# Stress vs Paying Debt Faster



## skimhitz (Aug 9, 2012)

Debt solved


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## slacker (Mar 8, 2010)

There is not much you are doing wrong.

You can do better at anticipating irregular expenses. For example you may have irregular car repair expenses, etc. The trick is to turn those irregular expenses to regular expenses. The method to fix is this:

- estimate as best as you could the annual amount of the unexpected expenses
- divide that amount by 12 months (or whatever your pay period is)
- pay that amount to yourself first
- if/when that irregular expense pop up, you'll better be able to handle it without disturbing your cash flow

TIP: open up an ING or Ally account. Those two banks allow for user to compartmentalize and create multiple accounts. For example, I have 5 or 6 accounts on ally, to help deal with all of my irregular major expenses like insurance, vacation, car repairs, etc.


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## donald (Apr 18, 2011)

I'd say focus on your income.What do you have to do @ your employment to earn more?
Focus on that(keep the bike,if it's important)Your prob in the perfect ''zone'' for advancement(young,hungry,ect).I don't know what line of work your in but make a goal to see if you can lift your earnings up to 36/37/38 hun(there is prob countless ways to lift your income(and you likely won't need a extra degree) and your employer would like nothing more-good chance)Ask your boss how you can add more value and then do what he/she says and follow it.That's where i would start.That's how your going to improve the situation-m.o.It's about income @ this stage-more important than saving(your still starting out)If it means overtime,it means overtime-do what it takes.


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## the-royal-mail (Dec 11, 2009)

I think this is simply a question of balance and allocation. No one is saying you should deprive yourself of controlled enjoyment (mc in this case) as long as that doesn't represent an irresponsible spending habit that goes across the board. It is good to be 'driven' (no pun intended) to pay off your debts but it's also very important to recognize and fix whatever issue caused the debt in the first place. What concerns me in your post is: _"sudden expenses throw everything off track and I end up with a couple grand on the card"_

That suggests that despite your repayments there is still a money leak someplace. Can you tell us what you mean by "sudden expenses?"

1. find and fix the source of the money leak
2. cover your recurring expenses (they seem pretty reasonable/average to me)
3. use whatever money is left to pay off the debt
4. no you should not have to give up your beloved mc and bus to work
5. yes it will take time to solve this, do not expect instant gratification

Once your debts are paid, I recommend that you then focus on building up your savings immediately. That's one of the biggest stress-relievers you can do but do not simply save money and blow it all on a new mc in 5 years. Allocating savings is a whole other topic for another day. Right now I recommend you implement the 5 steps above. My opinion of course.


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## Spudd (Oct 11, 2011)

Have you shopped around for insurance to see if you can lower your rate? $404 a month is a lot. 

If a good amount of the $404 is for the motorcycle, could you cancel the motorcycle insurance (summer's almost over anyways) and just park the bike until your loan is paid off? Then you'll get the bike back as a reward once your loan is gone. 

I also suggest saving some portion of your paycheck every month so you build up a small rainy day fund for when unexpected expenses arise. By my math, your fixed expenses are about $950 less than your take-home. You should be able to cover food/entertainment/gas with $800 easily, leaving you $150 to put aside for a rainy day.


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## Harp (Jul 18, 2012)

If I could I would like to add my 2 cents. 
From my limited time in getting my head out of you-know-where - there are 2 books that I have read and continue to read that really helped me. They are The Wealthy Barber by Dave Chilton and The Total Money Makeover by Dave Ramsay.

If you have an opportunity give them a read.


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## Chigu (Aug 6, 2009)

$86 cell phone??? How is that possible? I was paying $55 a month for 350 mins during the day, evenings after 6 and weekends free, as well as 6gb of data availability. Downgrade your plan. You can get wind mobile etc for a lot cheaper. Most likely you can cut your cell phone bill by $40 a month at least. 

I wouldn't give up the motorcycle if it brings you joy, gotta live life!! You just have to sacrifice elsewhere.


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## JustAGuy (Feb 5, 2012)

I pay $35 a month for my mobile plan

The thing I'd consider, is that smart phones with data plans and going on motorcycle trips are entertainment. So budgeting those as separate from your entertainment is a little silly.

What are you doing for your eating and entertainment habits? Learning how to cook can both fill a lot of time, and result in being healthier, a better entertainer, and can even cost you less than eating out, or buying prepackaged food. Could you cut down on alcohol consumption? Try not to think about how deprived you'll be if you cut back on some of your habits, but think about how much better you'll be able to enjoy your life when you don't have the burden of debt.

I'm with Royal on this.
1. find and fix the source of the money leak
2. cover your recurring expenses (they seem pretty reasonable/average to me)
3. use whatever money is left to pay off the debt
4. no you should not have to give up your beloved mc and bus to work
5. yes it will take time to solve this, do not expect instant gratification

My question, is do you need both a car and a motor cycle? Can you get by without a car? Is there a reason that the idea of taking the bus offends you?

Unless you're getting more than 18% interest in your rsp, it doesn't make sense to be making contributions to that while you have debt... leave the $13000 there if you want, but the extra contribution that you do each month? Would that not benefit you more to use that money to eliminate your debt?


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## brad (May 22, 2009)

skimhitz said:


> The other thing that I'm still working on is trying to figure out how the rest of my money is slipping through the cracks. Most likely I'm nickle-diming myself to death with lunches and eating out. Trying to convince myself to come up with a spreadsheet of where everything is going, though I will admit, knowing how much is being wasted does make me feel uneasy. :S


You might try the You Need a Budget (www.youneedabudget.com) method, which you can do for free or you can shell out US $60 for the software (worth every penny, in my opinion). It's by far the best personal financial management software I've ever encountered, and I've tested many of the products out there (and used Quicken for 20 years). It doesn't help you track investments, but as long as you can live with that I think you'd find it a big help.

A spreadsheet, or Quicken, or pretty much any other personal finance software is good for retospective analysis: for looking back in time and seeing where your money went. YNAB, on the other hand, looks forward. The first rule is "give every dollar a job," which means that when you get paid, you put your paycheque into YNAB and then you decide where every dollar of your paycheque is going to go. It puts you in the driver's seat.

This sounds like a chore, but I've found it a pleasure: you feel so much more in control this way. You allocate your dollars, and then you track your spending just as you would with any other finance software (you set up accounts and categories, and every time you spend money, you enter your transactions and categorize them..either by hand or by downloading QIF files from your bank's website). YNAB recognizes that nobody can actually stick to a budget, so you're encouraged to move money from category to category over the course of the month to account for your inaccurate estimates of how much you need for each category. But here's where the big value comes in: by forcing yourself to work with just the dollars you have allocated from your paycheque, YNAB also forces you to make decisions about which categories you will "rob" to fund the overspending in other categories. You get to see the consequences of your decisions: if you spend more than you budgeted for food, that money has to come from another category, so you have to decide: do I spend less on gas for my motorcycle, do I reduce the amount I had saved for vacation, etc.

Over time, this process helps you stay on track, because it sucks to have to borrow money from the goals you really want to reach in order to fund things you didn't really want to spend money on. It reveals your true priorities and shows you what's really important to you. It's non-judgmental in that regard, and it's flexible.

Ultimately, YNAB helps you build a "buffer" that allows you to live on last month's income. That way there are no surprises: you're always budgeting for this month based on income you have in hand from last month. Most of us live on this month's income (or even next month's income, if we're using credit cards), which can be stressful when unexpected bills show up. That doesn't happen when you're living on last month's income because you've got a cushion in place. 

You don't need to have a buffer in order to use YNAB; the most important rules are "give every dollar a job" and "roll with the punches." And you don't need to use the software; you can set up your own spreadsheet if you like, but the software's great and does a good job. There are excellent tutorials and instructions on the site, including a free PDF booklet that describes the YNAB process in detail.

I've avoided budgets all my life and I never thought it would be helpful for me. But YNAB has been an eye-opener for me and I really love its proactive approach. I feel more like I'm managing my finances instead of monitoring them, and it makes a big difference.


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## Four Pillars (Apr 5, 2009)

I second Brad's recommendation of YNAB. I don't use it myself, but I gave it a good test and was quite impressed. I met the owner recently in Denver - super nice guy.

My YNAB review: http://www.moneysmartsblog.com/ynab-review-you-need-budget/

In your case, you might have to just budget for your fixed expenses, add a buffer for variable stuff and then give yourself an allowance for the remainder and stick to it.

You have a high loan payment amount, so that it pretty good. But if that leaves you short every month then it might be defeating the purpose. Can you lower the loan amount a bit if that will help avoid needing the credit card?

I recently wrote an article about getting out of debt and wondered if it's worthwhile to really kill yourself to do it quickly. Might be of interest to you:

http://www.moneysmartsblog.com/debt-free-now-what/


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