Tuesday 9 December 2014

The Larger Picture of Cash Flow

There will be times when incidents happen that you need to take care of which can ruin or seriously disrupt your cash flow. Sometimes you can absorb such an unplanned expense, other times you can’t.

This is where a savings account comes in handy to top up your budget and keep your finances running smoothly. I have no savings account as all of my spare money goes to debt retirement. (Okay I have started to put $20.00 aside).

Well over the past few weeks I have had a few incidents where I could have used it, such as that sleeping bag and heater, and now my massive phone bill. The overage charges from October have finally hit me, to the tune of $400.00.

Now, I have a few options, all of which have advantages and disadvantages. As I said, the best option would be to have a savings account (Come August I plan to aggressively get going on one).

My first option is to pay the money out of the debt retirement budget. I can pay it off this month right away with that money and then only put say, $600.00 – $700.00 on the second card. If I did this I would miss goal of paying that second card off by April 1. That would then push paying the third card off possibly past August. Not something I am willing to do. 

I could just pay what I can this month and piss off the phone company for the next few months. Again an option and what I have done in the past when I have had little choice. I am working to get my credit into the excellent range and this will hurt my credit rating. So, one way or another that phone bill will get paid off in full this month like it has been every other month. 

I also could pay it off and just sink the main account into the overdraft. Technically that is what this is for. I am training myself that the overdraft doesn’t exist and to never ever go into it again, even for part of a day. 

So what I will do is pay my phone bill with the first credit card and pay it down with $50.00 a payday until it is done. If and when I get extra cash, it will go to eliminate this card. Right now it is sitting around $300.00 and so it will be around $700.00 with the phone bill on it. 

This way I can keep my overall pay-down on schedule, and still pay this card down over that same time frame. Sure I am paying interest, but this is worth it for me to keep that overall pay-down on schedule. In a few months I know I will have that first card paid off. I expect to do so by April 1 as well. 

By doing this I am proving to myself that I can put charges on a credit card and pay it off in a timely manner. It is an exercise to show that I can manage these things well. 

As far as the writing is going, I am doing well. I am averaging two chapters a morning, two passes each. Once this pass is done I will edit the whole book in one pass a few times, until I read it and make little changes. Then it will be ready for others to read and yes that editor I need.

At this pace, this process should not take long. I hope to have the book ready by January 1. (Then after all that hard work people can tell me it’s regurgitated rat-puke).

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