Task 17 - Pay off Credit Card

My friends and family would likely use the term frugal to describe me but that hasn't always been the case. In fact during my younger years they might have described me as totally the opposite. I never left the house with less then $500 in cash never looked at or considered what things cost.

I lived a life in a way that needs and wants were the same thing and I never wanted for anything. That behavior definitely had its costs and I managed to collect some fairly hefty credit card bills each month. I never had any problem paying them until I had a blip in the employment area. During that time I didn't really adjust my lifestyle and actually I spent more since I wasn't working. Part of it was home remodeling that I had already planned to do and had already committed a fairly large amount of money too. So rather then paying those cards off every month as I was accustomed they built up and left me with a relatively big nut to crack.

When the light bulb in my head finally turned on I made a lot of changes in my life. Partly because if I continued down that road it would have lead to financial ruin but also because I found a new hobby. That new hobby was seeing how frugally I could live. It was strange for me at first since I had never considered what anything cost. My parents are affluent successful people and provided very well for me. When I wasn't in school I was working and as such was able to provide for myself when my parents responsibility was done. They taught me the value of money but I missed the lesson on appreciating that value and what it all meant. Not working definitely taught me that lesson.

When I found a new job I didn't change that new mind set and have continued to be more careful then I had been in the past. No more fancy 50-80k cars that I would trade in every 2 years. No more dining at super expensive restaurants every weekend and no dropping 200$ every night every weekend out at the bars. I definitely noticed a shift in my friendships too. It was then that I realized that many were just along for the ride and weren't true friends.

While a large portion of my collected debt was from home remodeling and decorating that expense was no longer needed since my condo was completely renovated and decorated. My debt was manageable with some planning I could pay it all off. I setup a budget (that used to be a naughty word) and put myself on a payment plan. Some cards vanished almost immediately and others I consolidated into a few large ones with very low rates.

I had set a goal to pay them off with out stunting my lifestyle entirely. I am a hard worker and I love to travel and I vowed not to allow my debt to stop me from enjoying life.   I didn't need to go cold turkey I just needed to learn how to do things in moderation and on a budget.  Thankfully I stayed on track and now one of those cards is down to 0$. It is liberating to know that one is gone and now I am going to take the payment I had been sending to that one and add it to the other. This will help me pay it down even faster then planned. Hopefully by the end of my extended Day Zero Project it too will be a thing of the past.

Task 20 - Pay off Car Loan

When I bought my current car I had a choice between 36 and 60 month terms. I opted for the 60 month term since my bank was running a promotion for used cars reducing the APR to the same as the 36 month loan. There was no early payment penalty so I figured why not take the longer term and I would just plan to pay as if it was a 48 month term. 

I take very good care of my vehicles and keep up with preventative maintenance. I knew I had a timing belt coming soon so I took the car in early to get it done. I even paid cash to get a better price.  It was a mechanic I had used before and that my parents had used for years. Unfortunately shortly after that maintenance the timing belt skipped and ruined the engine. It was very disappointing that a bad mechanic could throw such an expensive wrench in my plans.

I managed to find a new mechanic who was honest and fairly priced who put my car back together at a more affordable price then the dealership wanted to charge. This however significantly slowed my increased payment stream since I first had to cover the 2800 engine I just had installed. I decided to slow my payments to the required amount only and replenish my savings account I had just drained.

While that slowed me down about 7 months I am happy to report that the car is paid off and the title in hand. It’s a great feeling not having a payment anymore. I have 120k miles on the car averaging 30k+ a year and hope to get a couple more years before needing to replace it. I plan to continue to pay myself the car payment to savings as a future down payment on a new car to keep the next loan as small as possible and also to help fund my Murphy Fund.
 

Task 24 – Increase my 401(k) contribution to 10%

Working part time at Sur La Table definitely has its perks. Not only do I really enjoy working with the people but it is a great opportunity to cover some of the expenses that dipped into my savings over the last year.  Another benefit of a part time job like this is that they offer their seasonal & part time employees the option of enrolling in their 401(k) plan. They also offer 50% match on the first 4% which is better than my full time job. Given that the income I receive from this job is purely gravy I thought I might as well contribute as much as possible to my retirement and at the very least enough to get the match.  To start I am going to contribute 10% of my Sur La Table income to my 401(k) but as soon as I have re-filled my savings account with the money I spent over the year I am going to up my contribution to max pre-tax allowed.

Hopefully like a money tree some of the money I sow today will yield a retirement where I don’t have to worry about money. That is after all the purpose of a 401(k) plan. My plan is to contribute the max allowed. If I did that this year it would be $17,000 pre-tax dollars. I won’t come close to that unfortunately.