Rookie Mistake #1: FORGOTTEN DEBT

A bit into my private life: I do have a boyfriend. When I moved into my current place, I had mix of odd furniture that didn’t include a bed or mattress! I also had only $2000 from my tax return and income to pay first month’s rent and deposit ($795 + $795 = $1590). This left me with $410 to rent a uhaul, go to Ikea, and buy a bed and mattress at the very minimum (although, I did have an air mattress I could have used while saving up).

My boyfriend stepped in and demanded I be able to get myself enough furniture to make myself a nice home that I feel comfortable in. I ended up with a new loveseat, end table, coffee table, living room lamp, storage/book shelf, dresser, bed frame, mattress, two rugs, and another side-table lamp with a couple kitchen mats for the floor. My boyfriend lent just over $1800 to make sure I was comfortable. A coworker-turned-friend gave me her old La-Z-boy recliner for free and another coworker-turned-friend supplied me with a patio set for free as well!

However, as one of my values is making mistakes and one of the blog ground rules is being honest… I have to tell you all that I forgot to include this debt in my initial totals of consumer debt. To date, this debt has been paid down to now owing $524. This bumps my current consumer debt to roughly $9,630 total.

I suppose it’s good I rounded up to paying off $10,000 worth of debt.

Estimate high when it comes to debt, estimate low when it comes to income.

Don’t be ashamed or become frustrated when you find debt you forgot about. Roll with it, baby. Part of this journey is to become adaptable. Forgive yourself and take action to adjust.


A Rough Sketch

So, I had a few ideas on how to accumulate $10,000 in a year to pay off my consumer debt. 4 to be exact, but they need some fleshing out. Some REAL (or real enough numbers) tagged to them. So, I developed a rough sketch as follows. It didn’t need to be perfect down to the decimal, but it needed to be something to give me an idea

I have a merit raise, based on performance review, and a possible title promotion (read: more hourly income) to take effect by September. While this may only bump me from $17.20/hour to somewhere closer to $19.00/hour (I’m personally hoping for $20.00), every extra bit helps. I have also been approved to work a full 40 hours/week, instead of the allotted 37.5 hours/week associated with my job description. This is an extra 2.5 hours of time and a half (currently $25.80).

Roughly considering taxes (estimated math, not exact), this gets me an extra $150-$180 per month or $1800-$2160 per year.

I have two pieces of jewelry to sell: an old engagement ring (estimating value at $450 without appraisal) and an old promise ring (estimating value at $100 without appraisal). Other odds and ends (books, DVDs, electronics, clothes) should total to another $150-$200.

This gives me a rough extra $700-$750 (which would pay off a single credit card)!

I have editing/writing/proof reading/design skills that I can market for extra, supplemental income from home. More on this later in this post.

1.3 miles from my front door is a FREE shuttle that travels to and from work, dropping me off right infront of my building. There is no excuse to not take it. My city also has a very workable public transit system. There is no excuse to not take it.

The entire idea (and a scary one at that) is to eliminate the need of a car for 2 reasons.

1. Save Financially (duh):
Right now, I spend anywhere from $50-$100 per month in gas and $70-$80 per month on insurance. My city sticker to park on the street costs $100 per year and renewing your license plate stickers costs $101 per year. Oil changes range from $40-$50 every 3 months. I do not have a car payment as the car was a gift at graduation.

At best, I spend $2,000 per year on my car. That isn’t including any repairs, maintenance, tires, or extra road trips, parking, or the inevitable city-living parking tickets (“Wait, does that sign mean 12 noon or 12 midnight?”).

2. Be mindful of your carbon footprint and seek intentional, alternative transportation:
I can take the bus/train/carpool/or ask to borrow someone’s car.

The next natural question that popped into my head was:

What does successful independence from a personal car look like? What would I have to do to prove I could be independent of a vehicle in my current situation.

I decided to define it as:

  • Travel to/from work for free 90% of the time.
    There are roughly 250 working days per year, with consideration of holidays. 90% of that is 225 days of free commuting with 25 days of admitting the use of a personal car (weather, emergencies, etc…).
  • Trips to see my family or personal travel do not need to include using a personal vehicle. I can train home, or I can rent for personal travel.

But then I came to an impasse. What about emergencies? What if there was a family emergency I needed to go home for and I couldn’t rely on Amtrak or I didn’t have the funds to rent a car? This lead me to ask myself, “Do I keep a car for emergencies only?” I allowed myself to sideline this question for now and focus on immediate action: taking free and public transit. I also researched and KBB quoted my car at $7,200 selling independently.


OK! That is a lot of numbers and planning! Including the option to sell my car, I’m resting at a nice $11,700 potential. That’s $1,700 over my goal! WHOA!

But… We’re not done yet. What if I don’t sell my car? Or, what if I keep it for emergencies only? At best, then, I’d be saving $600 per year on gas and that brings my total potential down to $3,100 and that simply isn’t good enough.

How much could I potentially earn with a supplemental income? I’m still missing $6,900 towards my goal. I would need to make an extra $575 per month to make up that difference. This is a red flag, but not necessarily impossible with proper planning and implementation.

Giving myself permission to consider selling my car IF I prove to myself, based on the above measurable goals, that I can be successfully independent of a car? A scary, but firm, “Yes!”

Giving myself permission to seek ways to make an extra $575 per month? An even scarier and quieter, “Yes.”

The first “YES”

We left off with me asking if I can come up with $10,000 within a year to pay off my consumer debt. Without thinking, I responded to myself with “YES!” and with an enthusiasm I forgot I had. Along with my personal growth journey (more on that to come later), I have learned to give myself permission to do things. On June 25th, 2014, I gave myself permission to get out of debt.

Ack! But HOW!? We already know I only have $200 extra per month without factoring in unexpected expenses. This $200 is all that I have for savings, fun, and to pay off my debt. I’m going to have to get creative:

  1. WORK
    I have a merit raise, based on performance review, and a possible title promotion (read: more hourly income) to take effect by September.
  2. SELL
    I have a bit I could immediately sell: an old engagement ring, an old promise ring, and other odds and ends (books, DVDs, electronics, clothes).
    I have editing/writing/proof reading/design skills that I can market for extra, supplemental income from home.
    1.3 miles from my front door is a FREE shuttle that travels to and from work, dropping me off right infront of my building. There is no excuse to not take it. My city also has a very workable public transit system. There is no excuse to not take it.

As I start to flesh out the details (and I will, I promise!), it is scary. Very real and very sincere lifestyle changes are going to be made, particularly around number 4 and if having a car even makes sense for me right now.

My Real Budget

In the name of honesty, I’ve decided to unleash what my real budget looks like. A few logistical notes, I keep the budget on Google Drive, so it can be with me anywhere I have my phone and I can update in real time to put in my actual spending. This budget goes into effect June 27th (payday!). The first step is to track my actual expenses vs my projected expenses for one month.

Income 1 – Paycheck 1 939
Income 2 – Paycheck 2 908
Total 1847
American Eagle 48
Gas (Fuel) 80
Groceries 80
Home Supplies 35
Auto Insurance 80
Rent 795
Pet Supplies 35
Bank of America 49
Bill Me Later 35
Capital One 25
Student Loans 50
Therapy 100
Util: Gas 70
Util: Internet 50
Util: Electric 50
Renter’s Insurance 25
Fun 40
Total 1647
Difference 200

And this is the spreadsheet I keep for my debt, including a “snowball system” where I pay the smallest amount off first, paying double the minimum. Once that debt is paid off, I take the total amount I was paying on it, and apply it to the minimum of the next smallest debt. Momentum! I also set “next step goals” and “percentage paid off” formula to cheer myself on and see the debt diminishing.

Debt Amount as of June 25, 2014 Interest Minimum Snowball Total Payment Very Next Step
Capital One – Credit Card 725.76 13.90% 25 50 75 Under 700
Paypal – BillMeLater 953.19 19.99% 35 75 110 Under 950
American Eagle – Credit Card 1616.27  ?? 48 110 158 Under 1600
Nelnet – Student Loans 3769.2 ?? 50 158 208 Under 3760
Bank of America – Credit Card 4961.52 0% until August 49 208 257 Under 4950
Total Current Debt 12025.94 207
Amount Paid Off 0
Percentage Debt Free 0

Defining Freedom

As highlighed in the about page, everything took off after watching this TEDx talk by Adam Baker, founder of It started with defining what freedom is to me. I started with the following list and few notes:


-No financial burden

-A job I love with flexibility to change it


-Not evil

-A sidenote: consumerism is not evil by nature. It is a driving force that keeps our current system alive and while this may not the best system… I’ve yet to see anyone come up with something better and I certainly haven’t myself.

-Another sidenote: debt is evil. It is a cycle of working a job to pay for debt you have accumulated because you have a job.

What I arrived at was:

Freedom is a life unrestrained by consumer debt, enabling me to passionately, honestly, and lovingly serve the planet, world, and society.

Perfect! But now I had to start shaping the idea around my values and lifestyle. I started with breaking down my debt. Total, consumer and student loan, debt equals $12,100 at the time of the posting. Roughly 9,100 of that is consumer debt (before you roll your eyes at my mere $3,000 of student loan debt, do me some justice… If it is crippling you, it is crippling you regardless of if it is $3,000 or $300,000. Ok? Ok.). I have a very stable administrative job at a university with amazing benefits. However, my take home pay per month is $1847 and my estimated monthly expenses living in a large city (bare bones) sits at $1550. This leaves me at just under $200 extra a month for savings/repaying debt above minimum payments/fun.

How the hell am I supposed to clear $9,100 (not including interest) worth of debt on an extra $200/month? That would take YEARS (3.2 years, to be exact) and I want to go to grad school! Frustration. Disappointment. Almost hopelessness… But, I asked myself a simple question:

Can I sell, budget, or find roughly $10,000 in a year?”

The answer? A BIG, FAT (scary) YES.