Now that I know where I am as far as financial matters go, I have to find out where I can trim down my budget to pay more towards my debt. As I said before, 28% of my income was wrapped in fees. Luckily, I know Excel very well from my day job, and was able to break down my fees and see when they were occurring. I normally get paid on the 15th, and have a cell phone bill that is automatically debited that day. My bank, Wachovia, tends to make the debit before they make the deposit, on a very consistent basis. This means that if I only have $40 left, I overdraft, and then the subway I get for lunch overdrafts, and now we’re at $70, unless a few more charges get through. Now, my bad experience with Wachovia is a story for another time, as this is just one example of the way I think they tend to make extra money (debits before deposits). Granted, I shouldn’t be living paycheck-to-paycheck, and a $60 charge shouldn’t hurt me, but I’m fixing that now.
To fix that particular issue, I had T-Mobile change my billing date forward to the 25th, receiving some of the best customer service I’ve had with a cellular provider. While on the phone, I had them review my current plan and see if I would be better served with a smaller plan. Originally, I had 1000 minutes, with an addition of a 400 text messages package. At one time, I was using both of those to capacity. However, my recent history has seen around 400 minutes per month, and 30 text messages. I was able to cut my plan down almost in half! That’s an extra $25 per month I’ll have.
I also noticed that my entertainment budget was out of whack. It was difficult to notice, because most of it is subscription based. I subscribe to Blockbuster Online and the Rhapsody music service, as well as to 2-3 magazines, go to the movies 1-2 times per month, and regularly buy music from iTunes. I’m going to keep Rhapsody since it keeps me sane at work, but I’m going to drop the magazines since I have no time to read them anyway. My Blockbuster subscription is awesome, but it’s for 3 movies out at a time, and it’s become hard to find things I haven’t seen but want to. I changed my plan to having 1 movie out at a time, and I think it will work much better. I save quite a bit this way, and I make better use of it. I’ll likely cut down theater-going to once per month. I don’t even enjoy most movies out these days anyway. As far as iTunes, it’s time to chill on that until my debt is gone. I can always listen through Rhapsody for now and then buy the music later, or wait for good CD sales.
Also, along the line of monthly fees, I am late on almost everything. This is because I’m both phlegmatic and love to procrastinate, and I wind up being late. Bam, a $30 charge here, a $5 charge there. It adds up, and gets compounded with interest. I put all my payments on auto-pay for this month. I would use Wachovia’s bill pay, but that’s another way they’ve messed up in the past. By eliminating late fees and overdrafts, I will save hundreds of dollars.
In addition, I can save money by making better choices with food. I need to be cooking more often, and when I do eat out, I need to make better decisions (both financially and calorie-wise). I also am a sucker for credit card activation sales pitches, because I’m non-confrontational. Thus, I have a few of those “credit protection” or “identity monitoring” services, and such. I need to get rid of those; I have no credit to monitor. When I get my debt under control, I’ll likely sign up with one not associated with my credit card. I know they are going to be a pain in my rear to quit them, but it will save me about $20 each month.
I’m also Craigslisting old junk I need to get rid of. Not only is it taking up valuable space in my apartment, but I don’t use it anyway, its value is decreasing by the day, and if I have to move, it’s going to be that much more of a pain. I’ve already made about $300 doing this, and expect to make about $1000 more, if my computer sells. (I’m on a Mac now, so I have no desire to keep a PC around)
The last thing I have left to do is change checking accounts. My current account both sucks and charges me for it, so it’s time to leave for something better, like the Schwab One account with Checking. That experience will likely be its own post, as it will be a big logistical move, and will actually earn me interest on the dollars I save.
Mostly, I can find extra money by changing the way I think; that’s what it comes down to. Instead of seeing a balance of $250 as something I can spend, I have to view it as something I can’t allow to be debited. Instead of just thinking problems will sort themselves out, I have to become proactive about every dollar I spend and owe. I can no longer say “Oh, it’s just $20, it won’t matter”. When I do that 5 times, it’s $100 extra per month I could be putting towards debt owed. This really is going to be as much a mental exercise as it is a logistical one.