Dear Mustachians,
An ailing yet aspiring Mustachian wants your help. I would love any help you are willing to grant your gifts upon my less knowledgeable person. I've done the best I can with what I know, but if you are able to lend some advice, I'd be more than willing to accept it and hope others can learn from my story. I've looked at the numbers so much that I can no longer see anything new or fresh about it. I'm hoping that new eyes can help me see things I'm overlooking.
I was happily trying to live the Mustachian life before I even knew about MMM (debt free and saving) a couple of years ago when health disaster struck. I became very ill and also re-injured my chronic back issue at the same time (can you say bad luck?). All said and done, I had several thousands of dollars in medical debt and no way to pay it. I applied for assistance and got a little bit of help, and paid out everything I had in savings, but still ended up with $10,000 in medical debt which was demanded to be paid.
The hospitals wanted that I get one of their "care credit cards" at nearly 30% interest (ouch!!!). I went debt shopping and applied for a few credit cards and loans to see what kind of interest rates I qualified for. One credit card at 10.99% and one at 18.99% were the best I could get (I wish at least one would have come back with one year no interest, but no such luck). All the loans I could get were over 20% (ick). I put the majority of it on the first card with the lower interest and the remainder on the second card. I then put everything extra into paying this off and not accumulating any savings. I managed to pay a little less than $5000 of the debt in a year and a half.
However, another event socked me right in the finances. While driving on a very busy interstate, someone sideswiped my car when they didn't look before changing lanes (I was rolled and should technically be dead), then drove off. They were followed by a good samaritan who saw the whole thing, got ticketed, went to court and lost, and their insurance company is still refusing to pay me for my car eight months later (I'm more than a little bitter and I've hired a lawyer, willing to work pro bono, to try and get recompense but he said it might take years). I tried going carless, but my health issues prohibit walking/biking, public transportation is useless here (I can't get to work when I need to or get home when I'm done), and bumming rides was becoming more and more difficult. So I went and again researched. I got a used, gas-friendly car with a loan in January of this year.
So, after all is said and done, here is where I stand with my debt:
Card 1: $3829.95 at 10.99%
Card 2: $1314.72 at 18.99%
Loan: $1959.58 at 11.09%
Total debt: $7104.25
Here is where I need your help: Can I be doing even better? I want this debt gone.
Breakdown of my finances:
Personal: Female, 28, United States
Income: $1500/month after taxes and medical insurance deducted, salaried working 70 hours a week. Ya, it's a lot of hours for little pay. I'm one of those lucky people that was able to get the job they've wanted their entire life. I'd rather not leave my dream to go somewhere else just to make more money. Just this month I've considered starting a (very small) business selling my homemade body care products (I make my own cause they're so expensive at the store) that everybody really loves (I give them as gifts instead of buying gifts for Christmas/birthdays). I have no idea how to do such things, so that's yet another facet of research I need to get into.
Savings: None. I only have what I get paid every month.
Expenses:
Rent: $500/month all utilities included
Phone: $25/month. I tried just using pre-paid phones, but I was going through minutes and texts so fast I wasn't saving anything (my family is obnoxiously over-informative). I'm currently a part of a plan with my entire family with unlimited talk and text (no data, that shit's stupid), which ends up being about $10/month cheaper.
Internet/Cable: Don't have any. I use the free internet at the library (two minutes from work) if I need it.
Insurance: Car and renters at $90/month. I'm never having less than full coverage again after the mess I just went through with my last car. No one will ever convince me to get liability coverage again, as I would have had this whole car debacle settled already according to both my insurance agent and the lawyer. Apparently only having liability is a great way for the other insurance agency to give you the big screw you and make you hire a lawyer. Bitter, party of one?
Medical: $147 a month. I have physical therapy/manual therapy four times a month. Since this is finally making a difference in my quality life, I will not cut it out. Hopefully, my therapy guy will get me healthy enough that I can ride a bike again soon. I wasn't walking a year ago, and he has me not only walking but lifting weights. Plus, due to his care I've been pain medication free for almost a year. This expense also includes free run of the gym, so I can get in extra PT as needed without paying for more sessions.
Gas/Car: I'm fairly close to work at a 7 mile round trip. I'm getting to where I can walk to the store (2 mile round trip) sometimes if the weather is good (my asthma doesn't allow for outdoor activities if it's cold). Plus, once a month I make a 200 mile round trip to visit my grandmother. I spend about $80/month on gas as far as I've calculated the last two months so far with this new car. I'm really hoping that I'll be able to start riding a bike again this summer as health improves. I can't bike much in the winter months, but I can save money in the summer to help buffer my winter gas expenditures. Also, can you recommend a bike that doesn't require leaning forward? One where I can sit up straight would be great (leaning forward is hard on my back and recumbents are just as painful). The car I picked was a 2000 Saturn LS2 with 30,000 miles that gets 30 mpg and no problems according to two different mechanics. Blue book was $5460, and I got it for $2000, including dealer fees and taxes.
Groceries: About $140 a month. This includes my asthma medications (about $40/month). I include medications here cause I get them at the pharmacy at the grocery store. Sorry if that's weird. This also includes supplies to make all my own body care products and food for my four cats. I don't eat out.
Laundry: My house doesn't come with laundry. I do most of my laundry at friend's houses when I can mooch time from them. I end up spending about $5-10 a month to do laundry at the laundromat.
Misc/Entertainment: I get free books and movies from the library. I have a $10 a month allowance for "fun" stuff. I do not shop for clothes. I do not go to movie theaters. I ask for all my needs for Christmas. If something breaks/wears out before then, I do without. I cut my own hair. I'm hoping that this summer I can take my first hike in years. :-)
Total expenses: $1012 depending on gas/grocery.
This leaves $498 a month to work with to pay off debts.
What my plan has been since I bought the car in January: Pay $150 a month on each card and the minimum loan payment of $65.82 for a total of $365.82 a month. This leaves $132.18 a month left over for additional expenses (car registration fees, pet licensing fees, and doctor trips as needed). If I do not need that money for additional expenses, it will go to the loan at the end of the month when I get paid my next paycheck. I figure when I finish off the lowest card, I'll focus all $300 on the remaining card. Then, when that is paid off, everything goes to the loan. If I did the calculations right, I should have everything paid off in two years. Although, I might be wrong. I'm not great at using amortization calculators.
Is there anything you can see as a blinding error? Can I improve anywhere? I'm seriously tired of paying off credit cards, and staring at my own finances for so long has not only made me cross eyed but blind to my own predicament.
Sincerely,
An Aspiring Mustachian