I’m not sure how much longer I can work as hard as I am now.
Lately, I’ve spent a lot of time thinking about what direction I need to be taking my finances. I also spend a good amount of time staring at my Mint.com page, wondering when I’ll be debt free. I want to start thinking about retirement, and I don’t know how much longer I can work as hard as I am now.
I’m 33 and live alone in New Orleans, La. I’m a clinical supervisor at a non-profit mental health agency and make $50,000 annually before taxes. I also have a small private practice, so my additional income ranges between $200-$600 monthly.
I own my car, which I bought used for $1,500, and bought a house in March 2017. My mother helped me with a $3,000 down payment. I never thought I would be able to own my home, much less live alone. I got a dog in January 2017, which is what prompted me to buy the house. This first year of homeownership has been enlightening – and expensive. In hindsight, I wish I had planned more before making such a big decision, but I’m sure I would have never made the leap without a little push. (It was the puppy!)
I recently created a pictograph for paying off my debt, and I cross off debts as I pay them off. I’m using the snowball approach and am now paying off the last $5,000 of my credit debt, and I project that I’ll be debt free by July 2018, barring any unforeseen emergencies.
Although I am doggedly paying off my debt, I still sometimes feel like I’m just moving money around, instead of actually increasing my net worth (although it does move incrementally each month).
Here’s how the numbers break down.
Income: I make $2,897 a month after taxes and retirement contributions are deducted, and I earn an extra $500 a month on average from my private practice. Total monthly cash flow: $3,397. Annual household income: $50,000
Total Monthly Expenses: Includes items like my mortgage, debts, dining out, and pet care. My monthly expenses add up to $3,050.
- Home expenses: $1,378
- Mortgage and Home Insurance: $1,048
- Utilities: $150
- Cell Phone: $105
- Car Insurance: $75
- Debts: $707
- Credit Cards, Lines of Credit: $546
- Student Loan: $161
- Misc/Other expenses: $715
- Gas: $40
- Dining out: $150
- Shopping: $100
- Private Practice Office Rent: $375
- Pet Care: $50
- Savings: $250
- Emergency Account: $150
- Other Emergency Funds: $100
What Surprised Me
I pay all of my bills with my monthly paycheck. I cover my day-to-day expenses with my private practice income. I guess I’m still in the mindset that “the money will come,” thanks to the extra income that I receive weekly, and it’s clear that I need to get more serious about budgeting.
What You Don't See
I hide money from myself in little secret accounts and “borrow” from them to cover emergencies. There are also unpleasant months where I run out of money before I get paid. I also pay into a retirement account that has a match from my employer, so $150 gets taken out of my paycheck before it’s ever deposited into my account.
What Makes Me Cringe
I’ve had more than a few months recently where I’ve run out of money before the end of the month. My emergency account has about $2,100 in it right now, but I’ve had to dip into it as I’ve had unexpected expenses that come with being a new homeowner.
What Makes Me Proud
Next month, I will have paid off $10,000 worth of debt from two lines of credit that I took out three years ago. My financial situation has changed so much since then, and I hope to never have to borrow money like that again.
What Frustrates Me
I’ve cut up my credit cards, but I still make impulse buys. I’m working on that aspect of my finances. I also have a Roth IRA that I haven’t contributed to at all in 2017 because I’m working so hard to pay off my debt. I hate to see it just sit there and not increase in value.
It’s enlightening to break it down and see that I am really moving towards paying off debt and will be able to start contributing to retirement in a serious way in 2018. I often feel like I’m just struggling to stay afloat, but I try to stay positive and celebrate small successes. Putting my plan on the fridge and crossing off the debts I’ve paid off from my pictogram have been helpful and inspiring actions.