As I am thinking about what I want to write, I don't think this post has much to do with our road to being debt free. So, if you are here for your lesson on how we are becoming debt free, you can move along. If you are just looking for a feel good kind thing to read, read on!
There's a saying that says, "apples don't fall far from trees". I often joke that my children are a lot like me and that the apple didn't fall far. My mom has often said, if I start acting like my mom you have permission to tell me so. I think most women fear a little that they will act like their mom. I know there are many things that I do that were picked up from my mom, and even my grandma. Before we got married my husband was even worried that I would turn out like my grandma, a little bossy. But as I think about Christmas and my grandma and my mom, I have never been more thankful to be the apple that didn't fall far from the tree.
When I was a little girl every Christmas Eve we would gather at my grandma's house. My mom, her siblings and their children. We would begin with a huge Thanksgiving-like meal. Following the meal would begin the gift giving. This was a sight to be seen. First my mom and her siblings and their spouses would exchange the gifts that they had purchased for the person whose name they drew at our Thanksgiving meal. Next my grandma would send the men down stairs to retrieve the presents. They would bring up trash bags full of wrapped gifts. On each gift was a number, not a name. My grandma had a list of each gift numbered, who it belonged to and what was in the package.
Often the children would help pass out the gifts. You would just hear numbers being shouted out and see grandma looking at her list telling who the gift belonged to. This is where the magic would happen, and if you weren't paying attention you might have missed it. Lucky for me I saw it! As grandma would look at her list she would grin as she would say who the gift was for. She delighted in picking out each item for each person and it showed on her face. Grandma would also be the first to remind the person with the fewest gifts "some people's money went further then others". Just thinking about it makes me laugh. You see, she spent the same amount on each grand child. If you preferred named brand items or things that cost a lot, you would only get a few packages. If you you weren't so picky, you received a lot of packages (much to my brothers disgust, I often had a lot of gifts. This is still the running joke as we open presents at my mothers house on Christmas day).
Once the gifts were all open, some family members would head out to midnight mass. A few times we (my mom and brother and I) stayed at grandma and grandpa's house. I always thought these Christmas's were extra special. I got to spend Christmas morning with my mom and my grandparents, and Santa found us at grandma's. Little did I know these were the Christmas's that were most painful for my mom and thats why we spent the night at grandma's. Over the years I have come to understand just how painful Christmas can be for my mom. Each year, my brother and I spent Christmas day with our dad. So, there was my mom, all alone on Christmas day. As a mother now, I can't imagine how difficult that was.
Although my grandparents are still with us (thank the Lord!) Christmas Eve looks a little different these days. They no longer have the ability to do all that shopping and purchasing. But the magic lives on. Each Christmas morning my brother and his family and my family join my mom and step dad for breakfast, followed by a round of gifts.
I think the tradition of a list with gifts written on it, has been a little odd to my husband, but it makes me smile every time I see it. Each year my mom purchases gifts for all of us, her children, our spouses and our children. You should see the obscene display. But as the gifts get passed out and as the gifts are open, you can see my mom light up. Although I appreciate the gits, I love to see my mom happy even more. She really seems to delight in seeing the reaction of all of us as we open the gifts that she picked out. I love it!
This morning as I was contemplating one more gift to give my husband, I realized the apple sure didn't fall far from the tree. I want to buy the gift and give it to him, because I know it will make him happy. I too value the ability to give. I realize that as you read this you may think I am writing about receiving gifts, and in a way I am. Not the gifts that are wrapped up in a package but the gift of a giving spirit. My mom, my grandma, they taught me that.
My mom, has given me many gifts in my life. But truly the best gifts are the ones that no one else may ever see. She taught me to be a good mom, to be a giver, and to be Christian. She taught me to be strong and not to give up. She taught me how to love and live. For all of these things I am truly grateful.
So go ahead, tell me that I am acting like my mom. I will take that as a compliment!
Merry Christmas!
Monday, December 10, 2012
Monday, December 3, 2012
The Balancing Act
Wow, it's been a month since my last post. I guess no news is good news.
Last week a mother from our child care passed away. There are only about 6 or 7 families at this child care, so we all know each other. This family though had only started back in September. We had a Thanksgiving lunch the Saturday before Thanksgiving. This was my first and only introduction to the mom. Our child care provider emailed all of the families to let us know of the tragedy. The mom hadn't been sick. I found out today it was a brain aneurysm.
Every time I think of this family and what they are going through my heart aches and I get sick to my stomach. Like most normal people, I begin to think "what if". What if that happened to us? What if I died and Hubby had to care for our two children? What if Hubby died and I had to pick up the pieces and keep going? How do people do that?
As I have been thinking of the different things my family can do to help this family, I realized there are some big things that are left undone at my house, and if any of the what ifs came true our children would be screwed. Two big things are on our "to do" list, 1) fill out our life insurance papers to secure additional term coverage (the papers are ther, we need to just do it- thank Nike) 2) we need a will. We have done our children diservice by not doing these two things.
During FPU we had learned about the importance of life insurance and the amount you needed while still in debt and not havine a fully funded emergency fund. WE NEED A LOT! In my investigating we made the decision to only get part of the total amount we need. It's what we can fit into our budget reasonably right now, and combined with a work policy it is sufficient. I had heard the family that lost the mom didn't have life insurance. Now I feel the urgency to fill out the paper work.
Although life insurance has been weighing heavily on my mind it is actually low on the list as far as my financial and personal goals. This woman was 11 months younger then me, and her life was ended so suddenly. There are so many things I want to do. Thank the Lord I have been able to do the two most meaningful things I have wanted to do, be a mother and wife. But I also want to travel! I am 38 years old and I've never been out of the country (well I've been to Mexico, does that count?).
I have had SERIOUS thoughts about saying screw the plan, lets buy some plane tickets! I need not ony a vacation but an opportunity to spend some time with my husband, who is working his butt off for our family. I miss him! We still haven't had a honeymoon or any type of trip since getting married four years ago. Even as I write this I want to hop on travelocity and check on trips to Ireland or even Florida or Hawaii, anywhere. But I can't. I won't. Because.....gezelle intensity. Stupid gezelle! I'm going to walmart to get a gun!
I know I am supposed to be working on paying down debt with gezelle intensity, but I need some fun and some balance in my life. How do you work that in without feeling like your are screwing your future for some peace today? And is that peace worth it, because what if you die tomorrow? I don't want to die with regret. But on the flipside, I don't want the regret to be that we didn't stick to our plan and pay down debt so now we have dug ourself a bigger hole.
As it is my budget is all a bit hazy this month. I know we are making huge strides because I am almost done Christmas shopping and nothing has been put on a credit card.
So friends, how do you balance being faithful to your plan while ensuring you don't go crazy in the mean time? Do you just stick to the plan for 2-3-4 years and then when you are done, save for that trip or whatever it is that keeps you sane? Or do you say, I need this and add in a hundred or two to your budget to start working toward your desire? I know Dave would tell me to save for it and stop whining. I know we could be doing more to pay down our debt. I guess I just need to start getting creative and sell off as much as I can so we can get a little joy.
Last week a mother from our child care passed away. There are only about 6 or 7 families at this child care, so we all know each other. This family though had only started back in September. We had a Thanksgiving lunch the Saturday before Thanksgiving. This was my first and only introduction to the mom. Our child care provider emailed all of the families to let us know of the tragedy. The mom hadn't been sick. I found out today it was a brain aneurysm.
Every time I think of this family and what they are going through my heart aches and I get sick to my stomach. Like most normal people, I begin to think "what if". What if that happened to us? What if I died and Hubby had to care for our two children? What if Hubby died and I had to pick up the pieces and keep going? How do people do that?
As I have been thinking of the different things my family can do to help this family, I realized there are some big things that are left undone at my house, and if any of the what ifs came true our children would be screwed. Two big things are on our "to do" list, 1) fill out our life insurance papers to secure additional term coverage (the papers are ther, we need to just do it- thank Nike) 2) we need a will. We have done our children diservice by not doing these two things.
During FPU we had learned about the importance of life insurance and the amount you needed while still in debt and not havine a fully funded emergency fund. WE NEED A LOT! In my investigating we made the decision to only get part of the total amount we need. It's what we can fit into our budget reasonably right now, and combined with a work policy it is sufficient. I had heard the family that lost the mom didn't have life insurance. Now I feel the urgency to fill out the paper work.
Although life insurance has been weighing heavily on my mind it is actually low on the list as far as my financial and personal goals. This woman was 11 months younger then me, and her life was ended so suddenly. There are so many things I want to do. Thank the Lord I have been able to do the two most meaningful things I have wanted to do, be a mother and wife. But I also want to travel! I am 38 years old and I've never been out of the country (well I've been to Mexico, does that count?).
I have had SERIOUS thoughts about saying screw the plan, lets buy some plane tickets! I need not ony a vacation but an opportunity to spend some time with my husband, who is working his butt off for our family. I miss him! We still haven't had a honeymoon or any type of trip since getting married four years ago. Even as I write this I want to hop on travelocity and check on trips to Ireland or even Florida or Hawaii, anywhere. But I can't. I won't. Because.....gezelle intensity. Stupid gezelle! I'm going to walmart to get a gun!
I know I am supposed to be working on paying down debt with gezelle intensity, but I need some fun and some balance in my life. How do you work that in without feeling like your are screwing your future for some peace today? And is that peace worth it, because what if you die tomorrow? I don't want to die with regret. But on the flipside, I don't want the regret to be that we didn't stick to our plan and pay down debt so now we have dug ourself a bigger hole.
As it is my budget is all a bit hazy this month. I know we are making huge strides because I am almost done Christmas shopping and nothing has been put on a credit card.
So friends, how do you balance being faithful to your plan while ensuring you don't go crazy in the mean time? Do you just stick to the plan for 2-3-4 years and then when you are done, save for that trip or whatever it is that keeps you sane? Or do you say, I need this and add in a hundred or two to your budget to start working toward your desire? I know Dave would tell me to save for it and stop whining. I know we could be doing more to pay down our debt. I guess I just need to start getting creative and sell off as much as I can so we can get a little joy.
Friday, November 2, 2012
Breathing Easier
Things have settled down with my job. Feeling more confident that I will be employed in the coming year. What a huge relief, and eye opener. I had always heard you should have 3-6 months expenses in savings, but I used to laugh and think "who does that?". Now I am feeling the pressure to take the road less traveled and to have a fully funded emergency fund.
Talk about a major set back batman. If I had to enter the new year without a job our debt would have increased drastically and quickly. For now, I don't have to worry about that pending doom, but there's always going to be the chance a grant runs dry and I will need to scramble to look for a job. It just makes sense to be prepared for that day, instead of hoping it never comes. I was once told, hoping is not a plan.
Our plan is now to keep working at chipping away at our debt, month by month, until it no longer exists. And it is going a little slower then I would like I have to admit. BUT, it is going. Going down, going in the correct direction. That fact feels so good.
A couple weeks ago our car personal property renewal forms came in the mail. Usually this is a huge source of stress. This time it was a big high five to the fact that we had saved $50 more then the renewal cost. WE SAVED THE MONEY! WE AREN'T ADDING TO OUR DEBT!!!!!! We aren't adding to our debt for a cost we know is going to come every year in November. It still blows me away, that not only did we save for this in just about 3 months time, we also saved for our emergency fund and were paying down our debt. Who are these people? They can't be me and hubby. This is not how we operate, or is it? It is now.
Last night I finalized our November budget. I also have December and January projected. I was just amazed at the amount of money we had saved for Christmas presents and we put money in our food budget for all the get togethers that will surely add up.
I'm starting to feel the rock that we've been under lighten up. I'm starting to feel the changes in behavior take place. Oddly I am so excited for this Christmas season. I can't wait to go shopping. It doesn't feel like a chore, but a great opportunity. It feels like the way it is supposed to. The fun of giving gifts. For the first time in YEARS we will be giving gifts without burying ourselves in debt. It doesn't erase the debt that we have, but it sure makes it feel more manageable.
We do still need to create a budget for the gifts. Just because we have the cash doesn't mean we can freely spend it or we will end up needing a gift for someone and no money. I think that budget will be a great guide! This telling your money where to go and how to work is working out so much better then money telling me where it is going. Why didn't we do this before?????????
Talk about a major set back batman. If I had to enter the new year without a job our debt would have increased drastically and quickly. For now, I don't have to worry about that pending doom, but there's always going to be the chance a grant runs dry and I will need to scramble to look for a job. It just makes sense to be prepared for that day, instead of hoping it never comes. I was once told, hoping is not a plan.
Our plan is now to keep working at chipping away at our debt, month by month, until it no longer exists. And it is going a little slower then I would like I have to admit. BUT, it is going. Going down, going in the correct direction. That fact feels so good.
A couple weeks ago our car personal property renewal forms came in the mail. Usually this is a huge source of stress. This time it was a big high five to the fact that we had saved $50 more then the renewal cost. WE SAVED THE MONEY! WE AREN'T ADDING TO OUR DEBT!!!!!! We aren't adding to our debt for a cost we know is going to come every year in November. It still blows me away, that not only did we save for this in just about 3 months time, we also saved for our emergency fund and were paying down our debt. Who are these people? They can't be me and hubby. This is not how we operate, or is it? It is now.
Last night I finalized our November budget. I also have December and January projected. I was just amazed at the amount of money we had saved for Christmas presents and we put money in our food budget for all the get togethers that will surely add up.
I'm starting to feel the rock that we've been under lighten up. I'm starting to feel the changes in behavior take place. Oddly I am so excited for this Christmas season. I can't wait to go shopping. It doesn't feel like a chore, but a great opportunity. It feels like the way it is supposed to. The fun of giving gifts. For the first time in YEARS we will be giving gifts without burying ourselves in debt. It doesn't erase the debt that we have, but it sure makes it feel more manageable.
We do still need to create a budget for the gifts. Just because we have the cash doesn't mean we can freely spend it or we will end up needing a gift for someone and no money. I think that budget will be a great guide! This telling your money where to go and how to work is working out so much better then money telling me where it is going. Why didn't we do this before?????????
Friday, October 12, 2012
Budget is a buzzkill!
In class we were reminded over and over that this was really about changing behaviors. And damn it I am not so sure I like the behaviors it is changing! What the hell do people do when they feel down and frustrated if they can't shop? Eat? I can't do that either!
So life is definitely throwing some lemons my way right now. My job (thanks to the Governor) is in jeopardy. My job is grant funded. Each year I get to play this game where I (with help from others) write a grant application to the state and after a month or so we get word on whether we are funded or not. Well this year, the rules of the game changed. WE were so used to the old rules, these new rules won't really allow us to be a good player in the game.
So as you can imagine, I'm a little stressed. I might be categorized as an emotional person, on a good day. So add a little (or a lot) of stress and well you've got a stress ball on your hands. A stress ball that just might burst out in tears at a moments notice. (Why do I use SO so often???)
Typically when feeling this way I would do one of two things...or both things really. 1) Shop 2) Eat. After losing 40lbs earlier this year, I'm not really eager to begin stress eating. But I did bake some pretty darn good pumpkin cookies the other night. My next logical thought is, shop, when can I go shopping? (I almost started with SO again, I have to stop that). With it being so close to Christmas, going shopping is like killing two birds with one stone. I get to medicate my stress with shopping, while actually being productive and getting Christmas gifts. I start thinking this is great!
Then I hear Dave Ramsey's voice in my ear as if he's the little angel sitting on my shoulder "did you save for that?" No Dave I did not save for my emotional melt down. But damn it now your voice is in my head and I won't enjoy shopping. Thank you very much (seriously thank you...my wonderful habits would have added to my waistline and our debt)!
Some day we will get to the point that we have extra money that we don't have a SPECIFIC plan for. Some day I will get to shop whenever I want to, within reason. For now I guess I'm stuck learning how to change my behaviors.
Again, I ask, what do people do when they are an emotional wreck? PLEASE, please don't answer exercise, because I can tell you that is not happening! Yes, that is a behavior I need to change too, but I seriously doubt that it will bring me the type of satisfaction I once found in food and shopping.
So life is definitely throwing some lemons my way right now. My job (thanks to the Governor) is in jeopardy. My job is grant funded. Each year I get to play this game where I (with help from others) write a grant application to the state and after a month or so we get word on whether we are funded or not. Well this year, the rules of the game changed. WE were so used to the old rules, these new rules won't really allow us to be a good player in the game.
So as you can imagine, I'm a little stressed. I might be categorized as an emotional person, on a good day. So add a little (or a lot) of stress and well you've got a stress ball on your hands. A stress ball that just might burst out in tears at a moments notice. (Why do I use SO so often???)
Typically when feeling this way I would do one of two things...or both things really. 1) Shop 2) Eat. After losing 40lbs earlier this year, I'm not really eager to begin stress eating. But I did bake some pretty darn good pumpkin cookies the other night. My next logical thought is, shop, when can I go shopping? (I almost started with SO again, I have to stop that). With it being so close to Christmas, going shopping is like killing two birds with one stone. I get to medicate my stress with shopping, while actually being productive and getting Christmas gifts. I start thinking this is great!
Then I hear Dave Ramsey's voice in my ear as if he's the little angel sitting on my shoulder "did you save for that?" No Dave I did not save for my emotional melt down. But damn it now your voice is in my head and I won't enjoy shopping. Thank you very much (seriously thank you...my wonderful habits would have added to my waistline and our debt)!
Some day we will get to the point that we have extra money that we don't have a SPECIFIC plan for. Some day I will get to shop whenever I want to, within reason. For now I guess I'm stuck learning how to change my behaviors.
Again, I ask, what do people do when they are an emotional wreck? PLEASE, please don't answer exercise, because I can tell you that is not happening! Yes, that is a behavior I need to change too, but I seriously doubt that it will bring me the type of satisfaction I once found in food and shopping.
Friday, October 5, 2012
Can you worry and have faith?
I started this post about 2 weeks ago and keep thinking I need to get back to it. Today full of even more worry then I was 2 weeks ago I've decided it is time to finish. Maybe if I get all the worry out I can put it aside and let God take care of it.
I don't know if you can tell, but I'm a worrier. I even own a book called The Worrier's Guide to the Patron Saints. Maybe I should consult it. I wonder if there is a saint that would help me stop being a worrier. I don't really know where the worry comes from. I had a pretty stable childhood, for a child of divorced parents. But as long as I can remember I've worried about things. No matter how many great quotes I see about worrying or about putting your faith in God, this is one thing about me that I can't seem to change. Don't get me wrong, I have a strong faith in God and I know that God is watching over me and listening to my prayers. The thing is, God and I don't always agree on timing.
I imagine your wondering, what the heck does the fact that you are a worry have to do with you and your journey to become debt free? (if you haven't read my last entry...you might want to do that now, and you will have your answer) Becoming debt free is a part of a plan. A plan for our future and our children's future. I worry because I want the best for my children and I'm afraid that I won't be able to provide it particular because of decisions I have made in my past. Decisions that were made before they were even a glimmer. I worry because I've chosen a certain career path, and although I know I have the power to change it, I don't know that I want to. For the past 12 years I have worked in grant funded positions. Meaning about once a year I don't know how much longer I will have a job. We've hit that time of year.
When I think of making a financial plan for the future my career definitely plays a part in why I worry. We are making great strides right now, but what if January 1, I don't have job? What then? I know logic says worry about that when it happens, but something in my gut says, worry about it now. If the economy was better, if there didn't seem to be an attack on early childhood education in KS and MO, I might not worry so much. I have great skills that are applicable to many different situations but I thrive in early childhood education. But that doesn't mean I will find a job that suits me or pays enough to support our family in the way we have been acustomed.
It is some what humurous that I worry about this and can't just seem to put it into God's hands. He has provided for me so many times in my life. Each and every job has seem to come when it was time. I've had wonderful opportunities. I know he will provide when the time comes again. BUT...at the same time I believe in the philosophy that God helps those who help themselves. My fear is that I will be like the man who is sitting on his roof top as the water rises and when help comes he says God will take care of me. Then when he finally drowns and goes to heaven he asks God why he didn't save him, and God replies I sent you help, you didn't take it. What if I don't recognize God's help when it arrives?
The Dave Ramsey class has definitely been a gift from God, my own personal "clue". He has opened our eyes to an error in our ways and has helped us develop a path to fix that error. We aren't perfect but we are making strides. I know life happens and it could put a kink in our plan, a tree in our road, but we will get around it. Even with my faith knowing that we will somehow make it through, I can't stop from worrying. Doing our monthly budget stops me from worrying so much about our finances, but honestly not completely. I think it has stopped the day to day worry but hasn't really chased away the future finance worries.
I know there shouldn't be room for worry when I have strong faith in God and God's plans for me. Jeremiah 29:11 For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future." Somehow I need to make this my mantra and know that God is for me, and if God is for me, who can be against me. Old habits die hard! I will try to hold strong to his message and push out the worry. I can be like the little blue engine and each day say, "I think I can, I think I can, I think I can." That's all I can do, try.
I don't know if you can tell, but I'm a worrier. I even own a book called The Worrier's Guide to the Patron Saints. Maybe I should consult it. I wonder if there is a saint that would help me stop being a worrier. I don't really know where the worry comes from. I had a pretty stable childhood, for a child of divorced parents. But as long as I can remember I've worried about things. No matter how many great quotes I see about worrying or about putting your faith in God, this is one thing about me that I can't seem to change. Don't get me wrong, I have a strong faith in God and I know that God is watching over me and listening to my prayers. The thing is, God and I don't always agree on timing.
I imagine your wondering, what the heck does the fact that you are a worry have to do with you and your journey to become debt free? (if you haven't read my last entry...you might want to do that now, and you will have your answer) Becoming debt free is a part of a plan. A plan for our future and our children's future. I worry because I want the best for my children and I'm afraid that I won't be able to provide it particular because of decisions I have made in my past. Decisions that were made before they were even a glimmer. I worry because I've chosen a certain career path, and although I know I have the power to change it, I don't know that I want to. For the past 12 years I have worked in grant funded positions. Meaning about once a year I don't know how much longer I will have a job. We've hit that time of year.
When I think of making a financial plan for the future my career definitely plays a part in why I worry. We are making great strides right now, but what if January 1, I don't have job? What then? I know logic says worry about that when it happens, but something in my gut says, worry about it now. If the economy was better, if there didn't seem to be an attack on early childhood education in KS and MO, I might not worry so much. I have great skills that are applicable to many different situations but I thrive in early childhood education. But that doesn't mean I will find a job that suits me or pays enough to support our family in the way we have been acustomed.
It is some what humurous that I worry about this and can't just seem to put it into God's hands. He has provided for me so many times in my life. Each and every job has seem to come when it was time. I've had wonderful opportunities. I know he will provide when the time comes again. BUT...at the same time I believe in the philosophy that God helps those who help themselves. My fear is that I will be like the man who is sitting on his roof top as the water rises and when help comes he says God will take care of me. Then when he finally drowns and goes to heaven he asks God why he didn't save him, and God replies I sent you help, you didn't take it. What if I don't recognize God's help when it arrives?
The Dave Ramsey class has definitely been a gift from God, my own personal "clue". He has opened our eyes to an error in our ways and has helped us develop a path to fix that error. We aren't perfect but we are making strides. I know life happens and it could put a kink in our plan, a tree in our road, but we will get around it. Even with my faith knowing that we will somehow make it through, I can't stop from worrying. Doing our monthly budget stops me from worrying so much about our finances, but honestly not completely. I think it has stopped the day to day worry but hasn't really chased away the future finance worries.
I know there shouldn't be room for worry when I have strong faith in God and God's plans for me. Jeremiah 29:11 For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future." Somehow I need to make this my mantra and know that God is for me, and if God is for me, who can be against me. Old habits die hard! I will try to hold strong to his message and push out the worry. I can be like the little blue engine and each day say, "I think I can, I think I can, I think I can." That's all I can do, try.
Sunday, September 16, 2012
Hmmm...why are we doing this?
Tonight in class (FPU Class) we talked about baby step 4 saving for retirement and tuition. As class began I was thinking, great these are two things we need to know about. Let me back up a second and remind you (and me) what the first three baby steps are: 1) $1000 emergency fund, 2) debt snowball (paying down debt with gazelle intensity) 3) fully funded emergency fund (3-6 months expenses). So first you complete steps 1-3 before beginning step 4. Makes sense.
Dave Ramsey suggests that you invest up to 15% of your salary into retirement, putting up to the max allowed into a Roth IRA. Ok, seems reasonable. This is where I started doing math in my head and my pulse started quickening. Dave talked about the ins and outs and dos and donts with IRA's. I really understood it all. I've been putting money in my IRA since I was 22.
After retirement we began to talk about tuition for the kiddos. Apparently you can put up to $2000 per kid in an ESA. So, two kiddos, $4000. (I think this is where I started breathing heavy). In my workbook you can see the scribblings of my quick math.
IF...big if....we were to invest in our retirement and save for the kids college at the rates suggested, we'd need to be saving/ investing way more then we are currently paying on debt. Feeling the big cloud coming over my head now. Feeling the rock crushing my chest. Can't breath. Want to cry.
The point that Dave drives home each class is that you live like no one else so that later you can LIVE like no one else. So if I do what I am supposed to do, pay down my debt, keep living in the hood where I'm afraid for my family, invest in my retirement fund, save for the kids college, where will we be? In the same f-ing place we are now.
Why should we bust our ass to get this debt paid off so that our quality of life stays the same? Once the debt is paid and we work on the next baby steps, we still won't have extra money to do any kind of living. So Dave, tell me how I'm going to LIVE like no one else. If we turn around and put the money we're paying to debt to retirement and to tuition, there still won't be the things I want for my family. No vacations. No different house in a better school district. No Hubby quitting his second job and spending more time with us.
It's days like this that I want to give up. We are only having two children so we can give them a good life. But we can't even give them a good life. So why do this? Why? We could just keep going on our merry way and pay for things with credit card, go on vacations on credit. ENJOY LIFE.
Writing this now there are tears in my eyes and I feel like I can't breath. We were supposed to be living like no one else so we can LIVE like no one else. I want to be able to provide the world for my children. That's why we are doing this. I want to be able to show them the world, well at least parts of th US. I want to travel outside of the US with my husband some day. But instead we will pay off our debt and begin working on steps 3 & 4 and we will continue living month to month (but saving for the future). What's the point?
Dave Ramsey suggests that you invest up to 15% of your salary into retirement, putting up to the max allowed into a Roth IRA. Ok, seems reasonable. This is where I started doing math in my head and my pulse started quickening. Dave talked about the ins and outs and dos and donts with IRA's. I really understood it all. I've been putting money in my IRA since I was 22.
After retirement we began to talk about tuition for the kiddos. Apparently you can put up to $2000 per kid in an ESA. So, two kiddos, $4000. (I think this is where I started breathing heavy). In my workbook you can see the scribblings of my quick math.
IF...big if....we were to invest in our retirement and save for the kids college at the rates suggested, we'd need to be saving/ investing way more then we are currently paying on debt. Feeling the big cloud coming over my head now. Feeling the rock crushing my chest. Can't breath. Want to cry.
The point that Dave drives home each class is that you live like no one else so that later you can LIVE like no one else. So if I do what I am supposed to do, pay down my debt, keep living in the hood where I'm afraid for my family, invest in my retirement fund, save for the kids college, where will we be? In the same f-ing place we are now.
Why should we bust our ass to get this debt paid off so that our quality of life stays the same? Once the debt is paid and we work on the next baby steps, we still won't have extra money to do any kind of living. So Dave, tell me how I'm going to LIVE like no one else. If we turn around and put the money we're paying to debt to retirement and to tuition, there still won't be the things I want for my family. No vacations. No different house in a better school district. No Hubby quitting his second job and spending more time with us.
It's days like this that I want to give up. We are only having two children so we can give them a good life. But we can't even give them a good life. So why do this? Why? We could just keep going on our merry way and pay for things with credit card, go on vacations on credit. ENJOY LIFE.
Writing this now there are tears in my eyes and I feel like I can't breath. We were supposed to be living like no one else so we can LIVE like no one else. I want to be able to provide the world for my children. That's why we are doing this. I want to be able to show them the world, well at least parts of th US. I want to travel outside of the US with my husband some day. But instead we will pay off our debt and begin working on steps 3 & 4 and we will continue living month to month (but saving for the future). What's the point?
Friday, September 14, 2012
A Snowball's Chance...
I feared this when I started writing this blog, that I wouldn't be good at making it a very regular thing. Sorry it has been a while since I have updated our progress.
Baby steps. This journey is all about baby steps. Baby steps to changing behavior. As if that is an easy thing to do. I have tried many times in my life to make changes to behavior but often end up back where I began. True these behaviors were different then the ones we are changing now, but I fear we will end with the same result. The result of slowly slacking and letting old habits creep in, and bringing their friends with them. I am curious if I will learn lessons from these behaviors that we are changing that I can apply to others, or if I can even compare the two. You may have guessed the behavior I am talking about....eating.
Let's compare them for a moment, eating and living in debt. How are they similar? Eating tasty good foods will add to your waistline. Buying things on credit adds to your debt. Eating good foods and buying things when you want them feels good in the moment, but often ends in some sort of remorse. Both are easy to rack up, pounds and debt, but hard to take off.
A good friend once told me that in life you have to repeat lessons until you learn them. At the time she was talking about my ability or inability to work with someone who is passive aggressive. Today I see how this statement/philosophy fits my struggle with both my weight and our debt. I have recently lost a significant amount of weight, but have been on hiatus for a couple months as we have been working on the beginnig of our debt free journey. In those couple months I have kept some of the behaviors that helped me lose weight, while letting old bad behaviors creep back in. I wonder if I can learn my lesson this time? I wonder if I can finally break the cycle of letting bad choices influence my health, both physical and financial.
We recently started on our debt snowball. Paying off our debt, smallest debt first, increasing each months payment as we eliminate each debt. I wonder if our debt snowball has a snowball's chance in hell to accumulate the funds needed to pay down the debt. I feel good about our journey and our successes so far. We have paid down our first 2 small debts, and after this month we will move on to the next. But sometimes the desire to "have" overrides the desire to pay down debt.
These days there are so many things that can sabotage your goal of becoming debt free. Each day I get emails telling me about this deal or that deal. They seem so hard to resist. THEY WILL SAVE US MONEY, the devil on my shoulder says, then the angel replies THEY AREN'T SAVING YOU MONEY WHEN YOU DIDN'T PLAN TO BUY IT IN THE FIRST PLACE. Devil: "But you need it." Angel: "You can live with out it another day" (holy moly I have mutiple personalities!) And don't get me started on Nebraska Furniture Mart. Stupid 30month no interest. That just fuels my desire to buy stuff I/WE don't need. I tell you what though, the day I get an email that says a trip to Ireland is like $350...all bets are off! :) I will not be able to be held liable for my actions on that day.
I know if we are going to be successful in this we will have to learn to build in money for fun, and for life. We were successful in doing that this month. Hubby and I knew we were going to go to the Irish Fest (it's kind of our thing) so we built money in the budget to go and enjoy ourselves. It did mean buying less crap from the shops. We normally each would have gotten something and maybe something for the kids. But we had a great night out. I konw we can't plan for everything and I guess that's where your emergency fund comes in. I can't wait for the day when that is fully funded at 3-6 months of income.
Earlier I compared this to changing the habits of eating. I thought I was going to say that this is easier. Truly they are equally hard. I love food! And I like having what I want when I want it. I know to be successful in both it comes down to discipline and making a plan. The days/weeks when I have a menu planned, I eat better. The months we have had a budget, our money went further and we started paying down debt and stopped incurring debt. Now if I could just start doing my menu when I do my budget, maybe we would start killing 2 birds with one stone. Then if we killed 2 birds we could have dinner for 2....wait I took that a little too far.
So as of right now I give our debt snowball a pretty good chance at getting bigger and covering a lot of ground. We are lucky we have people who have been there, done that, who can remind us why we started. OR we can look at the face of our beautiful children and be reminded why it is so important that we continue our journey.
Let's compare them for a moment, eating and living in debt. How are they similar? Eating tasty good foods will add to your waistline. Buying things on credit adds to your debt. Eating good foods and buying things when you want them feels good in the moment, but often ends in some sort of remorse. Both are easy to rack up, pounds and debt, but hard to take off.
A good friend once told me that in life you have to repeat lessons until you learn them. At the time she was talking about my ability or inability to work with someone who is passive aggressive. Today I see how this statement/philosophy fits my struggle with both my weight and our debt. I have recently lost a significant amount of weight, but have been on hiatus for a couple months as we have been working on the beginnig of our debt free journey. In those couple months I have kept some of the behaviors that helped me lose weight, while letting old bad behaviors creep back in. I wonder if I can learn my lesson this time? I wonder if I can finally break the cycle of letting bad choices influence my health, both physical and financial.
We recently started on our debt snowball. Paying off our debt, smallest debt first, increasing each months payment as we eliminate each debt. I wonder if our debt snowball has a snowball's chance in hell to accumulate the funds needed to pay down the debt. I feel good about our journey and our successes so far. We have paid down our first 2 small debts, and after this month we will move on to the next. But sometimes the desire to "have" overrides the desire to pay down debt.
These days there are so many things that can sabotage your goal of becoming debt free. Each day I get emails telling me about this deal or that deal. They seem so hard to resist. THEY WILL SAVE US MONEY, the devil on my shoulder says, then the angel replies THEY AREN'T SAVING YOU MONEY WHEN YOU DIDN'T PLAN TO BUY IT IN THE FIRST PLACE. Devil: "But you need it." Angel: "You can live with out it another day" (holy moly I have mutiple personalities!) And don't get me started on Nebraska Furniture Mart. Stupid 30month no interest. That just fuels my desire to buy stuff I/WE don't need. I tell you what though, the day I get an email that says a trip to Ireland is like $350...all bets are off! :) I will not be able to be held liable for my actions on that day.
I know if we are going to be successful in this we will have to learn to build in money for fun, and for life. We were successful in doing that this month. Hubby and I knew we were going to go to the Irish Fest (it's kind of our thing) so we built money in the budget to go and enjoy ourselves. It did mean buying less crap from the shops. We normally each would have gotten something and maybe something for the kids. But we had a great night out. I konw we can't plan for everything and I guess that's where your emergency fund comes in. I can't wait for the day when that is fully funded at 3-6 months of income.
Earlier I compared this to changing the habits of eating. I thought I was going to say that this is easier. Truly they are equally hard. I love food! And I like having what I want when I want it. I know to be successful in both it comes down to discipline and making a plan. The days/weeks when I have a menu planned, I eat better. The months we have had a budget, our money went further and we started paying down debt and stopped incurring debt. Now if I could just start doing my menu when I do my budget, maybe we would start killing 2 birds with one stone. Then if we killed 2 birds we could have dinner for 2....wait I took that a little too far.
So as of right now I give our debt snowball a pretty good chance at getting bigger and covering a lot of ground. We are lucky we have people who have been there, done that, who can remind us why we started. OR we can look at the face of our beautiful children and be reminded why it is so important that we continue our journey.
Thursday, August 30, 2012
Envelopes and Snowballs
Along the road to becoming debt free, life happens. In the first couple weeks of our journey my car battery died and hubby had to take a trip to the ER. It became real clear to me how much we needed our Emergency Fund, and as I wrote last time, we have successfully completed our $1000 emergency fund. Some day will get back to that fund and start saving 3-6 months of expenses. That comes after baby step 2, the Debt Snowball.
I've mentioned in other posts about using envelopes. I thought I would take a minute to explain the envelope system in case anyone is curious. Since we have started budgeting and attempting to pay down debt we have stopped using our debit card except for a few things and started paying cash for most things we can pay cash for. The one thing we have continued to use the debit card for is gas. Although it would help to pay for it in cash, I refuse to unload the children out of car seats, carry them inside to pay for the gas, and then load them back up, then pump gas. So we still use the debit card.
When we create our budget each month we have a line item for everything we could spend money on, well maybe not everything. Things pop up that you think, hmmm what envelope would that come out of. So here are some examples of the line items we have: Food/House Hold Items, Dining Out/Entertainment, Misc, Gifts and Clothes. We also have a category for blow money. Blow money is for whatever you want. Hubby and I each have our own blow money. At the begining and middle of the month we withdraw the cash from the bank and put it in our envelopes. Then through out the month when we need any of the things in these line items, we get the cash from the envelope and pay cash. (and then you are supposed to track on the envelope where you spent the money and how much...we are still perfecting this step)
I know you are thinking, how does this really work with groceries. Well at the beginning of the month, I take all the cash that I have in the envelope with me to the grocery store. I make my list based on the ads that week and what we need. Then I buy the groceries. We have yet not had enough money to buy what we need. Now as the month goes on, we have to be really cautious and selective of what we buy, so we stay with in our budgeted money. I'm not going to lie, I have used money from other envelopes to buy food if we got to the point that we were out of grocery money. Which does happen, because diapers suck up way too much of my grocery/household cash.
You are probably thinking this sounds like a pain in the butt. But I tell you it has really helped keep us in check. We use the debit card much much less. And the cash we have is the cash we have. We may move money from one envelope to another, but we never withdrawal more. We stick to what we budgeted.
I feel like an addict though. I miss my credit cards! I do. It feels like every day I have to recommit to not using them. Something will pop up that wasn't in our budget and I will think, I could just put that on the credit card we almost have paid off. Isn't that crazy??? We are paying down debt, and I'm still thinking how I can get what I want without having to pay for it today. So when I see that great groupon for a massage I have to talk myself down and say, no, when we are debt free, or when I save up my blow money, then I can buy that. I'm still not used to making sacrifices in other areas to get what I want. But I am working on it.
Baby step two is the Debt Snowball. This is the babystep we are working on. I think B must know we are on this baby step. He seems to have stalled in his learning to walk. And we will be on babystep 2 for quite some time.
What is the debt snowball? Well it is the method you use to pay down/off your debt. You begin by listing out your debt, minus your mortgage. Arrange the debt in the least owed to the most owed. Then you begin making minimum paymetns on the items you owe the most. Then you take all the money you would have normally paid to these items and add it to what you would normally pay on the least owed item, and make one big payment until you pay it off. For example, say you have budgeted $500 to pay on debt this month. And you have 5 items to pay on. Lets say you have 2 school loans, each you pay $75, and you have 3 credit cards, 1 you can pay a minimum of $25, and one you pay a minimum of $50. This would leave you $275 to pay on your least owed debt/credit card. Once you pay off that credit card or debt, you add the amount you were paying on the one you paid off to the amount you budgeted for your next least owed debt. Therefore each time you pay something off it gives you more money to pay on the next item....creating a snow ball effect.
We are kicking butt on this debt snowball. We paid off our lowest debt (ok, it was just $100, but that's $100 that we can now put toward something else) and in September we will have our next debt/credit card paid off too!!!!!!!! It feels awesome! It is the fact that we are making this progress that helps me recommit every day to not use that credit card when AMAZING deals that I just can't live without pop up.
Back to my original statement at the begining, life happens on your road to becoming debt free. Have we strayed from time to time from our budget. Yes. Did we get back on horse...probably side saddled, but we are on. This road is the one that is less traveled these days. But some day we are going to look back and think it was an amazing ride!
I've mentioned in other posts about using envelopes. I thought I would take a minute to explain the envelope system in case anyone is curious. Since we have started budgeting and attempting to pay down debt we have stopped using our debit card except for a few things and started paying cash for most things we can pay cash for. The one thing we have continued to use the debit card for is gas. Although it would help to pay for it in cash, I refuse to unload the children out of car seats, carry them inside to pay for the gas, and then load them back up, then pump gas. So we still use the debit card.
When we create our budget each month we have a line item for everything we could spend money on, well maybe not everything. Things pop up that you think, hmmm what envelope would that come out of. So here are some examples of the line items we have: Food/House Hold Items, Dining Out/Entertainment, Misc, Gifts and Clothes. We also have a category for blow money. Blow money is for whatever you want. Hubby and I each have our own blow money. At the begining and middle of the month we withdraw the cash from the bank and put it in our envelopes. Then through out the month when we need any of the things in these line items, we get the cash from the envelope and pay cash. (and then you are supposed to track on the envelope where you spent the money and how much...we are still perfecting this step)
I know you are thinking, how does this really work with groceries. Well at the beginning of the month, I take all the cash that I have in the envelope with me to the grocery store. I make my list based on the ads that week and what we need. Then I buy the groceries. We have yet not had enough money to buy what we need. Now as the month goes on, we have to be really cautious and selective of what we buy, so we stay with in our budgeted money. I'm not going to lie, I have used money from other envelopes to buy food if we got to the point that we were out of grocery money. Which does happen, because diapers suck up way too much of my grocery/household cash.
You are probably thinking this sounds like a pain in the butt. But I tell you it has really helped keep us in check. We use the debit card much much less. And the cash we have is the cash we have. We may move money from one envelope to another, but we never withdrawal more. We stick to what we budgeted.
I feel like an addict though. I miss my credit cards! I do. It feels like every day I have to recommit to not using them. Something will pop up that wasn't in our budget and I will think, I could just put that on the credit card we almost have paid off. Isn't that crazy??? We are paying down debt, and I'm still thinking how I can get what I want without having to pay for it today. So when I see that great groupon for a massage I have to talk myself down and say, no, when we are debt free, or when I save up my blow money, then I can buy that. I'm still not used to making sacrifices in other areas to get what I want. But I am working on it.
Baby step two is the Debt Snowball. This is the babystep we are working on. I think B must know we are on this baby step. He seems to have stalled in his learning to walk. And we will be on babystep 2 for quite some time.
What is the debt snowball? Well it is the method you use to pay down/off your debt. You begin by listing out your debt, minus your mortgage. Arrange the debt in the least owed to the most owed. Then you begin making minimum paymetns on the items you owe the most. Then you take all the money you would have normally paid to these items and add it to what you would normally pay on the least owed item, and make one big payment until you pay it off. For example, say you have budgeted $500 to pay on debt this month. And you have 5 items to pay on. Lets say you have 2 school loans, each you pay $75, and you have 3 credit cards, 1 you can pay a minimum of $25, and one you pay a minimum of $50. This would leave you $275 to pay on your least owed debt/credit card. Once you pay off that credit card or debt, you add the amount you were paying on the one you paid off to the amount you budgeted for your next least owed debt. Therefore each time you pay something off it gives you more money to pay on the next item....creating a snow ball effect.
We are kicking butt on this debt snowball. We paid off our lowest debt (ok, it was just $100, but that's $100 that we can now put toward something else) and in September we will have our next debt/credit card paid off too!!!!!!!! It feels awesome! It is the fact that we are making this progress that helps me recommit every day to not use that credit card when AMAZING deals that I just can't live without pop up.
Back to my original statement at the begining, life happens on your road to becoming debt free. Have we strayed from time to time from our budget. Yes. Did we get back on horse...probably side saddled, but we are on. This road is the one that is less traveled these days. But some day we are going to look back and think it was an amazing ride!
Monday, August 13, 2012
Baby Step 1- CHECK!
The other night I had the realization that we had made it one month without using a credit card, and without running out of money. The past month I've never had to worry when I use my debit card if there will be enough money in the checking account. So, what changed? We made a plan for our money, we told our money how to work for us, instead of watching money fly out of the account and not really knowing where it was going. Holy crap was that freeing. You would think living by a budget would be restricting and frustrating. But in reality it was freeing. I was able to stop worrying. Stop worrying that the debit card would be declined when I bought food or gas. Stop worrying about having money for things we needed and wanted. I knew we had the money and it had a place to go.
Right about now you are thinking, what does this have to do with baby step 1? Or at least I would be if I had read the title then got to this point in a story. The other thing we have accomplished is saving $1000. This is money just for emergencies. In less then 2 months, we have saved over $1000. Not only have we been saving for our emergency fund but we've been saving to pay our personal property tax on the cars that will be due in November. In previous months we would have borrowed about that much from savings (which was until we started this, empty). When we began I thought, no way, no way in the world are we going to save $1000 very quickly. We just can't do it. But we did. Baby step1- save $1000. CHECK!
Now we are on to baby step 2 - the debt snowball. (As in there's a snowball's chance in hell that we are going to get the debt paid off anytime soon.) I didn't realize until recently why the Emergency Fund was so important. The Emergency Fund is there so you don't use credit while working on your debt snowball. I know I have said this before, but they suggest cutting up your credit cards and closing accounts as you get them paid. I am sooooooo not there. I have a long intimate relationship with these cards, they have seen me through some tough times. They have been there for me when no one else was. They even helped me make friends in Chicago, when I seriously was all alone. So cut them up, I don't think so. I will get there. I will feel more comfortable with giving them up as I see the money owed to them disappear and as I feel more able to buy the things we need without using credit. But for today, even with the $1000 emergency fund, I will keep my cards intact.
OK, so I drank the Kool-Aid. I believed going into this Financial Peace University that it would work if we did it. If my friends and co-workers could do this, surely we could as well. Is it hard? No its not just hard, it's one of the hardest things I've done in my life as well as one of the easiest. I know that probably doesn't make sense to you, but it is what it is. In the beginning I related FPU to trying to lose weight, you really do use some of the same principals. You start to question how much you want some things versus other things. The other night I learned that is called opportunity cost. Who knew it had a name. I thought it was just me over thinking things, but no it really has a name. Let me explain a little better: Opportunity Cost is what you give up when you buy something else. So when trying to pay debt or save money you start annalyzing everything. If I go out to eat I will spend $20, but if I don't, what could I do with that $20? Pay off debt? Save it? Invest it? When trying to lose weight it is the conversation you have with yourself, if I eat that now, I won't lose weight. I'd rather lose weight then to eat that (and so on). It begins to get harder and harder to spend the cash in your pocket when you put that much thought into it. Before FPU I might put that much into rationalizing why I needed something, rather talking myself out of something.
The biggest similarity between becoming debt free and weightloss, is discipline. It takes a lot of discipline to stay on track. But if you have discipline you will succeed. During the first two weeks of this month, we lacked discipline. Our envelope system is seriouly screwed up and we have probably spent more then we intended. We did this by using the debit card for things we had started paying cash for. A week into the month I tried to reconcile the envelopes, but in the end I don't know that I did. We just started another two week period of this budget. We might be able to get things figured out, if we are lucky. It was encouraging when I told hubby that I'm a bit nervous about how we are spending versus what we budgeted, he said, but the good news is we know how to fix it. He's so right. Every day we have the opportunity to fix it. You just make a new plan. Just like when you are changing other habits, if you fall off the wagon, you just get back on. I can't wait for this all to become second nature (someone please tell me it will be second nature, someday).
Baby step one complete...6 more to go. I think we will be on step 2 for a while. So come along for the snowball fight, I mean ride.
Tuesday, July 31, 2012
Birthday vs Budget
Ok so I am going a little out of order here, but it's my blog and I can do what I want.
Tomorrow is my baby's first birthday. Where has the year gone? Along with the first birthday comes the first birthday party. It's a big deal! The party, the gift, the pictures, the balloons. It all has to be perfect! The baby only turns once in their life and in this instance it is the last time one of my children will turn one. Its the last first birthday party. Its not only a big deal for B, but for me.
Its been five weeks since we started our journey to be debt free. (Only five weeks, holy moly, it definitely seems like longer.) You might remember in my last post I shared that I had a major breakdown including some super water works, resulting in the puffiest eyes I have ever seen. The anticipation of the birthday while trying to live on a budget and not use credit cards was more then I could bare at that moment.
I know you are thinking, this chick is crazy, what's the big deal. Well, the big deal is/was that up until now I have purchased whatever I wanted/needed for the kids with minimal thought about the money in our bank account or the balance on the Kohl's card- because that's where I do most of the kids shopping. I was a good shopper. I don't know the last time I bought anything full price. I never really went overboard when it came to the kids, but at the same time I just bought without over thinking. (clue number 147 to how we got into debt) In my brain I started to feel like a bad mom, that because I needed to stick to a budget I was not going to be able to provide the same type of first birthday experience to the baby as I did his sister. He's going to grow up thinking we played favorites. I already haven't had his picture professionally taken as often as his sister. I thought about throwing this whole debt free living out the window. We can't become debt free at the sacrifice of our children.
OK! OK! You can stop yelling at me now. Stop the pity party Jen! The pity party started and ended somewhat quickly, with some kind words from my husband. (Thank God there's at least one calm rational person in our household, he is doomed though, 3 against 1).
Luckily the next homework assignment was to create our cash flow plan and budget, and it was coming at the right time, pay day! So I took all that energy I had been wasting on crying and feeling bad about not providing the best to my son and put it into creating our budget for the last 2 weeks of the month. I hate to admit it but it was the first time in my 37 years that I had actually made a plan for my/our money. (I've been working since I was 16. That's 21 years of wasted money.) It was the most amazing thing, after I completed the budget and hubby and I reviewed it, it felt like this huge weight was lifted. The boulder that I had placed on my chest, worrying about money and the kids and having enough for them, it rolled off. It was like when you are pregnant and the baby is taking up all your lung capacity, then the baby drops or you deliver, and voila you can breath. I could breath!!!!
Not only did we have a plan for the 2 weeks, but we were paying all our remaining bills for the month, AND I budgeted for the baby's party, present and pictures. The budget helped me make sure I had the things I felt were important for the kids. It helped me keep things in perspective. It didn't cut off my hand like I thought it would, rather gave me a helping hand in doing all the things I wanted to. We were able to get B's pictures taken. We spent less then we have in the past and pictures were 100x better. We only bought B one present, and if I do say so myself, I think it was his favorite. He received plenty more. I made his cake- which I still can't decide if that was economically the best choice, but he will never forget it.
It was our first couple weeks using the "envelope system" as well. If you've never tried paying for most things with cash, you should try it. You would be amazed at how hard it is to spend cash. Not that people won't take your cash, you just won't want to let it go. I will say we weren't 100% successful. We did borrow money from one envelope to pay for items we wanted from other envelopes...mainly food. But we didn't take out anymore cash then we originally budgeted, so that's not too bad for our first try. I will explain more on the whole envelope thing next time. As of right now we are in need of reviewing the budget we created for August and putting some money in our envelopes so we can do things like grocery store shopping.
Oh for those of you who are still stuck on the fact that I was a big blubbering moron earlier and feeling like a bad mom, I don't anymore. I really do get the big picture. That the sacrifices we are making now, changing our bad habits, actually makes me a better mom. The mom that will provide an amazing future to her kids (I am writing this from my point of view, but I am certainly not doing this alone, my husband is a great father and is making all the same sacrifices, so please don't be offended when I say I did this, I really truly mean WE). Getting ahold of our finances is probably one of the hardest things we have done, and oddly enough it seems it comes with using the most common sense that your parents and grandparents gave you. If I had only listened...
In this episode of Birthday vs Budget, it was a draw! We had an excellent birthday and didn't break the budget!
Tomorrow is my baby's first birthday. Where has the year gone? Along with the first birthday comes the first birthday party. It's a big deal! The party, the gift, the pictures, the balloons. It all has to be perfect! The baby only turns once in their life and in this instance it is the last time one of my children will turn one. Its the last first birthday party. Its not only a big deal for B, but for me.
Its been five weeks since we started our journey to be debt free. (Only five weeks, holy moly, it definitely seems like longer.) You might remember in my last post I shared that I had a major breakdown including some super water works, resulting in the puffiest eyes I have ever seen. The anticipation of the birthday while trying to live on a budget and not use credit cards was more then I could bare at that moment.
I know you are thinking, this chick is crazy, what's the big deal. Well, the big deal is/was that up until now I have purchased whatever I wanted/needed for the kids with minimal thought about the money in our bank account or the balance on the Kohl's card- because that's where I do most of the kids shopping. I was a good shopper. I don't know the last time I bought anything full price. I never really went overboard when it came to the kids, but at the same time I just bought without over thinking. (clue number 147 to how we got into debt) In my brain I started to feel like a bad mom, that because I needed to stick to a budget I was not going to be able to provide the same type of first birthday experience to the baby as I did his sister. He's going to grow up thinking we played favorites. I already haven't had his picture professionally taken as often as his sister. I thought about throwing this whole debt free living out the window. We can't become debt free at the sacrifice of our children.
OK! OK! You can stop yelling at me now. Stop the pity party Jen! The pity party started and ended somewhat quickly, with some kind words from my husband. (Thank God there's at least one calm rational person in our household, he is doomed though, 3 against 1).
Luckily the next homework assignment was to create our cash flow plan and budget, and it was coming at the right time, pay day! So I took all that energy I had been wasting on crying and feeling bad about not providing the best to my son and put it into creating our budget for the last 2 weeks of the month. I hate to admit it but it was the first time in my 37 years that I had actually made a plan for my/our money. (I've been working since I was 16. That's 21 years of wasted money.) It was the most amazing thing, after I completed the budget and hubby and I reviewed it, it felt like this huge weight was lifted. The boulder that I had placed on my chest, worrying about money and the kids and having enough for them, it rolled off. It was like when you are pregnant and the baby is taking up all your lung capacity, then the baby drops or you deliver, and voila you can breath. I could breath!!!!
Not only did we have a plan for the 2 weeks, but we were paying all our remaining bills for the month, AND I budgeted for the baby's party, present and pictures. The budget helped me make sure I had the things I felt were important for the kids. It helped me keep things in perspective. It didn't cut off my hand like I thought it would, rather gave me a helping hand in doing all the things I wanted to. We were able to get B's pictures taken. We spent less then we have in the past and pictures were 100x better. We only bought B one present, and if I do say so myself, I think it was his favorite. He received plenty more. I made his cake- which I still can't decide if that was economically the best choice, but he will never forget it.
Oh for those of you who are still stuck on the fact that I was a big blubbering moron earlier and feeling like a bad mom, I don't anymore. I really do get the big picture. That the sacrifices we are making now, changing our bad habits, actually makes me a better mom. The mom that will provide an amazing future to her kids (I am writing this from my point of view, but I am certainly not doing this alone, my husband is a great father and is making all the same sacrifices, so please don't be offended when I say I did this, I really truly mean WE). Getting ahold of our finances is probably one of the hardest things we have done, and oddly enough it seems it comes with using the most common sense that your parents and grandparents gave you. If I had only listened...
In this episode of Birthday vs Budget, it was a draw! We had an excellent birthday and didn't break the budget!
Wednesday, July 18, 2012
Live like no one else!
We had had homework from the last class. We were to do a "quickie" budget. (hee hee, we had a quickie) This little budget was to be just the essentials. I felt my heart sink to the pit of my stomach when my biggest fears were realized, we were almost down to the penny of our income with just our essentials. Then hubs said that he hadn't figured in the check from his 2nd job (yes he's working a second job and we are still in debt). Now I truly felt sick to my stomach. If we were down to the penny of our income with just the essentials, meaning we were making ends meet (sort of) on just the two incomes, what the hell were we doing with all the money from the second job?? I was shocked at the amount of money we were letting slip through our hands on a monthly bases. All because we didn't hav a plan for our money.
After we created the essentials budget hubs and I had a conversation about our monthly bills and how it seems like the middle part of the month is the hardest part to make ends meet. We were paying our house payment, two car payments and two weeks of child care with the checks we received in the middle of the month. Gee, I don't know why we would run out of money after paying all that. So since we had a little extra from hubs teaching summer school we added up the bills we pay at the beginning of the month and we decide that we can pay the mortgage on the first rather then the 15th. I paid another bill or two online. Exhale a big sigh of relief and go on my merry way. During class I'm high on the fact that we made such a great decision to pay our mortgage and how easy the rest of the month will be.
The week goes on and so do a few bills that we forgot to add into things that come out at the beginning of the month. All of a sudden it's Friday and we have $60 in the bank account and it has to last us until the next Friday. This is not going to work. We will both need gas for our vehicles and there are 2 bills that will need to be paid. Insert water works here. I had a huge melt down. I was so happy that we were making good decisions. Excited we started this class, blah blah blah. But now I felt hopeless. I was feeling like no matter what we did we were screwed. I felt like we couldn't get out from under this mountain we had put ourselves under. Luckily I had hubs by my side telling me it was going to be ok. Reminding me we knew this was going to be hard. Reminding me we had just begun. Although I began to breath and not hyperventilate any longer I still wasn't convinced.
In class Dave says, you have to live like no one else so later you can LIVE like no one else. So here we are living like no one else. And honestly it kind of sucks. I believe it will get easier. I believe in the big picture, the one that includes me on a beach or in a castle in Ireland with a little voice in the back of my head of a friend saying I told you so. Why is it so hard to stop wanting everything now? I waited so long for so many other things in my life, why should this be any different? I suppose it could be true that the things worth doing in life are the hardest.
In preparing to write this blog I came across a couple sayings that felt very appropriate for this journey and I wanted to share them with you.
Tuesday, July 10, 2012
Baby steps?! Are you kidding me?
Disclaimer: Hubs is an English teacher, not me, so if there are grammatical errors and run on sentences, please just don't kill the blogger.
The next couple posts are going to try to catch us up to where we are in the Financial Peace University.
On June 24th we, hubs and I, attended our first Financial Peace University (FPU) class. The first night of class you are supposed to bring with you your total debt not including mortgage written down on a piece of paper. So to get ready for class we sat down and listed out our debt. I sat there for a while and looked at the number. It could be worse I guess. Hubs actually said he thought it would be worse. I just know that whatever that number is currently it is what is standing between us and our dreams and I'm tired of it! I'm not ready to share with your how much that number is, but I will give you the percentage breakdown. It is about 55% car loans, 25% school loans, and 20% credit card debt. (sigh)
So we go to class. Get our (FREE) materials. People watch all the other people in our class; wonder who is worse off then we are.
The class begins. The instructor/facilitator asks us to share why we are there. I don't remember what I said anymore but I am sure it was something like we need to figure out how to get rid of our debt so we can retire and our kids can go to school. Ultimately we were all there for the same reason, to get out of debt and stay out.
The facilitator pops in a DVD and it begins. Our journey really begins. I think I started to sweat. That might be because it was 100 degrees outside and we were sitting in a room full of windows, or it could be that I was scared to death of what I had gotten us into. At first I was a bit miffed at the fact that we were watching a DVD. Really? A DVD? Because I don't think that is really an effective adult learning strategy. But then Dave Ramsey appeared and began talking. While making me feel like an idiot for getting into needing his help, he also made me feel human and able to laugh at the stupid things we had done which lead us to his door step.
Dave (I call him Dave now because anyone who knows your financial information so intimately should be called by their first name) has a wonderful sense of humor and an ability to make you feel like he knows you, knows your struggles and he's only talking to you. How he does this through a DVD or his live presentations I will never figure out. Dave says there are seven baby steps to becoming debt free. Baby steps. Right! If they were baby steps don't you think we would have already taken them. Baby steps are easy peasy not life changing, or are they?
Hmm, baby steps. Lets think about a baby learning to walk. (On a side note, my baby B is learning to walk, so I should get this, right). First they have to learn to stand, next they have to be able to steady themselves, then begin to take steps. They fall down more then they take steps, then finally learn to take steps waddling as they go. So maybe this will be more like taking baby steps then I realized. I'm sure Dave meant it was like taking small steps not learning to walk, but I like my analogy better.
Wait until you hear what baby step 1 is! Save $1000 as fast as you can. If we could do this, why would be here????? It seems that there is never money for saving, because there is never enough to pay what we owe. How can we save if we are paying what we owe? Really Dave this is the best you can do for baby step 1?
The $1000 is for the beginning of an emergency fund. It is not to be touched unless you have an emergency. ( I wonder if forgetting my lunch is an emergency) The DVD goes on to share examples of people who have saved that money and how great it is and blah blah blah. I'm still struggling with how to make this $1000 appear out of no where. I understand the need. Having $1000 in the bank, in case something happened to our house or car or child or whatever, could definitely save us from adding on to our debt. And that is the point, most people have emergencies and typically they are less then $1000. Wouldn't it be a game changer if you had the $1,000 in the bank instead of feeling the need to resort to a high interest credit card or even worse, ask a family member to borrow the money.
Following class we strategize how we might be able to put this $1,000 away and what the timeline might look like. Within a couple days I'm thinking, holy crap we might actually accomplish this baby step within a couple weeks. Rock on us! Fast forward 2 weeks. Guess who's car battery died before we got the $1,000 put together (well or any of it to be honest), that's right, this girl. So once again we found ourselves in need of using the plastic and cursing all the way. I had bought into the idea of baby step one before this day, but this really solidified it for me. We have to get this money together. I think it will be the first big clue we received that is going to make life much more peaceful.
Half a babystep forward, 2 babysteps back.
The next couple posts are going to try to catch us up to where we are in the Financial Peace University.
On June 24th we, hubs and I, attended our first Financial Peace University (FPU) class. The first night of class you are supposed to bring with you your total debt not including mortgage written down on a piece of paper. So to get ready for class we sat down and listed out our debt. I sat there for a while and looked at the number. It could be worse I guess. Hubs actually said he thought it would be worse. I just know that whatever that number is currently it is what is standing between us and our dreams and I'm tired of it! I'm not ready to share with your how much that number is, but I will give you the percentage breakdown. It is about 55% car loans, 25% school loans, and 20% credit card debt. (sigh)
So we go to class. Get our (FREE) materials. People watch all the other people in our class; wonder who is worse off then we are.
The class begins. The instructor/facilitator asks us to share why we are there. I don't remember what I said anymore but I am sure it was something like we need to figure out how to get rid of our debt so we can retire and our kids can go to school. Ultimately we were all there for the same reason, to get out of debt and stay out.
The facilitator pops in a DVD and it begins. Our journey really begins. I think I started to sweat. That might be because it was 100 degrees outside and we were sitting in a room full of windows, or it could be that I was scared to death of what I had gotten us into. At first I was a bit miffed at the fact that we were watching a DVD. Really? A DVD? Because I don't think that is really an effective adult learning strategy. But then Dave Ramsey appeared and began talking. While making me feel like an idiot for getting into needing his help, he also made me feel human and able to laugh at the stupid things we had done which lead us to his door step.
Dave (I call him Dave now because anyone who knows your financial information so intimately should be called by their first name) has a wonderful sense of humor and an ability to make you feel like he knows you, knows your struggles and he's only talking to you. How he does this through a DVD or his live presentations I will never figure out. Dave says there are seven baby steps to becoming debt free. Baby steps. Right! If they were baby steps don't you think we would have already taken them. Baby steps are easy peasy not life changing, or are they?
Hmm, baby steps. Lets think about a baby learning to walk. (On a side note, my baby B is learning to walk, so I should get this, right). First they have to learn to stand, next they have to be able to steady themselves, then begin to take steps. They fall down more then they take steps, then finally learn to take steps waddling as they go. So maybe this will be more like taking baby steps then I realized. I'm sure Dave meant it was like taking small steps not learning to walk, but I like my analogy better.
Wait until you hear what baby step 1 is! Save $1000 as fast as you can. If we could do this, why would be here????? It seems that there is never money for saving, because there is never enough to pay what we owe. How can we save if we are paying what we owe? Really Dave this is the best you can do for baby step 1?
The $1000 is for the beginning of an emergency fund. It is not to be touched unless you have an emergency. ( I wonder if forgetting my lunch is an emergency) The DVD goes on to share examples of people who have saved that money and how great it is and blah blah blah. I'm still struggling with how to make this $1000 appear out of no where. I understand the need. Having $1000 in the bank, in case something happened to our house or car or child or whatever, could definitely save us from adding on to our debt. And that is the point, most people have emergencies and typically they are less then $1000. Wouldn't it be a game changer if you had the $1,000 in the bank instead of feeling the need to resort to a high interest credit card or even worse, ask a family member to borrow the money.
Following class we strategize how we might be able to put this $1,000 away and what the timeline might look like. Within a couple days I'm thinking, holy crap we might actually accomplish this baby step within a couple weeks. Rock on us! Fast forward 2 weeks. Guess who's car battery died before we got the $1,000 put together (well or any of it to be honest), that's right, this girl. So once again we found ourselves in need of using the plastic and cursing all the way. I had bought into the idea of baby step one before this day, but this really solidified it for me. We have to get this money together. I think it will be the first big clue we received that is going to make life much more peaceful.
Half a babystep forward, 2 babysteps back.
Thursday, July 5, 2012
Ready or not here we go!
I actually find the title of today's blog amusing. 1- it relates to how I feel about starting this blog, 2- it relates to how I feel about our journey to become debt free (holy crap, we're working on becoming debt free).
Here's a little history on the hubs and I and how we found ourselves needing a "clue". Hubs and I met in high school. We were friends for a long time and then took a break (that's right Ross, we were "on a break"). Some how, as fate would have it, we found our way back to each other and started dating. In the mean time hubs racked up debt going to a private college, a local college and was, yes you guessed it, working on a Masters degree from a private college. All the while I was off trying to save the world while living in Chicago, way above my means, and I too, took on a wonderful school loan prior to that phase of my career and life. Fast forward close to four years add on a house, 2 cars, 2 AMAZING children, furniture, healthy appetites for food and fun and you find yourselves drowning and hoping someone will rescue you.
Although I just told you how we got here, I often still look at the bills and the pennies left in our bank account and wonder how the hell we got here. Really I don't have to wonder, I know, I just don't like the answer. I know we have to know why and how we got here to get out of here, but in this day and age, don't we all just want the quick fix? I know I do....oh wait that's what got me in this trouble. So often, I want it now. I want to have fun now. I want a new outfit for that special day. I want my kids to have the things they need and want. I want to go out to dinner, because I don't feel like cooking. I want to go out and celebrate because it is our anniversary or birthday, or Thursday. I don't want to have to think about is there money in our account, can we afford it or consider waiting until next pay day. Damn it I work hard. I spend my days away from my children to put food on the table and a roof over their head. My husband works two jobs so we can pay for child care, cars and clothes. We both have Masters Degrees, this shouldn't be so hard. But it is!
So we find ourselves in a pickle. We can keep going like we have been, with reckless abandon, worrying about money but not changing behaviors. OR we can do something different. Take the road less traveled. We can stick to a budget, pay off our debt and begin to think about our children's future and our own. We can just maybe stop worrying about money and begin to think about money. The first option definitely sounds more fun but the second option, the one where we become adults and take ownership of our story is the path we are headed on. I am hoping that this path leads us to the day where I can sit on a beach in Ireland and say "thank God we took this path, I thought we'd never get here".
About a month ago I was talking with a co-worker about the fact that we were having a hard time making ends meet and how frustrating it was. The truth was hubs and I just didn't talk much about money until there wasn't any there. Anyway, my co-worker suggested that we go to Financial Peace University(FPU). I had heard others talk about this before, and well I was just skeptical. I didn't want anyone to tell me to cut my credit cards and to be honest I still don't! But that same day on the radio I heard a couple guys talking about FPU and how they were going to be starting a class at their car dealership. Not only that but the first 10 people to sign up would get the class materials free, oooooo FREE! I felt like someone had hit me over the head and said "here's your clue". So I emailed hubs, he said sign up and with some hesitancy in my typing I signed us up. (What in the hell have I done?) GULP! ITs a 13 week class. Every Sunday night with the same people talking about money. You aren't supposed to talk about money, especially not with strangers, right. How is this going to work?
As the weeks went by leading up to the first class, I kept trying to think of ways to get us out of this. But I knew we needed it. The night arrived and it almost felt like we were heading off to marriage counseling, in a way I guess we were.
Over the next 13 weeks I plan to share our journey. OF course that will be just the beginning, the time when we go to class, have homework and need some heavy drinks to commit to what we started. The really hard work will come every day for the rest of our lives (holy cow we sound like addicts). Feel free to comment, share money saving tips or stories.
P.S. I don't claim to be a financial advisor and I don't play one on TV.
Here's a little history on the hubs and I and how we found ourselves needing a "clue". Hubs and I met in high school. We were friends for a long time and then took a break (that's right Ross, we were "on a break"). Some how, as fate would have it, we found our way back to each other and started dating. In the mean time hubs racked up debt going to a private college, a local college and was, yes you guessed it, working on a Masters degree from a private college. All the while I was off trying to save the world while living in Chicago, way above my means, and I too, took on a wonderful school loan prior to that phase of my career and life. Fast forward close to four years add on a house, 2 cars, 2 AMAZING children, furniture, healthy appetites for food and fun and you find yourselves drowning and hoping someone will rescue you.
Although I just told you how we got here, I often still look at the bills and the pennies left in our bank account and wonder how the hell we got here. Really I don't have to wonder, I know, I just don't like the answer. I know we have to know why and how we got here to get out of here, but in this day and age, don't we all just want the quick fix? I know I do....oh wait that's what got me in this trouble. So often, I want it now. I want to have fun now. I want a new outfit for that special day. I want my kids to have the things they need and want. I want to go out to dinner, because I don't feel like cooking. I want to go out and celebrate because it is our anniversary or birthday, or Thursday. I don't want to have to think about is there money in our account, can we afford it or consider waiting until next pay day. Damn it I work hard. I spend my days away from my children to put food on the table and a roof over their head. My husband works two jobs so we can pay for child care, cars and clothes. We both have Masters Degrees, this shouldn't be so hard. But it is!
So we find ourselves in a pickle. We can keep going like we have been, with reckless abandon, worrying about money but not changing behaviors. OR we can do something different. Take the road less traveled. We can stick to a budget, pay off our debt and begin to think about our children's future and our own. We can just maybe stop worrying about money and begin to think about money. The first option definitely sounds more fun but the second option, the one where we become adults and take ownership of our story is the path we are headed on. I am hoping that this path leads us to the day where I can sit on a beach in Ireland and say "thank God we took this path, I thought we'd never get here".
About a month ago I was talking with a co-worker about the fact that we were having a hard time making ends meet and how frustrating it was. The truth was hubs and I just didn't talk much about money until there wasn't any there. Anyway, my co-worker suggested that we go to Financial Peace University(FPU). I had heard others talk about this before, and well I was just skeptical. I didn't want anyone to tell me to cut my credit cards and to be honest I still don't! But that same day on the radio I heard a couple guys talking about FPU and how they were going to be starting a class at their car dealership. Not only that but the first 10 people to sign up would get the class materials free, oooooo FREE! I felt like someone had hit me over the head and said "here's your clue". So I emailed hubs, he said sign up and with some hesitancy in my typing I signed us up. (What in the hell have I done?) GULP! ITs a 13 week class. Every Sunday night with the same people talking about money. You aren't supposed to talk about money, especially not with strangers, right. How is this going to work?
As the weeks went by leading up to the first class, I kept trying to think of ways to get us out of this. But I knew we needed it. The night arrived and it almost felt like we were heading off to marriage counseling, in a way I guess we were.
Over the next 13 weeks I plan to share our journey. OF course that will be just the beginning, the time when we go to class, have homework and need some heavy drinks to commit to what we started. The really hard work will come every day for the rest of our lives (holy cow we sound like addicts). Feel free to comment, share money saving tips or stories.
P.S. I don't claim to be a financial advisor and I don't play one on TV.
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