I am looking forward to this new year. By mid-year, I will not have any credit card debt. That will be the first time in 30 some years I will not have balances on cards. My only use of credit cards will be for regular expenses that I pay off monthly to keep the cards active and my credit score firmly planted in the excellent zone.
I have examined 2011 expenses. Last year was a Dr. Jekyll/Mr. Hyde year. The first six months, I was bad; the last six months I celebrated my successes in debt reduction. I examined one-time expenses, unplanned expenses, and intermittent expenses such as twice-yearly insurance bills and veterinarian bills. As I planned my 2012 budget, I started to exclude nearly $3000 of unplanned expenses from 2011. I reconsidered and budgeted $4000 in 2012. If I don’t spend $4000; I can pay off my auto or mortgage that much faster.
I did not factor in a tax return. I am at a turning point—my home taxes and mortgage interest are no longer enough to itemize. I will not count my daughter as a deduction; nor will I have the ‘head of household’ deduction. If I get a return, I will reduce my credit card balance and pay it off early.
I have areas where I can reduce spending; I tracked every expense for six months and see the possibilities. In 2012, I will reduce lunch expenses by taking lunch to work four days a week. I will reduce dinner expenses by eating at home five nights each week. I will reduce my spending on wine and groceries. I buy fresh and organic food, but I hate to shop and buy more than I can consume. I like to shop for wine. There are significant reductions in my spending on food and wine that I can achieve.
I need to replace my computer this year. I planned a laptop purchase, but I may replace my tower and buy an iPad. If I buy a tower and iPad instead of a laptop, it will not cost much more (and accumulated gift cards will cover the difference). It is easier to carry an iPad than a laptop. I love my android phone, but I need a larger screen that is easier to see and that accommodates my large sloppy fingers. I am in the middle of my self-imposed 60-day waiting period of considering the purchase. It may be my splurge gift to me this year.
I plan to get healthier and wealthier—and wish the same to all!
Image: DeeganMarie, via Flickr.com