May 14, 2008

Just a note

Posted in Finances tagged at 10:48 pm by otherdeb


Today, I filled out my April 2008 report at NetworthIQ. I have done so sporadically since July 2007. There is some good news, too: Since I last filled out a report in September 2007, I have reduced my debt by $821. Okay, you may say it’s not a lot, but on a salary of under $20,000/ann., I am pretty proud of this.

Further, while my net worth is still negative, it is less so than when I started: Back in July 2007, I owed $59,704; as of this report, I owe $41,122. This is a reduction of $18,582. Again, not bad on a salary of less than $20,000/ann.

Granted, to do this, I have had to get creative. I sold things I was no longer using, switched to the library instead of buying books, started taking surveys online for cash, started taking advantage of free offers, and cutting down substantially on eating out.

Now, I know I still have a long way to go. Next steps are getting my bicycle checked out by a friend, and getting my cycling legs back, so I can cut down on transit spending (not to mention improving my health), paying off that last credit card, increasing my emergency fund, and continuing to figure out ways to generate extra income.

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7 Comments »

  1. […] The Dangling Conversation wrote an interesting post today on Just a noteHere’s a quick excerptI sold things I was no longer using, switched to the library instead of buying books, started taking surveys online for cash, started taking advantage of free offers, a… […]

  2. moshez said,

    “Further, while my net worth is still negative, it is less so than when I started”

    It’s kind of like dieting — it doesn’t matter how much you weigh, it’s how much there’s a change in weight 🙂 As long as the derivative is positive, you’ll get where you’re going in the end…

  3. otherdeb said,

    @moshez: Yes, it’s a lot like dieting in many ways, including that some days it’s a lot tougher to keep the goal in sight than others. And I spent a lot of time in both projects, just putting one foot in front of the other with really only blind faith that I would get to my goal.

  4. Marc S. Glasser said,

    I’m confused.

    How can you have increased your net worth in the past ten months by an amount greater than your income?

    The second paragraph of this post says that since July 2007, your net worth has increased from negative $59,704 to negative $41,122, a difference of $18,582. Yet your salary was less than $20K. And you were paying chunks of that for food, rent, utilities and so on.

    Did selling things you were no longer using, taking surveys online for cash, and taking advantage of free offers bring in thousands of dollars? Did you obtain forgiveness of some of the debts? I don’t *think* I remember driving a getaway car for you last summer…

    This begins to sound like one of those late-night infomercials that promise to “turn your debts into cash.”

  5. otherdeb said,

    @Marc S Glasser:

    (NOTE: To those of you who don’t know me, or who know me but don’t know the whole story — this is a fair question. Marc has been one of my best friends for several decades, and has seen me try to climb out of debt, almost get there, and fall back in again more times than either of us would be happy to admit. His cynicism is something I value, because it is part of what keeps me honest on this. And, if I had needed the getaway car he refers to, he knows he’s probably the person I would have called to drive it.)

    You bring up a very good question: how can you maximize your efforts at reducing large amounts of debt, especially when you don’t earn large amounts of money?

    Part of what happened was that I was flat on my back for the entire summer (except for going to the doctor), so I was able to put pretty much all of my summer pay toward my debts. Another part was that the roomie agreed that the dirty trick she pulled with her mother was unfair and wrong and we went back to our original agreement, which substantially reduced my debt there (admittedly, this was probably the biggest part of the reduction, but that negotiation was clearly a one-time event). Also, I put the entirety of my tax refunds, including the stimulus package to debt payments, and snowflaked any funds I got from surveys, selling things on eBay, and any jewelry or knitting commissions to my debt.

    More importantly, I determined that I was going to stop using my credit cards and spending more money than I had. This meant scaling back my wants, or finding creative means to get things. I haven’t stopped reading, for example, and my “want to read” list is still growing faster than what I can read, but now my book store is pretty much exclusively the library (although if I get enough in gift coupons to cover the shipping as well as the book, I will order the occasional book from Amazon.com). I want to knit and crochet, but have been using up my stash instead of acquiring new yarn (with one exception — I needed a couple of skeins to make a baby gift). Same with jewelry-making. I am using up what I have.

    Also, I had not realized how much and how often I was just grabbing a bite on the road. I am now bringing my lunch to work most days, and eating breakfast and dinner at home unless I actually plan to go to brunch or dinner with someone. Also, as you (in particular) know, there are times I cannot get around by public transit. Other than the odd ride to work in the morning or home in the afternoon (and I have a deal with a guy for when I need the latter) I have been using the express bus instead of automatically grabbing a cab or car service. And I allow for that when I plan my week.

    And, no, this is not a get rich quick infomercial. It’s been a long, slow, and (in some cases) very painful process, that I started far too late in life to allow myself much wiggle room.

    Now, I have a question for you (and for anyone else who cares to) to answer): What ways do you use to minimize expenditures, reduce debts, or create extra income? I’m still new enough at this that I’m sure I’m missing ways to do the above, and would love to hear ideas.

  6. Marc S. Glasser said,

    The debt reduction from the deal you made with your roommate and her mother must have been substantial, and as you point out, it was a one-shot. I’d say it was misleading at best to quantify the increase in your net worth and approximate your annual income without mentioning what a corporate balance sheet would have to specify as an “extraordinary item” (with details in a footnote).

    I do the same things to minimize expenditures that all the magazine articles tell you to do: buy generic/store-brand groceries and pharmaceuticals (unless I know from personal experience that the name brand is superior by orders of magnitude), stock up when there’s a sale (but ONLY on stuff I know I’ll use before it spoils), don’t shop when I’m hungry, take public transit (and bike in nice weather), use libraries rather than buy even more books, eat at home if I’m not meeting someone, bring meals to work when I can (working in an office with a company-supplied coffee machine and a couple of big refrigerators helps a lot).

    Avoiding impulse buying is a big factor, but being the sort of anal-retentive person who needs to thoroughly research any purchase that costs more than a dollar, I never really had a problem with that. I don’t know what advice I could give on curbing the habit for those who have it, other than to cultivate a new habit of asking oneself, on the way to the cash register, “Do I need this? How urgently? Is this the best kind at the best price that I could get at this point in the week/the year/my life? How sure am I?”

    All the big stores now put their sale circulars up on line, sometimes a day or two before the sales start, so a mouse potato can put an hour or so into researching before deciding at which store to do the weekly/monthly shopping. This, of course, only works for those who live near enough big stores to have the option.

    I used to clip coupons a lot, but found that even with the coupons, most name-brand items still cost more than the store brands I was accustomed to buying, and the clipping and organizing was wasting my time. Now I only clip coupons for the actual brands and products I know I’ll be buying.

    I fill out surveys and such (from reputable organizations) whenever I can, and they send me a few bucks for my trouble once in a while, but the income from all the surveys I’ve filled out in the past five years is less than I earn in half a day at work–I’d call it negligible. It’s certainly not worth sacrificing wage-earning time for.

    That’s all off the top of my head after reading your reply. If I think of any other things to add, I know where to add them.

  7. otherdeb said,

    @Marc S Glasser:

    I think I may have noted this on my NetWorth IQ page when I did the actual negotiation to restore the original agreement.

    As far as noting it here, when I had set up the NetWorth IQ page, the higher number was the amount owed, and it was a very real debt. The negotiation to get the roommate to rescind her dirty trick was not an easy one, but I didn’t really want to get too deeply into the details, since the details are between the two of us.

    I was not, by any means, intending to be misleading. Wanting to spare someone embarrassment should not be a reason to dodge facts, nor was I intending to do so, and I thank you for asking me to clear uop what came across as a grey area.

    Again, thank you for asking me to clarify this. That is exactly one of the kinds of dialogue I’m hoping to develop with folks!


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