Last month I decided to give myself the gift of a rebuilt emergency fund by setting up a public challenge to get it back to the base of $1,000 by the end of the year. My reasoning for the amount was that $1,000 is the recommended starter fund from Dave Ramsey’s The Total Money Makeover, an attainable goal as well as an amount that makes me feel somewhat safe should something unexpected come up. When I kicked the challenge off I had $108 in my savings account, currently my progress has been a little slower than I had hoped for but is progressing just the same.
So for my current status I have $259 in my emergency fund account – an increase of $151. In addition I have also increased my health savings account from $0 to $99. So my total savings for the past month is about $250 but some of that went into savings for health care as I am planning to get a doctor’s visit in by the end of the year (it has been about 12 years since I have had a physical).
I am also hoping to jump start a couple of extra income steams by the end of the year in order to add to my savings and debt repayment plan. Currently I am working on:
Blog income via ads and adsense.
Writing EHow articles: 8 published so far and about $5 in earnings after one month. I have not devoted much time yet but am encouraged.
Selling stuff on EBay: I have a handful of things that I could sell without really even noticing. Why not get rid of some clutter and make a few dollars?
In addition – my final car payment will be next month and that will free up an additional $400 per month for me to work into the budget. I am really excited about having another debt repaid and crossed off my list!
Back in the beginning of the year I posted on some of the things I am looking forward to in2009 and considering that we are now about half way through the year I figured I would post an update of where I stand. The past few months have been pretty interesting and quite a bit has happened so I will get right down to it.
Getting back in shape: I have been going to the gym for 5 months or so now. Lately I have been getting up early in the morning and going to work out four or five days a week. My gym is closed on Sundays thorough the summer so I am really only missing one or two days per week that the gym is available. Since the gym closed for Sundays a couple weeks ago I have been working to get outside and do something on Sundays as well. Overall I now: get a pretty good amount of exercise, have quite smoking for over a year and do not drink. My diet is still a bit unhealthy and I tend to overeat and have a sweet tooth but I am making progress.
No more car payments: Next month will be my final full payment followed by a half payment in August and that will be done. I am very much looking forward to not owing money to my ex-girlfriend any more and am looking even more forward to having the extra cash every month!
Giving my site a new look: I have changed my theme twice and am thinking I will settle with this one for a little bit. So far so good I think.
Paying off my credit card: I no longer carry a balance on my credit card from month to month! I am still getting to a point where I do not spend at all on it but my balance of nearly $2,000 that was carrying over and accruing interest fees is now gone!
Rebuilding my savings account: I am getting there. I have my own little emergency fund challenge for 2009 running to give myself some public incentive and accountability to get my savings account back in shape. Right now I am up to $250 in the emergency fund and am aiming to reach $1,000 before the end of the year.
So far 2009 has been a pretty productive year and I am really looking forward to seeing how it all wraps up. I am hopeful that my personal financial situation will continue to improve. My girlfriend has also been taking some pretty impressive steps to improve her financial fitness as well and has impressed me with her ability to reach her goals as well. I think that right now she has more in savings than I do and was telling me the other day that now that she has the money in savings she does not want to touch it. Needless to say – I am proud of her and am awed by her ability to accomplish her goals.
A couple of months ago I pulled most of my cash out of savings and applied it to my credit card debt. While this eliminated the debt it put me back in the position that many Americans today are stuck in: not having an emergency fund. I could always fall back on my credit card in an emergency but I really feel much more comfortable having a little bit of money in savings in case something comes up. One of my goals is to reestablish my starter emergency fund and while thinking about it last night I thought that I would invite any readers trying to get their emergency funds up and running to join me!
The challenge is pretty informal and is geared to help hold me accountable to rebuilding my emergency fund and to help anyone else out there that would like the additional encouragement! To take part feel free to leave a comment, contact me here, or even send me an email to: matt at myfinancialrecovery dot net. Just drop me a line somewhere along the way with a goal you would like to reach by the end of the year. Then send over an update at the end of each month from June – December and I will post updates monthly of my progress and will also post your progress in the process.
My goal is to build back up to the $1,000 starter fund recommended by Dave Ramsey in The Total Money Makeover by the end of the year. My current status is that I have $108 in my online savings account that I have had set aside as an emergency fund. In order to reach my goal of getting it back up to $1,000 I do not want to drastically impact our family budget in any given month. In fact - I would like to reach the goal without any noticeable impact on the family. Here is my plan so far to accomplish my goal:
Communicate with my girlfriend about where we are at financially: Setting money aside will effect both of us and I find life is a lot better when we are both on the same page. Usually checking in once every week or two works fairly well for us on financial matters.
Pay attention to my spending: Identify areas that I buy things for myself that I could go without and make a few sacrifices.
Make small weekly transfers to savings: In stead of trying to make a big monthly payment work on making small weekly ones – $25 per week seems much more manageable than $100 in one shot.
Keep an eye open for any extra opportunities to save a little bit extra.
Discuss budgeting based on my base salary with my girlfriend and put a couple months of commissions into the bank.
Based on the math I would have (including June) 7 months to reach this goal and would need to save about $125 per month to do so. At the same time I intend to continue paying off my current debts by making at least minimum payments. I also have one other variable coming up in August when I send my last payment to an ex-girlfriend for the car she lent me money for – which will free up another $400 per month. Overall the goal should be easily attainable based on my current income and expenses and I should have it completed by the end of summer or so.
So now the question is – does anyone else out there want to join me in starting, rebuilding or increasing their emergency fund?
Over the weekend I discovered that I have a new favorite television network: Planet Green. I had seen a couple of clips from shows on the network but had not sat and watched for an extended period of time until Sunday afternoon. My girlfriend had hurt her back so we were having a mellow afternoon and she told me about a show called Off the Grid she had seen the night before after I had fallen asleep. She said it was pretty cool and that I would have really liked it.
The show is a documentary starring Les Stroud (also known as Survivorman) and his family as they purchase 150 acres of Canadian wilderness and move off the grid. I was just amazed at the lifestyle the family chose and really just could not stop thinking about how cool their plan was.
The best part – they went green on a budget! Obstacles like not being able to drill through bed rock due to cost constraints were real and they faced the challenges like a regular family. Once completed the family produced their own power and water which left them both living green and free of utility bills.
I personally dream of a day when I can go somewhat off the grid with my family in our own home. I do not think we will be using any self composting toilets but I am open to the idea of a gravity feed from collected rain water (provided my better half agrees). However – I do not want to go totally off the grid at this time. While I strongly believe in trying to live a greener lifestyle I also think that we may be able to give back additional power generated if we were to produce our own energy via solar or wind power. From the setup that Les Stroud and his family had it appeared that once their batteries were charged the system just stopped producing energy. I figure that if the system is producing energy anyway and we have the ability to be wired in then why not give some of it back to the power company? I have also heard that the power companies will also reimburse you for the power provided back but my goal would be more in line with providing a little bit of green power back more than making money. Anyway – at this point it is more or less just a wishful dream of mine but I hope someday that it will be a reality. I suppose when the time comes then my girlfriend and I will talk it out and make decisions based on what we can and can not do.
In the mean time – while digging around on the show a little bit I found it over on YouTube. Here is an embedded clip of the show for anyone that wants a preview. For the rest of the episode just head on over to YouTube and search “Off the Grid Les Stroud”.
So when I received letters in the mail last Saturday noting that my loans had been reassigned to another collection ageny I had some mixed emotions. I was disappointed because it appeared that I would now be dealing with the original lender once again but glad that I no longer had to deal with the folks from the previous agency. I was also a bit frustrated due to the amount of digging I had to do in order to contact somebody at the correct location. I had already called the previous collection agency, the processing company and the original lender and thought I had been given the correct place to mail my payments – then I received the letters noting I had someone else to call.
Earlier this week I placed a call to the new collection agency. Much to my surprise – they were courteous, professional and really easy to work with. They did not once accuse me of anything and were glad to work with me on a payment schedule. They were more than happy to honor my previous arrangement and even offered up a couple of pleasant surprises.
First – they noted that there had been a rehabilitation program that was offered up until about a year ago. The program ended due to the economic crisis but may become available again. I had been asking if there was any possible way to get these loans back into good standing for five years and was repeatedly told no but I could settle in full if I paid up $18,000 in cash. I found it a little frustrating that I had been lied to for so long and was a bit angry but I can not change the facts now. On the flip side they also said that should the program become available that they will submit all on time payments made as eligible for the program. That means if the program kicks off a few months down the road again I could be rolled into an automatic rehabilitation and have my loans back in good standing. Of course I do not expect anything yet but the folks over at the collection agency sounded a little hopeful that the economy was headed in a positive enough direction that they have heard a little buzz about the possibility.
Secondly – the new agency will send out monthly balance sheets! It might seem like a standard practice to get a monthly statement for your debts but for some reason the old agency would not send them. If I was to call and request them they would usually say they would send something but it normally would not contain complete records if it arrived at all. I discussed options for additional payments and was told that it was ok to have the normal payments applied and to mail back extra with any of the statements provided to have the additional payment applied to that particular loan.
Given the change in collection agencies I am cautiously optimistic that I can work something out and pay these debts down! Right now the loans I have in collection have followed me along like some form of financialleprosy and I will be happy to see those debts disappear! After paying them off I will be down to my last two student loans which are both in good standing and then will be (hopefully) debt free!
