Money Quest

Some of you have been noticing a much more serious approach to money from me recently. It’s part of my “Prepare to be 50” plan. Being 30, I’ve realized that I’m going to be 50 before I know it, and I don’t want to be in a bad place financially or health wise when I get there.

Now, I’m not a rich guy, but I earn a pretty decent salary at my job. At least enough to be maxing out a Roth IRA and getting the company match from my 401k.

Recently I’ve been listening to Dave Ramsey’s podcast, and I’m reading his book, Total Money Makeover. The gist of his message is:

  1. get a small emergency fund in place
  2. pay off all debt except house
  3. establish a real emergency fund: 3-6 months
  4. 15% towards retirement a month after debt is gone
  5. pay off the house

The whole drive of the book is eliminating debt completely, and he’s won me over. I like many others have accepted debt as a necessary part of life. Well, no more.

Currently the only debt I have is a car loan, with about 10k remaining on it. How do I hammer this out fast? Well, time to budget out the money. How much am I spending on stuff?

I’ve been using quicken for a year, so I have a good general idea of what I spend, but no idea of whether or not those amounts are reasonable. So I attacked it from another way: spend as little as possible. This month gets an up-front budget, and I’m going to try and live skinny. If I can do this, I can pay off my car in about 10 months and be completely debt free.

Then I keep living skinny and start slamming money into retirement and mutual funds for a while.

So here’s a fun list of things that are changing or getting cut.

Qwest: Can’t deliver teh snappy. $37/mo saved.

FastQ ISP Service: Blame it on Qwest guys, you’re out. $23/mo saved.

Textdrive: This is my new hosting provider. $499 lifetime hosting. $50/mo for ten months, then free for life.

Cable: HBO is gone at least until Deadwood, Sopranos and Carnivale return. $11/mo saved Second cable box returned, never use it. $6/mo saved. Internet service activated. 6Mb/sec. yummy. $39/mo spent.

Progressive: You have awesome claims service. But you decided to up my premium by 15% for no reason this year. Moving to Geico who will continue to give me the same coverages for your current price. Even trade, but $16/mo cheaper than what progessive wanted to charge me.

T-mobile: I have 600 minutes a month on my plan. I use on average 200. Time for a cheaper plan. $10/mo saved.

Rent: Moved to the new place. My portion of the rent went from $780 a month to $690. $90/mo saved.

All told, this puts me up $70 a month until Textdrive is accrued out (it’s paid up front, but it’s fun to do accrual accounting), then up $120. Not too shabby. This is the equivalent of a $1850 yearly raise.

Also, now that I live closer to work, I don’t eat at the company cafeteria, I go home. I was spending about $3-7 a day. Now some of that will be pushed off into grocery costs, but 2 days of eating at work will translate into 5 at home. Should be about $60 a month saved there.

The Bottom Line The bulk of these cuts I won’t even notice as far as lifestyle goes. I’ve found that most people have these little $10 a month expenses that they could loose and not feel at all. Sure I’ll be eating out less, but that’s really not a big deal. There are other areas that have sporadic expenses, like the whole photography area, but I’m going to budget in some slop there to cover.

One area that is painful is turning down a trip to Maine to train with a few of my favorite martial artist type people. The cost was $500 in total, and I could find a way to make it work, but if I did, I’d probably find ways to justify other spending as well. I need to be hardcore for at least a year. Of course it doesn’t help that my insurance and car registration both are due this month as well.

I will train with another fellow who’s coming out in April, Mark Russo. That’s going in the budget.

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