It’s been a long time since I actually sat down to write a debt report (January to be exact), or net worth report, so here goes.
Where Have I Been?
I’ve been struggling with this feeling between wanting to tell you what’s been going on and my fear of doing so. After a few months, I missed this monthly schedule and need to jump back in, even if it hurts.
Confession: I haven’t been paying off much debt lately. I’ve been doing quite the opposite in fact. Against all of the advice I’ve given in the past…
…I am saving money. Quite a bit actually – more on that later.
I thought I was letting you all down by not actually following through on what I initially set out to do. For that reason, I stopped posting debt reports and net worth updates, and anything really. I felt like I would be letting you all down.
Now I realize that I was actually doing you all, and myself, a disservice by not bringing this to light. Priorities change, life happens, and that’s nothing to be ashamed of or to hide from.
So here I am, with a long explanation of where I’ve been and what I’ve been up to.
First, Why Am I Saving?
There are a bunch of reasons I am saving money, but they all can be categorized into two main buckets:
- More expenses– I went through a breakup in September, so I’ve been living in a studio apartment, meaning I have had more expenses on the agenda since then. While I sold my car (LINK) in July giving me around $400 extra a month, moving out on your own is quite expensive – everything you may have split the costs for before are now solely your responsibility.
Living on your own also allows for a lot of self-reflection and free time, which for an extroverted introvert was extremely nice. I also live in the center of the city now so everything is within walking distance, or a short bus ride. Yay public transportation.
- Emergency fund – I’m slightly more prone to risk and would feel a little more secure if I had a few months where I could make zero dollars and still be afloat if something were to happen. That is the goal here. I want to be financially stable enough that I could make due without any income for around 6-8 months while I figured out how to start earning money again. We all have different priorities, and at this point mine are to err on the side of caution.
Second, When Will I Start Attacking My Debt Again?
Since I’ve been working on building up an emergency fund, I’ll start attacking my debt again once I’ve reached about $20k in savings. Yes, it seems like a lot, but I’m trying to be proactive and avoid putting myself into a hole if something were to happen.
How Did I Settle on $20k?
Well, 8 months of expenses would put me at around $15k. The extra $5k is just my gut telling me I needed a little more. There really isn’t much math past the $15k, it’s all emotional and personally important.
And being as finance is a personal thing, I’m okay with that.
Yes, part of me is screaming to take the savings I’ve built so far and decrease my debt to around $20k. It’s a constant struggle to remember WHY I’m doing what I’m doing – but I’m proud of the progress I’ve made so far.
There is also another reason I’m saving money, but that will be revealed in time. I’m not ready to share that in a public place just yet.
My Current Job Situation
Over the last few months, I’ve switched jobs a few times. At the end of February, I left the same company I had been with for six years. It was my first “real job” out of college and I had transitioned into a few different roles during that time. I had grown a lot and was learning a ton there, but an opportunity came up where I’d be making around the same money and would cut out my long commute each day.
I thought it was perfect and was ready to learn even more in this new role.
However, the grass isn’t always greener. A few weeks into the new position, I felt like something was off and it wasn’t the best fit for me. Trying to make the best of it, I stuck it out to see how it would go.
Three months later, my previous position still hadn’t been filled and my old job contacted me with an offer I couldn’t refuse.
As much as I dislike the cliche’s about life handing you signs, and that things always happen for a reason – I’ve learned them to be (mostly) true.
Along with the great offer, the learning opportunities I had access to at the old gig were too much to pass up. After a lot of internal negotiation and discussion with the people I’m closest to, I made the decision to bite the bullet and acquire that long commute yet again.
Will I regret it? Maybe. But at this time I know I’m doing what’s best for me. And over the last year, I’ve learned that my happiness is worth any risk that comes along with it.
Along with switching jobs, I’ve realized just how important it is to be financially ready for the hard times – another reason saving has been a priority for me at this point.
While I do still have around $30k in student loans left to pay off, if I lost my job I’d only be left to find about $300 a month to keep my payments consistent. However, if I kept throwing every penny at debt and not creating a barrier against things going wrong, I could be in a much worse place with no savings account.
I want to put the caveat out there that savings would in no way be my priority if I had credit card debt. The interest is much too high to simply put money into an account earning you 1% interest, while letting a credit card company charge you 15-20% interest every month.
While I do suggest that you really evaluate your situation and what’s best for you at the moment, I hope this in a way will help those of you who do have circumstances in life that make you feel like responsible saving is a priority as well. Paying more than your minimum payments each month is the only way you will get out of debt faster.
While I will continue to post my “debt reports” they will be focused on both the saving and debt payoff aspects of my situation. I’m happy with where I am at the moment, and will follow this plan until I reach my goal.
After that long explanation, let’s go back to the regularly scheduled program:
My Net Worth
Disclosure: I had a few thousand saved before I went on a hiatus, so the entirety of my savings numbers were not solely accumulated in the last three months.
My Current Debts:
Student Loan: $31,258.42
Credit Card: – $674.51*
*My credit card is something I pay off each month. I’m at a point where I’ve learned enough about myself to be able to responsibly handle this, so I’m doing this to earn points to help pay for some bills.
My Current Assets:
This is spread out across a few different bank accounts because I like separating my goals out accordingly.At this time, I’m only looking at the total number, so this is what I will report on here. Previously, I was keeping track of various goals I was saving for. You can read about my love for multiple savings accounts and reviews the accounts I’ve used (Capital One 360 & Ally Bank).
Roth IRA: $1,036.61
My Current Net Worth: $19,263.97
If you recall from my last debt report, I was at $31,795 in student loan debt. Clearly, my approach has not been causing this number to fluctuate all that much. However, the savings portion of my net worth has grown quite a bit.
I’m very happy with the progress so far and am going to keep piling away money until I am at my goal. At that time I will start throwing my extra money at my student loan debt to get back on track for paying it off.
I’ll keep posting reports like this one each month to give you a better breakdown of where I am, and to hold myself accountable.
If you want to create your own net worth report, here is a guide I put together for you.