snowball –> 401k

I was paying off my credit cards at $1200/mo, plus any unused funds that might show up.

Once they were paid off I starting depositing that nut into a 401.k instead.  I knew if was pre-tax, but I was still surprised when I had $200 more (net) than before in my checking;  of course it’s the difference of the tax that wasn’t taken out.

I’ll increase the contribution to $1400 to take advantage of it.

thriving on minimal resources

[Note:  this entry is based on a CRVL post]

I am still in a house but I have been living on very little for several years in order to pay off debt from a previous life.  🙂   Now I snowball that same debt payment amount into pre-tax accounts so I am still living on the same pittance.

As I wrote this up I realized it might seem a bit like a hair shirt;  it’s really not.  Now I see frugality as a game and a challenge.  Here is how I live on little:

  • housing
    • live in a rural area in a rundown house with very low rent while I plan for ‘dwelling retirement
    • aggressive use of digital thermostat to control house temp.  I cool only my bedroom at night with a window unit in summer and warm with heated mattress pad and dogs in winter).
  • transportation
    • truck is paid for
    • drive at a reasonable speed to maximize MPG;  currently getting 28.1 MPG in a 4cyl Ford Ranger with 299K miles on it.  Motorcycle gets 65mpg.
    • do my own vehicle maintenance when possible
  • food
    • cook for myself instead of eating out
    • a few years ago I reduced the amount of meat I eat (other than that I take myself, a la Ted Nugent).
    • the meat I do eat tends to be inexpensive which work well in a pressure cooker.
    • eat what is cheap due to season, excess production, loss leader sales, etc.
    • if I can put it to immediate use, buy clearance dairy and meat
    • make my own coffee.  I use a thrift store french press ($2-$3) which makes tremendous coffee.  Recommended ratio:  1 ounce of coffee for 16 fluid ounces of water (30g/500ml for our frozen Canadian friends)
    • keep my pantry stocked so I can buy stuff only when it is for sale at my predetermined price point
    • pour a nightcap for myself (Bulleit Rye, omg omg omg) if I want one instead of buying a drink somewhere.  I only buy on sale.
  • durable items
    • thrift stores and garage sales
    • stopped buying any durables that do not fit into my boondocking plan <– amazingly effective life change
  • clothes
    • bought at thrift stores.  Yesterday everything but my socks and underwear was 2nd-hand.
  • communication
  • health
    • medical from VA, optics from Zenni
    • $50 treadmill, $100 weight station
  • hobbies:
    • Computer stuff
      • I have never owned a new PC.  My current machines are vintage 2007 (workstation) and 2005 (laptop) and run great.  When I retire an old machine every few years the sweet spot for replacement is about $120 shipped on eBay.
      • It’s cheap to max out memory on them and run a lightweight (and free) OS on them:  Debian linux on the box and Antergos/Arch on the laptop.   Both of these have Live versions where you can run the OS completely from USB or CD/DVD to see how you like it.  No changes are made to your normal machine!
    • reading – I only read ebooks now;  these can be checked out remotely from the library.  Many older or public domain works are available for free.
    • sewing – I have an old $20 Singer which I use to mend clothes, etc.
  • relationships
    • I am happily divorced.  I don’t think I could be living this simply with an S.O.
    • I no longer chase women.  It’s expensive, exhausting, and in the medium term not a good investment (Keynes:  “in the long term we are all dead”).
    • I came to this position independently, but later learned of the MGTOW movement.  As with most movements, the principles are useful but some of the adherents are angry, unhappy people looking for an excuse to hate on others (c.f. religion, politics, sports, etc).  So in the way a woman might say “I’m a feminist but not a man-hating feminist”, I will say “I am MGTOW but not a woman-hating MGTOW”.  I am reminded of the approach in Thomas Jefferson’s first inaugural:  “honest friendship with all… entangling alliances with none”.  🙂

snowball

I paid off my credit card debt and now the only money I owe is on my Honda motorcycle.

The amount remaining at this moment is $1666.06 at 4% apr.  That is almost exactly the amount of my monthly snowball ($1600.00) so I could pay it off in January.

But the price on the of my military service credit purchase will increase 10% on Sept 1st.  So I think I will aim the snowballs at the service credit until that is paid back.

Now here’s the weird bit.  I can either pay for the service credit purchase with a check (post-tax funds) or by a rollover from a 401k (pre-tax funds).  Since the state retirement account is a qualified rollover I can effectively pay for my service credit purchase from the 401k.  I already did this once this year when I bought 10 months of military service credit.

So I logged into my 401k site and opted to contribute the snowball each month to the 401k.  I’ll keep it that way until I pay for everything I want to with the 401k, then reassess.  That is probably 3-4 years out.

Payday paydown for October

I work at a state agency where we get paid on the 1st of each month.  I pay (or schedule) all my bills that day so everything is done for the month.

Some observations for the month:

  • I am slightly ahead on my CC payoff.  At this rate I will pay off the last of my revolving credit card debt after Dec 1, 2016 instead of Jan 1, 2017.
  • My credit rating continues to rise as my CC debt/limit ratio improves.  Since only the 800 level was important to me I won’t go much into detail on it going forward.

Payday = pay off debt day

Making steady progress.

I got a respectable raise this month and poured it directly into debt payoff.  Also had about a $600 windfall and that went in, too.

So here is the nitty gritty from my spreadsheet:

months to cc payoff months to total payoff credit score
3.15 5.59 797

At my current rate I will pay off my credit card debt by the end of the year.  At that point my only other debt will be about $2k left on the motorcycle note.  So I will be debt free by March.

Then I snowball the debt payoff funds into savings to buy back the remainder of the military service time by Sept 1, 2017.

Working as designed, yo.