David on Finance

June has come and gone, and it’s been an exciting month, a month of experimentation. For the first time, I’ve kept good track of all my money and where it has gone. I have made a solid effort to decrease spending in my major categories. I have kept a budget and stuck to it. Most of all, I’ve explored the areas where I have psychologically been deficient and made an effort to correct those. I think the main problem most people have with finances comes down to problems in mindset. I have made frugality a game. However, I’ve also failed already. I bought a few things that, while useful, I did not need. I didn’t exceed my budget, but that is money I could be using this month to pay off some major debt.

So, let’s look at my current state. I began June with $8,486.40 in credit card debt, and ended with $8,680.16! What?! It really surprised me that since I have made all my payments on time, my balance would be higher. Totally unintuitive. However, I reviewed all my statements, did some math, and determined that there are 4-5 late fees from May that did not post until June’s statement, increasing my balance more than the minimums I payed off. Plus, I made no “extra” payments this month, choosing to get into a better payment routine over making more payments.

However, my biggest goal for June was to pay no bank fees, no overdrafts, no NSF fees. In this goal, I did wonderful, except for May’s credit card late fees seeping through to my balances. I had no overdrafts, even at the expense of digging deep into my pantry to avoid overspending. Not only that, but I have ended the month with $200 in my bank account to put towards July. It is my goal to carry a revolving balance of $500 before I make considerable extra payments to debt, because I need an extra $200 for the first half of the month anyway, and this can double as both a cushion to keep overdraft away, as well as an “extreme emergency” fund. Once I pay off some higher debt, I want to get a legitimate emergency fund going with a few thousand dollars, but until then I just need something in case my car’s water pump goes out, or something.

Overall, I think June was satisfactory, but I admit I was expecting that CC balance to start dropping. It makes me a bit disappointed I didn’t catch the late fees ahead of time. I am happy with my mental progress, as well as making better spending habits. And I am realizing this is going to be difficult work, not as easy as I expected initially.

My goals for July are simple. First and foremost, I am to maintain the lack of overdrafts and avoid all late fees from CCs too. I will be setting up automatic payment plans either with the CC or my bank. I hope to end the month with at least $500 in my account. Anything over that amount will be used in August to pay off more debt. In addition, I have a goal to do at least one or two side jobs for extra money. I will decrease yet again the amount of times I eat out (currently dropped 50%, plan to drop another 50% from last month). And most of all, I will continue to explore the areas in my mind that have a messed up view of money, and try to correct them. To top it off, I will encourage my friends who are also trying to become debt free and help them along the journey. July’s going to be a great month!