Money On My Mind

I finally buckeled down and completed my taxes last weekend. I expect to receive my tax refund in the next few days. I also recently completed my last FAFSA of graduate school. Time is going by way too quickly!

So what will I do with this 'expected windfall'? The majority of it will go toward my airfare for an international trip I want to take later this year, I'll talk about this trip in more detail once I make more head-way in planning it. I won't begrudge myself traveling opportunities as long as I don't incur more debt to pay for them. The remainder of my tax refund will go toward making an extra payment on my credit card balance. I'm going to try to make larger payments for the remainder of the year to see faster progress in paying the remaining balance off. It bugs me that it has been lingering around for so long.

I feel like I won't be able to fully focus on other financial goals until my credit card is completely paid off. But to be honest, I haven't been making debt repayment a high priority lately. I don't plan on taking on a side hustle until I finish my graduate program at the end of the year, but when that time comes, I'll definitely allocate all money made on my future side-hustle to debt repayment. It's time to re-focus on my money (more specificially on how I spend it and how I save it) because 2010 is zooming by and I'd like to have some goals accomplished before the year ends and that includes shedding some debt.

Paying off debt like an Olympian

Watching so much of the television coverage of the 2008 Olympic Trials over the past few weeks has me thinking of my own goals. Specifially, my goal to pay off my debt. While I am definitely no athlete I can apply the same focus and energy to making strides on my financial goals as an athlete makes strides to win that Olympic medal. Every month when I am juggling around my money to see how much extra money I can put toward paying off my consumer debt I get frustrated because I think of how much money I’d have saved if all of this money was going in my savings account and not on my credit card balances or student loan payments ugh!

I got lax during the month of June with using my credit card and my balance crept up some. But I have a new resolve and plan to have at least 2,000 of my credit card debt paid off by the end of the year. Once I have my EF up to 1,500 (not a month’s worth of living expenses but a small cushion is better than none at all). I will resume the more long-term goal of 5,000 in Emergency savings in January. It makes no sense to have more than a months worth of expenses saved up and still have credit card balances to pay off. I will then throw as much money as I can on my credit card balances because I am determined to have them paid off by this time next year. It’s time to buckle down and get this monkey off my back. I can comfortably afford to put $500 a month toward credit card balances if I curb my impulse spending.

A person seeking an Olympic medal and a person seeking to pay off debt both need:

• Focus and Drive. You have to have single minded focus to pay off large amounts of debt. If your focus strays, you are more likely to incur more debt. If your focus strays in competition, you are likely to lose.


• Visualizing Yourself Reaching Your Goal. Like any other goal, actually visualizing your goal is key in accomplishing it. Visualize a zero balance on your credit card statement as you would visualize yourself crossing the finish line in a race.


• Good coaching. Whether it be from a financial advisor, trusted friend, or blogging community, everyone needs coaching at some point to reach the goal of paying off major debt, just as you would need coaching to beat your opponent in a gymnastics competition. An objective person that can see the good and bad things you are doing to meet your final goal is very helpful in accomplishing that goal.


• A Plan of Attack. Just as a relay team has a plan of attack and knows how to play up the strengths of differerent members of the team at various points of the race, you need a plan to pay off debt. Whether you are paying off high interest debt first, or concentrating on paying off debt by amount, you need to devise a plan and stick to it to pay it off in a timely manner.


• Know Your Opponent. Credit card companies, retail stores and other outside forces can suck you right back into a cycle of debt, so its good to know your opponet so you won't fall pray to their advances. Say no when you are offered a discount to open a store card when the cashier is ringing you up. Don't use that credit card just because you are racking up frequent flyer miles if you a carrying a large balance. Stay vigilant because there are deterrants everywhere to impede on your progress.

My closest brush to athletic competion was winning a gold medal in my brief run as figure skater while I was around 10 years old. I have forgotten all of the spins and jumps I so painstakenly practiced to win that medal, but I do remember that feeling of winning and the pure joy that goes along with that. I want to have that feeling again when I win this battle against my debt.

I'm going to train my mind to zero in on my ultimate goal of being debt free as if I have an Olympic gold medal riding on reaching this milestone. Hey whatever works to make it happen right?

Can Debt Stress Make you Sick?

A recent Washington Examiner article, Debt hurts your body too stated:

Although most people appear to be managing their debts all right, perhaps 10
million to 16 million are "suffering terribly due to their debts, and their health is likely to be negatively impacted," says Paul J. Lavrakas, a research psychologist and AP consultant who analyzed the results of the survey. Those are people who reported high levels of debt stress and suffered from at least three stress-related illnesses, he says. That finding is supported by medical research that has linked chronic stress to a wide range of ailments. And the current tough economic times and rising costs of living seem to be leading to increasing debt stress, 14 percent higher this year than in 2004, according to an index tied to the AP-AOL survey.

Yes, debt is a serious issue among many American households, but you shouldn’t let debt stress impede on your health. Setting goals and thinking positively can help put debt issues in perspective. I truly believe a lot of health issues stem from people’s emotional turmoil and stress so please try to keep it to a minimum!

Interesting Articles

Here are a few articles I have found interesting over the past week:

How to calculate savings bonds’ new math

Consumer borrowing unexpectedly surges

Your Losing Hand

Commodities Aren't in a Bubble, Demand Key Factor, Economists Say

How to Cut Food Costs

On another note, I am fairly new to the debt crushing game, but stories like Debt Hater's are a source of inspiration for me. She has recently paid off her credit card debt. One day in the not too distant future, I hope to be able to share the same news. I've just got to keep my eyes on the prize...

I Need To Be More Aggressive With Paying Off My Debt

I have admittedly been a little lax with paying down my debt and controlling my spending over the last few weeks. I definitely need to tighten up my budget because my budget busters have been getting to me (clothes and shoes). I had a graduation to attend last weekend and another this weekend and had slim clothing options…so I bought a new dress last week and another this week. I also did purchase an iPod with money I received from an unexpected windfall; the iPod I once had has been broken beyond repair for a minute. I rationalized that purchase by telling myself that I do spend a lot of time in transit (hey, I’m human!).

But I am resolved to get back on the frugal wagon and tighten up my spending again. There will be some unavoidable expenses coming up though: Mother’s Day gifts (this week), train or bus rides home (next month), booking travel for my trip to Florida (August) and other events I’m sure will pop up when the summer starts officially.

During the upcoming weeks: I will resist the temptation of surfing iTunes for more music for my iPod, I will stay away from bookstores and get books from the library instead, I will go grocery shopping more regularly to prevent overspending money on food while out in the street and I will avoid ordering movies On Demand and find something else to entertain me on the weekends that won’t cost money. I will also create a new budget and stick to it.

It’s not always easy making responsible decisions….but I hope to see the difference in my bank account soon and make progress on paying down my debt.

If I'm So Smart, Why Do I Have Debt?

I consider myself to be a fairly intelligent person, so why do I have debt? Here are a few reasons why I have debt that are not unique to other 20-somethings out there:

Student Loans. My parents did not have the money to pay for my college education out-of-pocket (not a unique situation these days), so I took out student loans to finance my college education. I was also a decent high school student, but did not receive much in scholarship money. But I did not want this to prevent me from attending college. I know this debt is well worth the expense, but it IS still debt that I will be paying for at least the next few years—unless I get some crazy, unexpected windfall sometime soon. For this reason, I am trying to figure out how to NOT accumulate more student loan debt in reaching my short term goal (during the next 5 years) of obtaining a graduate degree.

Supporting Yourself Isn't Always Cheap. I got my first job out of college the summer after I graduated and relocated back to the city I attended college in (Washington, DC). Because my family resides in another city, I didn't have the option of living at home for a while to save up money. For the first several months of my first job, I had roommates; I have lived on my own for the past 10 months. I love my independence and enjoy the feeling of knowing that I received only a moderate amount of help from my family in learning how to support myself.
But because I didn't have the fall back of living at home for a while (which would have been a pretty good decision in hindsight), combined with the fact that I live in a city where housing isn't cheap, a big chunk of my take-home pay goes to rent, utilities and other living expenses.

Former Spendthrift. I wasn't always committed to finding ways to live in style on a small budget. So as a result of my spending habits in the past, I have credit card debt… If I stay on track, I can pay all of my credit cards off by March 2009, but this will take discipline. I am fully committed to paying off my credit cards and not ever have credit card debt again once they are paid off. I think credit cards are great and would encourage people to use them, ONLY IF they can pay balances in full when the bill is due.

So, I pose the question to you, why do you have debt and what is your plan to get of it?