work in progress

I read an article in the NY Times this morning about people in debt creating blogs to vent their financial travails. I like the idea. Maybe if I keep a log, (and why not in a modern format?) I can stick to my plan better. My budget is so tight, so much so because I'm trying to pay down my personal debt quickly, that it often hurts. Venting might help.

I like the idea of the Compact movement, where people don't buy anything new other than food, medicine and underwear for an appointed time, such as one year. I know I could do this. I even love the prospect of not entering a Target for a year. I see all that merchandise as landfill, anyway. What about used stuff? I buy used books and clothes already. I can spend plenty of money that way. For me, no new-to-me would have to be the rule, unless I could get it for free.

My major debt:

$13,264. to one credit card with a 4.99% APR through 3/07. My plan is to pay $500./m toward this debt, and keep the APR low by moving it to another account of mine or else negotiating to keep the low APR at the current company. I consolidated all my consumer debt to one place, now I aim to keep the APR low. On top of this, I don't want to get any new credit cards. (That is supposed to help my credit score.) I already have four cards, two of which are totally out of use. A third, I use for certain travel I do, so I can clearly watch my travel budget. I pay that right back. I used the same card for my annual party, which I fund with part of my tax return. I spent a thousand dollars on that. As soon as I get my tax return, (calculated by my tax guy to be about $3,000.), I will pay off this debt. I owe another $1000. to my dad, who gave me a short term loan to pay off an old friend well ahead of the due date. Though the debt was not late, it was coming between us, hence the help from dad. He and I can do business together, I already know. The last $1000? I guess it would be best put toward my big debt. Instead, since I don't have a savings, I want to put it in an ING account for an emergency fund. I wish I could accumulate at least $10,000. for a real emergency fund. Then, when my car dies, I could buy another outright. Or survive an unexpected job loss. Or put it toward a house down-payment.

I am immensely frustrated financially. Mainly, it's where I live: Oakland, Ca. Here, the median house cost is $740,400. That is equal to the median in San Francisco. These were just listed in the top ten most expensive housing markets in the country. Only the next most expensive, L.A. and N.Y.C. were in the $500,000. range. Big difference. Others in the top ten went down to the $300.000s. I make $50,000./yr. and am single with no kids. That is more money than most people in the world make. Yet here, I feel strained, and as though it would be impossible to ever buy a house in the Bay Area. As I write, I think of a millionaire I know, who was complaining to me about money the other day. He bought a house around here for a million. He is constantly pressured about his gargantuan mortgage payment, taxes and insurance. And he's single too, with no kids. I didn't feel simply resentful to hear him complain. In fact, I felt kind of equal with him. I mean, in his case, his money doesn't afford him no worries. But he could help himself a lot. He didn't have to buy such an extravagant home. He also owns a $90,000. luxury car. I don't know the extent of his other extravagances. But without the fancy, expensive stuff, he could have more wiggle room. What is it worth to him?

In my case, I have created a budget, I make my own coffee each morning, and have cut down from two cups to one...I rely heavily on the library for new books, I only fill my car-tank once a month, I didn't run the heat this winter, I share an apartment to save rent, I sleep at youth hostels when travelling, I split meals at restaurants...(I'll get into the transgressions later). What are my extravagances? Like my rich friend, there is probably more I could cut.

I do have fun, as grim as my budgeted lifestyle may sound. I live in a gorgeous apartment, and I pay $600./month. Oakland boasts some of the sunniest, balmiest weather in the world. The plum trees and magnolias are in bloom right now, sweetly scenting the air. I just had my annual Valentine Party, with an art exhibit of my friend's stuff, a DJ and a lavish array of flowers. There goes a lot of my money! I love to walk in my neighborhood, hike, visit, read, and attend poetry readings and art openings. I like to cook and bake. I'm a community activist. So much can be done on a shoestring budget. My sister has a lot of money, and her house is like a spa destination for me out of town. I put attention on enjoying everyday life, even as I don't have extra money for much travel, gifts, material things.

With my plan to pay $500./m toward my debt, I should be able to pay it off in two and a half years. What if I make short term goals, along the way, to help keep me on track? For example, by April 30, I should be down to 12,264. (Not including finance charges.) Then, by the end of August (my birthday month), I should be down to 10, 264. By December, 8,264. Can somebody give me advice about how to factor in finance charges? I figure that in the end, it might tack on $2000. more to my cost. Currently, my minimum pymt is listed as about $200./m, and I pay $300./m more than that.