Thursday, August 18, 2016

ça y est—c'est fait

It is accomplished.

I've put in the "pay off" request with OneMain Financial, so after the request processes through in a few business days—first at OneMain, then at my bank—I'll have completely paid off the second of my four major debts. Everything is proceeding perfectly on track per my unsinkable budget, which really is a well-oiled machine. Although making that budget was one of the more boring things I've done, I also think it's one of the most important, and I'm very glad I did it. It makes up for the terrible life-choices I had made in my youth, and it resets the crooked tent pole of my life back to the vertical. Freeing myself from the OneMain debt means giving myself $250 a month of extra breathing room, which is now added to the extra $213/month of breathing room that came when I paid off my car earlier this year.

I chose this debt-payment strategy because it made psychological sense to me: chop away at my smaller debts first, saving my larger debts for last. This lets me feel a sense of accomplishment as I work my way upward while also allowing the savings to gain momentum by freeing up progressively more cash with every successive payoff. As things stand, I'll have almost $10,000 in the bank by this December; by August of next year, that total will have ballooned to $15,000. By December 2017, that will have gone up to $27,000.* By the time my budget "ends" (it never ends, really) in December of 2019, I'll have almost $40,000 in the bank. At that point, if I continue saving at the same rate—and with no major debts to hold me back any longer—I'll be saving at an insane rate once I'm in my fifties.

*The reason for the seemingly sudden jump has to do with how Korean companies (at least those involved with education) handle severance pay. In the 90s, the rule was that, for every year that you worked, you'd receive one month's pay as part of your severance. In other words, if you worked at a given company for five years, then decided to quit, you'd be paid five months' severance pay. That's not a bad bit of cash, although it's undoubtedly less than you'd be getting, over time, if you had a more American-style retirement package.

Many schools and educational institutes (like hagweons, including the one I'm working for now) have reinterpreted the rule to mean that you'll be paid one month's salary every year, pending renewal of your one-year contract. Mathematically, this works out the same, but the difference is that you get paid at renewal; the severance money isn't saved up until the very end. I've built that fact into my budget such that, once a year, my savings will suddenly jump because I've effectively been paid double in September or October. (My contract ends on my birthday, August 31, so I'd expect my extra month's pay to happen in either September or October, depending on how quick the finance office is. That office is often asleep at the switch when it comes to any sort of non-automatic payments, so Murphy's Law suggests that I won't get my pay boost until October.)


Charles said...

Congrats, dude!

Sorry to hear that your tent pole is crooked, though. Maybe once you've paid off the last of your debts you can start saving up for surgery to fix that.

Kevin Kim said...

I think the ladies like it better crooked.

Charles said...

Well, in that case... if it ain't broke, don't fix it!