I wrapped up Ben’s Challenge a little over a month ago (you can see my “final” update here), and even though the original challenge was for just 3 months, I realized I really wanted to continue writing about my experience getting out of debt. Why? Because I’m getting so close to finally reaching that magic number: zero.
So I figured, “What the heck, why not do an update every month until I’m entirely debt free?”
This is my update for April and May, which means I have two month’s worth of progress to report. As Kramer would say, “Giddyup!”
The Incredible Shrinking Credit Card Balance
If you’ve been reading the challenge updates all along, then you know exactly how far I’ve come. But in case you haven’t (or you’ve forgotten), I wanted to show the progress since January, as the balance on my credit card has been slowly paid down. Here is the amount of my total balance for each month since the beginning of the challenge:
I’m intentionally leaving the amount for May blank for a moment, because before I reveal my current balance I want to describe all the efforts I’ve made over the past month, including…
Becoming a Budget Ninja
I used to be hopeless when it came to budgeting. It’s not that I was engaged in excessive spending; on the contrary, I’ve always tried to be frugal. But my strategy was simply to not buy anything I didn’t need rather than actually track my monthly expenses. If I spent more than my income in a given month, I’d just put the difference on my credit card and hope to pay it off the next month.
The problem was that certain expenses ended up slipping through the cracks. When I finally got serious about tracking my monthly budget (using this great spreadsheet created by Azra), I realized that these little “necessities” added up to a big percentage of my spending. Things like eating lunch out instead of bringing something from home were impacting my budget negatively.
So for the last couple months I have been dedicated to becoming a black belt in budgeting. It’s really helped me identify ways to save money. For example, these days when I go to the grocery store I’m more aware of price differences, and I notice how cheap something like oatmeal is (one of my breakfast favorites). I’ve also been paying more attention to how often I eat out and making a concerted effort to bring lunches from home.
And I think I’m starting to see some progress. I previously wrote about my budget for February. Here’s what my budget looked like for March:
Not great. But not terrible. While I went over budget by $226, the amount I spent on travel was $303. My March travel spending included a staff retreat where a friendly game of poker caused me to lose some serious money (okay, maybe it was only $10) to this guy.
Without the travel spending, I would’ve been under budget. As they say, though, “almost doesn’t count.” So let’s move on and see how I did with my April budget:
I spent $542 less in April than I did in May! How awesome is that? This is officially the first time I’ve spent less than I budgeted, by a whopping $316, and I’m pretty darn proud of myself for that. I think it’s clear by now that the three main categories that cause the most variation from month to month (at least for me) are Travel, Eating Out, and Miscellaneous.
Since I had no costs associated with Travel or Miscellaneous in April, and since my Eating Out expenses were at an all-time low, I was able to save quite a bit of money.
And take a wild guess what I did with that extra money?
Yep, I paid down my balance. But I’m not quite ready to disclose where my current balance is. First, I want to share my experience with…
Renting My Car For Fun and Profit
I’ve been wanting to make some extra money on the side to help pay off my credit card, and since I didn’t have much luck making extra money on eBay, I was curious to try something else.
That’s when I decided to try Getaround. In order to list your car on their website, you have to have a car with less than 150,000 miles that you’re willing to rent to strangers. My car has slightly less than 150k miles and although I was a little wary of renting my car to people I had never met before, I decided to give it a try.
The sign-up process was very smooth, and I created a profile for my car, with pictures and everything:
Pretty cool, right?
The beauty of this program is you can make your car available only when you don’t need it. For me, I take public transportation to work, so I usually only need my car on the weekends. I listed my car’s availability like this:
Once I created my profile, I waited. And for a few days I didn’t hear anything. Then I started getting some bites. My first rental went pretty well – the person came by to pick up the car in the morning and brought it back the next morning. When I got it back, I carefully checked all over the car for any signs of damage or reckless driving, but thankfully didn’t find any. That helped me feel a little more confident about future rentals. (Plus, Getaround provides insurance in case anything should go wrong)
All told now, I’ve rented it four times, and my earnings so far are:
Not too bad, right? That’s another $96 I’ve put toward my credit card debt, so it will likely save me a few bucks in interest charges as well.
I am going to continue being cautious about renting my car out, but as long as I feel comfortable with the people I’m renting to, it’s a convenient way to make some extra money to pay off my balance quicker. Speaking of…
My Current Credit Card Balance
So what’s my balance now? I’m sure you’re on the edge of your seat waiting to find out, so I won’t drag out the suspense much longer. Here’s a summary of changes to my balance over the last month and half:
$1881 (April Balance)
– $488 (April Payment)
– $316 (Extra Payment due to spending less)
– $96 (Extra Payment due to renting out car)
$981 (Current balance)
Get your own snapshot – click here!
So there it is, $981 – I’m finally in the triple digits!
Also, I feel like I should say thanks to USAA for an awesomely low 6.9% interest rate! That’s been a big help in getting closer to debt free. (If you want to get your own interest rates lowered, try these tips)
That’s it for my latest update. So what do you think? Am I doing well? Am I missing anything? Is it wise to rent my car out… or is it foolish? I look forward to reading your comments below!
Image 1 by Alan Cleaver