Monday, March 31, 2014

Doing Stuff About Debt

So, it's not like I've been totally blithe about debt and savings and other personal finance issues all these years. It's just didn't seem to matter that much right now. There were more important things, like keeping the rent paid month to month, and I was still young, anyway, right? Plenty of time to do things like save.

But now that I've had this abrupt switch flip, not only am I mourning my lack of retirement savings, I'm also suddenly totally allergic to the debt. Realistically, I know that I've made big progress, and that it's pretty cool that I could get out of debt entirely a year out of graduate school. Less realistically, it's driving me CRAZY that I have to put basically all my remaining cash, after the bills are paid, towards the debt if I want to do that. I mourn the much nicer savings account I could've had after this year of full-time employment if I'd only lived just a little bit more within my means while in Very Expensive Grad School City....

That said, I've been pleased with some of the debt-reduction strategies I've used this year. First of all, I had enough sense to pay down my high-interest credit cards using my first couple paychecks. I'd built some up because of a series of emergency expenses incurred over the previous year (and of course I didn't have an emergency fund, so.) Then, I paid off the used car I bought from friend who was moving out of the country. And then, around September, I was finally ready to start thinking about the loan...and since my grace period didn't end until December, I was able to pay $4000 of it before it started accumulating interest. (The 6.8% for graduate loans is extremely annoying, by the way, and a big reason why I'm focused on paying them off before investing more in a retirement account.)

Second, I took a smaller apartment for $750 instead of a larger one for $950. This is kind of a medium win, since I looked at several apartments that were even cheaper, but none of them had laundry in the building and I kind of caved; after a decade of dragging everything to the laundromat, I was done. I feel, in retrospect, like maybe I should've been tougher on the apartment front. But at least I didn't take the even more expensive and nicer option!

Third, while I haven't been keeping really close track of expenses (I'm sort of afraid to think about how much I spend on food a month; it's not that I go out so much, although I do probably spend too much on coffee and grabbing a sandwich, etc; but I like really nice ingredients and fresh produce and so on, and that definitely adds up) I have been using and checking it religiously, and I feel like overall that's been really good about keeping me on track: focused on the debt but also on keeping expenses to a relatively low level instead of running off for vacations all over the place. Those scary red bars are scary!

I've had setbacks -- a big tax bill that needed to be paid in February meant that I only put the minimum towards the loans in that month, and December holiday expenses also meant a lower loan payment -- but I've basically been steadily chipping away, anywhere from $1000 to (this month) $2600 every month. I still hate how slowly the balance seems to drop, even when you throw over 2/3 of your take-home pay at it!

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