Tuesday, July 9, 2013

a year without lattes?

I love my lattes. And I love going to nice cafes, alone, with a book, newspaper or a magazine. On the other hand, I hate my credit card debt, which is almost 10,000 usd.

My bank is a bit like a leaky bucket. I put something in, and without spending anything the money is very soon gone. I am not blaming my debt entirely on the lattes, but they definitely contribute to this "leaky bucket" situation.

So, can I give my dear lattes up for a year?
And can I get rid of 10,000 usd debt (+ interests) within that year?

some fuzzy math.

I mostly got into this financial mess on my own, and I want to get rid of it on my own. I.e. I don't want the household budget to suffer for it. I also think it is healthy and necessary for me to take responsibility for getting myself into this trouble. While my husband and I mostly have joint finances, we have always kept some of our salary in our personal accounts. At this point, each of us keeps around 450 usd as our personal spending money each month. I use this money to buy the lattes, for food at work, train tickets, clothes, mobile phone, to pay the minimum on my credit card, and then some other miscellaneous things. As it is, this money is always gone before the end of the month.

Now, if I skip everything except the essentials, such as the train and the mobile phone, I should be able to use about 350 usd to pay down my debt each month. This requires no lattes, no clothes, no cinema tickets, and bringing my own lunch to work every day. This should give me about 4200 within the year. So not quite enough to wipe out the 10,000.

As I got inspired to get rid of this consumer debt asap I asked whether I could get some extra projects at work...and it looks like I will have some projects in the spring, that will pay about 4,500 usd.

So with no frivolous spending for a whole year, and by doing some extra work, I am almost there, but still missing some.

I need to figure out how to get these extra dollars, and will keep my eyes (and mind) open for opportunities to save, or earn, an extra buck. But I am determined that by 1st of July 2014, my consumer debt will be zero.