Day 8| Paid: $1150.36 | Remaining Debt: $61998.08
Now that we have taken a closer look at my debts, I want to take some time to look at my non-debt expenses to get a clearer picture of where those stand, and to see if there is anything I can either completely eliminate or at least cut back on.
The reality is that the only way out of this mess is to either decrease expenses or increase my income. Ideally I can find ways to do both at once.
So now lets take a look at my expenses and see if there is anything I can eliminate, or at least cut back on
Automatic Deductions from Paycheck
Health Insurance: $33.18 /week
Dental Insurance: $4.00 /week
Legal Insurance $3.22 /week
401K Contribution: $49.84 /week
Plus Federal, State, Medicare, and Social Security Witholdings.
Obviously I can’t do anything about the taxes. The health and dental insurance are excellent plans, relatively inexpensive, and are the cheapest option my employer offers. So they stay.
I am tempted to stop paying for legal insurance, but it has already more than paid for itself when I used it a couple years ago when I was selling my old house, and I feel it is more than affordable and could really save me if there are any non-criminal legal issues that pop up.
I have decided to stop contributing to my 401k until at least the payday loans are paid off. I actually set it up so my contributions stopped during the last pay period in December, so I know that after the adjustment for taxes this puts an extra $40 in my paycheck each week. That is at least $160 a month that can go straight to my debt.
I was hesitant to stop contributing to the 401k since I knew I would be giving up the matched ‘free’ money from my employer. However I want this debt gone as soon as possible, especially those high interest payday loans, and the $40 a week will do a lot more good paying those down than they will collecting 10% or so interest, even with the matching funds. Right now I am planning on restarting my contributions as soon as the payday loans are paid off. Monthly impact: $160
Static Monthly Expenses
Housing: $0 – I currently live on a guest house on my parents property. A few years ago I lost my job, and I had trouble finding a new one where I lived. However I did find a job relatively close to where my parents live. So since nothing was tying me down to where I live I rented out my house and moved home. Then when COVID initially hit my tenants lost their jobs and decided to move out, so I decided to sell my house. That was a whole fiasco and really doesn’t impact the purpose of this blog, other than to serve as some backstory. Regardless I have been living rent free on my parents property for a couple years now, which of course makes me even more pissed at myself because without having to worry about rent or mortgage I should have had the extra cash to clear up this debt already.
Electric & Internet: $100 – I pay my parents $25 a week towards the electric and internet bills. I could ask my parents if I could not pay this, but they have been gracious enough allowing me to live on the property rent free I just don’t feel right doing that.
Car Insurance: $135.50 – I have a plan with Progressive. I have shopped around regularly for better rates, but this continues to be the best I am able to find. I currently only have the minimum state required liability insurance, as well as a rideshare rider since, as I will be discussing in a later post, I do use my vehicle for rideshare.
Storage Unit: $94.95 – When I moved back to my parents property and sold my old house I had a lot of extra things that just didn’t fit in the guest house. I did get rid of alot of things and downsized significantly before the move, but I do have some old books and other items I am not willing to fully give up. Hopefully I can purge more and move into a smaller unit soon, but for now this is an expense that can’t really budget. I hate this expense, and as someone drawn to minimalism I feel like this is one of the worst of my monthly expenses.
Phone: $68.09 – This does not include the $18.34 that I pay each month on the installment plan for my phone, which I include under the debt category. My plan has unlimited calls, unlimited data, and also comes with HBO Max. I can’t get a cheaper unlimited plan with my carrier. I know I could switch to a lower cost carrier, but that would also mean immediately paying off the balance of my phone, and I have been with my carrier for ages and they have the best service by far around both where I live and work.
SiriusXM: $16.87 – I have the lowest plan they offer that includes music. I am hesitatnt to give this up because it is my go-to when driving for Uber. I also enjoy it as an alternative to spotify and terrestrial radio. I spend so much time in my car that I feel like I am willing to keep this extra, but it is high on my list for possible things to cut if needed.
Zoom: $16.04 – When COVID-19 started I picked this up both for my work (I run a lot of meetings and conferences) and also for personal use. The free option just didn’t have the functionality I needed. I still use this almost daily. I do get reimbursed for it from my work annually, but that won’t happen until October of this year, so for now I have to count it in my expenses.
Spotify: $10.69 – From 2015 until 2021 I barely listened to any music. I get really into podcasts and just listened to those while driving. However last year I rediscovered my love of music and finally downloaded Spotify and quickly subscribed to the premium version. It has been amazing rediscovering old bands I love, as well as discovering new music. I don’t want to give this up, I just spend too much time in my car and enjoy having the freedom and flexibility that Spotify gives me with music.
Gym Membership: $10 – I have a Planet Fitness membership. I know they are looked down upon by a lot of the fitness community, but it is the cheapest option in my area and it has been great for me so far. I used to be a member of a more expensive gym and I never really felt that the high price was worth it. The $10 fee is more than worth it considering how often I go to the gym. Could I get a better workout somewhere else? Almost certainly. But I would be paying a lot more than I am not, and upgrading to a better gym just doesn’t fit with my current financial status and goals. On the flip side I am not willing to hurt my physical health just to save $10 a month.
Netflix: $9.62 – I am definitely going to cancel this now. I may renew later, but I get HBO Max for free through AT&T. I don’t watch much TV or movies anyway, but right now if I do watch anything I will focus on watching things on HBO and put this extra $9.62 (lets just call it $10 to keep it simple) toward my debt. Monthly Impact: $10
Google Plus: $6.38 – A number of years ago I did some consulting and coaching on the side, and created a website and a custom email address. I still use that email as my primary email. I could get rid of it, but I actually hope to eventually resurrect this little side venture in some form as part of my plan to pay off the debt, so I guess this stays for now.
Membership Sites & Courses: $38 – I subscribe to two different e-learning membership sites. I love learning new things and have gained some valuable knowledge that has helped me in my career as well as personal development. The one site I use the most costs $30 a month, and I get true enjoyment out of that one. The other costs $8 a month and I do love it, but I have been subscribing for about a year now and I don’t know how much more I can get out of it anyway. So I am definitely going to cancel that one, and will put the other $30 site high on my list of things to cut in the future if needed. Monthly Impact: $8
Stocks and Roth IRA: $15 – I have an account with Acorns. I know it isn’t the best platform but it has worked well for me. I have both an “Invest” account and a “Later” account, which is a Roth IRA. Both the balances are small since I have only been putting $15 a week towards them combined. I am going to pause those payments, and while I can’t touch the Roth IRA balance, I have withdrawn the Invest balance of $849.75 already and that went to that Payday Loan 1 lump sum payment that was due on Friday. So I wiped that account out, and will pause all payments for now. Monthly Impact: $60
Variable Monthly Expenses
Propane: $60 – I use propane for heat, hot water, and also for cooking. In 2021 I spent $653 total on propane, which averages out to $54 a month. However the bulk of that is in the winter months. I am going to budget $60 a month for propane in 2022 with the understanding that most of that will be spent in January and February this year. In fact I just got my tank filled last week and I have a bill for $220 due this month. I need to start putting aside a set amount each month towards this bill so it doesn’t impact my finances much in the winter months. Unfortunately there is no significant way to cut this bill down as I already keep the house pretty cool.
Car Maintenance: $50 – Last year I averaged about $50 a month on maintenance, repairs, inspection, oil changes, etc. I know that within the next couple months I will need new tires as well as an oil change, and considering how much I drive I probably have more expensive maintenance coming up fairly soon.
Tolls: $100 – Between my regular driving, visiting my girlfriend, and trips to the mountains or the beach, I average around $100 a month in tolls. When you are regularly driving on toll roads or have to regularly cross bridges, these expenses are almost impossible to avoid. I can probably cut down this expense a little bit, but not without potentially impacting my relationship and non-financial goals negatively.
Fuel: $250 – As I have said a few times, I drive a lot. Commuting to work, visiting my girlfriend, Ubering. My gas expense varies drastically each week, and even each month. If all I do during the week is drive back and forth from work I can easily get by with a single tank of gas for the week. But if I travel to hike, visit the girlfriend, or do any Ubering, I can easily get up to 3 or 4 tanks a week. The price of gas also drastically impacts this number. For now I am going to budget $250 a month for gas, but will definitely have to reevaluate this.
Food: $200 – Like my fuel expense this can vary drastically by month. For example in November I only spent a total of $203 on groceries and eating out. However in December that was over $400. I tend to only eat one meal a day, but I make that meal high quality. Since I do live on my parents property I will have dinner with them maybe once a week, and whenever I visit my girlfriend if we go out to eat or grab food anywhere she usually pays. That tends to be our tradeoff – I drive to visit her (much easier for me to do for various reason) and she pays for the food while I am there. I have no problem paying my half, or even for both of us, and I do so occasionally, but she is always more than happy to cover the cost. So this expense is variable, but for now lets say $200 a month for food expenses.
Vices: $300 – I have some vices. Not anything terrible or illegal, but I do love caffience, alcohol, and nicotine in all its forms. I use them all in moderation, and I tend to change it up depending on what mood I am in and what is stressing me out. I really feel like the use of tese all is a result of boredom and self-loathing from some pretty negative experiences over the past few years more than anything else.
These are a major financial drain. Looking at these expenses as a group in 2021 I averaged around $10 a day. That is $300 for any given month, or $3650 for the year. That along could have prevented me from the worst of my debt. So I need to give these up, not only for my physical and mental health, but for my financial health as well.
So no more substances. Maybe the occasional drink if I am out to dinner with my girlfriend. And caffeine will be limited to coffee or tea that I brew at home – no more coffee shop drinks. And definitely no nicotine or other products. Potential Savings: $10/day, $70/week, or $300/month.
Annual Expenses
Notion: $48, Workflowy: $49, and Todoist: $29 – I use these professionally and personally. I am a little bit of a ‘productivity’ junkie and I have fine tuned my own system pretty well, and I use all of these. These are annual subscriptions, and Notion and Workflowy have already been paid in January. ToDoist is renewing in June. I will have to consider if it is worth renewing when the time comes.
Medium: $50 – This was also already paid at the start of January, so either way it stays for now. I read enough on there and want to support the content creators that I enjoy, so I do feel its worth it, but I will revisit next fall to see if I should renew for 2023.
Highbrow: $48 – This is a service that provides mini courses via daily email lessons. It is set to renew in April. I do enjoy it but I think I have pretty much gotten everything I can out of it so I probably won’t renew when the time comes in April.
Geocaching: $30 – I occasionally do some geocaching when I travel or go hiking. Not sure if it is worth the subscription. It renews in July so I will see then.
Google One: $30 – I have tons of stuff stored on Google Drive. So much stuff that I had to pay for extra space. This renews in November, so I am going to see about clearing out the clutter in the drive before then so I don’t have to pay the extra.
Gaia GPS: $10 – I do as much hiking as I am able to whenever and where I can. I use this to both plan and track my routes. It is definitely worth the price. In fact I think the pro plan is more than worth the price, but because of this financial mission I am on I will probably keep it at the basic level for now. Renews in August.
Altogether if I don’t cancel any of these annual membership they total to about $$294 annually, so about $24.50 a month, or about $5.65 a week.
Summary of Savings
401k: $160 monthly
Acorns: $60 monthly
Netflix: $10
Membership Sites: $8
Vices: $300
Some months have 5 weeks, so for those months the total for some of these items will be different
Total Monthly Impact: $538
This is actually more than I thought it would be when I started going through this. If I can put that much extra per month towards my debt and an emergency fund, as well as find ways to earn some extra income, I should be able to get rid of this debt in a decent amount of time.