July '13 Update (aka Interesting Interest)

This month's update is dedicated to interest...

...for those who need a refresher or (just a fresh lesson) on what interest is (both simple and compounding) here's all you need to know -- but skip the video if you know what interest is and how it works:

But back to the news...In 5 days (6/29/13 through today, 7/4/2013) my largest loans (two loans that total ~$32,000) accrued (grew by) $18.00 in interest. Wtf?!  At this rate I'd accrue $108 of *only* interest over a month!  (calculation: 30 days divided by 5 days = 6, and 6 days x $18 = $108, and $108 = wtf?!)...oh but wait, it gets better. That's for just one loan, and does not account for compounding interest. UUUGGGHHHHH!

If I account for my other loans (of about $6,600), and the daily compounding interest, then, in 11 days (the next time I will make a payment) I will accrue $70 -- in 11 days. @_@ (You can use this calculator to calculate your interest.) That's more than I spent on my weekly groceries today, enough for a new pair of shoes that I need, and also less than I'm paying for a flight to friend's wedding; a $62 flight that I'm booking with mostly miles I already had. Yes, so my loans will accrue $70 for just sitting there!!

Breathe Ani. Breathe.

In 11 days?! Really guys? Come on banks.

This daily compounding thing is total nonsense. It's like going 500 steps forward and 70 steps back. You *MUST* make payments greater than your interest. Repeat. You *MUST* make payments greater than your interest. Could you imagine? If I just paid the minimum ~$400 that I was required to pay last month, rather than the ~$2,000 I actually paid, then it would be like taking 400 steps forward and 120 steps back. Ew. No way. I'm getting this done asap! I also paid $133 more than I'd budgeted towards my loans. Yeay!

I'm more determined than ever to get rid of these now $39,000 chains. Here are a few schemes (aka brilliant ideas) in the works:

1. Track like a boss: I started using an iphone app that tracks my expenses like a boss eating pie (charts). That, plus my favorite budgeting spreadsheet on the internet (designed by Joe Mihalic), ain't no penny going unturned!

The June 2013 expense pie chart (not yummy):

1. The big green slice (you guessed it, the loan slice) = 45.69%
2. Rent = 19.85%
3. My business = 11.55%
4. Utilities = 4.94%
5. Dining out = 4.43%
6. Money I owed my mom = 4.29%
7. Entertainment = 3.68%
8. Groceries = 1.7%
9. Parking & Gas = 1.47%
10. Misc = 1.14%
11. Dues = 0.82%
12. Gifts = 0.44%
13. Tracking like a boss = priceless

2. F* rent: My rent is too dang high -- a little over $900. It's the most I've ever paid for rent. Even though I adore my little apartment, when my lease is up in 9 months I'm either going back to getting roommates, living at home for a few months and then getting a cheap studio, or living on a farm. Not gonna lie...but I think I'd really like to live on a farm! Tee hee! I'm going to check out the place this weekend and maybe start volunteering. It would just be wonderful to be surrounded by plants and animals. Just so wonderful to tend to a nice big garden and be in the sunshine. Ah. Glory. Stay tuned...

3. Make it rain: I'm growing my little side photography business and have made some upfront investments (11.55% of my June expenses to be exact, for those keeping score at home) into my wonderful little endeavor. I still get work from the film arm of it, but want the photography part to grown. It's happening ya'll! Get an umbrella, cause it's 'bout to pour!

4. Use protection: If I liquidate my retirement (:::cringe:::) I'll get about $8,000 clean; after the penalties. But then I'd liquidate my retirement (:::cringe:::). If worse comes to worse -- my goal date comes around and I'm significantly short -- then this will be a more viable option. For now, this is definitely off the table. I'm also still making a monthly contribution ($100) that my job matches. This is also off the table. Like come on, it's free money, and my only liquid asset. There's no way...right? I'm not cashing it out.

But...what I am going to do is focus on abundance more. I check my student loan balance at least once a week. And then I go and write about it on the internet. But what about my investments?! I should be checking on those guys just as much too. Right? I'm trying to change my mindset a bit so I focus more on abundance and investments, rather than just harping on my debt all the time. Tune in next week for more on abundance! Woot woot!

Happy Independence Day America! Here's to achieving financial independence!

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