The snowball effect

Dave Ramsey (the guy behind “Financial Peace Univ”.) has a surefire way to get your self out of debt and in a rather quick manner. Here are the steps (probably not exactly how he puts it but reiterated close enough for you to get the idea).

1. Get $1000 in your savings account as soon as possible. This is to prevent you from having to go further in debt if an emergency comes up while you’re paying off your debt.

2. Pay the minimum balance on all but your smallest piece of debt . Put as much money each month towards this smallest piece of debt as you can. Budget the rest of your spending accordingly and don’t be afraid to make sacrifices like cutting out or reducing other unnecessary monthly bills (cable/internet, gym memberships you don’t use, etc)

3. Once you’ve paid off that smallest piece of debt, take the money you were paying per month and put that towards your next smallest piece of debt. Then rinse and repeat. This creates the “Snowball Effect” where as you continue paying off your smaller debts you’re able to put larger and larger sums of money towards your next, larger, piece of debt which allows you to actually pay off all of your debts (including the large) ones in a much quicker fashion.

With this advice I’ve already paid off 1 credit card and my car and by July another credit card will be paid off which only leaves one more piece of “bad debt” and by my calculations that should be gone with a last payment in April 2011. All the while I’ll still be able to put a little bit of money away for some house projects etc.

Assessing the damage

Useful definitions for this and future posts:

Wagon Train = being on track, being smart, being healthy… with your diet, spending habits, use of time, etc

Usually I come back from a trip thinking to myself “ok, time to get back on the wagon train” but coming back from almost a week gone I feel pretty good about what I ate & what I spent. Though I went over one day on calories I’m under for the rest of the week so it more than balances out. I also only had one night of “spending” happen when we were out on the town in Austin and I may have had a little too much whiskey.

I will admit that the last couple days of my trip were definitely more difficult with my diet since we had to eat out for almost every meal, meaning I had to very quickly assess the menu and find a tasty, satisfying and calorie conscious option.

Another plus is that even though I just got back in town I was still set up for success by having breakfast ready for me to make at work (oatmeal) and even though I forgot a lunch I just ran up to subway for a 6″ sandwich so I’m still way ahead for the day.

I still have a weekend of some possible celebrating (more on that later) ahead that I need to remain good for…

Built in savings account

Though posts about health/diet/exercise etc will dominate this blog 5 to 1 I think there are important principles that can cross over between having a healthy lifestyle and healthy budget. So here’s a post on money…

It was the summer of 2002, I was 20 years old and had just returned from a trip to find that I had lost track of what I was spending and I over-drafted my account twice. Meaning I was $60+ in the hole and my next paycheck (which was going to be small anyways since I’d been out of town) wasn’t coming for another week.

What to do…

I began unpacking while thinking over my options. I could… just not spend any money for a week or so (which was unrealistic), ask my parents for money (I’d probably go with the first option before my pride gave in to this one) or…

As I was thinking that I remembered a pocket in my backpack was full of change so I added it to my change jar only to realize there was a lot of money sitting there… I counted it and found I have over $100 in change collected from just the past 6 months or so. I went to the bank, cashed it in, payed off my over-draft fees and still had a little spending/gas money until my next check came through.

Saving money through spending it…

It was then I realized my finances had a secret friend. Change!

Ever since then I’ve been borderline obsessed with change. If you offered me a dollar bill or 3 quarters I would opt for the 3 quarters every time. Ever since then I’ve never paid for anything in exact change, when the cashier reaches for the “give a penny/take a penny jar” I ask for the change instead and when I see a penny, nickel, dime or quarter on the ground I always pick it up.

This has become my not so secret savings account. Before I go on a big trip I usually go cash in my change and have anywhere between $50-$200 for extra spending money. With my spending habits, budget etc this means I am “saving” around $25 a month from money I don’t miss anyway.

In your day to day life rounding up your spending to the nearest dollar doesn’t seem like a big deal but when you head to the bank with a zip lock bag that is so heavy it had to be double-bagged 6 months later it becomes a big deal.

I get funny looks from people sometimes when this side of me shows but they get over it and I don’t care because I have extra money to spend.

Saving Money & Calories

If guys had bff’s mine would be Dave.

We met a little over 7 years ago and became fast friends. He moved a few hours north with his wife a year ago. Since then we only get to hang out for a night or two when I can sneak up there or he’s down here so when he told me he’d be down here for a week for training and that he needed a place to crash of course I turned my 2nd bedroom (now a band rehearsal space) into a guest bedroom and put him up for the week.

Sounds great right? It is, but we can be bad for each other. We’re both bigger dudes and we both accept where we’re at. Sometimes people ask us if we’re brothers to which one of us quickly replies “Why, because we’re both heavy?” and then we get a good laugh off the dumb look on the person’s face. Anyways, we both enjoy food and when one of us is visiting the other we pretty much eat out for every meal and this week would be no different.

Knowing this I planned ahead. I’m bringing my lunch to work everyday this week (and very light lunches at that) so when we’re out to dinner at night I can cut loose a little and not feel bad.

I’ve kept my breakfast, lunch & snacks to about 700 calories total leaving me 1300-1900 calories I can consume later if I so choose (though I’m trying to stay under 2000 calories a day).

Monday while we were out to dinner we ran into a coworker of mine whose husband worked for a restaurant and she gave us his discount # which gives us 70% off everything we order there. Talk about saving money. We were both full from dinner so we each just had a couple beers and the total was $6.

Then last night we went out to a place called The Well for their “wing night” ($.50 wings). Dave had told me how great their wings were so of course I needed to find out for myself. We each ordered a dozen of them and while I was tempted to give in to the happy hour drink specials I stuck with water. The wings were delicious and filling. Adding some celery and blue cheese brought my total to $7.50.

By Lose It’s & my calculations for the past 3 days…

- I am almost 2000 calories under budget for the week

- I am about $13 richer

This happened from opting for water instead of beer, ordering a normal amount of food while being out and taking advantage of discounts/specials at the places I spend my time/money at.

Sometimes things like this may not seem like a big deal but I think being able to conquer small decisions like this will have a snowball effect and only help me reach my goals quicker. I feel a little presumptuous being that I am only a few days into this with no hard results to show for it yet but my problem has never been on the knowledge end of things, it’s always been the execution.

A tight wallet & a tighter belt

I start this blog/journey after years of up and down failed attempts at getting healthy. I’ve joined a gym a handful of times, changed my diet momentarily a few more times than that and thought “tomorrow I start eating right” more times than I can remember.

Being a guy that lives alone I have little to no accountability with my diet or spending habits. I start this blog, although somewhat anonymously, to give myself the accountability to really plan out and think through what I’m putting in my body and how I’m spending my money. For me those two areas definitely coincide. What’s the difference between a night of bar food and beer and a night of eating at home and drinking water? About 2000 calories and 50+ dollars.

Here’s my my current profile/what I’m up against

• single/live alone – meaning, I’m on my own for most meals and don’t need to report to anyone for the way I spend my money
• web designer by day – meaning, I sit on my ass all day and have delicious places that surround me to eat breakfast and lunch at
• musician by night – meaning, I’m up late and out at bars where beer and tasty bar food constantly haunts me, also taco bell seems to call my name on most drives home at 2am or later

Being that I have no one to report to for how I spend my time/money, what I eat, where I go etc it’s pretty easy to just give in to whatever I feel will make me happiest or most comfortable at the time (regardless of what it means for my health or bank account). I do notice this so I occasionally do catch myself and hold back from making poor decisions but most of the time it doesn’t feel like a bad decision, it feels like I’m just living life like everybody else.

I ordered a cool new scale that will hopefully provide me a little accountability to get myself up and moving around, eating better portions and watching where my money is going.

I’d like to update this site with stats though I’m not sure of the frequency yet so for now I’ll list the 2 different areas I’d like to improve upon (where I started, where I’m at and my goal)

Area	Started at	Currently	Goal
Weight	330	330	200
Savings	200	200	1000

My plan is to share my experiences, tips and tricks I find and my progress.