Note: Content reposted from other blog in effort to consolidate my internet footprint
I have written a list of actions I will take to get out of debt. Despite my delusions that I will suddenly receive a huge cash windfall to wipe it all away, I am going to have to take smaller steps that will chip away slowly but surely until there is nothing left.
ACTION PLAN:
To Tackle Rolling Balances:
1. Stop leaving a balance on my credit cards: I have one commitment* in the end of August that will require a charge, but if able I will use my bank card for the expense instead. Aside from that, I will not charge anything else without paying at end of term (barring an extreme emergency situation.)
*EDIT: Turns out I already placed this purchase on my Discover card, so in actuality I am starting with a clean slate!
2. Pay double minimums: Starting in August, I will be making credit card payments every pay period, as opposed to every month. That means I will be making 26 payments a year instead of 12!
3. Round Up: I will round up all of my rolling balance minimums (car and credit payments) to the nearest ten. Example: A $24 or $29 minimum would round up to $30 payment.
4. Balance Transfers: One of my top tricks to keep a high credit score and diminish interest paid is to take advantage of good balance transfer offers when I receive them! Any offer with no fee to transfer and with a lengthy 0% APR introductory rate could help alleviate the crunch of credit card debt in many ways! Firstly, in a very immediate sense, you are typically relieved of any payment for several weeks after the transfer. You won't incur any added interest for the 0% APR timeframe. If you're lucky enough to get it all combined onto 1 card, that means you are down to one monthly minimum payment, which certainly simplifies things! And finally, the largest factor that impacts your credit score is your percentage of credit being used vs what is available. When you open a new account with a balance transfer, your credit line has just increased, thereby lowering your percentage of use!
To Reduce Regular Spending & Save Money:
5. Savings Account "Allowance": This is a method I already employ, but I will adhere to it more religiously. After each paycheck, I calculate my bills for each pay period, and subtract the figure from my checking balance. I divide that figure in half, and place one half in my Savings Account. One of the reasons I do this is because my expenditures each pay period vary heavily, as my largest expenditure (RENT) far outweighs the rest of my bills. Because of this, I squirrel away the extra, but generally take the money back to cover rent later. Where I have failed in this more recently is taking money back for unnecessary/frivolous expenses, and the buck stops here.
6. Food "Allowance": One of the purposes of this blog is so I may be extremely authentic and keep myself honest and accountable by airing my dirty laundry on the internet. That being said, my biggest frivolous expense is "extra" food that is outside of my typical grocery store shops. I live and work in Providence, which has no shortage of awesome food, and I have gone totally crazy taking advantage of all the city has to offer! I know myself, and at this time it is unrealistic for me to commit to making and bringing lunch every day - I need to live! - but I will set a daily allowance of no more than $10 to be spent on extra food on the weekdays. And if that seems like an easy goal, you try living next door to a Whole Foods hot buffet!
7. Term Payments: Whenever possible, pay all term bills (auto and renter's insurance) at once. This is how I used to roll when I lived in New Hampshire, but everything costs more to insure down here in Lil Rhody! The benefit of this is that you can save a lot more in the long run if you pay all at once versus monthly installments.
8. "Spare Change": Each morning, I will transfer the "change" in my Checking account into my Savings account. Example: $200.55 becomes $200.00. This is purely experimental, but it is a small step that could pay off well and be barely noticeable on a day-to-day basis.
9. Limit Frivolous Spending: This is obvious and vague, but no money-saving list would be complete without it!
To Gain More Money:
10. Raise/Promotion/Expenses: My job is salaried, which is great, but unfortunately no amount of overtime will net me more money in my paycheck. My best hope here is to get a good merit raise or promotion (luckily at least one of these is right around the corner!) I also get to travel on occasion and am reimbursed for mileage, which I could squirrel away to meet my goals.
11. Sell Stuff: My goodness, I have SO much extra STUFF to get rid of. First on the chopping block are the categories of: clothes, books, movies, & games. This step is really exciting to me just because having too much STUFF stresses me out, so I am excited to pare down.
12: Mechanical Turk: This is my when-I'm-bored "side hustle" which nets me a couple extra bucks a day from Amazon just for taking surveys and performing small tasks for people. It is more fun than anything. So far this is the only working-on-the-internet scheme that fits in line with my attention span, skillset, and level of commitment.
13. Odds & Ends: This is my section for things that could significantly affect my financial situation, but aren't measurable or guaranteed. These would include: having a roommate, monetary gifts, tax refunds, and any other uncontrolled influx of money.
Time to get out there and make some magic happen!
M
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