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!

Live like no one else!

On July 1 we, hubs and I, attended our second Financial Peace University class. Again it is hot in class and we have new people to add to our journey. You know you are in for some fun class discussion when one of your new classmates references Star Trek in thier response. (shoot me now!)

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.

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.

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.