By | July 12, 2017

The past few months have been a whirlwind. I’ve experienced numerous setbacks towards my financial goals. It has been said that life is what happens when you make plans. Well, that saying has been true for me recently. I’ve seen my credit card debt rise week by week. My spending has been out of control. Also, my emergency funds have been depleted. Sometimes when you’re traveling on a road, you experience road bumps. In this journey we call life, sometimes we experience setbacks. But, the key question is, how do we deal with the setbacks once they occur?


I’ve experienced setbacks in two financial areas. Those are my credit cared debt, and my emergency fund. Let’s discussed what has happened with each.

Credit Card Debt

I have several credit cards, but only two are worth discussing for this post. The first credit card has a balance of $3000. I had a zero balance on this card in April. I’ve since maxed out the card. This clearly has affected my credit score and continues to bring my score down. I wrote more about that topic in my post, Credit Score Went Down.

The reason for maxing out the credit card included huge unexpected and expected expenses. I was deemed to be at fault for returning a rental vehicle that was damaged. However, that only accounted for $700 on my card. The good news is that I am waiting for a full refund from my credit card company. Approval is almost complete. They are just waiting on getting a release from the rental car company saying they won’t come after me for anything else. I also had another $600 in annual expenses that were totally expected. The good news here is that my job will be reimbursing me for half that amount, but I won’t receive that until sometime in August.

If you add the $700 for the rental car and the $600 for the expected expenses, that only totals $1300. That means the remaining $1700 stems from me living ABOVE my means. Let me be absolutely clear on this point. If you want to get ahead financially, you have to learn how to live BELOW your means. That means, you spend less money than you take in. It’s good advice that I failed to follow for the past 3-4 months. As a result, I’ve seen my credit card being maxed out.

For the other credit card, that has a limit of $5000. I’ve already used $50 on that card. I’m basically using my credit card for living expenses because I ran out of money before my next pay check. I clearly have to learn to rein in my spending. But, keep reading. It gets worse.

Emergency Funds

I have money in emergency funds in several places. I use Qapital and Digit as two locations for my emergency funds. They each had about $1000 in them in April. Now, Digit has about $100 left and Qapital has about $200. AAAHHHHH!!!!  Yea, that’s me screaming across the internet. What the heck did I spend money on?  The answer includes, a vacation, way too many expensive drinks, rental cars (because I don’t own a car), eating out EVERY day, audio books (about dividend investing), etc. I didn’t make a big purchase or anything. Its just small everyday expenses that add up to a huge amount. There is a snowball effect to debt, much like there is for direct reinvestment plans or DRIPs. Over time, little by little adds up to a lot.

As I’ve mentioned, I have my emergency funds in several places. One of those places includes Robinhood. The balance in my Robinhood account is about $1500. It’s not the greatest of places for an emergency fund, but I’m fine with the fact that the money is invested for short term and may go down when I really need to access it. But, if push comes to shove, I can liquidate my Robinhood account as well. Of course, the simple solution is to control my spending. That will help me turn the tide against my setbacks.

The Plan

In life, sometimes we fall. But, what’s important is for us to get back up again every time. I’ve since stopped saving with Qapital. During the above period, it withdrew an unexpected large amount from my account which caused my balance to go negative. I had so many rules set up with Qapital that it was hard to keep track. I prefer Digit. I’ve used Digit longer and the amounts withdrawn doesn’t hurt as much. I know I could use Qapital with fewer goals and rules, but sometimes simplicity is best. I’m completely fine knowing that an unknown small amount of money will be withdrawn from my account on a regular basis. It makes it harder to budget, but I’m fine with that.

To overcome my setbacks, I must control my spending. I just started a new position at work and so I expect that my income will rise. I also expect my expenses will fall, even though I will still eat out every day. Sorry, I haven’t cooked consistently in decades, and doubt I’m going to start now. However, I can spend less money eating out and that’s what I intend to do. Quite frankly, I fully expect my living expenses to be MUCH less just because of life’s circumstances right now. For example, I don’t have a car payment and won’t need to rent a car for the foreseeable future.

With my next paycheck, I will be paying down the credit card with the smallest balance to bring it back down to zero. I am going to go back to my version of the envelop system. That’s where I decide exactly how much money I can spend per day. If I decide that amount to be $20 per day, I can use that $20 on anything I want, but I won’t go over it. My next main task though is to pay off the credit card that has the $3000 limit on it. It may take me a couple months (maybe three), but that’s going to be a top priority.

What about my Dividend Portfolio? Well, I intend on maintaining my current levels of investing. Arguably, I could have cut back on those levels to avoid some of the debt. Between my retirement accounts (401k and IRA) and my dividend portfolio, I am really saving a large percentage of my paycheck. I haven’t done the math yet, but I might be saving more than 50% of my income. It’s definitely at least 40%. It’s important for me to maintain that level of savings.

Also, with my renewed focus on reigning in my spending, there is a decent chance that I might increase the contributions to my dividend portfolio with excess cash. I’ve been thinking about increasing my savings goals for 2018, but might start a little bit earlier. More on this in a future post.


Setbacks are bound to happen. Building wealth through dividend growth investing takes time and patience. It also takes discipline. I know I’ve written about my setbacks before. But, blogging about it helps to keep me honest. Accountability is one reason why I blog. I’m happy to share the successes of my monthly dividend reports, etc. But, during tough times, it’s important to share those as well. When setbacks happen, you just have to learn to deal with it. As the saying goes, there’s no use crying over spilt milk. We just have to keep on going.

Did you incur any setbacks recently? How do you handle setbacks when they do occur? Let me know in the comments below.

15 thoughts on “Setbacks

  1. Investment Hunting

    Bummer about the rental car issue. It really sucks to go through something like that. Hopefully your credit card company comes through with the coverage. As for the savings apps, I really like Digit. I use Digit as my early mortgage payoff system. As soon as my Digit balance reaches a certain amount, I pay down my mortgage. Wash, rinse, and repeat; my mortgage should be paid down in short order.

    Don’t get discouraged. First plug the largest money sucking holes, then plug the smaller ones. Eating out is one that adds up so darn fast. Even though I can afford it, I bring lunch everyday to work. I’d rather invest that money. Best of luck.
    Investment Hunting recently posted…Two Lbrands Cash Secured PutsMy Profile

    1. Dividend Portfolio Post author

      Thanks IH. That’s the plan. I plan on plugging the big holes in short order and will then tackle the smaller ones.

      I definitely still eat out but I’m spending much less. Every little bit helps.

  2. Dividend Diplomats

    Hey, setbacks happen. Nobody is perfect and anyone that tells you they are are full of it. The important thing is that you realized you have a problem and are taking the corrective actions to take care of it. As IH said, start plug the holes of the low hanging fruit. Rental car accidents and disagreements will happen, but you can easily change things such as buying expensive drinks at bars and eating out all the time. It will be an adjustment, but one that you can easily fix tomorrow. Over time, if you want it bad enough, you will learn to start playing great defense with your money and get the savings rate in great shape. So for now, keep chugging along and keep working on reducing your CC as much as possible.

    Best of luck. Feel free to ask us or others in the PF blogging community if you have questions. I’ve learned a ton from others out there!

    Dividend Diplomats recently posted…The Power of $50,000 in Dividend Income, ExplainedMy Profile

    1. Dividend Portfolio Post author

      Appreciate it Bert. Right now I am tracking everything. I’m bracing for a potential reduction of my income for the next year. I really won’t know until the dust settles in August what my monthly paycheck will be. But yea, definitely working on plugging holes. Rome wasn’t built in a day and change takes time. But hoping to reverse course towards the right direction shortly.

      Thankfully, I won’t have much opportunity to overspend (like I used to) for the next year even if I wanted to.

      Thanks for the comment. The DGI community is great.

  3. Project2035

    Ha, you know it man. Bottom is the best place to start climbing 😉 Personaly I use public transport even tough I own a car, thats saves a lot to me. My transport spending is minimal less then 1/10 of our total income. Also I intend to spend less on food as it makes big part of our spending and I have tp say to big 1/4 of our income. Then there is another 1/5 with name other cost. Have to look at them also. Gool luck. I was in much worse situation some 7y ago, but its nothing compared to what was back in 2008-2009. Imagine your fired and there is no jobs at the market and you in shit load of debts. And even then people manage to work their way out 🙂

    1. Dividend Portfolio Post author

      Yea thanks P2035. I won’t have to worry about auto expenses at all for the next year. No more rental cars (unless I take a vacation and want to rent one). Right now, work and everything I need is within a 10 minute walking distance. So that part has been taken care of for the next year.

      Food is still a struggle it’s gotten better but it’s still bad.

      I definitely realize it could be worse. One of my favorite quotes says that “I cried because I have no shoes, until I saw a man with no feet.” The point being is that one should count there blessings because things could always be worse.

      Thanks for stopping by man.

  4. Vivianne

    Yesterday my tenant emailed me that the washer was jumping around. Less than a year old washer is having problems? Anyhow, I came to check it out as I’m going to be out of town. It turned out the load was too much. She was washing sheets. I wasn’t mentally prepared for the $500 setback. But once I was done with my bike ride, I’m slowly accepting. 🙂 anyhow, I’m glad that I don’t have to do anything extra.

    My points is if you can recover from a a bumpy road faster, these kind of stress won’t bother you as much. With that said, best of luck to you. I’m sure you can save a tons when you’re consciously thinking about saving.

    1. Dividend Portfolio Post author

      Yea bumps in the road are no fun but sometimes it’s important to go through them. Sorry about your tenant problem but at least it wasn’t worse.

  5. Dividend Daze

    Accountability is huge. And you are right, blogging about everything and staying transparent keeps you honest and on track. Everyone has setbacks but looks like you are doing the right things. For example, your dividend meter in the side widget is over full. So you are still reaching goals. Prioritizing things on your list may help also. Just keep at it!
    Dividend Daze recently posted…2017 Goal UpdateMy Profile

    1. Dividend Portfolio Post author

      haha – you noticed. I’m in the middle of writing my next post and it’s all about the fact that I reached my goal for 2017 already. Time to adjust.

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  9. Mr. Robot

    Those are some setbacks, sorry to hear that!

    As others have said before, when you are critical and conscious about your spending (and as a result your saving) so you will still find ways to add extra “income”. Food is defintely an area where one can save a lot of money whil still having a nutritious and great tasting meal.
    Mr. Robot recently posted…This is my buy for July 2017My Profile

    1. Dividend Portfolio Post author

      Yea I’ve been struggling with my food budget for sometime. I estimate it’s still gonna be a struggle. But you’re absolutely right. It’s good to be conscious of your spending and savings.


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