Money is for Losers

our paid for car

2009-03-04T11:07:00.000-08:00

FPU = complete! (mostly)

2008-12-05T04:56:00.000-08:00

We made it through our class...it was very good & informative. We missed the last 2 classes due to various illnesses. Thats okay.

During those 13 weeks we incurred NO NEW DEBT and paid down our debt over $4000. Our starting balance was almost $54K, so we are officially at $49,800. It is good.

Also during this time, my income from the daycare decreased about 1/3 (not good), our house payment went up 1/3, and an unexpected medical expense. We haven't had to hit the emergency fund, and so far have had at least some money to snowball every month. And in case you think we might have a big "shovel"...NOPE! Our take home pay for the month is only around 4000-4400/mo. Average.

What this means is that we were able to reduce our living expenses enough (1/3, so we are living on 67% of our take home pay), to be able to pay off debt equaling a month's worth of pay. Amazing.

To be honest, we are not funding some of our envelopes right now (clothing, classes for the kids, curriculum, housing wants). We have enough of those things for the better part year or even two years. So when we are done with the debt payoff, there are still items to be replaced/fixed/etc, that we are totally putting off for now. Still, those items will only add a couple hundred, at most, to the overall budget.

We start FPU on Monday!

2008-09-04T12:14:00.000-07:00

PFU = Financial Peace University. "Dave" sanctioned and everything. It is a 13 week class on Monday nights. Totally takes balls to commit to something that long. Well, Jason is on-board and enthusiastic, so who knows what the future may bring.

So far our budgeting is going well. We need to increase the fuel expense and medical....amazing how that money keeps going out. Except for the house should be able to be debt free in 2-3 years (seems like forever!). We will get there! Yes we will! What a journey, though...

Plan your work, then work the plan!

2008-08-05T04:14:00.000-07:00

Okay....we are officially back into the game! We've got our budget created - and balanced! - and pending spouse's approval. For me, this is really the hardest step is laying out the budget. Following it should be okay as long as we don't get a "Murphy" visit. The Murphy of the famed Murphy's Law: "If anything can go wrong, it will".

We still have our Beginning Emergency Fund of $1000 in savings. We have sinking funds for various longer term items (twice yearly insurance, house repairs/upkeep, christmas fund) in an Orange account from ING Direct.

The kids have been commission style for a while---I have not paying much in allowances lately. Savings for me, disappointed they don't do their extra chores beyond the bare minimum. Humph.

We are planning on reading the Financial Peace or Total Money Makeover again, just to get motivated. We are setting our long-term goals and try to fit all this into it.

We are brainstorming ways to reduce expenses. We had cut down expenses a long time ago and kept many frugal habits, but there is some fluff in the budget we could axe. Next year, I can do a bit bigger garden. This is more for health than budget, but it works in both ways. Double benefit!

Also brainstorming ways to increase income. I think I am going to try to add a child to the daycare. I will be at capacity again. I haven't filled the spot because I wanted some special times with my long-term kids before adding a new one to the mix. I actually like the chaos of a full house. I may also make some things out of extra stuff around the house -- like scrap pages, activity quilts, jewelry, bookmarks. We have the supplies just hanging around in our art cabinet. Maybe income online: chacha guide,doing online surveys, associate content writing. I may do retail over the holidays as a short term gig. Spouse is going to work OT as much as they let him.

So far so good...planning almost done.

Next step: implementation.

2008-07-29T12:47:00.001-07:00

Over a year since I looked at my blog. I am a horrible blogger, I know. I am this way IRL, email, letters, calls back....

well, after a year 'off-plan', we are going to attempt the whole debt-elimination plan. Okay....we are going to succeed at getting out of under our debt-load.

Not selling the house, or much of anything

2007-06-11T03:44:00.000-07:00

Not gonna happen in this market. Sure, we could price it 'right' & end up still needing to bring 5-7K in to the closing table. It isn't much of a 'savings' by moving closer to J's work.
*Moving would be a $2K expense (deposits for utilities, apartment, etc)
*church is still out here (so at least once a week 150 miles).
*all of the kids doctors - so once a month another 150 miles(more if having issues), and quarterly another 100 miles. Plus no income from daycare. I am so not doing daycare in a rental.
* MOST of all *I* don't want to move to the area where J works. We would have to give up our foster care license, & daycare license since it would be in a different state
*Also, we would have to take the kids off state health ins & pay for them on Js insurance (much more expensive).
*staying in state & just closer---living expenses don't decrease *enough* to warrant the expense of a move.

Well, things are looking up on the house front.
J is able to refi the house in his name only, through a FNMA program for buyers with under 50K income. The back end ratio can be up to 60%. A conventional loan, yeah!

Income:
J's job hunt is not going well. *I* think it is mostly due to him being at his current job for a bit over 6mo. He is just starting to get a call back here & there. His resume is awesome, and we have had it work previously (obviously). The only change really is that last job only being 6mo. It should work itself out sooner or later. For now, we are thankful he has a job. After watching Pursuit of Happyness yesterday, we are totally thankful of that job.

Dh was considering getting a PT gig at a local gas station. A few evening hours here & there. He is still considering it.

I am going to start watching a new baby in a couple of weeks (too cute!). She will be my only one over the summer (besides my kids). I also have a new family starting in the fall, and in the winter my long term daycare boy (3.5yo) is getting a baby sibling that I will get in Jan. Exciting! Plus it will be fun to have a house full again. The routine goes smoother for me with more kids. Go figure?!

My summer job (scoring standardized tests), ended up not panning out due to the schedule - I do evenings & they had no evening contracts. And day contracts isn't worth the gas & babysitter expense. So that is why I signed up the baby during summertime. I hope it works out. If not, we can squeeze by until fall when school starts up & my daycare kids come back (parents are teachers).

Van:
Ended up being a similar situation to the house. Even though we bought it used, it still depreciated enough that we can't come up with the difference(4K). We wouldn't need the second vehicle, but it is a security thing since dh works soooo far away & can't dink around with car issues. And with daycare kids I can't either, until he gets home (which is when the kids leave anyway).

Eating out:
Not much anymore. J gets blow money from his grandmother every once in a while, and that is J's treat to us. :)

Overall, we are doing okay. Slowly (very slowly) reducing debt.

May update

2007-05-18T06:17:00.000-07:00

Current debt totals, after MAY payments:

Credit card:$0
Rae's Sallie Mae:$7710
Kia Sedona:$13662
Jason's Sallie Mae:$31,942

Total non-house debt: $53,314

Logjams....

2007-04-07T09:21:00.000-07:00

Okay, major logjams that are preventing 'gazelle intensity'

*house
*van
*eating out
*fuel costs

So we have decided they gotta go. #1 problem is that the housing market in our subdivision is very crappy. So we have to do FSBO or expect -$0- at closing since the realtor fees will eat up literally ALL the equity. If we can sell it, that it. I did talk to a couple investment brokers, and we considering doing a lease-option, but I do not really want to go in that direction. We would still have our mortgage & own the play, get rent that may not cover expenses, and all that rot. Still better than what we are currently doing, but not the best option. There are several houses in pre-foreclosure (that doesn't help), and lots for sale. Average time on market is well over 180 days. But then, *I* haven't seen any resale listings in our subdivision that are reasonable in their pricing. Way out of line.

Van - have yet to take it to Carmax. We'll see.

Eating out---it is hard, it is a form of entertainment. babysteppin'

Commute to Clean Harbors is killing in gas money. Can't do much about that right at the moment.

April Update

2007-04-07T09:18:00.000-07:00

We are officially on Step#2, debt reduction.
We have the $1K Beginner emergency fund in ING account

Current debt totals, after April payments:
Perkins loans: $0!!!!! we paid that bad boy off!!
Credit card:$0!!!!paid off completely...stubborn chiro payment
Rae's Sallie Mae:$7763
Kia Sedona:$14007
Jason's Sallie Mae:$32271

Total non-house debt:$54,041

Turmoil regarding tithing...

2007-03-28T07:39:00.000-07:00

For the most part, I *want* to give. Right now, our debt allows for minimal to no tithe or offering. Which is 2 separate things. Supposedly, tithe is the first 10% of your wealth to your 'home church', and anything over that is 'offering', and that can go toward anything/anyone.

There is some dissent among churches if tithe is a Christian 'requirement' or only if it can be done with a joyful heart. Some say it was an old testament 'thing', never a law, and it was fulfilled by Jesus when he died for our sins, among other things. I think Jesus challenges us to give *everything*, but haven't gotten that far in comprehension of things yet.

However, there is agreement that *everything* we have belongs to God, we are only responsible for it while on Earth. The definition of being a good steward of what we do have is widely open to debate and that is where the tithe/not tithe to home church. Then there is the whole thing on if it is 10% gross or net income, or if it is 10% of total wealth (of which we have none).

*I* feel that we should give joyfully at least 10% income to those less fortunate, be 'responsible' of the rest, which may include more giving. But we got ourselves in a muddle in a time when we were NOT responsible with our money, and now are 'owned' buy WAMU & Chase.

Hmmm. I do NOT think it is okay to have debt. I do NOT think it is okay to not give to charities and/or church. But we are where we are, and need to go on from here. Obviously changing lifestyle and spending habits to be able to live on less than 90%. Otherwise we will never have 'enough' to tithe.

March update:

2007-03-20T12:51:00.000-07:00

We are officially on Step#2, debt reduction.
We have the $1K Beginner emergency fund

Current debt totals, after March payments:
Perkins loans: $0!!!!! we paid that bad boy off!!
Credit card:$997
Rae's Sallie Mae:$7862
Kia Sedona:$13990
Jason's Sallie Mae:$31985

Total non-house debt:$54,834

"Found Money"

2007-01-30T08:06:00.000-08:00

Now that we know the 'steps', and we have a mostly workable budget. We have to come up with a plan for what Dave calls "found money". That means leftovers in the budget, cash gifts, overtime/extra income, refunds, prize money, income tax return. Blow Money is a separate category, not found money. I want to be seriously serious about debt reduction. I propose that that found money go to whatever step we are on, with the exception of money for birthdays. Birthday money is considered 'extra blow money'. But everything else goes to 'THE PLAN'. After we get past babystep 2, then we can revisit this.

PreSteps---getting current and budgeting

2007-01-27T04:21:00.000-08:00

Budget----Okay. Over the past week, I have worked our a 'doable' budget. "Dave says" that it takes about 3 months of doing a budget (well, he calls it money allocation or some neutral term) before you have your categories in the correct ranges. I think I am pretty close to our 'real' numbers for expenses. But I will be following every dollar and where it goes, so that we are in control of our finances instead of our finances controlling us. Not balancing the checkbook, and not sticking to budgeted expenses is where you get those sneaking "leaks" and before you know it...you have to your the Emergency Fund so you don't bounce the mortgage.

We are going to be debt free! I want to do this as fast as possible. Beholden to no man...blah, blah, something.

System----So, the envelope system. It works, I will have to pay attention a bit more in the grocery store. Thats all. Impulse buys --- nope. Gas (ONLY gas at the gas station!!!) on the debit card. Everything beyond bills is cash. We both spend waaayyyy too freely using the debit card. We just do not think before we swipe.

Get current ---- I do have a couple outstanding bills - $70 to the dentist (which I thought was covered 100% by insurance - big raspberry!), TruGreen ChemLawn - $30ish. These will have to wait until next Friday. I think that is it.

Blow Money ----this will be in cash. JASON!!! On Saturday you get $50. Spending money will include any of your bad habits (tomacco and/or 'new releases'). I do NOT want to see Isle 16 purchase on the debit card---or worse, the credit card!

Savings without a mission is garbage!
-Dave Ramsey

We still need to set up larger goals, longer term type stuff. But for right now, Baby step #2 is sufficient for our needs here. The goal to be consumer debt free is a huge motivator.

7 Baby Steps to Financial Peace

2007-01-27T03:47:00.000-08:00

7 Baby Steps to Financial Peace

1. First level emergency fund $1,000. Pay minimums on everything else.

2. Kill off personal debt except for the house

3. Save the rest of the emergency fund. 3-6 months of *expenses*.

4. Fully fund all pretax retirement accounts. Also at this time, review all insurance coverage. With a large emergency savings, you can now afford $500-$1000 deductibles.

5. College savings accounts for children (optional).

6. Pay off house as early as possible.

7. Build wealth! Mutual funds, real estate…wait for the great deals & pay cash. This step is the ‘rich getting richer’.

January update

2007-01-26T08:47:00.000-08:00

I am a huge Dave Ramsey fan, and following (mostly) his 7 babysteps to financial success. Babystep #1 is $1000 emergency fund. It was funded, but then we haven't been following a budget lately, Christmas happened (so NOT an emergency). So I had to move our EF over to checking to cover the mortgage and the Homestudy check this month. Shouldn't have happened, but it did. So time to build it up again. Blech.

This was in September:

So our financial planning goals are to be debt free. We are working on it, and I am going to try to keep a progress report. So, not including the house, we have outstanding debt of $56,055. This encompasses a van, student loans totaling almost $40K, and a $2K on a credit card. So there is the truth of our debt and hoping to get rid of it all asap.

So I am now posting a more detailed totals list.

Emergency fund: $130; Goal: $1000

Perkins Student loan: $270
Credit Card: $899
Rae's Sallie Mae Loan: $7915
Jason's Sallie Mae Loan:$31519
Van loan: $14312
Total debt :............$54915

So it is an improvement, at least. Heading in the right direction. Not 'gazelle intense', but babystepping.