Working toward a plan

Over the past few days, I feel as if I’m making good progress toward creating a solid financial plan.

financial_planning_process

On Monday, I couldn’t wait to put one-third of my tax refund into my main savings account – the Emergency Fund. Seriously, I jetted off work to make sure I arrived at the bank before 5 p.m. closing time. It felt so good to save that money, although I hated seeing my checking account deplete because of it. It’s so funny how I used to spend, spend, spend until I was near zero by the next paycheck. Not anymore. I like seeing stuff grow now.

It was tough to figure out what to do with the refund, but I followed this one-third rule. A writer on greenpath.com suggested that we consider using your tax refund in three areas: save, pay and spend. Solid advice. I had to get a balance and this was perfect for me.

On Tuesday evening, I did the overdue homework of completing the spending plan Teacher, the personal finance adviser who’s teaching the free workshop at the local women’s center, has been using for years. She said she can track down every expense. Nothing slips by her.

When I was done, I thought “My goodness! Crunching numbers really does lay it all out there.” I didn’t have to do too much work because I already started tracking my expenses and adding them into my Google spreadsheets. The exercise reiterated the point that you can’t know where you’re going until you know where you’ve been.

On Wednesday, March 5, I had the pleasure of participating in a “How To Budget” Google Hangout with Michelle Singletary. In the Q & A Session, I asked her if I should cut down on spending on insurance and my Roth IRA in order to cut down debt. I also asked if I should have term insurance.

When my picture and name appeared on her screen, she smiled and said “Hey, girl.” It felt so great that she recognized me even if she pronounced my name as Dionne, as in Warwick. Just the week before, I tweeted her that I had given my “21-Day Financial Fast” book to one of my best friends and bought another for my mother’s birthday gift. Michelle agreed that I should cut down on spending for the future to reduce debt now.

So yesterday, I asked the same of Teacher. She concurred. Teacher and my classmates commended me – the baby of the group – for even putting money toward those vehicles.

Later that day, I called Insurance Man and told him about my plans, the nearly $6,000 in credit card debt and all of the school loans. He agreed to stop the Roth IRA payments until the end of the year. Then we’d reevaluate my situation.

He said, “Now, I want you to promise me that you’ll put that $88 toward debt…”

I cut him off. “Oh, I’m already excited about creating an automatic transfer.”

“Dioni, you rock!” Insurance Man said laughing.

He said he’s proud of me, and believes in my plan and ability to budget. Well, I’m glad somebody is. It’s hard out here for a pimp.

As soon as I hung up the phone with him, I set up that automatic transfer toward the first credit card balance I wanted to kill. That extra money is an addition to the minimum payment, so I should knock this out within 4 months.

I’m so excited. I can see the light at the end of that tunnel.

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