Thankfulness and the November 2012 Total Money Makeover Update

Many people have been posting something they’re thankful for each day of November on Facebook. I’ve decided to do the same on a weekly basis, but here in the (relative) quietness of my blog. Here are my first seven, in no particular order.

1. I’m thankful for my husband Dexter. He is my best friend, and he knows when it’s time to bake a batch of brownies and brew a pot of tea. He’s so creative and has so many big dreams. I’m so proud that he’s started a business called Iron Swallow, which offers ready-made and custom comic book wallets, greeting card, and journals.
2. I’m thankful for the health insurance and sick leave my job provides. I used both today and was reminded that I received amazing services, information, and medication with incredible flexibility and affordability that many people don’t have.
3. I’m thankful to have a job I love. Real talk: sometimes I get really tired of my job. However, my students–with a smile, a question, or an enthusiastic “Miss Kelsey!”–always remind me that I love what I do.
4. I’m thankful for parents who taught me about Jesus, always made sure I knew that I was loved, warned me to NOT EVER mess around with credit card debt, and have been a great example of what it looks like for two imperfect people work together to make a marriage survive and thrive.
5. I’m thankful that we got through our fire safely, and that a year later we are back home with our puppies and a mostly unpacked house.
6. I’m thankful for our roommate. She has introduced us to some amazing Honduran foods, she made my birthday celebration extra special, and she’s just a good friend.
7. I’m thankful that for the first time since our fire, we are able to make extra payments on our debt each month! Since September, we paid off 1.3% of our debt and we have 63.6% to go!

What are you thankful for this month?

September 2012 Total Money Makeover Update

Life is startling to feel a little bit normal again!

We received our insurance check in August. The mattress we ordered was delivered on Tuesday–which we are so excited about after 6 months of camping on our bedroom floor!

With our insurance money, we paid off Debt #3. We had had “just a little bit” left for a long time, and we are so happy to have that bill gone.

Thanks to our larger-than-normal payment on that debt, plus our minimum payments on our two remaining student loans, we paid off 3% of our debt over the past three months, and we have 64.9% to go.

Debts #4 and #5 are daunting. Thinking mathematically, I realize that we are not on track to pay off our debt entirely by March of 2014, which is the goal we set when we first embarked on our journey to debt freedom. However, we’ll keep that goal in mind to spur us on.

Total Money Makeover Update: November 2011

Last month was the first time since the beginning of our Total Money Makeover that I neglected my monthly update. I forgot my online banking password, and since we didn’t make any payments, I knew it wasn’t going to be very exciting. However, I knew I needed to keep track of our progress because it’s a key to staying encouraged on our path to debt freedom. Plus, nobody likes to be a flake.

In the past two months, we’ve paid off 0.8% of our debt and we have 70.7% remaining.

I’m excited that even without extra payments, we should be under 70% by the first of the year. This month, any surplus will be going to refilling our emergency fund after we used funds from it in September to repair our car. I’ve also recently started a side business (details coming soon!) which has required some financial investment. Finally, because of our house fire, we’re eating out every night and having to buy more convenience foods for lunches because we’re still living in a hotel. Our insurance company will repay us for the eating out, but we don’t know when that will be, so we need to plan for that to be covered in the cash flow this month.

Thanks for all of your thoughts, prayers, and kind words in regards to our fire. We feel so blessed to have so many friends and family who care about us.

Total Money Makeover Update: August 2011

Since I’m switching to budgeting a calendar month at a time (rather than starting at the 15th of each month), I knew I would have to do a teeny-tiny, half the payments update sooner or later. So here it is.

In the past two weeks we’ve paid off 0.2% of our debt and we have 72% left to go.

I’m not expecting a huge drop in percent next month since we made a bigger payment last month with my multiple paychecks from school. My first paycheck of the school year is in September, so I’m hoping to be able to celebrate my birthday in October by moving down into the 60s.

Total Money Makeover Update: July 2011 – Shaking Up My Easy Budgeting System

Since we’ve become an all-Mac family, I’ve had to change the way I track our budget. I was so frustrated since I had spent years perfecting my system. The upkeep was quick and painless each month, and it was easy to check on my progress throughout the month.

Those days are over. I’ve spent the last month or two downloading the wrong version of Quicken, downloading the right version of Quicken, realizing that my bank’s files aren’t compatible with Quicken for Mac. (From what I’ve read online, this is because Quicken wants extra money from my bank to give them permission to let me have a file with the EXACT SAME NAME. I found a way to hack the system, but I didn’t want to get in trouble. Plus, on principle, it should just work if I’m paying that much for their product.) It hasn’t been fun.

I’ve decided to give Mint.com a go, since it’s free and *should* look up all my financial information for me each time I log in. This will save me time logging into each of my loan accounts to track our balance each month. However, it seems like every time I log in there’s at least one financial institution that’s not updating properly. So, I may not be saving any time at all. But did I mention it’s free?

By using Mint, I’m also giving up my ability to track my spending starting on the 15th of this month. I’ve gotten around that problem by using part of my triple-beginning-of-summer-paycheck to give us a cushion at the beginning of each month up until the latest day our first paycheck might come. So, after this month, I’ll plan to do my Total Money Makeover Updates during the first week of the month.

Unfortunately, my way of coping with changing our budget system has been avoidance. In fact, my task tonight is to catch up on July and see how big a hole we’ve dug for ourselves where we’re at on this month’s budget. We’re thankful that my summer job brought in a few hundred dollars more than we’d planned so we could pay the $130 ticket we got for forgetting to register our car have a little bit of cushion on our summer budget.

Let’s cut to the chase.

This month, we paid off 2.1% of our debt and we have 72.2% to go.

And remember…register your vehicle.

Total Money Makeover Update: June 2011

Goals are a blessing and a curse.

They say that statistically there is correlation between writing down goals and achieving success. I don’t know who they are or what sort of study they did, but there is obviously some wisdom to formalizing plans for what you’d like to accomplish. Dexter and I planned to pay off our debt pretty quickly after college. However, until we set our goal to have them paid off by March of 2014, we paid our minimums each month and made no progress. Since setting the goal 16 months ago, we’ve paid off a quarter of our non-mortgage debt.

The curse manifests when you’re not making the progress you think you should be. To be out of debt by March of 2014, Dexter and I would have to pay off 2.4% of our debt each month. That has not been happening. I really like to look good in front of other people, and reporting that we’ve paid off less than 1% of our debt month after month doesn’t qualify as “looking good” in my book.

Speaking of what we’ve paid this month, since May 15, we’ve paid off 0.7% of our debt and we have 74.3% remaining.

Photo Credit: foxumon

Last week, I couldn’t fall asleep one night, so I got up and did what any normal person would do: I averaged interest rates, used debt snowball calculators, and created Excel worksheets. The information I found told me that on a fairly (but not incredibly) strict budget, getting out of debt should take about seven years. Not from when we started, but from now. I’m pretty good at math, so I realized that seven years is more than the three that we had been hoping for.

Needless to say, I was upset. It was a busy week, so I didn’t have time to sit down and talk to Dexter about what I’d learned. On Wednesday night, I was working on our summer budget, hoping (while doubting) that we’d be able to pay off Debt #3 this summer. I had been hoping and planning to do this for so long, that even though I knew we probably wouldn’t have enough, I almost wrote the check and took it to the bank, thinking that if I just did it I could escape the consequences. (This is the kind of risk that people like me who have never experimented with drugs and other risky behaviors do for a rush–we think about paying off debt irresponsibly fast.)

Thankfully my logic defeated my impulse, because we only had enough to pay off a quarter of what remains on the loan. If I had paid it, we would have been living off emergency savings, car replacement savings, Chrismas savings, and spare change from the top of the dryer all during August.

All this begs the question: Why did we think we could pay off the loan by March 2014 in the first place? Easy. We thought we’d make more money, spend less money, and let God help (but just a little bit).

Why are we making less money? Although it sounds terrible, we actually made a decision last month to start bringing in less money for a short period of time with the hope of increasing our income even more in the future. I’ll share more about that decision next week.

Why are we spending more money? That’s a harder question. We’re doing good things with our money, like giving to Compassion and Campus Crusade, buying local food, and using dairy from happy cows. We’re also doing a bad job keeping up with our cash system, which means more “I’m sure we have enough” purchases on the debit card. We’re eating out more. We’re getting comfortable, knowing that we make enough to pay the bills each month.

Why are we “letting” God help? We purposely chose a goal date to be debt free that was a bit of a challenge. We wanted God to be glorified through our journey to debt freedom, and that wasn’t going to happen if we approached the goal as if we could do it all ourselves.

What are we going to do about it?

The problem I see with the answers I’ve given above are with how comfortable we are parting with money. For the past several months, I haven’t been mad about our debt. I remember looking at a tax form for one of our student loans last year. I realized that we had spent one entire month of my income on interest for that one loan. That made me sick, but it also renewed my sense of urgency about getting out of debt.

Looking at our summer budget this week and realizing that we couldn’t pay of Debt #3 made me mad. When I analyzed our summer budget, I thought, “Who needs clothes when you have debt?!” and “Restaurants are for rich people!” I did, obviously, leave some room in the budget for those things, but I have a renewed desire to spend as little as possible in those areas. Hopefully this new drive will help us stick to the budget and really analyze what is a need and what is a want.

 

Total Money Makeover Update: April 2011

Photo Credit: Billy Alexander

It’s been a busy month! Our evenings and weekends have been packed with events, friends, and responsibilities. I’m at the point where when a friend cancels, I’m thrilled. I even had to take a rain check on an invitation for dinner with this lovely lady. We’re looking forward to our next completely free weekend on May 21. (Sigh. That’s a long time.)

We’re not making extra income like we were in the fall when I worked after school three days a week. I miss the check, but as busy as we’ve been, I’m so thankful it’s no longer such a frequent commitment. It’s also been interesting to see what cooking for four has done to our budget. I also failed to get cash in my envelopes last month, which resulted in us coming in around $60 over budget. (It’s a miracle that it wasn’t more!) Since our month starts today, I plan to go to the bank tomorrow morning (or send Dexter) so I don’t make excuses later.

I was disappointed about the lack of extra payments we made this month. We paid off 0.8%  of our debt and have 75.8% to go. Next month we’ll make another small extra payment, but I’m hoping it at least gets us down to 75%. The following two months should be much more fun!

Thanks for checking in on our progress!

Total Money Makeover Update: March 2011

Photo Credit: Egahen

The past 28 days have been busy. Although in January I resolved to use cash for all of our spending, we never made it to the bank to get cash for this month. Fortunately, we didn’t have a lot of time for shopping, either, so I didn’t waste money on things we didn’t need. We bought food and toilet paper, and we paid our bills.

We had a friend move into our basement for a three-or-four-month stay and invited another friend to eat dinner with us on a regular basis, so we had to increase our grocery budget. I’m still figuring out what a grocery budget for three grown men and one woman should look like. Fortunately, I don’t think it will quite double what we currently spend. Hopefully, it will help us to use up everything we buy and will force me to plan meals better. (It’s a lot harder to “wing it” at dinner time when there are four stomachs to feed!) I may have gone a little crazy buying canned food for the nights I don’t feel up to cooking. There were some good sales on Indian food and Muir Glen organic soups the weekend our friend moved in, and I bought about 16 cans (which is really only about 8 meals). I’m hoping to get some freezer cooking done over spring break to further save money and take the stress out of making dinner. (Dish suggestions welcome!)

Last month, I shared a review of the progress we made after having done our Total Money Makeover for a whole year. It was rewarding to see how all our hard work has paid off! When I made this month’s budget, I was a little disappointed. We had lots of extra income due to our tax return, but we also had some larger-than-usual expenses, so the extra loan payment amount on my spreadsheet looked pretty boring and average. However, after totalling our remaining debt and calculating our percentage, I’m encouraged. This month, we paid off 1.1% of our debt and we have 76.6% to go.

I’m also encouraged as I look at the balances for each of our loans. I can see a difference even in the balance even for the loans we haven’t paid extra on. Debt #3, which we are working on now, is looking pretty conquerable. I’m hoping to have it gone by July 1. Debts #4 and #5 are still dauntingly huge, but Debt #5′s biggest digit will drop next month.

Currently, I’m taking Leah’s advice and praying for God to provide opportunities to earn extra money and speed up our debt repayment. For now, we’re pressing on and are hoping to be at the 75% point very soon!

Total Money Makeover Update: February 2011 and One Year Review!

One year ago, Dexter and I made the decision to buckle down about getting out of debt. We pored over Dave Ramsey’s Total Money Makeover book, and my aunt and uncle gave us a subscription to Financial Peace University. Then we put what we learned into action. We cancelled our credit cards, switched to using a cash envelope system for most of our purchases, and we revised and tracked our budget month after month. We were encouraged as we tracked our debt repayment and had big months like April and July. We were discouraged the months we were lax about our spending or didn’t have much extra income.

It’s been a month since our last Total Money Makeover Update. In those 31 days, we paid off 0.9% of our debt. We also brought our baby emergency fund back up to $1,000 (because we realized after-the-fact last month that the money wasn’t all there to fill it up). We also took care of a few yearly expenses. We stayed pretty close to budget in most areas and succeeded in using the cash system *most* of the month.

Let’s take a look at the year in review, seeing what percent of our debt was repaid each month in the last year.

• March – 1.4%
• April – 6.5%
• May – 2.0%
• June – 1.0%
• July -4.1%
• August – 1.5%
• September – 0.4%
• October – 0.9%
• November – 1.5%
• December – 0.8%
• January – 1.8%
• February – 0.9%

This brings us to a total of 22.3% of our debt GONE! We have 77.7% to go. Let’s break it down some more.

• Highest Month – April (thanks to the tax-credit we received for buying our home!)
• Lowest Month – September (my third consecutive month without a real paycheck)
• Average Per Month – 1.9%
• Projected finish date at the beginning: March 2014
• Projected finish date at 1.9% paid per month: June 2014
• Projected 50% date at 1.9% paid per month: May 2012

I so badly wanted to sell off everything we own to get down to 75% this month. I thought that being a quarter of the way through our debt in a quarter of the time we wanted to take to pay it off sounded really good. It’s disappointing to realize that we’re a few months behind schedule. However, I’m so thankful for how far we’ve come. Our debt is scheduled by the banks to be paid off in 20-30 years. Four years and some extra months is so much more encouraging than 30!

I’m also refusing to be discouraged because of some things we’ll be changing in the next year.

• Last year, we saved $200/month to replace our car whenever that becomes necessary. Because we think we have enough saved to replace our car’s transmission if that were to go out or to buy an old car to tide us over till we’re out of debt, we’ve decided to stop saving for a car. From now on, we’ll have an extra $200 a month to put toward our debt!
• Starting this summer, we’ll be having the housemate who lived with us last year move back in. Although last summer he lived here for the cost of groceries and a little for utilities, since he’ll be staying here long-term, we’ll actually be making a little profit from rent. We researched how much he’d be paying for accommodations nearby and are charging him a lower price. We’re hoping to save him money and speed up our debt repayment a little, too!

Most importantly, we’re refusing to be discouraged because we’re trusting God to work out our financial situation as he sees fit. If he wants us to be done in March 2014, that’s when we’ll be done. If he wants us to be done in June 2014 (or later), we’ll trust that his plan is good. If he wants us to be done earlier, I definitely won’t fight him either!

We’d like to say thanks to all of you who have encouraged us over the past year. Your positive comments, especially in the slowest months, meant a lot to us. Although we’ve heard stories about people being mocked and even berated about their decision to live frugally and become debt free, we’ve been blessed to have family and friends who think it’s cool that we’re making these financial decisions.

Let’s get year 2 of this Total Money Makeover started!

Total Money Makeover Update: January 2011

Photo Credit: brokenarts

Thanks to Dexter getting three paychecks this month instead of two, we were able to recover from last month’s spending spree, refill our emergency fund, and make a big extra payment on Debt #3. The first digit (biggest place value) in Debt #3 dropped by two this month, which is exciting for me as I look for any glimmer of hope as I calculate our debt each month.

Our day-to-day spending wasn’t as good as our big payments. We ate out more than we should have this month, and I definitely didn’t update my checkbook every day like I promised. I also gave myself permission to only use envelopes for groceries. This wasn’t very effective, because I kept forgetting about my envelopes altogether and used my card anyway. We’ll be back to the envelope system next month. We only use our bank card for the ATM, gas, and online purchases. I’m trying to devise a way to leave my bank card at home so I’m not tempted to use it or don’t accidentally use it. I wonder if I can use gift cards to pay at the pump at any gas stations? Then, as long as I get all my cash ahead of time or by going inside the bank, I shouldn’t need my card.

I was thinking about buying a refill of Dave Ramsey envelopes and reinforcing them with packing tape, but they’re currently out of stock. I like that they’re bound together, but they didn’t last long. I’d also probably cut the flaps off the envelopes because it takes too long to find my envelope and open it when I’m checking out. (It doesn’t seem like a legitimate problem, but I felt so slow when I used it before!) I also found this template for cute tabbed envelopes. I’m still deciding if it’s worth my time to make these when I can just use the plain white standard envelopes I already have. Maybe it would give me some inspiration to get back on track with my envelopes!

In summary, we paid off 1.8% of our debt this month and have 78.6% to go. We hope to pay off the rest of Debt #3, almost 8% of our total debt, this summer. Then we’ll just have two (miserably huge) debts to go!

Tune in next month for the one-year summary of our Total Money Makeover!