Fare-locked potential airfare plans. To give me 3 days to decide if I wanted to do this.

Made a purchase to an entertainment show I wanted to see.

Sleep.

Finally receive confirmation for time off.

Made the room reservation. Sucked my breath in with the price when booking said reservation.

Mind you my emotions are ALL OVER THE PLACE with this planning. Yes, no. Yes, no.

Book airfare.

Later that night, tell myself we can’t go. “What’s the one fundamental rule I am breaking?” Answer, I am using the credit card without having the money to pay it off right away.

I was getting super nervous about charging so much. Airfare and the room together were at the max I wanted to spend.

Slept on it all before I cancelled.

Morning, decide we are still going.

Look at tons of stuff to do and put together a tentative agenda to figure out what entertainment fees I need to make.

My gut feelings are not screaming at me to listen and not make this trip due because I was throwing myself into a financially vulnerable position charging money I didn’t have or a plan on how I was going to pay it off. Reminding me that I don’t have back up support if I fail to pay and that I need to be a role model to my child. That I don’t have anymore room for debt in my budget spreadsheet.

I go home to figure out potential bus/train ride from Boston to Salem. Look at other transportation options. The fares…

24 hour deadline to cancel airfare looms that evening. I get really nervous. Freak out. Cancel minutes before it expires.

Break news we can’t go.

I cried for not keeping my plans, for trying to make this happen in the first place, and because it’s hard doing the right thing that went with the financial values I am trying to instill.

What would you have done?

Really I do want a consensus on this emotional plan. Did I make the right choice canceling? Financially, yes I did. It’s clear cut. Emotionally, I am not convinced.

Sadly this story isn’t over because my room reservations have not been cancelled yet. I have until Sunday to cancel. Itchy fingers to rebook a flight.

ETA: It’s over, I cancelled. All is cancelled. Not going. 

Tell me to cancel it.

I cancelled!

I’ll lose money on the show if I don’t go. But I am going to send the tickets to my aunt and uncle. Hopefully they will use them or have friends that can. Why don’t I cut costs and stay with family? Because they are a distance the other direction. I want them to come visit me in Salem.

This journey of getting out of debt sucks. Debt has always been a twisted comfort. I am not convinced yet that turning things around will work (save for it, go and not be left with debt). Weird right?

But apparently there is still hope for me. I kind of believe saving for something will work or I wouldn’t have listened to my gut. My gut has always been right.

Silver lining:

  • Shaved a few dollars from some categories and created a travel fund category to pay for a trip up front next time.

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Photo credit: aquatravel and trip savvy

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A Predicament to my Budget

I knew this was coming sometime. I was just hoping it was going to happen a year and a half from now. The timing is just off for it to happen right now. I need to move.

The first 3 years of rent rates were affordable with minimal rent increases. Then the place was bought by corporate. They turned on the hot water with the rates the last couple of years.

Now they want to gentrify the place. Guess who is in an older abode? Moi & Co. I have been here half a decade. It’s walls contains many a life experiences. Some so dear to my heart that I am having a difficult time thinking about parting ways with the place. But I don’t have a choice to stay.

The business is reducing my leasing time and increasing my rent to where I personally will be hitting my cap in ability to pay. They want me out so they can renovate the place. They could not come up with a solution to keep its current tenants in and renovate at the same time. Or so they say. But I guess it doesn’t matter. I can’t afford it anymore. :(

To Stay in the Guidelines

Sentiments aside, the real issue is staying within my budget. Lower the expenses, faster I can pay off this debt. In deciding how much rent I can afford, the general guidelines say rent should be 30% of your income. Net or Gross? I think gross is great when a landlord is figuring out how much a tenant can afford. But as a tenant, I think budgeting net is a good compass to one’s level ability to pay rent (especially as a single parent).

Gross: $91,000 ÷ 40 = $2275

Net: $65,000 ÷ 40 = $1,625

As you can see, my current rate of $1715 is somewhere in between that. Personally, it’s a lot of money. And my monthly budget shows 30% gross rent payment would not in my (debtor’s) situation Because if I factor in the new rate, I am left with a deficit (see below):

Budget stupid debt

see the red. that was caused by the “new rate”. right now my current budget leaves me $6 left over.

But technically, I need to factor out the debt payments and 3rd paychecks when calculating the 30% rule.

Note: I don’t count in any 3rd-paychecks into the equation (there are 2). Which keeps me safe, allows room for error, and/or gives me snowballs to use.

Gross: $91,000 – $12,000 (annual debt payments) – $4,600 (3rds) = $1,860

Net: $65,000 – $12000 – $4,600 = $1,210

In this case, 30% based on gross could be adequate in this case, but net would be optimal.

By downsizing our quarters:

New Rate Stupid Debt

yes, it hurts knowing I pay $1,000/m in debt.

The new rate would leave me a tiny bit of wiggle room.

The current rate had me reduce the family’s clothing expenses to $0.  The new rate would allow me to put the $50 clothing expense back into the monthly budget. It would be a nice expense category to have back.

As a SIK (single income with kid(s)), an approximate range of $200/m makes a world of difference. And talk about parental guilt, that having debt is causing us the need to downsize. Debt Sucks. Stupid debt.

Overall, I will be looking at this as a challenge (because change is hard). A fun challenge towards becoming debt free. It’s team in training for tiny house living. The amount of money saved will really not be conducive in accelerating my debt payments,  but it will keep us in budget.  That’s key, right? And while this move is temporarily… temporary usually is longer than planned. So staying organized and spending more time outdoors will be key. Okay, I am off to finalize the details and play with the furniture layout of the new place. Thanks for listening to me rant and sort things out in my head.

$10,000 by November. Here’s how I am going to do it.

I’m always messing around with my spreadsheets and making new scenarios for this debt pay down. Well I kept tinkering with it because I was coming up short on being able to pay the auto loan in time.

Current goal is to pay down approx $7,000 by November before the SL come out of deferment.

Well I forgot about the snowball. (duh! such a dork sometimes). once the Emergency Fund was back up to par, that money would then go towards paying off the auto loan in time. Which brings me to the next part.

Excursion Fund

Remembering the last part and repurposing a small savings account ($500) recently has now made it possible to add the new plans of saving  up for what I am calling a “generational growth excursion”. I realize some people may not agree with that. And I totally get it, as I have $70,000 of debt to pay off. I argued with it myself for a while. But this is an opportunity of a lifetime I couldn’t pass up for various reasons. Here me out: it will be the first time I am paying cash for a large purchase. None of the excursion is being paid on credit. And what is needed beyond the $3,000 will be raised:

  • asking friends and family to donate their recyclables to us
  • setting up for weekend hire (garage cleaning,  painting, mow the lawn, car washes, etc…)
  • grocery shopping trips – earning 5% cash back rewards with immediate payoff

Even with the mentioned above, the budget would still need to be whittled down a bit. Here is what was revised on the monthly budget in more detail:

  • clothing budget – $50 brought down to $0. This will be tough not buying any clothes. The child has mass amounts (even though she says she has none). And I can buy anything needed from my personal allowance (I am gong to stretch my $20 bi-weekly faaaaarrrr). Maybe I can participate in a clothing swap and/or hope for gift cards & clothes gifts when holiday or celebrations arise.
  • Household/Food – $700/m to $650/m – savings us $50/m. This adds some restraint, but will not be too much if eating out is done rarely and work meals continue to be packed. So far in the last two weeks, we have not been out to eat at all.
  • Cellular x2 – $100 to $85 – $15 savings per month. I happened to log in to see what the most basic plan was for data on the prepaid phones. At least for my phone since 90% of it tethers off wi-fi. Well, we are at the lowest plan, but found my provider lowered the plan rate for whatever reason.  Glad I checked it!

  • Internet/Ph/Cable – The $35 savings is tentative right now. I will explain in a future post when I get it set up. But essentially it’s moving my house phone to Google Voice (free) with the use an Obi phone adapter (one time purchase). I’m not stranger to Google voice – been using it for years – as its a great way to provide an alternative number to dates or businesses. I didn’t connect my home phone before because there was talk that years ago that GV was going away. But now I hear its not. Once installed, I will rid of the the cable once again. Leaving the house with wi-fi only at the “standard” rate (these companies drive me crazy).

Total added savings per month: $115

with potential to save up to $150 (aka $1,800/yr).

Other: re-purposed savings account became the EF account; sinking funds account became the excursion fund account and dropped automatic transfers down a $100/m; added annual payments (aka, sinking funds) as a line on the expense report for now. but will be dropped into the EF account. really I just need to set up the money to be automatically transferred.

And that my friends, will just have us skimming by in November to make $7,000 in debt be paid off and $3,000 available towards an excursion equaling $10,000 I never thought I had to pull a trick like this.

ps – I would show you my debt payoff calculator scenario, but I want to leave an element of surprise to the amount snowballed this month. will post when all is past tense in the next week or two. :)

pss – I know you’re asking, “but what about paying the $2,394.40 of student loan interest before the deferment ends?” I’m using a 3rd paycheck in December to kick that too the curb. I never knew I had such monies. Focus works (hope I can keep it up all year).

Student Loan Debt – Bleck, Interest and stuff.

After reading Dear Debt: A Story About Breaking up with Debt by Melanie Lockert (short read, but an indepth great read. i gave it 5 stars on goodreads)… I figured out my daily student loan interest.

See below.

Oh the pain! I never realized I am paying almost $7 per day in interest alone. Approximately $210 per month. $2,520 per year.

My Student Loans have been in deferment since Nov 2016 because I can’t afford its payment. I am looking into refinancing my student loans right now. But until my auto loan is paid off, I can’t afford to make payments on a refi. So… essentially I am paying $210 per month to hold the loan for me.

Debt Suuuuuucccccckkkksss!

Not to mention the interest being accrued. Currently outstanding at $1,231.37.

So by November, I will owe something like approx. $2,701 in interest plus a $300+ monthly payment.

Student Loan Breakdown:

Loan Group APR% Amount (as of MAR-17) Daily Interest
A: 6.00% 3,544.85 0.58
C: 6.00% 1,658.34 0.27
D: 6.80% 3,151.63 0.59
E: 4.660% 8,620.09 1.10
F: 4.660% 9,318.79 1.19
JA: 2.125% 7,470.51 0.43
JB: 6.800% 8,296.11 1.55
JC: 6.800% 4,570.92 0.85

Total Daily Student Loan Interest being accrued: $6.56

Sad sh*t.