Sold My Car – I’m Now Car Free

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It had been my intention to sell or donate my car before the end of the year.  I finally got around to putting my car on Craigslist today.  Within an hour of listing it I had five calls from people interested in purchasing it.  Maybe I underpriced it?  It seemed like a reasonable price based on other listings.  I’m not going to worry about whether I could have sold it for more.

The first guy to look at it bought it and paid for it with cash.  He had a Toyota dealership mechanic with him so the car must not have been in too bad of shape mechanically.  It worked out very well.  I had my car sold and cash in my hand within three hours of listing my car.  Now I need to call my insurance agent and cancel my insurance.

Eating on $1 a Day

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There has been a lot of press lately about a couple who ate on $1 a day for a month. This is an interesting project that has been done by several people before.  I’m not sure why this one has been getting so much attention.  I did a similar project last May and spent $31.60 on food for a month.   I got the idea to do so from Hungry for a Month that did the $1 diet in November 2006.

The results of both projects were similar.  They were able to eat for that amount but it wasn’t easy.  They also remarked that they weren’t able to eat very healthy.  Looking at their menus though I think they probably ate healthier than the average American.  It definitely isn’t easy to eat on $1 a day and I’m glad I don’t have to.  Next year I’m going to try to spend $0 on food for a month if I can get it planned out.

Law School Loan Forgiveness and Income Based Repayment

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I wrote a post about law school loan forgiveness and income based repayment back in March. At that time both were still proposals but back in October they became official after being passed by Congress.

It is nice to know that if I do 10 years of public service that my law school loans will be forgiven. It is even nicer to know that my loan payments will be capped at 15% of my income above 150% of the poverty level and any remaining balance will be forgiven after 25 years. I hope I’m not still paying on my student loans in 25 years but it is good to know that my payments will be capped at a level I can easily make.

The only drawback is that if I have loans forgiven they will be treated as income for that year. That would most likely result in a huge tax bill. I’m not going to worry about that for now though. If it appears likely that I will have my loans forgiven than I’ll come up with a strategy for dealing with the taxes at that time.

Frugality and Relationships

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A commenter yesterday asked how my girlfriend deals with my lack of spending. My reply started to become rather lengthy so I am posting on the subject as well.

My GF is relatively frugal when compared to how most people spend their money. Compared to me she is not that frugal. I realize that my level of frugality is not what most people are accustomed to. I’m not going to change my frugal ways though. At least not much. In any relationship you have to compromise some and we have both made some compromises. She has become slightly more frugal and I have loosened up on my spending a little. Money hasn’t been a problem so far because we keep our money separate. It could become an issue eventually depending on what happens with our relationship.

Since I am now living with my GF money is more of an issue than when we were just dating. I pay her an amount roughly the same as I was paying for my apartment towards our household expenses and she pays all the bills. I suppose some could question whether this is a fair arrangement since I’m paying less than half the household bills. I do pay more than what my living with my GF is costing her though. We are both happy with this arrangement and that is what counts.

I don’t think there is a standard formula for dealing with money for couples. Couples just need to discuss the subject and come up with their own solution.

Reviewing My Income and Expenses

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Jacob at Early Retirement Extreme is having a 30 Day Early Retirement Extreme Makeover.   One of the goals of this makeover is cut your expense level to $10,000 or less a year.  I thought I was close to this goal already since I try to keep my monthly expenses at $1000 a month or less and I knew I was below that level a few months this year.  After reviewing my expenses for the year I realize I’m farther away from the $10,000 goal than I thought.  Although I did have some months below the $1000 level I had more months above the $1000 level.  I’m estimating that my total expenses will be about $15,000 for this year and  my total income at about $12,000.  This is not as good as I thought but that is part of the reason why I track my income and expenses; so I can review them and tell how I’m doing.

Looking at my expenses my budget busters are transportation and entertainment.  The transportation category is somewhat misleading because I drove my car delivering pizza most of the year.  Some of that expense should really be a deduction from income.  Still there is plenty of room for improvement in the transportation category and I will be making some major changes there.  Some of the increase in my entertainment expenditure is from having a GF but most of it was just the result of stupid decisions on my part.  This expenditure can easily be reduced just by choosing more free or low-cost options for entertainment.

Since the new year is almost here I’ll go ahead and set a couple goals now.  The first is to have my expenses under $10,000 next year.  The next is to have my income higher than my expenses.  These are reasonable goals and I will be planning specific measures to achieve them.