... so I may as well make an actual substantive post.
Travel:
I want to. I really want to. Unfortunately I'm pretty sure work won't allow for this type of thing in the near future. So I'm left cursing Tony Bourdain, and surfing the likes of CouchSurfing.com. I want to just take off sometimes. Ryan, whom I went to school with has provided some measure of inspiration in this regard with his aforelinked website. Long term travel (weeks or months) probably won't happen for a while, if ever. But a guy can dream.
Finances:
I read finance blogs like The Simple Dollar every day. Most of what I'm going to say is probably borrowed/stolen from that blog. I'm not in bad financial state, I'm actually paying back my student debts fairly quickly. I also have no credit card debt whatsoever, as I was taught early on that credit cards are not free money. However, I would say that the worse monetary mistake I've made since leaving college was to buy a new car.
Not to say that my old one was going to make it. The passenger door was broken and it was over 100k miles, with good maintenance on my part, but who knows about the previous owner. I personally didn't have a huge problem with it, but apparently several people were worried about my continued healthy existence when I took Blue Lightning on the highway. But when a new car losses such a huge percentage of it's value in the first year or two, I could have maybe found a late model used car for much less, perhaps something pre-leased. Obviously my car is no longer new, so it makes no sense at all to sell it and get a used one, but it's something that I wish I had thought about earlier.
How you pay back a debt can have a huge impact on what it does to your life. Pretty much the worst thing you can do is just pay the minimum every month. This is a great way to make lenders like you. You pay out tons of cash in interest, but only slowly erase your debt. A cash cow for the lenders.
Some people advocate what they call the snowball method. Basically, make minimum payments on all of your debts, and then throw down any surplus you have onto the debt with the greatest interest rate. Once this is done, you move on to focusing on the debt with the next highest interest rate. This is probably the most efficient way of paying off debt.
Some people go another way, a minor modification of the snowball method whereupon they focus on paying down the smallest debt first (always making minimum payments on everything), and when that is done, yet again focusing all surplus onto the next smallest debt. This has the benefit of making it seem faster. Smaller debts go away quickly, and the money saved by not having to pay into it anymore can be snowballed into the next smaller debt and so on. While less efficient than the first snowball method, it has a great psychological advantage. People can actually see their different debts disappearing.
I've chosen a more conservative approach, which is slightly less efficient but has a much greater safety factor. As with all other plans, each debt gets their minimum payment each month. The credit card, which I rarely if ever use, is paid in full. All surplus (and I eat bagged broccoli and hotdogs for lunch every day to ensure there is one), is placed into an ING savings account. Whereas my savings accounts at Chase and Bank of America generally seemed to pay 1% interest, ING pays me 4.5% APR (slightly less than that in 'real' interest of course), every month.
This is the fabled 'emergency fund'. I've heard that the general rule is that people should have 3 months of expenses in their emergency fund, and 6 months if they have dependents. I also believe in what some people call a freedom fund. This is simply a place to put money that you know you are going to need. For example, I know Christmas is coming in about 3 months, so I've got to be saving for it. Skimping on bills, loan repayment, or putting it on a credit card is just not an option. Same thing for any other expenses that you know or expect to incur in the future. I try to keep enough excess in there to pay for auto maintenance and repairs, depending on your situation you would want to factor in healthcare, childcare, veterinary, or even deposit on an apartment.
I plan on pushing any money I can scrape up into there until my excess (amount exceeding the emergency minimum) is equal to my college loans. Then I'm going to lump-sum pay off the college loans.
The advantage here is, that while it's not as efficient as dumping any surplus onto the debt every month, my emergency fund can grow large and if something comes up requiring money, it can be covered. Because my ING account bears a significant amount of interest (comparatively), I'm somewhat making up for the 'extra' interest I will pay on my loans because I'm not dumping money into them as quickly as I can.
Why the student loans before the car payments? Because the car is a secured loan. If I feel like not paying it anymore, I can sell the car and erase most if not all of the debt. My student loans have no such option, so they are my first option. In addition, since I put a large down payment on my car, the interest rate is not nearly as high as it could have been. In the future however, you can be certain that I will be on the lookout for late model USED cars.
I'm really glad that I have financially responsible parents. That, and the fact that I've been (pretty much) employed doing something since I was fifteen and a half has gotten me used to the idea of budgeting, paying off debts, and paying close attention to finances. This is a lesson I was considerably less keen on when I was younger, but one that I've taken to heart as time has gone on.
Preview:
I've got tons more stuff I've wanted to write about lately, life goals, my continuing education, cooking, my evolving workout routine, and the emergence of grujitsu, but I'm just too tired at the moment. I have to crash and get up early to catch the lunar eclipse in the very early morning. Because life's about experiences.
