Welcome

Hello Dear Reader,

This past New Year, I resolved to reduce my debt. I have a stupendous amount (or what seems like a lot) of credit card, and car loan debt. I was not at that point sure what to resolve to. It was a vague "I-want-to-reduce-my-debt" at the time. But this is what I wanted at the time:

* Be credit-card debt free ($16,728.19)
* Pay off my car loan ($10,095.17)
* Have a $1,500 emergency savings fund ($0 currently)

Now don’t get me wrong, I have other goals too, related to retirement, investing, travel funds and property-buying. However, being a graduate student with limited financial resources, I limit myself to these goals for now. I will eventually expand.

My goal is to have all this under control in three years time. This is a lofty goal given that I am a graduate student who is a full-time student, and works 20 hrs a week on a 9-month work-contract. After tax is withheld, I get a measly $1,219.89 per month. This money goes into payment of rent, car, credit-card minimum payments (I can't afford more, but hope to change this), groceries, gas, phone, and other stuff. I would gladly work more if I could, but can't for reasons that can't be overcome, and that limits my income.

Not having a detailed plan at the time, this is the progress I made in 4 months –

* Credit-Card Debt : $15,886.50 (- $841.69)
* Car Loan : $9,283.87 (- $811.30)
* Emergency Savings : $105.00 (+ $105.00)

How did I achieve this? The answer is – I am not sure! However, a few things that I changed since 01/01/2008 are:

* I kept track of every single cent I spent
* I eat out less often now
* I cancelled my Netflix subscription
* I downgraded my cell-phone plan
* I did not charge anything new to my credit cards

Then, around early April, I began seriously investigating debt management. I read several PF blogs, met with a financial counselor, asked my parents to lend me some money and paid off three smaller credit card balances. I also created a very elaborate spreadsheet that helps me budget, track expenditure, bill payments, debt repayments and the progress made. Then I decided to start a blog myself and be accountable. This blog is my attempt at managing my personal finances and being debt-free eventually. Since I will be a student for two-and-a-half more years, progress will be slow and painful. I imagine that cataloging my own expenditure and income in such a public way would also be painful. But I think I would like to feel the pain. It might make success that much more sweet!

Here is a chart of what I have accomplished money-wise so far:

* Please note that the chart tracks my progress starting 04/01/2008

It is terribly painful to see myself make such infinitesimal changes each month. At times I think I ought to give up until I get a job and worry about all this then. But since just making the minimum payments on my credit cards wipes out most of my money, managing my finances is very important. The greatest virtue I must own now is patience.

Amat victoria curam!