Ben’s Challenge Update: May 3

PiggybankI 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:

January: $3199
February: $2716
March: $2361
April: $1881
May:

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:

ben's budget 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:

ben's budget april

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

Well, maybe not so much for fun… but definitely for profit. Have you heard of a company called Getaround? We’ve mentioned it before on the blog, and we linked to them in our Zero Debt Action Plan.

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:

Getaround - my car

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:

Getaround availability

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:

Getaround earnings

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)

ReadyForZero Snapshot for May

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

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  • Zack Jones

    No way could I do that rent my car thing — well at least not with my current cars. If I had a spare I might be able to do it. How does insurance work? How does the person renting the car from you prove they have insurance?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      They do provide insurance which is effective during the time the renter has the car. If you’re curious, this page explains how their insurance works: 
      http://www.getaround.com/insurance – I definitely understand being cautious, though!

  • Amanda

    This is a great, inspring story! I could definitely do a better job tracking my finances, cutting out the extras that add up very fast.

    Getaround is great idea for earning some extra cash, especially since your car is just sitting around for most of the time. 

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks, Amanda! Are you also trying to get out of debt, or just want to save up some money? I think there’s certainly more urgency when trying to get out of debt, but either way you can start new habits to help you accomplish your goal.

  • http://www.scriptinghappiness.com Jeena Cho

    I love the getaround.com idea. Another possibility would be zimride where you can share rides with people. 

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      I’ve looked at Zimride before and it looks great. I’d like to try it sometime soon! Have you ever tried it?

      • http://www.scriptinghappiness.com Jeena Cho

        I only used it once when I was going on a group retreat. Unfortunately, no one wanted to share a ride with me. But it’s really easy to use and a great concept!

  • ImpulseSave

    Way to go, Ben! Looks like you are really getting a great hold on your budgeting and paying down credit card debt. It must feel so good to see that number go down – you’ll be in the home stretch in no time! I also love the idea of renting your car out (through a great service like this). It’s excellent because while the car would have just been sitting in your driveway losing value, you’re actually making some money off of it! Can’t wait to see more of your updates!

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks! Yes, it does feel really good to see the balance getting smaller every month. Even seeing it dip below $1,000 was a big relief, because it feels a lot more manageable.

      And renting the car has been helpful, too. Like you said, if it’s just going to be sitting there during the week, I might as well allow others to get some use out of it (and help pay down my debt in the meantime)! I hope you’ll check back for future updates in the coming months.

  • Jenna from Adaptu

    Congrats on the triple digits!  Does GetAround have some sort of insurance policy?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks, Jenna! Much appreciated. And yes, Getaround does have insurance. I’ve now updated the post to reflect that because I realized I did not mention it originally.

  • http://carefulcents.com/ Carrie Smith

    I bet it feels awesome to finally make it under the $1,000 mark. Woohoo, congratulations! I’ve never heard of GetAround but it totally sounds like a nice way to make some side cash. Too bad I use my car to commute everyday, but on the flip side, it’s definitely a good option when I’m traveling (which is pretty often). Keep up the debt payoff :) can’t wait to see your progress next month.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Yes, it could be perfect for when you’re traveling. I think Getaround is only in California and Oregon right now, but there are other companies that provide similar services in other parts of the country. Thanks for the encouragement!

  • http://www.creditkarma.com/ Bethy @ Credit Karma

    Yeah! Great job so far, Ben! Super impressed by your idea to rent your car, too. If I had a car to rent, I would totally do this. Keep up the great work!

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks for your support, Bethy! And yes, renting my car was a little scary the first time, but I’m getting a lot more comfortable with it now. It’s nice to have an extra $100 to pay down my balance with.

  • http://femmefrugality.blogspot.com/ femmefrugality

    Congrats on all your progress!  You’re brave renting your car out like that…I don’t think I could do it…

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks very much!

  • Mark

    If you commute to work by transit, have you considered selling your car?  

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      No, I still need my car for various reasons, including visits to friends and family who live within a few hours of me. If I sold it, I’d be renting a car several times per month, which would get to be a hassle after a while.

  • Kieran Mullen

    Your misc budget seems like a pit for money.  Also your budget for groceries, clothing and eating out seems out of whack.   (very high)  Family of 4 we spend $100 at Costco/Winco   and we do not go out very often.  We also find that if we wash clothes, we can wear them for more than 30 days so we might have a clothing budget of $100 but every 2-3 months instead. Also why the high cell phone bill? Do you really need it? I spent $70 last year on prepaid and I used it whenever I felt like it and I didn’t feel guilty. If you are some sort of traveling sales person I could see a need for that fancy cell phone and data plan. It is all a matter of misplaced priorities.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      I think if you click the link in the first paragraph and read through some of my previous updates you’ll get a better idea of what I’ve been trying. As for the clothing/miscellaneous categories, you’ll notice that often they are zero for the entire month. Things that fall into miscellaneous can include parking tickets, a space heater, etc. But thanks for your interest in my budget!