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.

Advertisements

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: 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!

First Birthday
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.

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!