All right, this update, well it's a little different. It's mostly a bunch of rambling.
I'm not going to go into all
the underpinning details, I'm just sort of going to relay the plan since this FFJ is all about behavior, having a plan and executing it.
Okay first let's tackle the G Unit (What I call The Grandma) situation. Things are going to pan out eventually we've really been working on this, and I've got some idea of the numbers involved for now. I have to share something. When I told my mom I could help with this financially, she froze. She couldn't believe it. Yeah. Being out of debt is awesome.
But anyway to the crunchy stuff. We've got to settle some of her current bills and such so that's going to be a cost of $189.46 now and $185.00 2 weeks from now. That'll get her on an even keel for a while, during which time I have to save $1900 by December 31, 2009. That goal is a bit arbitrary but it's based on what I feel I can realistically do, when I've been told I may need the money, and all that good stuff. I've actually crunched it out as $1903.46 but that's just being nerdy.
Second, I need to establish a barely passable Emergency Fund or Contingency Fund or whatever you like to call it. I've decided to base this goal on the same time frame for convenience.
Now as for what I already have, first I happen to have a $1000 EE series US savings bond for some reason. Honestly I don't know why I bought it but there it is. Well I know why I bought it, I wanted some emergency last ditch money I wouldn't spend and it worked, because that was in 2003 when I bought this thing.
The way EE series bonds work is you actually pay half the face value and then over so many years it climbs up to the face value, basically it's like most bonds in the private sector with no coupon payments: sold at a deep discount less than face. I have decided at the present time I'm just going to sit on this bond, it's done its job so far. It's suitable for an emergency fund because you can cash it in at any bank whenever so that's good enough for me.
For my purposes however I'm simply going to value the bond at $500. I know it's worth more than that but I'm not worried about it.
Now I also already have about $900 or so in cash at ING. The thing is I've been using this as my "Emergency Fund" but really this money is supposed
to pay for anticipated expenses within the year, insurance premiums and the like. So it's not really "emergency" money at all. So I'm going to consider this merely to be cash I needed to be saving to meet expenses anyway and will ignore it for my purposes now.
Anyway, I have ways of spending only $1000 a month some months. I have gotten really good at this sort of stuff over the past year. So I think a decent starting point for the Emergency Fund is to have $3000 tucked away. Considering I actually do have money saved up for all my predictable expenses before they happen now that's actually not an unrealistic start for the E Fund, but I'll probably want to ramp it up a little bit more. For now I need a goal more than anything and that's a good goal to get it going. Now I have another "problem" in how do I hold it. After much debate I've decided the E Fund will actually look like this:
Savings Bond $500
Brick and Mortar Bank Account $700
Justification: the savings bond I already have. I can cash it in whenever but I feel no need to so there it is. I don't want to give myself immediate access to the whole pile yet but I do want some cash right where I can get it with a handwritten check or a local ATM just in case. With some in the local bank I can write a check on it, and if it's real bad I can go deposit the bond there and then write the check, and if it's really really bad I figure I can wait for the ING transfer. The thing I like about this is that $2300 is psychologically removed from my immediate control but if I really need to I can still get at it quickly enough.
The $700 in my local bank will be a "cushion" in an existing account, so I'll just pretend my balance is always $700 lower. Might I change this later? Sure but for now, like I said, I need a goal and the perfect is the enemy of the good.
Now, this very week, I'm doing something special. I'm letting myself spend $384.04 on anything I want. Anything.
Item 1, I will buy some pants. Yay.
Item 2, I had another reminder this past week that life without a cell phone is terrible. I've gone without it for a long time to make bigger debt payments and the truth is I really do not want another $50 a month payment right now. Yeah it'd be cool to toute a Crackberry or something but realistically that's not a good idea right now even though I could afford it if I really wanted to (I did crunch the numbers). It's that lifestyle inflation problem.
So here's what I'm going to do. I'm used to not having a cell phone at all. I think it's best to go ahead and figure out a solution for the next 10-12 months that will solve my real problem of having no way of being reached, or reaching other people, in certain situations. The utility of a marginally good plan is phenomenal when you've gone without for so long, yes?
I did some research, and found this to be really helpful.
http://www.prepaidreviews.com/wehelpyou ... udget.html
T Mobile makes a cool prepaid phone that has plenty of silly things for me to play with and I can get 1000 minutes for $100 and they'll last a whole year, total cost around $200. No monthly bill, I'll never be out any more than that. You know what, problem solved
as far as I'm concerned. I'll try to make this last until next, let's say July, and if it sucks well that's the beauty of the prepaid option you just stop what you're doing. In the meantime that's only 20 bucks a month I'm out all paid cash up front, so I think this is a good way to go for me right now. Maybe next year I'll revisit the idea of getting a real plan.
That does leave a little bit of money but I'll spend that later on something I want. Not need, want. So there!
So anyway next update I'll actually start filling up the E Fund. I'll also likely be able to put a little bit into the G Fund (I was going to call it the G Unit Fund but then I realized hey, E Fund and G Fund!). After that I hope to start making regular contributions to both through year's end.
January, I'll change what I'm doing. I don't know how yet but I know it will change somehow. But it's okay I'm actually very happy about this because I thought it would take all of this year to reach this point. Being out of debt gives you an intense 96 hour rush, and that dies off, but then every once in a while you get a little tingle of joy from knowing you can do something you couldn't before, not to mention the not worrying all the time is awesome.
I figure I still have a financial mountain to climb, I'm just not climbing while carrying an oven, an anvil and for some reason a meat cooler any more. So let's end with my new reporting format:
Goals by 12/31/2009
*BAM is for Brick and Mortar