Screw money... it's summer!!!

Yeah I said it... and I will say it again!  Screw money... it's summer! 

The summer mantra is on, and has been going strong for the past few months. After finally getting to see my guru, Dave Ramsey, my image of him shattered.  It was just so sad to see him over selling all of his "financial tools" to all of us poor people hanging on his every word.   Now to get him back...

Ha! I'll show him... no more drinking his kool-aid!  Right?!  Who's with me?!  No?  Alright then.

Kool-aid... the summer drink of champions and those committing revolutionary suicide.

If you are like everyone else in America that owns a house and lives somewhere that gets snow, you know you have 4 months to get your shit in order. Summer was once a time of fornication and getting lost in the haze... now it consists of 16 hour days on the weekend, sweating (and not in a good way), working in the yard or on the house. 

Since this spring/summer season began I have been un-friended by a surprising amount of people because they must think I died. It really hasn't been that long... they must have been waiting to pounce on that one.

However we have landscaped the front yard, and 1/5 of the backyard, put hardwood floors in 4 rooms and painted 3 rooms and a hallway.  What a great summer!  <we need a sarcasm face>

Yes, that will do!

Total bill so far?  Surprisingly we did 2 bedrooms and a hallway of laminate wood flooring for about $400. Hand scraped laminate hard wood in the family room for about $500.  Estimated landscaping $300. Paint $200... we had some issues with pink in the family room.

In light of the summer season, I guess I will just ignore the bill and worry about things when it gets cold again.. just like the hundreds of other people I see at Lowe's every weekend.

I think I did pretty well only using "Hard Wood" once in this blog. ;}

The Future: It would help if we had a plan

So false alarm on the last post... we will be paid for the dental work at some point. However I have bigger fish to fry. The future is a vast and glorious place in my mind... full of opportunity to eventually own a bigger house, live debt free, move to a farm, have a child to pass my useless knowledge to.  Who knows...

The problem with not knowing, is that we can't plan.

My dreams today (because they change on a whim) include a big 4 bedroom house, which includes a workout room with a sauna like we have now... but not at the expense of a bedroom, a room big enough for a baby grand piano I can play, a big family room complete with stone fireplace, a small barn out back to hold our chickens, ducks, cow and pig, and a gorgeous entertaining kitchen complete with gas range. Oh... its fun to dream, isn't it?

My spouses dream: To own a house that is close to the ocean/lake for sailing and close to the mountains for snowboarding, somewhere that has a strong sense of community, a house big enough for the two of us, but would include a room for instruments and a bar, relatively close to the airport so we can travel somewhere to snowboard in the summer.

This is the problem... so how can we come to an agreement?  So far we don't. We have fun dreaming up this beautiful house in the perfect location... that is in our price range... and that is as far as it goes. Perhaps that is as far as it will ever go. You don't need money to dream!

April Fools

April Fools was yesterday and while nothing particularly funny happened... I do get the feeling someone is behind the scenes, fooling with our budget every month. Our spending has progressively increased over the past 3 months but this is ridiculous.

Just when I think we are about to be in the straight and narrow, someone punches me in the stomach... or in this case, the wallet.  Feels the same though. My husband did some dental work on a relative and the lab bill came in at nearly $900. Instead of taking the money so we could pay the lab bill... he bartered some services for the summer.  WHAT????!!!!!

Seriously, I sat and cried this morning because I am at my wits end right now. Even as I write this sentence the tears are resurfacing. We are going to be fine... it isn't that big of a deal, but I have no idea what I can possibly do that will make us more money.

I am working full time now and I do bookkeeping on the side for another company. I have sold stuff and cut back... I have even created in depth reports for our sales team at work, so we all have a better chance at hitting our bonus. Please God just tell me what I can do, to bring in more money. I can't wait for someone else to do it... that just isn't going to work. It has to be me and I have no idea what else to do. I suppose a part time job wouldn't be terrible for a short time, but realistically who is hiring?

Time to get on springsjobs.com and figure something out.

It is always easier to see where the money goes when you have a visual aid. This is our first quarter graph on our expenses.  Student loan and bills eat us alive!!!  I can only imagine what life will be like once we are out of debt.

Unfortunately this is as big as I could make the graph... get your magnifying glass!

 As you can see here we have been getting lazier with the budget. The food expense is on the rise, but the entertainment expense is decreasing. It's not great but it could be a lot worse.

Dave Ramsey Live - I did NOT buy the T-Shirt

It was quite interesting to see Dave Ramsey live. There is what I took from the show:

1. I have officially learned everything he has to teach.
There were no new stories to hear, or life changing moments for me. I have read Financial Peace and Total Money Makeover at least 3 times a piece, listened to all 13 CDs for Financial Peace University, and watched two DVDs prior to this live event.

2. This is excellent, if your spouse is not fully on board.
While was filing the workbook before we covered the material, my spouse was listening and getting on board. He didn't show it while we were there, but the entire car ride home we discussed the budget and his thoughts on the show.

3. People are going into debt, trying to get out of debt.
Let me describe the scene:  Tickets $29 / VIP $69  - we bought the $29 tickets. We parked at the movie theater around the corner from the arena so we didn't have to pay for parking (Savings $5). At every break they sold Financial Peace University ($99), Financial Peace Jr. ($30), Total Money Makeover Starter Kit ($50), T-shirts ($15). Every person left there with bags stuffed to the gills.  We walked to our car empty handed except the free workbook.  I think we are the only people actual implementing his principles.

I believe in his principles because they work. I do not I believe in selling hundreds of dollars worth of stuff, to broke people that clearly need help.

 

Top 5 reasons you are broke!

#5 You Don't make Enough

I will let this one slide... there is ample opportunity out there to make some money but, you have to be smart. By smart, I don't mean book smart. I mean you need to be able to read people and know how to act. Which for a lot of people is easier said than done. Didn't get a second interview? You probably acted like a know-it-all, jackass in your first interview. Good  employers and companies hire good people based on attitude and personality. You can train almost anyone to do a job.

#4 Your Significant Other has a Spending Problem

This can go both ways people... women can be shop-a-holics, and men can be gear-heads or electronics junkies, or vise-versa. If you are married, your money should all be in the same cookie jar. You need to have a plan in place, so you don't argue about money. 80% of marriages fail because of financial problems. Take care of your spending first, BEFORE you do an intervention with your spouse.



#3 You Don't Have Time to Cook

Do you work 7 days a week, 16 hours a day?  I bet you don't.  You have plenty of time to go grocery shopping and make some meal plans for the week. Always buy a few extra bags of food for the freezer for those nights you really don't feel like cooking.  To say that you can't cook, don't have time to plan, or don't know how is basically saying:  I am a lazy, irritating person that doesn't care how I, or my family eats. Go cry to weight-watchers, because eating out also reeks havoc on your waistline.

#2 You Deserve It

I am all about self empowerment... but chances are you don't deserve a damn thing, besides someone kicking you in the ass and cutting up your credit cards.  I believe it is L' Oreal that uses "Because You're Worth It" as their campaign slogan. Brilliant really... until everyone in American now believes that they are entitled to, not only a box of hair dye, but a BMW, Gucci glasses and a Fendi Bag. If you don't have the money for it, you don't deserve squat.


#1 You Spend More Than You Make

What is a credit card for? For buying stuff you can't afford to buy now.  When you don't plan out your spending for the month, you end up spending more than you make. The only way to stop this cycle is to make a budget. "But I don't have time to budget." You can't afford NOT to make a budget! At the most basic level you need to write down total monthly income, minus monthly bills, and see what is left over. You can't spend more than that magic number a month, or you will be hanging yourself on your money tree.

Motivation - Gone.

I have officially lost my motivation. I bought 3 shirts this past weekend and haven't said no to a night out in 2 weeks. I am hoping to regain a sense of purpose, and hope, after attending Dave Ramsey's seminar on Saturday May 26th.

I thought that after we received the loan repayment, it would be the push we need to stay on track. That was not the case. It only served to push us into our bad habits by reminding us that there will be more money now than 1 month ago. That $466.66 we are saving per month is to be used to pay off the credit card and student loans. Really I am just creating this post to remind myself of what we should be doing with our money.

St. Patty's Day is always a day of celebration and green beer. We spent $75.00 on booze and 1 sandwich ($9). This is not surprising. We have done worse. However it is now time to straighten up and get back to business. What's on the calendar for the rest of the month?  Hockey game in Denver on Thursday and then DAVE RAMSEY!!!!   Only 1 week away!

Poof! It's gone...

Less than 24 hours later the $60,000 was applied to both of our great lakes loans.  Sayonara crappy loan company charging us 7.2%!  Hello, extra $466.66 a month!

Ahh... how wonderful it is to have our first student loan paid off. Now we can really start up the debt snowball.  First order of business, is to put all extra money into our tax bill until it has been paid off. After that short challenge, we will begin putting $466.66 + $250 = $716.66 onto our credit card every month.  We will also be putting any additional money made through bonuses, extra jobs, selling stuff and hopefully have it paid off by September.

If all goes well and we accomplish this, with my 3rd quarter bonus (depending on what tier we hit) we will be able to put a minimum of  $5,700 into another loan.  Just like losing weight we need some small wins to keep us going! 

$60,000 Loan Repayment!

Finally the financial Gods have spoken and we have received our loan repayment disbursement. For everyone out there that wants to know what this is, and how the hell you get it, let me explain.

If you are a medical provider in an under served area or work for some public health locations, the government offers a loan repayment program. Your office must be a qualified location and your position must be a qualified position. You have to apply like you would a grant or scholarship. They only give money to a certain number of people per year. If they accept you, in about 90 to 120 days, you get a lump sum to be used on qualified government loans. You must provide proof of payment and stay at your job in the position your are in for at least 2 years from the date of the loan acceptance. 

The state and federal governments both provide these types of programs, so if you work for public health or a branch of government look into this for yourself.  They provide this as an incentive to work for those companies because generally you will be paid less than if you were in private practice. 

Anyway $60,000 is hovering out there in outer-space waiting to be applied to our loans. Now which loans are we going to payoff?  Dave Ramsey says you pay off the smallest balance ones first. Unfortunately that won't help us in the long run. Remember Ramsey says getting out of debt should take you 12 to 24 months and we are looking at 7 years! So I vote for the highest interest.

We are now $60,000 less in debt than yesterday.  Which puts our total debt (not including mortgage) at $519,754.  While this figure is still shocking it is no longer discouraging any more. We are going to do this!  

Debt Companies that "Help" You

Boy everyone is trying to profit off the poor man.  What is the deal?  Give us a break already!  All these debt companies promising to consolidate your payments and settle your accounts.  At what cost? 

First of all sorry to say this but... you took out the debt to get stuff, lots of stuff, and now you should pay it back. I was the idiot that took out student loans, I was the dummy that wracked up my credit card bills to buy vacations and crap that I don't use any more. Why should the financial institution have to suffer?  Ok well they should suffer... I mean they shouldn't have LET me get into so much debt. They should have stopped shoving their credit card offers down my throat, until I couldn't breath and just HAD to sign up for ANOTHER ONE!

I do not agree with marketing tactics or allowing someone to get credit that shouldn't, but we have to own up to this mess... or else we will continue to put ourselves back into it. So #1:  Own your debt!  It sucks, but its the first step.

Next, these companies claim to be "non-profit" yet they have to pay their employees somehow, right?  There only job is to help you. Oh how noble! -sniff- -tear- Puh-lease! I know we are super smart... hence the debt.. but we should know that no business works for free, and I have never heard of one of these companies asking for a donation at the end of the call. 

I once spoke with a debt consolidation company in 2005 before we were paying on student loans. She put my info into her system and then said. "Um... how are you even eating?" Exactly! These people don't have a clue what our real situation is. #2 Stay away from debt companies. They wouldn't have jobs if it weren't for people like us.


Debt settlement companies are not the way to go either. They are making a profit off you and crushing your credit score. Which you wouldn't need if you used cash all the time but lets face facts... you don't. Also your credit score can not only effect buying stuff but, also getting a job and renting an apartment. So before you do something stupid like work with one of these companies or even worse, claim bankruptcy, there are people worse off out there and making it work. #3 Debt settlement and bankruptcy ruin your credit report so DON'T use them!

Lastly, sit down and make a budget... or talk to someone you know that is good with money.  NOT the person with new Lexus... they are probably Hood Rich like the rest of America. Talk to people you know and love for help... not giving-you-money-help... just someone that can show you, you aren't as bad off as you think. #4 Work with what you got.. talk to someone that is good with money for help.

That's it folks... let me know if you like it! 

Make More or Spend Less

There is only 2 ways to have more money... make more or spend less.  So where do we draw the line between making money and enjoying our job?

I love my job. I love working with numbers all day... I am pretty sure no matter where I was working, as long as I am working with numbers (and not customers), I would be happy. The people I work with are great and my bosses are amazing.  However, there isn't room to move up... or make more money at this time.

If I had an opportunity to work elsewhere as a CFO making $100,000 would I take it? The only reason I would take it, is for the money, so is that a good reason?  I wouldn't be able to predict if I would be happy there or if I would like my boss and co-workers. But $100,000?!  Would I be crazy to pass it up?

Think about all the reasons you like your job... or all the reasons you don't like it.  Could there be a better opportunity out there for you?

Actual Spending - Feb... zoinks!

The final numbers are in and February, also known as the shortest month of the year, was worse than January!
 

February summary:
BILLS:
Student Loans Paid			4276.23
Mortgage			1427.73
Credit Card Payments			250
Car Payment			502.52
Utilities			449.04
Food			1131.55
Gas			383.53
Travel			350.48
entertainment			153.62
Charity			50
medical - vet			278.85
dues			35
hair cut			9.99
sheets			4.36
TOTAL SPENT IN FEBRUARY:			9302.9

A couple trying to pay off debt should not be spending $1,131.55 in FOOD!!!!  Holy shit! My next post is going to be about losing weight!  Gas is high because of multiple trips to the mountains, including one with a 4 hour drive there and another 4 hour drive home.

Odds and ends: $35 for some unnecessary university alum dues. $278.85 in vet bills because our oldest dog didn't eat breakfast one day. We had to get blood work and heart worm done. $153.62 on various entertainment expenses like movies, music, $70 50 mile race fee (my husband). 

The good news is that his haircut was only $9.99 because of a coupon to the Hair Cuttery and we bought another set of much needed sheets for the guest room for $4.36.... they were on clearance and then I had 2 gift cards. 

Oh where, oh where, has all my money gone?

All numbers aren't in yet folks, but in the mean time I am trying to figure out how to pull off March.  Yes we have enough to pay the bills but we only have 45 days until our $5,000 tax bill is due.  Eeeek!

A few things to look forward to this month are the $60,000 government loan payment from the feds. Which means we get to skip a few of the qualified loan payments and dump the remainder into our highest interest loans.  And Dave Ramsey Live!!!!  Oh Yeah!

Other money worries this month? Another family trip to visit us, a hockey game in Denver, and St. Patty's Day.  St. Patty's day is a major holiday in this family so a few green pints are inevitable.

Budget to be posted soon.

February was a Disaster

Wow, February ended up a huge disaster!  What could have been a decent, but over budget, month turned into a black hole sucking any extra money into its vortex.  I don't have the exact numbers yet but I will.

Family just left.  We spent $600 on a condo in the mountains, blew a ton of money on gas and food... thinking about it makes me sick. Especially with a $5000 tax bill. Time to do some fancy accounting for March... Stay Tuned!

Are You Skinny or Fat?

Seriously look at yourself in the mirror and make a decision.  Either you could do with more exercise and some healthy foods or you give up on yourself. You are going to have to work hard to keep in shape for the rest of your life.  All of us are!

Dave uses this example when talking about your finances.  You need to continue to education yourself and work hard to control your money and spending habits. Time to take a good look at your bills and accounts... just do it! Your bills aren't going away on their own (I wish!). So take a look at what you have and start to schedule some time into your day to work with your money. Just like you do (or should do) with exercise.

I started working out again on Sunday after a long holiday/travel break. The first day I was forcing myself to lift weights. The second day I got up an hour early and lifted more weights. The third day I got up before my alarm and lifted weights again... THEN when I got home from work I did a 30 min cardio workout on the treadmill. What changed on that third day?  Besides some new tunes on my ipod and jamming out on the way home, I had major energy. I was ready to run my ass off... literally!

That was exactly how it was with starting this debt snowball... or working on our budget. We were pushing ourselves and resisting. Then all of the sudden we saw we had more money to put on debt. We were energized and ready to make some big payments.

Now get some motivation and get to work already!

The Silver Lining of Being $800,000 in Debt

I firmly believe there is a reason for everything.  In our 20s, we spent every penny on drinking, eating at restaurants, clothes, expensive cars, and traveling.  We still travel and eat out occasionally but we are learning how to live way beneath our means. If we make $150,000 a year we need to learn how to live on $60,000 a year. If we can master that, once we are debt free we will have $90,000 to invest, give and save.

Let's see how much we would need a year if we were debt free. 

Utilities: $300
Phone: $15 (see Changes Page for explanation, was $188)
Internet/Cable: $87
Hair Cut: $25
Netflix: $15
Groceries: $521 (budgeted)
Gas: $280 (budgeted)

Total: $1,243 x 12 months = $14,916

What is my point?  If we weren't in this much debt now, we would have continued to spend, and spend, and spend.  I am sure you know at least one person that gets a new car nearly every year... or someone that constantly gets new stuff like phones, ipods, computers, ipad, kindle, and any other electronic.  Chances are pretty damn good that they are broke.  Even if they did pay off the credit card they bought the stuff on... what are the odds they have a fully funded emergency fund? How about a plan for retirement?  

There is no way I could have ever imagined living debt free. If we hadn't been in such a deep hole, I never would have read Dave Ramsey's book and learned that we could be debt free.  I never would have learned how to invest in my 401k properly or to have an emergency fund.  


The future is bright... much brighter than if we would have just continued down the spending path we were on. 

A Breakup Letter to My Credit Card

Dear Credit Card,
I can hardly begin to put into words what we have been through. When I think of you, I think of Paris, Cabo, Cancun, Playa del Carmen and so many other trips we have been on together. I am not sure what I would have done if you hadn't been there during the summer of 2005, when I was at my lowest point. It was scary not knowing how I would eat week to week.  It was you that got me through that rough time.

Unfortunately all those times I thought you were helping me out, I came to realize that I would have to pay you back plus 12% to 28% interest. Do you know how that made me feel? I had just pulled myself out of a horrible time and then I get slapped across the face by an interest charge of $200?! How is that fair?!

Yet like a battered wife, I returned to you time and time again. I thought I needed you... I thought you were helping me out by giving me points, cash back and airline miles. I was wrong. You don't help, you hurt people. There is no give and take in this relationship. It is all about you and I get nothing out of it. I respect myself enough to end it here and now.

We are over.  You are no longer my emergency contact... I have been seeing someone else. They are honest and respectful, simple yet powerful. My new relationship is with cash.

I am sure you will find someone else to harass and control. I wish I could spread the message to stay away from you, but I guess people will have to learn on their own.

Do not contact me any more, I don't care about any of your offers.

-We are done!

This letter was inspired from John Acuff's book Gazelles, Baby Steps and 37 Other Things Dave Ramsey Taught Me about Debt.

Financing a Vacation

Do you put your trip or vacation on a credit card?  When you are on the trip do you put your hotel, meals and entertainment on a credit card? That's exactly what we did and nearly everyone else in America.

Here are a few tips for a debt free vacation:
1. Book your flights on your debit card. Yeah I said it! Don't book your vacation until you have the money in your checking account and can pay for it right then and there.

2. Budget your meals. "A vacation is for relaxing and spending, not budgeting!" Guess what? There is a reason you are reading this blog... you have a problem with spending. You rationalize your money away.  This past weekend I had to say these words to my family: "Hi my name is Amanda and I have a problem with debt."  Seriously! I said that to my brother and mom when we were leaving a diner after having breakfast. I think the topic was opening a discover card or something.  You HAVE to budget everything. I am not saying you have to have a side salad for your dinner. I am saying for 2 people budgeting $100 a day for food on vacation is probably plenty, depending on where you are vacationing. Just set a limit and stick to it!

3. Booking a hotel... see #1.  Put it on your debit card. Don't have the money? Don't book the trip!

4. Use cash for entertainment. Plan on swimming with the dolphins, touring museums, parasailing, or concerts? Bring cash for all activities and once the cash runs out the fun stops. Plan ahead... usually you can book your excursions ahead of time online.

Severe Weather Expenses

Winter weather... or "The Winter Storm of 2011" as they will call it... is going to leave many people without power, transportation and access to cash.  I have seen cars broken down in the middle of the road from cracked lines, broken belts, and busted parts these past 2 days.  I have experienced water not turning on in the bathroom sink and bathtubs not draining from frozen p-traps. What will happen when it starts to get warm?  Thankfully we have home owners insurance for the worst of it, if necessary. Otherwise we need to dip into our emergency fund of $1,000 (auto/home insurance deductible).

As bad as this will be for many people across the US, I can't help but reflect back on the worst weather experience we have ever had... oh what a story it is...

2005 Hurricane Katerina was making headlines for months.  Katerina had hit south florida and we were out of power for 5 days. Hot and sticky but manageable. It was Wilma that came in with vengeance a few weeks later.  I had just made my first very own car purchase. A 2003 BMW 300 series, 2 door coupe. Leather interior and tinted windows that would surely get me pulled over. Oh it smelled SOOOO amazing! 7 days after I signed my financial freedom away, I was at the gym and when I came out I noticed someone had keyed my car. It was keyed on the hood, trunk, sides... someone purposely destroyed my paint job.  Obviously I was livid! But there is not one thing I could but other than pay the deductible and have someone redo the paint job.

I took it to some mechanic shop that was going to "give me a deal" (my first mistake). I said good-bye and picked up my crappy rental car.  A hurricane was blowing into town over the next week or so and I was relieved to have my car safely stowed away in someone's garage instead of out there in the elements. Sure enough it was the worst hurricane we had been through.  After hours of being pummeled we came out of our houses and decided to take a tour to access the damage. No one had power or radio.

The city looked like a war zone. Seriously. Giant sky scrapers made with all windows looked like a bomb had gone off. Million dollar condos lining the city were left with only braces and beams. No street signs or light. Trees lying across the roads, along with glass and yard furniture. There was a curfew of 6pm.  If you were out past 6 you would be pulled over and ticketed.

2am: less than 24 hours after the storm. A knock on the door wakes us up. We couldn't turn on a light to see who it was... and that in itself was terrifying. It was the police. 2 teens had broken into the garage where my car was stored and stolen it. They were picked up about 45 minutes across the county and we were to go and identify the car.... in the middle of the night... with no street lights, signs or stop lights. That 45 minute drive was horrific... giant trees blocking the roads, debris everywhere.

We made it finally and I saw my car... bashed and beaten. I started crying.  The police officer said. "Don't cry, it's only an object ma'am." I replied with a teary: "It's my first and only object in my name!" (now-a-days I realize it was in the banks name). It was drivable with major outer damage but nothing a good mechanic couldn't fix. It was 3 months before I got my car back.  I had already made 2 car payments on it and had only driven it for 7 days. We were out of power for 21 days in the hot, sticky, horrible heat in South Florida.

So for everyone that will have to deal with "The Winter Storm of 2011," my heart goes out to you. Been there, done that. Good luck and be safe.

The Steps to Financial Peace

It's my last post of the month and I would like to go over the steps for Financial Peace. It doesn't just stop at becoming debt free...

1. Save $1,000 - This will take some people a month or two, and others already have it.

2. Debt Snowball - We will be working on this for about 3+ years, but most people only need 18 to 24 months. In this step you will be aggressively paying off all debt except for the house.

3. 3-6 month emergency fund - A fully funded emergency fund will cover 3-6 months worth of expenses, which now that you are debt free except for the house, should take 2-4 months.

4. Invest 15% - Invest 15% of your income into your company matched plan, Roth IRAs and other pre-tax investments.

5. Fund the kids college - Using an ESA and 529 save for college, while investing your 15% into retirement.

6. Pay off the House - While investing 15% and saving for college, every additional penny you make should go into paying off the house.

7. Build Wealth and Give! - You are now 100% debt free, you have the college fund funded, your 3-6 month emergency fund is comforting you... it is now time to give, invest and have some fun!

401k, 403b, IRA, WTF?

Let's be realistic, how much do you know about a 401k?  Or for that matter, if you contribute to your 401k do you know where your money is going?  Dave recommends this when planning for retirement.

1. Do not invest in your retirement unless it will take longer than 18 months to get yourself out of debt. (Obviously it will take us much longer...)
2. If your company offers a match, take it! It's free money.
3. Do not put your money into things you do not understand.

I had a 401k at my last job and I needed to do a rollover into my current company 401k. I began my 401k at my current job in July of 2010. When I opened my 401k I was not asked what I wanted to invest in... it defaulted to a Money Market fund getting on average a .66% return.  If inflation is about 4% a year than I am losing money in this fund.

After listening and reading Dave's chapters on "Mice and Mutual Funds" in Financial Peace, I decided to find out about what I could invest in.  With my rollover, 2010 contributions and my company match I have $5,000 to work with.  Although Dave says the beginner with less than $10,000 should probably do Growth Funds... I am young enough to invest and not touch the money for about 35 years.  So I decided to put 25% into American Mutual Funds, 25% into Foreign Funds, 25% into small company funds, and 25% into balanced funds.  Totally diversified with an average rate of return over 10 years of about 6%.

What is a 403b?  My husband has a 403b at his company which is the same as a 401k except it is for nonprofit companies like hospitals, schools and churches. His company also matches at 4% after 1 year of employment.  Currently he is only investing 1% until July (his 1 year anniversary) and then he will start contributing the full 4%.

When I came home feeling excited, intelligent and grown up yesterday, I talked to him about the mutual funds I invested in and he started to get interested in where his money might be invested.  :)

The best part is that I can't wait for my first statement to come in so I can see how my money is doing. This is so exciting!  If you are really interested in investing your money, you MUST have some knowledge about what to look for in these funds.  I recommend Dave's book as always.

Today's Lesson: Know and understand where your money is going!

Damn Taxes!

Pretty Accurate, Right?

Just when I think things are going to be okay... We received all of our W2s and most of our other paperwork this week. I decided to get an idea of what our tax bill would be, before I send my packet to the accountant.  Using the free service from taxslayer.com, I started to panic when I saw our bill is going to be around $5,000!!!  Time to start praying...

What I want to know is why can't I write off all of our student loan interest?  I have statements here totaling more than $19,000 we paid in student loan interest.  Grrr... The $11,000 in mortgage interest only lowers the bill by about $2,000.  We did donate about $2500 to charity this year, put $1500 in 401ks, and have several work expenses to itemize but there is really only one thing we can do... Change our W2s for next year!

Lets hope someone with a little more skill can work some magic.

January 2011 Month End Summary

Wow what a month! It isn't over yet, but all bills have been paid and groceries have been bought. Plus I will be on a short hiatus this weekend visiting family in Boston.

This month we paid:

Student Loans Paid			4396.50
Mortgage			1427.73
Credit Card Payments			650.00
Car Payment			502.52
Groceries			505.94
Utilities/phone/cable/internet			395.11
Gas			200.31
Hobbies			185.95
Car Ins.			128.03
			$8,392.09

We paid more on student loans by $124.98 (I know, lame!).
We paid $450 more on the credit card than the normal minimum payment.

How did we come up with so much money this month?  We sold $408.46 worth of old sports goods and used up any christmas bonuses we might have had left, and any additional savings aside from the $1000 emergency fund.

All in all... for our first month we KICKED ASS!!! Let's see if we can continue the momentum in February...

Car Insurance - Switch it!

Our car insurance is up for renewal. Instead of just renewing the policy we decided to look up some quotes. We were with Geico and our next bill was going to be $1004 for 6 months. Our deductible has been $250 and we have a special engine policy on my car that covers everything except normal wear and tear.

We decided to switch everything to Progressive.  We raised my deductible to $500, dropped the engine policy and lowered our bill to $750 for six months. That is a $254 savings!

Our current policy was paid in 1 payment every 6 months. We switched it to monthly to make it easier to budget.

Murphy's Law: Whatever Can Go Wrong, Will Go Wrong

Yesterday I checked into my flight to Boston at about 3:30pm. Before I went to bed that night I checked my flight status just because I one of those feelings. Sure enough my flight was canceled due to a pending snow storm the following day.  

My old boss used to say "Chance favors the prepared." Boy was I prepared to go on this trip! I had directions to the cheap parking lot printed, directions from the cheap parking lot to over flow lot if that was full.  Directions to the airport from home just in case I was running late and couldn't wait for the shuttle, and directions from each of those locations home. I had the house stocked full of food for my hubby. All his favorite snacks & sodas, to home made shrimp dip, chili, chicken soup, pizza, muffins and brownies.  I was packed, had the iPod,  Kindle and DVD player charged (you see why I am broke?!) and my girly netflix movies ready to watch. 

I called the airline when I saw my flight was canceled (thanks for letting me know JetBlue grrr...) and they had booked my on the next days flight.  No good! I was only going for 3.5 days and now one day was gone. So they issued a credit for my next ticket. I wasn't mad, just disappointed.  My mantra is everything happens for a reason and I firmly believe that. The worst part was delivering the bad news to my mom. 

Today I went online to rebook the trip, and not one flight no matter how I tried, was as cheap as my original one.  So I had pay $40 to rebook the trip.  This was NOT in our budget of course... but luckily we had our emergency budget meeting and penciled it in.  

What did I learn from all this?  Even if you prepare as much as possible Murphy might still creep in and try to ruin things.  Also, never book a trip in January to a location that gets a lot of snow. 

Give: to present voluntarily and without expecting compensation

When you start working on your budget and actually sticking to it, you will find you have a lot more money at the end of the month.  Rather than having too much month left at the end of your money! Money is fluid... it moves and changes.  Dave Ramsey compares it to a fist.  If you put money in your hand and make a fist money isn't going out, but money also isn't coming in.  If you put money in your open palm, it has the ability to flow in and out.

Let's face it, money is going out wether we want it to or not.  Either you are working on your debt snowball and paying the bills, investing in 401k and mutual funds, or taking care of Murphy. (Murphy's Law: Anything that can go wrong, will go wrong.)

We have more than enough money to make out minimum payments and keep the lights on. Yes we want to put all extra money into our debt snowball but it is time to start giving. Giving is a habit. If you don't normally do it, you don't want to do it. If we start now, we will make it a habit.  Plus it is one of the few things you can do in your adult life that gives the warm fuzzy feelings.

We are starting with $50 a month.  I highly recommend if you are going to give, use this website: Charity Navigator. Not only will it match you with WHAT you want to give to... like children, animals, or natural disaster victims... it also tells you how many employees they have, what there annual revenue is, what they are spending their money on, and most importantly: how much their CEO makes.

This month we have chosen to make a donation to The Elephant Sanctuary in Tennessee.  In fact we have setup automatic withdrawals for next 3 months to this organization.

Remember my blog about "The Path." If you do the right things, karma, God, the Universe... whatever you believe in will start giving you a pat on the back.  Don't get me wrong, I don't expect anything. The feeling of giving is enough but lets just see where this takes us.

Today's Lesson:  Giving is good for the soul.  Do it!

Good-bye Smart Phone :(

Well 2010 was a good run. I could check my email, surf the web, text, download free apps, download pictures, and more often than not... hang up on someone simply by pushing my face up against my smart phone.

This used flip phone to the left of the Droid was sent to us by my mother-in-law who had upgraded a while ago.  This phone comes complete with calling ability, antennae and a car charger.  No regular charger... that must have gotten lost years ago.

"Can you hear me now? No? Ok let me pull up the antennae."

Enough pouting... lets focus on the good...  We will now save an extra $15 per month because we
no longer need to have a data plan.  $15 doesn't seem like a lot so lets extrapolate that out:

$15 x 12 months = $180 for 1 year

Now we expect to keep things pretty tight for the next 3 years $180 x 3 = $540.

Our December cell phone bill was $204.36
January cell phone + home phone bill = $25

Just for fun lets take a long term look at that savings:  $204.36 - $25 = $179.36
$179.36 x 12 = $2,152.32 savings in 1 year!!!!
Now how about over our 3 year plan = $2,152.32 x 3 = $6,456.96

That is some good savings!!!!   I know you are thinking "My cell phone bill isn't $200!"
Alright lets look at some average cell phone bills:
1 personal cell phone bill is about $80 a month.  $55 savings each month if you drop to a $10 cell phone and a $15 land line from vonage.  $55 x 12 = $660 in the first year.  $660 x 3 = $1,980 savings in 3 years.

The average couple has a cell phone bill of lets say $125. Drop the cell to $10 a month and add a $15 land line and you have a savings of $100.  $100 x 12 = $1,200 savings per year.  $1,200 x 3 = $3,600 over 3 years.

Today's Lesson:  When you are giving up something small, like a $15 payment a month, take a look at how much you will save long term.  It will give you the motivation you need to 'cut the cord'.

The Path

I wish I had nice pics to post again... but this post is about knowing you are doing the right thing.  So back in April of 2008 when I first started budgeting and making changes, good things started to happen. My husband finally got his bonus we had been waiting too long for, refunds I had forgotten I applied for came through, and I got the first job I sent my resume to.

Flashing forward to January 2011... I had my first glimpses at rewards for what we are doing. We were sent a $50 check from an Aunt and Uncle for Christmas (arrived in Jan because they do not live in the US). I won a $25 gift card at work. I found a $20 target card on the ground. On Saturday I received a belated Christmas card that had $30 gift card to Jimmy Johns... oh yeah! I actually didn't notice this trend until I went grocery shopping...

The first isle I hit at Wal-mart was the hair dye section... (it is my major indulgence that can't live without). I had the color I wanted in mind but I didn't see it on the shelf. I bent down to look at some of the lighter colors and low and behold I spotted it.  There was a piece of paper in front of it I brushed away and excitedly threw it in my cart.  Then I thought... what was that paper? I picked it up and it was a $3 off coupon someone had cut out and left right in front of the box I wanted. I was shocked and pleased!

Next I picked up a few items from the dairy isle and went to go get some detergent.  Why do they put the purex washer/dryer sheets on the top shelf?  I reached up and snagged a 24 pack... then I started to ponder if the 38 pack was a better value at $9.  I reached up and grabbed a $9 pack to compare and a coupon was stuck to the side for $2 off!!!  Ok now I am dancing around like an idiot.

My grocery bill came to $104 after the $5 in coupons.  If I didn't have that extra $5, I would have been under my budget by pennies.

Today's lesson is:  When you are on the right path, there will be small signs telling you: Good Job, Keep it Up!!!!

Plastic Surgery

This was the first one to go. Good old Wells Fargo. The one we have a balance on... This was the scariest one to cut up since this was always our "emergency" card. Obviously we haven't had $10,000 worth of emergencies this year... so that card had to go.

"If you can't afford to buy it now... don't buy it!" - Dave Ramsey

No more secret purchases, no more living beyond our means, no more paying 14% interest on food, booze and tips from restaurants... :)

Good-bye safety net...

Now for Home Depot... I guess we will have to wait on that bathroom remodel, deck, flooring, porch stain, giant christmas wreath, and the 1000s of other projects we dream about.

Sure no interest, no payments sound great... until the year is up and you don't have the money to pay it off!

Everyone that dreams of owning a house has no idea the amount of money that goes into it. We have had our house for 1.5 years and already we have a leaky pipe, clogged dishwasher (which was brand new), ruined hardwood floor and issues with the garbage disposal.

Good times...

This card was purchased ($4.95) as a joke. You could put whatever picture you wanted on it and my husband put a pic of his friend and himself from Halloween on it.

We went white water rafting over the summer and while making a purchase at the gas station he tossed it on the counter in front of his buddy.  It was a good laugh until the statement came in.

It takes disipline to use credit cards.  So if you don't think you have what it takes... don't start!  Credit is almost an addiction. You have it to use... then you start using and abusing it until all you have is debt.

Lesson for the day: If you don't have the money in the bank to buy it today, DO NOT BUY IT!!!!

FPU - Get your mind out of the gutter!

My co-worker has so graciously let me borrow her FPU (Financial Peace University) kit.  The kit comes with the book Financial Peace by Dave Ramsey, a hard cover workbook, the envelope system to keep your money, tip cards and 15 audio CDs breaking down the lessons in the book.  We were going to sign up for FPU but it was $100 and I have already read The Total Money Makeover... I know the steps and I just have to put it in action. Plus we have tickets to see Dave live in March. 

These CD's are truly inspirational and if you need a kick in the ass to get going on this then make one last purchase. 

I have considered calling in to Dave's radio show but I work during the hours he is on the air. I have thought about writing to him but I think he only answers on the air. What I would ask is:  Of all the examples you give in your books no one has as much student loan debt as us.  What are your recommendations?  We have started investing in our company match 401Ks... should we hold off for now?  How drastic should we go on this?  With gazelle intensity when do you see us being debt free? 

I guess we will have to come up with our own answers.  Step 1:  Save $1000 in an emergency fund... Done. Step 2: Work the debt snowball.... (for the next 5 years for us). The journey continues...

My Personal Mission Statement

I have been thinking about this since the beginning of the new year and I have finally condensed it to one long sentence. 

To focus and work as hard as I can, at home and at work, and do all jobs to the best of my ability; so that one day I will live debt free and be able to save more, spend more and give more.

I am going to post this at home and work and remember that when I start to struggle... this is my mission. It's all for the cause!

When Two Become One

I pulled copies of our credit report today to see what is still open.  We have been married since 2006 and this year is the first time I have pulled my report and saw his student loans.  Yikes!

You are allowed 1 credit report from Equifax, Transunion, and Experian a year. If you have not done this annually... DO IT!  It is amazing to see what accounts are still open even though you called and wrote letters to have them closed. Plus you will be able to see any fraudulent activity.  Click here for your free annual reports.

My report shows that I have credit cards open under Bank of America, Capital One, Paypal, Home Depot, Wells Fargo and New York & Company. That is just on 1 report!!!  All of these accounts except the wells fargo credit card have been closed at one point... by phone call or letter.  Well I guess the customer retention rep decided they would rather have a bonus than do as I asked.

Some people will say: it looks bad to close your credit card accounts. That may be but who cares?  The whole point of this is to no long go into debt... ever again. If that means performing plastic surgery on my card, than that's what I have to do! So this weekend my plan is to call and cancel these open cards and cut up any remaining plastic.  I will be posting pics so stay tuned...

1-13-11 Allowance

How much is acceptable for a weekly allowance? $20, $40, $60? My friend and fellow bean counter told me she takes an allowance of $20 a week to do whatever she wants with. That seems like a great idea, but lets take a look at what would be acceptable for us.

We both take $20/week = $40 x 4 = $160
Disposable income = $400 - $160 = $240

We both take $10/week = $20 x 4 = $80
Disposable income = $400 - $80 = $320

I just can't see giving up our cell phones for that.  Am I being unreasonable?  I did go from freaking out about the budget to basically putting an iron clad lock on our spending.  Where is a happy medium?  Food for thought...

Last night I got home from work and got the mail.  To my surprise there was an insufficient funds notice from an account that I closed 4 months ago.  You can only imagine the rage running through my veins at that time. I decided to worry about it the next morning and put it out of my mind.

6:00am alarm goes off and my first thought was... great... I have to spend an hour dealing with this mess.  I called first thing, knowing it was 8:00am eastern time, and after hitting the pound button a hundred times to bypass the "enter your account please" I finally got a rep on the phone.  I explained that my account should have been closed 4 months ago and then was put on hold.  Shockingly the lady came back on the line and said that it was the banks fault. THE BANKS FAULT! Have you ever heard a bank say that?  Ever?

A wave of relief hit me and I couldn't help but assume this day was going to be awesome! I headed to work and then realized the phones were not working properly, my software froze up and the heating duct outside my office sprung a cold air leak.  Well so much for starting your day on a good note!

1-14-11 update: We spoke last night and decided that until March we will not have an allowance. These months are for correcting bad habits and spending the cash in our pockets is a VERY bad habit. 

1-12-11 Sell everything!

"Sell everything... make the kids think they're next" - Dave Ramsey

We have people coming to town... we know we are going to be spending some money. So instead of putting things on credit cards or dipping into the emergency fund, we are going to sell, sell, sell! All of my husbands ice climbing equipment has been put on ebay or craigslist. He is the one that decided to retire from ice climbing, and he is the one that made this decision.

Tonight I am quite sure I will be next in line to have to sell something. Luckily I have dresses that have never been worn ready to sell and all of my stuff from my cake decorating business from 9 years ago that never opened up. :p I was an ambitious young girl that never really followed through on anything.

I think the quote goes: "In 5 years you will be the exact same person except for the people you meet and the books you read." - T. Jones (?) 9 years ago I was not the same person I am today. I have read countless self help books about money, making friends, work, health and marriage. Each one has taught me to be a better person.

I now have a job I love, friends I can count on, a weight that is manageable, and a husband who is a hand full but worth it. Although our money problems will be with us for a few years it is manageable. I will follow through on my debt snowball. I know that about myself. If selling a few items will make it happen all that much faster... why not?

1-11-11 Snowboarding

Yes last fall I spent $450 on a ski pass to 5 mountains in Colorado. That was stupid. Last year I used my pass. A LOT. I enjoyed snowboarding. I was also only working 25 hours a week and have plenty of time to get shit done before work. Now my weekends are sacred. Only 2 days to meal plan, grocery shop, run errands, clean the house, workout (ok I do this during the week too) and most of all relax.

I would love to relax after work but instead I come home, feed the dogs, workout, make dinner, do the laundry, start the dishwasher, get my stuff ready for work the next day (clothes, lunches, etc.) and then go to bed. I read for about 30 mins and its lights out. I hate having to commit a whole day to snowboarding when my legs only last about 3 hours. Factor in the 2.5 hour drive to and from the mountain and an extra 2-3 hours because there is no way my husband is going to the mountain for only 3 hours... and boom the day is shot. I come home exhausted.

Not only is my pass a complete waste but this whole season eats up enormous amounts of money on gas, dining out, hotels and everything else that comes along with the ski weekend. The winter months in CO are making us BROKE!

How is spending money on a hotel going to help us get out of debt? "There are a bunch of us going so we can split it." It is still money going toward a place to stay. You have a place to stay. In fact we are making payments on right now and they are a hell of a lot more than a damn hotel.

It's not just snowboarding. In summer it will be something else like Mountain Biking or Running. Which you would think running would be cheap. You have two legs already right? But no... we have to buy multiple pairs of shoes, pay race fees, a running coach, hotels for the races and in some cases plane tickets to get to the races!

Does the avarice ever end?

1-10-11 I will not fight, I will not fight, I will not fight

So my husband got home from a 4 day trip to see some family and run an ultra marathon in NC last night. Before he left we were about to kill each other over the budget. Let's go over a typical budget conversation prior to his departure:

Him: "I think we should give up more than just cell phones."

Me: "Well you could give up your $90 a month running coach, your $80 a month mandolin lessons, and I could give up my $40 a month violin lessons."

Him: "Oh sure... (insert attitude here)... it's a waste of money for you to take violin anyway since you never practice! I actually use and enjoy my hobbies."

Me (angry): "Well my hobbies don't cost us $170 a month!!"

Him: "At least the money I spend is being put to a good use!!"

Me: "Yeah getting you out of the house for an hour every other week while you go to your mandolin lesson is worth the $80 for me!!!!!!"

You see what's happening? We can't have a conversation without turning on each other. So today when I asked him. "Did you eat the lunch I packed you?" (knowing full well he didn't or else the dish would have been waiting to be washed in the sink) He answered. "No. But I will tomorrow." I quietly left the room to go and vent to my blog.

Having gotten all of that out, I feel much better. What I am pissed about isn't the lunch though... it is that he has been eating out for 4 days and then chooses to eat out again RIGHT after he gets home. (calming breath...)

It just isn't worth fighting over or at least not yet. I am going to bide my time... and then perhaps use all his extra spending against him during our February budget meeting! (evil laugh) Muahahahaha! Sadly, I wish I was joking.

The truth is budgeting is hard. For one person it is hard but for two completely different people it is damn near impossible. I have been semi-budgeting since April 2008. Yes I can remember the exact day I started a budget. This is the very first time my husband has been involved in the finances at all and I should be thrilled that he finally came around. I guess instead of fighting about the spending and holding it over his head, I will celebrate how great he has done this month. And just maybe... the encouragement will fuel him to do even better next month.

1-9-11 Sick

I ended up with the stomach flu last night... that's one way to get out of going places. Plus it cuts down on the grocery bill. At least for the next 3 days I will want to stay away from most food.

Today I still must go to the store and buy my groceries for the week. Here is a great tip on saving money: Make a grocery list once a week and shop 1 time. In other words do NOT stop at the store after work or have your spouse "pick a few items up." It's once a week for everything and if you forget an ingredient... improvise. This is a time and money saver.

I do all my grocery shopping at Walmart. I am not a big fan of Walmart but you can buy the same items for at least $1 cheaper. When we first moved here I shopped at Safeway and my bill was about $120 each week. Then I tried King Soopers (Kroger) and my bill dropped to $90 a week. Then I bit the bullet and drove to Walmart one week and my grocery bill fell to about $65 a week. When you are on a budget beggar's can't be choosers, right?

My new 2011 grocery budget is $110 per week. Last week my total was $95. This week's meals consist of:
Dinners: Homemade chicken soup (using 1 rotisserie chicken), lasagna, homemade pizza, enchiladas, Asian Stir Fry, Minestrone
Lunches: Leftover Soup, Veggie & chickpea sandwiches (I try to make a few vegetarian meals), salmon salad pitas, Any other leftovers from the week
Snacks: Pita & Hummus, yogurt, apples, clementines

Total grocery bill for this week: $51.96