Welcome to "Wait Til I Get My Money Right" week. I know it's Wednesday, but I just decided it was money week, so I'm now welcoming you. :)
Well-Heeled is a 20-something woman who blogs on personal finance and happens to have an affinity for fly shoes, hence the double entendre of "Well Heeled" as the name of her blog. When I first started reading, I was most impressed that she has $30K saved (I mentioned she was 20-something right). Family, I don't have ANY money saved. I thought it was mainly because of my age, but she proved me wrong.
I asked her to take a look at my budget and unlike most of you, she doesn't know very much about me, so she asked a lot of questions when she sent her thoughts back to me. I'm going to attempt to answer most of the questions below. Enjoy:
"So from the looks of it, all your percentages seem very reasonable. Which means there might not be an obvious area of "fat" to cut. Which means that you might have to either 1. buckle down if you want to pay off the debt asap, or 2. make a realistic budget and have the debt for longer instead. Neither one is right or wrong - just what will work better for you."
Emphasis on realistic is mine. Realistic is my word of the week.
"I think rolling the balance of one CC over and then canceling it might be a good idea. In my personal experience, I only use 1 CC (and 1 for backup in my home in case the first is stolen). This way I know what my credit limit is, I know when to pay, I know the rewards - just simpler and less temptation all around."
I'll speak to this on Friday when I address the other CC advice I got.
"Tithe - is this a non-negotiable item?"
It is indeed, non-negotiable. 2009 was the first year that I gave my tithe consistently. I'm very proud of that and grateful for the opportunity to be able to give. It's a commitment I intend to keep and hopefully be able to give even more.
"Can you cancel Cable and Netflix? That might be an extra $30 or $40 a month that you can divert to eating out (so you won't have to take out that $$ from the Short term savings)."
iaintgonebeabletodoit. Cable: long story short, I've done it before & it's a hassle. I always get it back for football season, so all the re-activation fees end up having me break even. Netflix: I watch movies while I'm twisting my hair. Doing my own hair saves me a grip of money, so I'm keeping that too.
"Also, I don't see a line item for saving for Emergency Fund.. do you have one? Ever since I lost my job I've been thanking goodness that I have an EF."
*le sigh* Nope, I'm bad Tea. No EF. I might sock away a little bit of money every paycheck thanks to K to the's reco, but I haven't committed to this yet. I'm open to horror stories or some suggestions to light a fire under my tail to at least START an EF.
"How is your gym membership? Do you use it enough for it to be worth it? Can you trade down to a cheaper gym or go without a gym for a while (assuming you can still get exercise)?"
My gym is A.MA.Zing and I go enough to make it worth the expense. It's actually an "athletic club." LOL! It's biggest draw is proximity to my house and convenient classes. Also, my job subsidizes my gym membership and puts the money right into my check. So if I lose my gym membership, I'd lose some income... if that makes sense.
"Rent - do you live with roommates? If not, can you stomach that for a year while you pay off CCs?" Hell to the naw, Bobby. I live alone. I just started decorating my place and I must say I love my little studio now. It's actually a great deal and I enjoy the niceties of living solo. Y'all should see what I have on right now...
"Student loans - many loan companies would lower your interest rate by 0.25%-1% if you do an automatic debit. Check with your providers to see if this is the case."
I AM ABSOLUTELY LOOKING INTO THIS. That would be AWESOME!
"Also, do you have good health insurance with low premiums & copays?"
I do indeed. Also, if I lose my job, they're required to offer the same health insurance to me, but I'd just have to pay out of pocket, which I'm ok with. I can hear y'all know. How you gone pay out of pocket Tea and you don't have an Emergency Fund...
Um... more on the emergency fund tomorrow.
Many thanks to Well Heeled for answering my questions. She's like a 20-something Suze Orman who actually responds to my e-mails. Please check out her blog: http://www.wellheeledblog.com/