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: June 2012

Life has been a tad chaotic since I last posted about our Total Money Makeover progress.

After our fire, we lived in a Comfort Inn for 6 weeks. We ate out every night–which is not in our normal budget–and were begrudgingly given an advance of $500 (after we’d spent about $1000) by an insurance lady who said they didn’t usually give advances for food. (Which begs the question, What must one need in order to get an advance?)

Then, we moved to a condo and were given a rather random and unhelpful assortment of our stuff to live with. Salad spinner – yes. Bed sheets – no. We also were blessed with the companionship of a family of adorable, but filthy and disgusting brown mice who were much too smart to crawl into our humane mousetrap, even when it was full of cheese and peanut butter. About a week before we moved out, our property manager finally returned our call about taking care of the mice, but we decided to live with the mice and let maintenance deal with mouse-killing after we were gone.

About a week and a half after we moved back into our newly remodeled home, I took one of my students to the hospital and spent most of my evenings for the next three weeks with her. When she was discharged, she moved in with us and became our unofficial foster daughter for a few weeks. Then, she decided to get married.

During all of this, Dexter spent about two months out of work, though God blessed him with a few fantastic freelance jobs. He now has a nice, predictable job at a bank and I get to see him dressed up, tie and all, every morning. We also took an amazing class called Perspectives which added plenty of homework to our schedule. Dexter, always creative and always entrepreneurial, started a handmade product business which I’ll tell you more about soon.

How has all of this life affected our financial situation?

For the last eight months, we haven’t budgeted well at all. We started using a credit card and paying it off every month, but then using it again because paying it off used up our cash flow. After depleting our emergency fund, our car stopped working, so we opened a new, interest-free credit card for that bill.

For me, this summer is about getting back on track financially. We’re paying off the credit cards, getting back on the cash envelope system, and trying to live simply.

I remembered getting to the 75% mark in our debt repayment process, but I didn’t remember how close we came to 70% last time I calculated our debt. I was happily surprised that after months of paying only minimums, we had still made visible progress. Over the past seven months, we paid off 2.8% of our debt and have 67.9% to go.

We haven’t received the check for what we lost from the insurance company. This is mostly our fault, because we haven’t finished our paperwork. I like to blame this on the people who cleaned our house, because we keep unpacking damaged items mixed in with undamaged items, and having to record them in our paperwork. We have a few pieces of furniture to get repair estimates for, and then we should be done. Once the check comes in, things will look a lot more cheery in the financial department. With the check, we’ll do things like:

  • Save money
  • Replace our bed (We are currently floor-camping, and have been since February 6. It’s surprisingly comfortable, but we’re thankful for the new carpet underneath the sleeping bag.)
  • Replace our couch, window treatments, and set money aside for things we discover we need in the future
  • Fix our air conditioner
  • Look into refinancing our house
  • Finish paying off Debt #3

In my imagination, we’ll take the rest of our thousands of dollars and go on a vacation and buy a new car, but it’s unlikely we’ll be able to do all the things on the list above. A girl can dream.

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: September 2011

Hello, internet. It’s been several weeks since I’ve blogged. School started, we got a second renter, Dexter and I have been talking and praying about future dreams, and I just plain didn’t want to.

This blog and I have become frenemies. I love the chance to write, to interact with the nice people online, and to urge myself to be creative. However, I think I’ve been taking it all too seriously in light of my other priorities. I also struggle with what to write about–freedom is a blessing and a curse for the no-niche blogger.

I did, however, commit myself to updating the blog monthly with our debt repayment. I knew what to write about. I didn’t feel like I was contriving something to write just so I could talk to you. I thought some math symbols would break the ice or anesthetize the awkwardness. Whether or not it’s working, here I am.

close up picture of keys on a calculator

In August, we paid o.5% of our debt and we have 71.5% remaining.

It’s far enough into September that I know what our extra loan payment situation looks like. Last month, I naively wished that for my birthday in October, I could pay off Debt #3 or at least get down into the 60%s rather than the 70%s. Then, we paid for six months of auto insurance, a year of life insurance, three new tires, and new front breaks and rotors. So, not only do we not have any extra payments, we’re dipping into our baby emergency fund.

I was really frustrated when I prepped the budget for this month. I really want to be out of debt. I’m tired of the bondage and having an eerie voice whisper in my ear in the checkout lane.

You shouldn’t be buying this. Underpants without holes aren’t a need, they’re a want. Who cares about animal welfare; you need money.

While I successfully smother these voices long enough to buy what is good and practical to buy, the feeling they leave is uncomfortable.

What’s wrong with you? Why did you let yourself get into so much debt in the first place? Was a college education really worth it? Why is it taking you so long to pay off? You must not be smart enough to take care of your finances. Other people are done paying off their debt after 18 months. You’re not even 30% of the way there.

My inner-monologue is not always very friendly.

I had to remind myself that we made the choice to make less money at the beginning of summer. I didn’t tell you why, but I’ll tell you now.

My extremely talented (and handsome) husband cut down his paid hours at the coffee shop and was accepted as an intern at an innovative, well-respected web development company, Cramer Dev.

It was a gutsy move on Dexter’s part. He took the cut at work without knowing he’d get the internship. He worked really hard crafting a layered print resume that combined an 80s color scheme with professional quality. (Yeah, he’s that good.)

Since June, I went from understanding 99% of what he told me about his coffee shop job to giggling in the middle of his how-was-your-day report because he sounded like the trumpet-voiced teacher from Charlie Brown to me. I listened really hard, though, and figured out what the words meant.

He has learned so much in the past three months, and he has been so happy learning it. When he used to get on facebook or Tumblr to kill time, now I catch him writing CSS on the sly. My new question for him, whenever I see what he’s created, is, “So, did you make that by just typing some words?”

So, when I remind myself that, aside from slowing down our debt, this summer has allowed Dexter to pursue a passion and develop skills for his vocation (which may end up helping us to pay off our debt faster down the road!), the sacrifice of staying in debt just a little longer is a no brainer.

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: May 2011 – Hitting a Milestone

Remember how I keep saying that we’re going to get back on the cash envelope system wagon? This month, I really meant to. But Dexter got called into work the morning I was going to go to the bank, so I didn’t have a car, and then a trip to the bank never happened. It was another one of those haphazard-spending-amazed-we-came-out-okay months. But this month, I’m going to make it happen. 

We bought a computer this month, which should contribute to my blogging more regularly. We have only had one easy-to-use computer for about a year, so now I can blog and Dexter can write his web novel* simultaneously. Although the new computer has brought about tremendous happiness and convenience, it definitely hurt to shell out that much money once I figured out what percent of our loans it would have paid off. I try not to think about it.

I am happy to report that we have finally reached our long-awaited milestone. This month, we paid off 0.82% of our loans, and we have 74.98% to go! I had to switch to two digits after the decimal otherwise my rounding would have pushed it up to 75%, and I really want to remind myself that we are under 75%!

I’m unsure of how to predict and plan our progress for the next few months. We need to refill the (new car) savings we used to buy our computer. We’d also like to buy a new bed frame and do a few projects around the house. Obviously, we’ll attempt to accomplish those things spending as little money as possible, but it will take at least a little cash. We’re at a point where we know it’s still going to take a few years to pay down our debt, so we have to decide whether we’re going to hold out on buying conveniences (like a bed sturdy enough to withstand our four-legged, 65-pound baby jumping on and off multiple times a day) until we’re debt free, or if we’re going to slow down our repayment a bit so we can enjoy them now.

The bed I really want...only $350.99 from overstock.com!

What would you do? Buy a bed and fix up the house or wait until 2014 and end up debt free a month or two earlier?

*Warning: The comic is rated PG for violence, but if you click away from Dexter’s web novel you’ll find web comics that are rated R for language, drug references, and zombie violence. I also rate Dexter’s novel A for awesome.

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!

Top Ten Things I Haven’t Bought (But Really Wanted To)

When my old boss was saving to buy a new house, she decided to keep a running list of all the things she wanted to buy but didn’t. Each day, she totalled how much she had “saved” as a morale booster. These are the things I’ve been jonesing for, but have not bought for the sake of our Total Money Makeover.

  1. Trip to New York over Spring Break – $1,500
  2. Adorable dresser from IKEA – $300
  3. Bed and headboard from IKEA – $800
  4. Window treatments for my living room, basement, kitchen, and bedroom – approx. $320
  5. Dyson vacuum – $550
  6. iPad – $500
  7. MacBookPro – $1200
  8. Vizio TV with apps – $2,200
  9. Honda Civic Hybrid – $24,000
  10. A mustang for Dexter – $23,000

In our culture, lots of people would have gone out and charged most of these things. I’m thankful to have had parents who made sure I knew how dangerous credit cards can be. So, for my morale booster today, I’ve saved $54,370 (+ tax and interest)!

Maybe it’s silly to think I would have bought all of these things. However, with the exception of the cars, I’ve thought to myself on more than one occasion, “It would be so useful. I should just get it before I think better of it.”

Find more Top Ten Tuesday at Oh Amanda!