To reflect

It has been nine months since I began the onslaught to right my profligate ways.

While I am still a little more than a year away from achieving the most important goal -- being debt free -- I take comfort in noting how profoundly my financial behavior has changed.

Here is a list of three new, and essential, nerdy habits I have acquired so far:

1. I diligently track my spending, with the help of a trusty software program. This has allowed me to continuously find new expenses to pare. It also has made me acutely aware of how each dollar used for a purchase is one less that can go into in my emergency fund (my primary goal at the moment given persistent layoff buzz). My monthly expenses have dropped to about half my take home pay now. Talk about living below one's means.

2. I review my budget at the beginning of each month and reevaluate my spending. I also run reports to see how well I hit the mark the previous month. I keenly know my weak spots now. The biggest one is not taking the time on Sunday to make my lunches for the week. Every time I tell myself that I'll fix something on the fly, it never happens. So note to self -- suck it up and cook EVERY Sunday, not just most of them.

3. As soon as my salary hits my checking account, I throw the money I budgeted for savings into the emergency fund. Next, I pay any bills due in the coming two weeks. As a result, little confusion -- or delusion -- exists over how much money I really have until my next paycheck arrives.

4. When I can, I listen to the online stream of Dave Ramsey's show on Fridays. He devotes this day to listeners who call and scream -- "We're debt free!" They also share how they reached the milestone. I am a total sap about this. I find it completely motivating to hear how long people worked to rid themselves of debt and the exultation in their voices at having achieved it. For me, it will be about a two-year process in all. You can count on a huge shout from these lungs when it is all done.

There are other habits I could note, but these are the big ones. 

I'm starting to feel a bit like an athlete, preparing for the big game of wealth building once I remove the $14K weights I currently have around my ankles.

Adrienne!

Yippee!

Here's a bit of good news.

I checked my IRA and 401k accounts today, something I have avoided doing much because the balances seemed to drop each time I looked.

My investments were up $1,900. Woo hoo! I still haven't made up all my losses since October, and I realize my holdings could slide again tomorrow. Nevertheless, it is nice to see my net worth climb again.

It has been a little disheartening to work so hard to pay off my debt and build up my cash savings only to see my retirement accounts decline in value. It seemed at times as if I was jogging at a stand still, waiting for the crosswalk sign to change, instead of improving my overall financial position.

The Dave Ramsey debt reduction plan I started nearly a year ago calls for no contributions to retirement until the debt is gone and the emergency fund is complete. It has been a scary feeling not to give to my 401K, but it keeps me motivated to fix my mess quickly. 

The Ramsey way has one downside, at least lately -- it makes market drops all the more glaring, because I have no new contributions to mask them. Hence the hamster-on-a-spinning-wheel feeling I have.

I eagerly await the magic month --  June 2009, when my debt is gone and emergency fund is complete. My retirement contributions will return in full force, with an additional 5 percent on top of what I had been making.

My new short-term goals will then be home ownership and boosting my net worth to $100K. Hopefully, this can be accomplished in another 2-3 years. 

A girl can dream, and strive, can't she?

Relief, or something like it

It appears I have survived another round of layoffs. 

No one has been fired in two weeks, so I am assuming the bloodbath is over. Unlike last year, no official announcements were made. We do not even know how many people were let go. It really is appalling. 

I often find myself counting the days until my immediate financial goals are met, a favorite distracting reverie. If only I could fast forward my life until next

June -- no debt, $10K cash in the bank. Oh the Freedom. The savings will continue after I reach the mark, of course. But there is something magic about obtaining that first big, round number. 

I do have other things to consider, though.

While I love what I do, I have begun to entertain other career options. There is only so much I am willing to sacrifice to stay in this industry. The worthy employers are becoming fewer in number.

I'm giving myself until next summer to find a job doing the same kind of work, but at a different company. 

If that fails, I will be taking the plunge into a new career. I don't know what that is yet. There is much thinking to do. Switching as I near 40 is not going to be easy, especially since I want to do something that satisfies my mind and heart.

Life is too brief to want to speed through any of it.

Knock, knock

Three weeks after paying off my credit card, the offers for new ones seem to be increasing.

The most amusing letter to date is from American Express. It arrived today, greeting me with the following:

The road to financial success has many milestones marking how far you've come. You've just reached one such milestone. You've been Selected for the American Express Preferred Rewards Green Card.

It also praises my financial record and lists all the benefits I would get with their credit card, including no pre-set spending limit. Yikes!

I have nothing against the company. I just find it ironic given the sacrifices I have made to rid myself of consumer debt. After all, this is the first month in years I received a credit card statement with a zero balance and no interest charges. 

These are the milestones that matters to me.

It is hard for me to imagine any circumstances under which I would get one again given how universally accepted debit cards have become.

The only debt I would consider assuming at this point would be a home loan. I will not be ready for this, though, until I pay everything else off, save a hefty down payment and enjoy living life for a while without ANY loans.

Bach me

My friend, a.k.a. Monkey, mentioned tonight how certain moments in life became sweeter after she began guarding her pennies closely.

She recently treated herself and her beaux to $80 tickets for a performance of J.S. Bach's St. Mathew Passion. The experience, she said, was more intense now that pricey excursions were rare.

It has happened to me, too. At times I feel like my puritan quest to eliminate Debt is in some sense a pursuit for simplicity -- to learn how to consume only what I truly need. It has been a hairy trek since I cling to habits, particularly the bad ones.  Yet it has also has yielded childish joy in what was once mundane.

My example, perhaps a shallow one, will appear tomorrow in the form of a fancy haircut. (I do have pangs of vanity, despite my deprivations of late.) I can't wait for the scalp massage, the free glass of wine and the hour and a half a talented stylist will devote to my beauty. 

It is my reward for slaying my MasterCard. It will also make me look a little less slovenly as I wear jeans and motorcycle boots I to my corporate job.

Granted, her fine work will have to survive another five months. But the bounce it will give promises to last for weeks.

A brighter side

Being an insufferable optimist does have its benefits.

Not only does it balance my inner Eeyore, it softens the blow of disappointments.

Delaying my debt payoff so I can build my emergency fund to $10,000 is such a case. I have been a tad down at having to revise my financial goals to accommodate job uncertainty. So I started researching what I could earn once I hit my savings target. 

Thankfully, my current bank will pay 2.82% APY -- double what I now have -- once I reach the mark. This is almost as much as the rate I pay on my student loan.

So by October I will begin accruing nearly $25 a month in interest income. Not only will this be the most I have ever received on my cash savings, it will ease the pain of prolonging monthly interest payments of about $38 on my student loans.

I may be able to find better deals at other banks, but the convenience of having my checking and savings at the same institution is valuable to me. Transfers immediately appear in my checking account when emergencies arise, and refunding my savings account is just as instantaneous.

Sometimes it is important to take comfort in the little things.

Pardon the interruption

I have been a wayward blogger of late. Please forgive me.

Like much of the country, I became obsessed with the presidential primary races. So when I came home from work, I hopped on the web to read the latest news and developments. This left little time for diary entries on my debt reduction plan.

But with the Democratic battle turning into a war of attrition and the Republican nomination settled, my spare time can now turn back to tracking my financial progress.

And I do have good news to share.

I paid off my credit card! Woo hoo! I have been mentally doing back flips for two weeks now, and I see no signs of this waning.

The amount of pride I feel in accomplishing this -- in seven months -- cannot be under estimated. It reflects mucho sacrifice. I have not had a hair cut in five months. My living room TV remains broken. The CD drive on my computer stands unrepaired. Many social outings have been spurned so I could babysit to earn extra cash. An untold number of beans have been eaten.

I am allowing myself at least one treat to celebrate. I will finally see my hairdresser on Thursday. I will ask her, though, to give me another cut that can endure five months until my next appointment. For I still have much to accomplish.

The week I completely paid off my credit card, the chairman of my company announced another round of layoffs. I have been spared, this time. But who nows how long the reprieve will last. My industry is convulsing, and nothing can be taken for granted.

So I have revised my goals. I originally strove to be debt free by the end of the year. This must now be put on pause while I build up my financial safety cushion. I intend to amass $10,000 in my emergency fund by Oct. 1. The amount is roughly equivalent to six months of living expenses. 

I will continue to make minimum payments on my student loan. After I accumulate the necessary savings, I will return to throwing every spare penny towards this debt. I should have both my student and family loans reduced to zero by Summer 2009.

It hurts to postpone my freedom from debt by another six months. Delayed gratification must apply to this endeavor, too?!

My larger goal, though, is financial stability. Starting next year, my employer will offer severance pay equivalent to one week of pay (instead of two) for every year worked at the company. For me, that means a month's salary should I be axed. That would not sustain me and my two little dogs for very long.

I still love what I do, and I am far from ready to find another vocation. As a result, I must change my ways accordingly to reduce the risk of working in this industry.