Declaring a Snowflake Plan

I've been working with my budget now for six months and overall I've done well. I've managed to avoid staking out a street corner to make ends meet, but I haven't been able to make much headway on the credit card debt. The last year or so, my habit has been to collect up a large payment and hammer away at the debt. The problem now is that the number of large balance payments is becoming increasingly infrequent.
In an effort to try a different approach to paying off the card, I am going to try a snowflaking method. If you need a primer on snowflaking, here's a good one.

My plan will be to snowflake the money I would have spent on a meal, when I prepare the food instead of purchase the food.

• For every breakfast I do not purchase, I will snowflake $3.00
• For every lunch I do not purchase, I will snowflake $6.00

I don't currently cave a lot on dinners, so I'll leave the list at this and see how it goes. As of right now I am undecided on whether the snowflaked money will come from my "Food" budget, or from my "Buffer" budget. In any case, it was homemade pizza for lunch and $6.00 towards the credit card. Go me!

Caved In: The Eating Out edition

Some days, you just gotta get out of the office. Some days, you want to be with people instead of staring at blank wall or a computer screen. And some days, you want something with fat and grease and salt, preferably in conjunction with some chili and cheese. Today was such a day. Maybe I used food as an emotional crutch, but it was a mighty tasty emotional crutch.

Afterwards, I started to feel a little guilty. I felt guilty for ditching the lunch I brought to work and I felt guilty for whipping out the cash card (not the credit card) on what felt like a whim. It felt like the waist-expanding and wallet-shrinking behavior I was trying to leave behind. So I was all set to feel bad with my full belly, until I realized a few things:

1. Since I am pretty close to my actual budget, I knew I could afford it without fuss
2. The meal I abandoned in the fridge at work will be fine for tomorrow
   
3. It has been a while since I've eaten out at work.

In fact, once I opened my financial excel sheet to enter the transaction, I realized that I hadn't purchased ANYTHING at work in two weeks. And since I used to be more in the "Bring food in once every two weeks" category, this was pretty much a validation that I am doing much better with my finances than I thought. Total Happiness indeed! Now I can enjoy my belly in peace. :)

"Where is my money going?" month wrapup

So, how did it go?

I think the month was a success. Since I was already tracking my spending and working with a budget, this month's activities did not provide a wealth of new information. What the "Where is my money going?" month did do was provide me with positive reinforcement that what I am doing is certainly on the right track to financial freedom. Another benefit of the month was getting to see ideas from other people. Case in point: No Spend Days (NSDs).

What I get from NSDs is a more planned approach to spending. After reading that article, I looked back through my digital check book and noticed how I seemed to be doing something with money almost every day. The good news is that most of the transactions are a part of the budget. In the time since reading the article, I have tended to try and group my spending together.

As an example, on the day the paycheck hits, all of the budget transactions occur like normal, but I'll also get some pocket cash out and my haircut money out as well. After those transactions are done, I can update my Excel spreadsheet and then I don't have to think about money for several days. I know I will have a small grocery store run and maybe a gas fill up in a few days, so anything that isn't an emergency can wait until then.

The Pit of Despair!

The challenge of not having an internet connection at home is that I have to wait till the following day to post any thoughts or revelations that I have had. The delay in posting also makes it hard to relive the emotional state that prompted the post to begin with. And in this case, I'm okay with that. Whereas last night, I had that sinking feeling in my gut, today I can be a little more practical about it.

So what happened you ask? Last night I sat down with my trusty Excel budget and tried to really understand what would be happening with my money over the next few months. Two of the biggest changes that will be happening soon is the beginning of mandatory retirement savings at my job (decreasing my net bring home) and the need for a new-to-me vehicle. The two questions I really needed to answer were these:

1. How will these changes affect my debt reduction plan?
2. How long will my little cash cushion hold out?

The answers were "Drastically" and "Somewhere between August and December", in that order.

Zoinks!

So much for having that credit card paid off by December (and then snowballing another credit line). I cannot fathom how much trouble I would have gotten myself into had I not spent the two hours to research and forecast my finances.

Up to this point, I have been paying the minimum on the line of credit (LOC), and throwing whatever I could at the credit card. As soon as I add a new vehicle to the mix, that behaviour will stop. I simply cannot afford it. So what to do then? I consulted the Magic Excel Sheet and the answer was disheartening to say the least: If I pay $100 per month on the credit card, I will clear the account in April, 2013. Considering two hours prior, I had envisioned having this beast paid off in December of 2009, this is a hard answer to swallow. Some more calculations alleviate some of the stress: If I pay the monthly interest in addition to the $100 amount, I will shave $500 in interest charges and 15 months from the payback.

And all of this assumes that I don't find a way to generate more income. With no cable bill, no Internet service bill, and no land line bill, there's not a whole lot left to cut. There is hope however; With some guaranteed overtime coming in the next two months, my cash cushion won't take too hard of a hit. During this time, I need to work on gearing up my after-hours computer support gig. If I can bill 8 hours a month, I might just be okay. If I can bill 12 hours a month, I'll be even better than okay, I'll be back on track.

Real economic education

As an adult, there have been many instances where I have seen something and wished I had "it" when I was a kid. And here's the latest to my "Cool!" list:



I get the impression that this is a new venue, so I wonder how well it will work with a decreased population as the newness wears off. Also, I wonder if this is geared towards school groups. If an entire school district showed up on one day, there would be enough "worker bees" to get the economy running...

Wait....I just a had a brilliant idea. Send our lawmakers to this place. Let them see how well dropping billions into banks (who don't loan the money) works. Sheesh.