Summer of Recession 2009

What a difference a year makes...

I am fortunate, but at the same time this summer is going to suck if you are planning on saving. Last week I hit a new milestone first, spending over $50 on a tank of gas. Not only that but my budget for food has increased as well. With my revamped plan for debt elimination, the current status of the economy is not assisting me one bit. I've had to cut back on savings by $75 because of increases in gas as well as money spent on groceries.

I've returned from Thailand, hating life back in America. I absolutely loved it: Pics. I went to many sights in Bangkok, ruins of Ayutthaya, bridge over the River Kwai, and Koh Samui. Samui is where they filmed The Beach. I never saw the movie but immediately rented it on Neflix when I returned, not impressed. I usually dislike Leonardo DeCaprio movies, so to me it did not disappoint. The Thai people were all very friendly, and willing to negotiate on any price in any market, that kinda got to me because I was sick of haggling. But it was great because we were travelling with Thai people so got to see some of the real sides and not just touristy areas. Also, got to snorkel and ocean kayak for the first time.

My ankle is still a little tender but when I returned I've ran about 10 miles/week and things seem to be holding up. Not 100% convinced that it will be ok but we'll see in the next upcoming months as I start to run more in preparation for the Baltimore Half-Marathon. I'm holding off on registering until I can confirm that my ankle will hold up.

Update...last entry I said I was going to increase my 401k contribution from 291 to 580/month(12%) but after some number crunching I'm able to increase my contributions to my full company match which is 25% up to 15%. I figured why give more money to Uncle Sam now. It may be a gamble down the road, if I'm in a higher tax bracket, but I'd rather save more money now then pay more to the government. I've also restructured my debt snowballs and will work to still pay of my car by November 2009, but then begin saving a little more. I was going to shift all my money used to pay off my car loan to my student loan but I'm just going to increase payments from 86.49 a month to somewhere between 300-400/month. I haven't decided total amount but I have a year and a half to decide that. My reasoning behind this is because a student loan is not "bad" debt, it is debt but it's very manageable. I really only wanted to eliminate my car loan debt before I applied for a mortgage, so this way I would have achieved it.

I've been thinking heavily about purchasing a house. Housing continues to slip which is not level with what is was several years ago but every few months the houses I've been eyeing are becoming more affordable to me. Also had some discussions with friends who are homeowners and I asked about PIM, well first I asked if they had it and they did. I'm still naive to most benefits of homeownership so I will not say much but it seems like the good outweighs the bad, if you can afford it. I'm not going to purchase my first home as it is going to be my last, I will compromise on a lot but still want something I enjoy. My next milestone after paying off car is still saving the 20,000-25,000 grand to put down on a house. I probably will have to take out PIM because I doubt I'll be able to find a house appeasing to me that 20-25,000 grand accounts for 20% of the home cost. That is in the cards within the next 18-24 months. My fiance, Ali, will be moving in with me at the end of July so I'm looking forward to that. Also, probably have to start wedding plans, I know she is going to start looking at reception places and then the floodgates will open. I'm trying to be cognizant of budgeting on the wedding because after doing some research I see we Americans like to go over the top. We aren't looking for anything extravagant but even the little things can add up, so I'm going to make sure we keep these all in mind in the upcoming months.

Even though the summer of 2009 will be awful for saving, it should be fun for other things in my life. It's already starting to feel like summer with the temp at 97 and very humid. But with weddings, parties, and talks of our wedding and future, bring on the Summer of 2009!

Reached a new milestone

I know it has been a while since I last posted. In mid-March I suffered a severe, untreated ankle sprain. I'm still unable to run without pain but I am holding off on going to a professional until I return from Thailand. I performed a self-rehab and things were going well but a month into it I started running outside and after 2 weeks of running 10 miles, I started getting pains in my achilles tendon. I usually would stick through it but I didn't want to screw up my left leg for life. I proceeded to using an elliptical trainer 3 times a week for 30 minutes, and when I return from Thailand I will try to run 2-3 miles 2 or 3 times the first week and see how it feels. If I'm still in pain I'll go to an orthopedic doctor.

Anyways, this last month has been a big step in my goal to becoming debt free. Starting in March, I increased the amount of money I was throwing at my debt(student loan, and car payment), and was on target for 31 months. I knew I wanted to eliminate it much sooner but my current financial status only allowed me to put $650/month while I was saving $5,000 to put in my Emergency Fund. Well, that all changed last week. Thanks to G.W.'s brilliant plan to stimulate the economy(if you don't know me, that was sarcastic), and receiving a well-deserved bonus, I have reached the goal of $5,000 in an emergency fund. I also received an unexpected, but well-deserved 16% raise, which is effective June 1st. So it has been a big month, my next milestone is very lofty but seems very doable. Save $14,500, and eliminate all debt by October 2010, more importantly pay of my 2007 Mazda 3 by November 2009. Also, with the compensation increase, it has allowed me to increase my 401k contribution from 291/month to 580/month. I realized since I began budgeting I didn't need anymore money to spend on "stuff", and I also wanted to get closer to the 15% employee match of 401k. Although I haven't fully achieved my goal of 15%, I upped my contributions from 7% to 12%, and have budgeted to increase my debt snowball to $850 a month. I'm in the dark for one reason, a wedding. I'm not sure how much is expected of us to put towards our wedding, I know my parents are paying for the honeymoon expense but there is a lot of things I don't even know about that I will probably be responsible for. Also, saving $14,500 is for a down payment on a house, total of $20,000 but my fiance is working to save the remaining $5,500. Depending on the housing market at the beginning of 2010, it will dictate whether or not I can wait to save $14,500 or just use what I have saved up until that point. So that is my plan for my short-term financial future. I feel good that I have a $5,100 cushion for any emergencies. In the next month, I will also look into investment options for part of that money, since inflation is rendering my savings account pointless. Oh when will the recession end, but at least I have a clear head to endure the storm. I'll write when I return from Thailand at the end of May. Until next time...