After re-reading the title to this entry, I want to let everyone know that this isn’t some misery-loves-company type of post nor is it some way for me to bitch and moan about finances. Instead, I thought I’d share the quick conclusion that I came to after doing some number crunching the other night. For reasons of specificity, the numbers that I crunched the other night included reviewing and revising the following documents: my personal budget through September 30, 2010, my income projections through December 31, 2010, and my student loan repayment schedule through April 1, 2011.
First things first – yes, I really do sit down and dedicate a good deal of my time to revising and reviewing these documents. I’ve been doing this for a few years now with Microsoft Excel spreadsheets that I created from scratch and it is a tremendously effective method for forecasting my financial intake and outflow (i.e. money in and money out). If you haven’t created these types of documents for yourself and you are trying to dig out of serious debt or just want to be a more fiscally sound individual, then I highly suggest sitting down and creating a spreadsheet that works for you. Let me know if you have any questions because my spreadsheets rock!
It would appear that I am doing less in 2010. I’m not quite sure how to quantify what “doing less” means in a specific way other than saying that I’m doing less of everything that people normally do. I’m going out to eat less, I’m going out to the store less, I’m buying less clothing, I’m driving the car less, I’m hanging out at the bar less, etc. Does that make any sense? In essence, the 29th year of my life is going to be a year marked by a great reduction in my student loan debt that was made possible, in part, by doing much less. There is a symbiotic relationship there – spend less money by “doing less” of the activities listed above and spend more money on repaying student loan debt.
In the short-term, it obviously sucks doing less of these activities. But in the long-term, I’m doing so much more. I’m setting myself up to be able to buy a home sooner rather than later; I’m setting myself up to be financially free much sooner than most people; I’m ingraining a strict budget mindset in my life which will pay dividends (figuratively and literally) for the rest of my life. It’s great.
So, while I won’t be doing much for the rest of this year, rest assured that I’m spending my time laying a strong financial foundation on which to build my future.
And now for some fun, numbers crunching stuff!
This year alone I project about $36 thousand in student loan payments (pretty gross, huh?). By December 31, 2010, I project holding about $65 thousand in student loan debt broken out as about $54 thousand in USDOE debt and about $11 thousand in NJHESAA debt. These projections are based on a repayment plan that is even more grueling and strict than the one that I am currently on because it incorporates income that I expect to receive from teaching at the local and online colleges through the end of the summer and this fall. Up until I began drafting this proposed stricter repayment plan for myself, I’ve never banked on teaching income for these types of payments. However, when I was doing all of this the other night, I wanted to create the most rigorous financial assumptions possible and so I decided to include them for the student loan repayment projections only. In other words, the student loan repayment projections are based on a best of all possible worlds scenario while my personal budget forecast is based on projected income and expenses outside of the teaching income.
Another item that isn’t included in any projections is income derived from my website company because, well, it’s a separate and independent entity and it creates its own financial statements. I don’t take a salary for my web work, so I don’t anticipate any “new” income coming to me from that source. I also don’t bank on any federal income tax or state tax rebate checks (this only applies to the student loan repayment projections since the projection document that I created extends out through April 1, 2011… and even a few more months beyond that date).
A final income category that I don’t touch is the possibility of getting a raise at my day job. To stay conservative in my financial projections, I opted to assume my income level stays stagnant at its current level (though I better be getting a raise at the end of September!).
Again, while my friends and family may not think that I’m doing much this year, rest assured that I’m spending a great deal of time putting all of my financial assets to work. Now, if I can find a way to incorporate getting some more physical activity in my daily routine and drop some of this weight… Hey, if I can manage an overly complex repayment plan, investment schedule, and ever changing personal budget, I can manage to workout a little bit more, right?