I have heard that most New Year’s resolutions are long forgotten by mid-February so I thought I would take a look and see how I am doing on my 2 main goals for 2013.
Goal Number 1: Lose Weight
I thought I would start with the simplest and most straight forward of the 2 goals, losing weight. I want to lose 15 pounds by May to get me to about 215 in time for softball season. I want to still be able to make it down the line quickly and not hurt my knees so much so getting to 215 is a start.
On the day that I hit the heaviest I have ever been, I weighed in at 230.4 pounds. Since that day, I have managed to weigh in at even or down each week. Yesterday, I was 224.8 for a total 5.6 pound weight loss in a little over 6 weeks. A pound per week should be quite sustainable. Also, I have not lost any strength although my upper body workout has been less than stellar these past 2 weeks due to muscle spasms in my upper back. It should be better in the next week or two.
Goal Number 2: Lose Debt
This is a little more complicated as technically my liabilities have increased over the past month, but that is because the PLUS loans that are paid out for fall and spring semesters go into repayment starting in February. So that total has been added to the overall mix. But the debts that I have wanted to focus on (namely consumer debt) has been decreasing. In January, I managed to knock about $6000 off the total.
Now I started a new blog to more closely follow and share my progress. It is called Shredding Debt, which is exactly what I am looking forward to doing to all my credit cards when I get them paid off. Shred them for good! Be sure to stop by and check out the blog. The design and logo is the work of Andrea at Nuts and Bolts Media. I think she did a fabulous job for a reasonable cost. All I have to do is log in and start writing.
February will not end up as good. This is because I am hoarding cash for a possible business purchase or investment. I have been meeting with bankers and a consultant to see what can be worked out. I am keeping the cash in case I need to put up some equity into the deal to make it happen. Once the picture is clearer, I can resume my efforts.
Nevertheless, there will be some debt payoff simply from principal repayments. At least I am able to track my progress closely. I have been updating my spreadsheet monthly since October of 2012 working on getting debt paid off and freeing up some monthly cash flow.
Finally, here are the carnivals that featured my blogs in the past few weeks:
There is no doubt that cash flow is one of the most important aspects to managing personal finances and building long term wealth. It is only when one spends less than one earns can the excess cash be put to good use and be used to make additional income. If you are constantly spending more than you make, then it becomes impossible to begin to build wealth.
It took me a while to realize the importance of cash flow, but now that I am trying to focus on this aspect of personal finance, I feel that I am beginning to turn the corner and will see marked improvements over the next several years. Cash flow is much different than net worth. It is possible to have many assets that do not yield much cash and to even have a positive net worth and be in danger of bankruptcy if those assets cannot be sold in a timely fashion.
Two Ways to Improve Cash Flow
The concept of improving cash flow is simple and yet can be difficult to implement. You can either make more money, spend less money, or work on a combination of the two. I am working on a combination of the two simultaneously.
First, I am saving money by using extra cash flow to pay off debt. I have managed to pay off a business credit card and a business credit line in the past 6 months. This freed up almost $200 per month minimum that I no longer am obligated to pay each month. I am now working on paying off my Discover Card. My goal is to get it paid off by the end of the year at the latest freeing up another $200 per month out of my spending plan.
Just these small moves make it possible to restructure some of my debt to create a reasonable plan for becoming debt free over the next 6-10 years. That may seem like a long time, but I do have a lot of debt so I would be pleased to have it done in that time frame. The net impact to my monthly cash flow will be negligible and easy to manage while relieving a large debt burden off my shoulders.
Earning More Money
I am also trying to pick up extra shifts at work when possible and using my blogging income solely for debt repayment. There is a limit to how much I can work, but there is plenty of room for income growth from blogging. The longer I am online, the more traffic and earnings that become possible. As debt payments are made each month, more goes to principal. There is a virtuous cycle that is created as I mentioned above.
I have other debts that will be paid off naturally over the next few years which will only continue to improve monthly cash flow. I have been paying close attention to the debt balances and the minimum monthly payments. Each month, they are declining leaving more room in the budget although I am committed to paying more than the minimums and creating more and more breathing room.
Looking for More Ways to Improve Cash Flow
There are other places that I could be saving money so I will be constantly reviewing these areas as well. Looking at costs for insurance, trying to get lower interest rates for debts, eating out less and more frugally when we do are just some of the ways to save money. I am also doing what I can to grow my online earnings through expansion of blogging opportunities.
I am trying to increase my focus on dividend stocks, but that doesn’t help me in the near term because they are in retirement accounts. However, the experience and knowledge gained is invaluable for when debts have been retired and cash producing assets could be purchased.
Blogging has provided a great opportunity to focus the mind and to actually accomplish tasks. The accountability is awesome. When I started this blog, I had just come to the conclusion that cash flow was one of the most important priorities on which I needed to focus for a while. Hence, the name of the blog. Focusing on cash flow has been a great idea, and I will continue to do so documenting my progress as I move forward.
Thanks for reading and joining me on this journey.
Categories: Earning, Spending Tags: Discover Card, Free Cash Flow, Money, blogging, cash flow, debt, earning money, make more money, monthly budget, net worth, paying off debt, saving money, spending plan