Maintaining momentum
Feb. 12th, 2010 08:48 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
jamethiel posting in ![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
actyourwageI've said it many times before, but personal financial management is as much about psychology as anything else.
One of the things I have is a LOT of goals. There's getting the credit card debt gone. There's saving up for a house deposit. I want to have a yearly public transport ticket. I want a digital SLR. I want my tattoo finished. I want three months wages as a buffer.
The credit card thing is... progressing (60.9% gone!). I've worked out what my payments have to be to get the debt paid off in 6 months time and I meet those with no problems. My tattoo is simply part of my budget. I put the money for it aside and that's no problem. Both of those should be over by the end of this year. (As a note: my priorities may not be yours. My tattoo is important to me and it brings me great joy.)
But then it gets tricky. Technically, the sooner I pay off my credit card the less I pay in interest. I'm at the stage now where switching the balance, even to a card with a zero interest rate isn't worth it. There's no point saving $44 in interest if I have to pay a $59 fee to switch the card.
But having a yearly public transport ticket will also save me money--around $9 a month. I can also take the money that I currently use on public transport and put it towards the credit card. Theoretically I should take the money that I would usually spend on public transport and put it towards next year's ticket, but that money can be doing more useful things right now.
But my budget's pretty tight. I do end up with some money at the end of the month but it is honestly NOT MUCH. And before I was splitting it between a couple of different goals. So I'd save for a couple of months, end up with not much and then something else would come up and it would be the amount I have in savings and I'd think "Well, I'm so far off my goal anyway, I may as well just pay this unexpected expense and start again."
Then something happened. With getting my new savings account, I didn't have the "cloned accounts" setup I had previously. So all of my money was going into the one place. All of a sudden, I was saving up faster. I was in a situation where I could have taken some money from my savings to buy something and I looked at the balance and said "If I keep saving at this rate, I can afford this in 2 months" and I didn't take money out.
Today's thought: if your priorities shift, slow saving may not work for you because progress towards one goal may not happen.
Also, your opinions are sought. In three months time, if I cancel my tattoo sessions for the month I can wipe out my credit card debt completely. This will save me around $21 in interest. I'm strongly leaning towards doing it. Thoughts towards or against?
One of the things I have is a LOT of goals. There's getting the credit card debt gone. There's saving up for a house deposit. I want to have a yearly public transport ticket. I want a digital SLR. I want my tattoo finished. I want three months wages as a buffer.
The credit card thing is... progressing (60.9% gone!). I've worked out what my payments have to be to get the debt paid off in 6 months time and I meet those with no problems. My tattoo is simply part of my budget. I put the money for it aside and that's no problem. Both of those should be over by the end of this year. (As a note: my priorities may not be yours. My tattoo is important to me and it brings me great joy.)
But then it gets tricky. Technically, the sooner I pay off my credit card the less I pay in interest. I'm at the stage now where switching the balance, even to a card with a zero interest rate isn't worth it. There's no point saving $44 in interest if I have to pay a $59 fee to switch the card.
But having a yearly public transport ticket will also save me money--around $9 a month. I can also take the money that I currently use on public transport and put it towards the credit card. Theoretically I should take the money that I would usually spend on public transport and put it towards next year's ticket, but that money can be doing more useful things right now.
But my budget's pretty tight. I do end up with some money at the end of the month but it is honestly NOT MUCH. And before I was splitting it between a couple of different goals. So I'd save for a couple of months, end up with not much and then something else would come up and it would be the amount I have in savings and I'd think "Well, I'm so far off my goal anyway, I may as well just pay this unexpected expense and start again."
Then something happened. With getting my new savings account, I didn't have the "cloned accounts" setup I had previously. So all of my money was going into the one place. All of a sudden, I was saving up faster. I was in a situation where I could have taken some money from my savings to buy something and I looked at the balance and said "If I keep saving at this rate, I can afford this in 2 months" and I didn't take money out.
Today's thought: if your priorities shift, slow saving may not work for you because progress towards one goal may not happen.
Also, your opinions are sought. In three months time, if I cancel my tattoo sessions for the month I can wipe out my credit card debt completely. This will save me around $21 in interest. I'm strongly leaning towards doing it. Thoughts towards or against?
(no subject)
Date: 2010-02-14 11:00 pm (UTC)With the tattoo, it's not finishing it. Not by a long shot. I get work done on it every two weeks and it just goes straight out of my paycheck. I actually pay more on that than I do on my credit card! My thought on getting rid of the credit card debt is that I can keep the money I would have paid for that around until my tattoo appointment. Then if it's a long session, I don't have to worry and if it's not I can transfer the money into my savings. But it'll only take 3 months off my total "time that I'm in debt" so it's not a big deal either way.
And as for the credit card debt and psychology--I've managed to get my head around "getting rid of debt is good!" I've finally gotten over the hump of "paying bills is a chore" and having got rid of half my debt I feel excited at being debt free. So... it's either/or, really.
I think I may just see how I'm feeling when it's closer to the date.