Getting Accountable With Our Debt- Our Debt Update

It’s amazing what sitting down and really looking at spending and money habits can do to your financial life.  So last year I had posted about really wanting to focus on getting out of debt.  It was a terrible feeling and I was at my wits end and decided then and there that I would focus on getting us out of debt.

Guess what?  We have made a major dent in our debt.

Here’s the last update I had posted.  So where are we today?

We are not living paycheck to paycheck anymore and we have not used credit cards at all.  If we don’t have it we don’t spend it!

Let’s see, I worked on a budget and kept to it pretty closely.  I paid all the bills first before we did anything else and I am happy to say we are on our way to being debt free.  We paid off so much that we actually can breathe again and I am not as stressed.  We have our mortgage, student loan and one loan left to pay off and we are selling our RV this week so that will be one less debt we have to worry about and another $237 to go towards our debt.  I’m so proud of our success and although it was not easy it has been well worth the struggle.  I’m not stressed about money any more and I’m not feeling overwhelmed when the kids or Hubby asks about our spending.

We’ve paid off about $8,000 in debt in the last year and I know that doesn’t seem like much but with all the interest and stress it is like a million dollars to me.

We are actually in a better place when it comes to our financial life and when we talk about money we don’t get stressed out or have an argument.  It feels good.  Now we have to focus on the student loan debt and need to start saving a little so I can buy a car in the next year.  Jacob will driving so he’ll get my car.  I’m thinking it won’t be a new car, but that will all depend on where we are at that point.

I shopped for school clothes and school supplies this year and we did not use credit cards, it was nice cause I had budgeted how much we needed and I set it aside just for that.  I started using a CapitalOne360.com online account to save for these items and I am so glad because it was easy to set up an automatic transfer every paycheck and we didn’t miss it.  Now I’ll just continue that habit for Christmas and we will be sure not to have to use credit there too.

If you are in need of some help and want to get real with your money let me know.  I created an awesome spreadsheet that helped me manage our money and our debt and it kept us accountable. I’m always here to help.

 

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Living Paycheck to Paycheck – Budgeting Update

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In December I posted about the fact that we were working on getting out of debt, you can read that post here.   It has only been two months and although we have not made that much of a dent we are learning a few things along the way.

  1. There are hundreds of ways to budget.
  2. I made a few mistakes a long the way with our money…again.
  3. Having to budget for the whole family is hard when you are the only one handling the budget.
  4. Living paycheck to paycheck sucks!

There are a hundred ways to budget.

I’ve been visiting Pinterest quite a bit lately and I’m amazed at how many ways you can manage a budget.

  • Calendar budgeting- this is where I started.  I took a calendar for each month and for each debt I wrote the amount on the date it was due.  I would then cross it off when it was paid.  This worked for a while but only focused on the stuff we were paying (meaning debt) and not actually what we were spending.
  • Good ol’ fasioned paper and pen- you can list what you make and subtract everything you owe and then whatever is left is what you get to spend.  You still need to figure how much money is spent on items like groceries, necessities, gas, haircuts, etc.
  • There is an App for that!  Seriously, there are tons of budgeting apps out there.   Some of them are great and some were a littel cumbersome.  I tried a few but I always felt like I couldn’t see things in real time.  If you wanted to pay for a premium app you could sync it to your account balances and then know how much you are spending.
  • Excel spreadsheets- this is by far the easiest for me right now.  I keep tweaking it so it seems to be getting better and better.  I’m not an expert at Excel, I just know the common stuff like basic formulas and filters.  Other than it’s super simple and I’ve added a column to keep track of outstanding items like bills I have paid to ensure that I’m watching that they get paid.  I had an issue a while back which I’ll explain later that caused me to add this.

I made a few mistakes a long the way

  • I didn’t keep track of a payment that was made and it was debited from our account and then later credited back to the account because the routing number was wrong.  I ended up thinking I had more money than we really had and spent it. The creditor called me and said I hadn’t paid which made me furious and sure enough the payment didn’t actually clear so it was never paid.  So I had to scramble to find $482 in our budget.
  • Mistake number 2 was a doozie.  I paid our mortgage twice.  Not because I wanted to or had the money to do so.  I thought I had forgotten to pay it and actually had done at the beginning of the month so when the payment had not cleared instead of going in and checking the payment status I just paid it again.  It caused my bank to move money from our savings to our checking to cover the overage.  Uggghh.  I have not had an overdraft in over 20 years.  I was so upset.  The mortgage company was super awesome when I called and said no problem they’ll just reverse the payment and refund the money back.  I am glad because I never meant to touch the money in our savings.

Having to budget for the whole family is hard when you are the only handling the budget.

I’m grumpy most days when it’s the day I have to look at our budget and see what is going on with our money.  Why?  Because we have too much month at the end of the money.  We had a couple of extra expenses this month that I didn’t account for…oh wait it’s not that they weren’t accounted for, someone didn’t tell me we were going to be spending that money.  You know who that someone was right?  My Hubby, that guy that rocks most days. Well he pissed me off the last two weeks. He decided to sign up little one for Baseball.  Cost is $190- he paid the deposit of $100 and didn’t tell me.  He also paid for his yearly license to hunt and fish, again without telling me that he spent $55.

I’m pretty sure I’m sounding like I’m bitching cause $155 shouldn’t be an issue right? It’s an issue when you have no money and are living pay to pay check.

Living paycheck to paycheck sucks!

We are at that point right now and it honestly sucks big time.  I hate it.  But right now it’s the only way I can manage the budget until we sock away some of our debt. We are building an emergency fund and we are also working at pounding away some of the debt we have.  So far we have paid out $3,612.38 in debt and that was just in January.  Yuck right?  I mean seriously imagine all the things we could do if that money was actually ours and not someone else’s.  Yeah that’s how you have to look at debt people.  Once you have spent it and are now paying someone else the money you make every check is not yours, it’s someone else’s.  Enter curse words here!!!! #&%#!

I’m glad that we are working on getting ourselves out of debt but at the same time I wish we had never gotten here to begin with.  It seriously sucks and when we are all done with our debt I am going to be so darn happy!

 

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Budget Experiment- No Grocery Shopping

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So over the last two weeks or so we have tried a little experiment.  I’m not sure it was a total fail but I am thinking we could have done a little better.

No Grocery Shopping

We decided a little over a week or so ago to not buy groceries except for staples we need like milk, eggs and bread but to instead utilize everything we have in our freezers and in our pantry. I had cleaned out our pantry and freezers and found a ton of food that had not been eaten and was most likely going to get really old.  We had steaks, chicken (lots of this), pizza, frozen entrees and we had lots of vegetables. Soups, boxed items like pasta, rice and of course the good ol’ standard, mac and cheese. I do not make home made mac and cheese but my oldest loves it so we had several boxes of it.  Not my favorite dish but it worked as a meal.  So we decided we would not buy groceries outside of the items we use every day like milk, eggs, cheese and bread and a few fruits and vegetables.  It worked pretty well and I feel like our grocery shopping decreased a little so I thought.

Here’s a look at some of the meals we had.

  • Chicken tacos- I made the chicken in the crock pot with some seasoning and shredded it after it was done.  Fried some corn tortillas and served with the usual cheese, lettuce, onions and salsa.  We did not have any sides with this dish.
  • Steaks- My husband defrosted them and marinated them for a day or so and they turned out delicious.  I made some rice with broccoli we had in the pantry.
  • Fried potatoes and Johnsonville Summer Sausage with some onions.
  • BLT’s- we had several packages of bacon in the freezer so I cooked it in the oven and we had delicious BLT’s with some soup.
  • Frozen pizza- this was the kids favorite because they can eat pizza any time.
  • Buffalo wings with chips and dip and mozzarella sticks.  We called this Appetizer night and the kids enjoyed it.
  • Chicken salad sandwiches- the kids did not enjoy this at all. I had a can of chicken I had purchased during the summer at Costco in a 3 pack and there was one can left.  Hubby and I thought it was pretty good but the kids did not enjoy it.
  • Spaghetti- I’m not a big fan and neither is my little one but my older son loves spaghetti.  I used some frozen turkey we had in the freezer and it turned out pretty good.
  • Instead of buying Arizona Green Tea I bought a new sun tea jar and we started making tea at home.  So far this has been pretty good for the kids.  We don’t drink sodas but they do love their tea.

How did the no grocery shopping experiment go?

As I said it wasn’t a fail but unfortunately during this time we also had run pretty low on snacks like granola bars, fruit snacks and lunchables for the kiddos so we still had to run to the grocery store to get a few items.  My youngest has to take a snack every day to school and they both eat snacks after school and prefer ready made or easy to make snacks.  So we didn’t quite hit our regular grocery budget but we did end up spending more than I thought we would.  We didn’t make a run to Costco so far and I truly believe every time we go we spend far more there than we should.  I’m sure that’s my fault too.

I think it helped us realize that we need to really think about our grocery shopping before we head out to the store.  I’ve started writing down a list of items we need as we run out but there are still times I am guilty of buying things that are not on our list.  I think I need to convince my Hubby to shop more for us so this doesn’t happen.  He is also better at really looking at the sales.

Have you done an experiment like this?  How did it go?

 

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6 Reasons You Need an Emergency Fund

Dave Ramsey talks about having an emergency fund every day on his podcasts.  How do I know because I listen to them daily while I’m doing research at work.

What is an emergency fund?

My version is a stash of cash readily available to pay for those unforeseen events, this can be in the case of not having a paycheck suddenly or a car repair.

I know it is not fun saving up your hard earned cash.  You have been eyeing that Coach purse at the mall or you have your eyes on a new set of shoes or maybe a cute dress. No, you can’t spend your emergency fund on the purse or shoes.  Putting money in an emergency is no fun.  But it will save you in the long run.

The idea behind an emergency fund is store at least six months of net income for just in case moments.  This could be just in case you face a job loss or possibly your car gives out.

If you are in debt you Dave says to start with a $1,000 emergency fund and after that has been stashed away you start to chip away at the debt with the debt snowball method.

6 Reasons You Need an Emergency Fund

Here are some reasons why you need an emergency fund?

Job loss– I have been fortunate and have never ever lost a job (Thank you Lord!) but you never ever know.  This is really the primary reason why you need an emergency fund.  If you are no longer receiving a paycheck how are you going to pay for food and to keep the lights on?

Major health or dental expense– A few years ago I had a major health expense, fortunately I had insurance through my employer but there was still quite a bit of money that had to come 0ut of our pocket for my surgery.  It wasn’t a teeny amount either, it was far more than $1,000.  Guess what?  We didn’t have enough so I had to work out payment arrangements with the hospital.  I’m glad they were able to help us but we shouldn’t have been in that situation.  Over the last year the hubby had to have a root canal a crown and two cavities filled.  Luckily we did have an emergency fund but guess what we are now building it up again.

Emergency Pet Care– Oh man this one hit us the hardest.  About a year maybe two or so ago our dog Sniffy, he’s pictured on this page, had an accident.  He was cruising with my Hubby in our jeep and he jumped out.  Yes, the dog that had never ever once in his life jumped out of a moving vehicle jumped out and broke his femur.  We had several choices, one to put him down (would have been the cheapest option), two have his leg amputated and three have surgery to see if we could save his leg.  After lots of thinking and heart to heart talks with the kids we decided to go with the surgery.  Over $5,000 later we have debt and a healthy dog.  We are still paying for this debt, don’t let this happen to you.

Car repairs– knock on wood we have not had to worry to much about this but if you think you will never have to do any repairs on your car think again.  My friend told me that in her hometown the only mechanic in town does not take credit cards.  Imagine if you were stranded there and have no cash stashed away for this, you are stuck.

Taxes– I haven’t seen a refund in years so every year we do our taxes well enough in advance so that we can have time to come up with the funds to pay the tax bill.  Not a good idea I know but I am working on getting us out of this situation.

Death in the family– this has to be the worst because not only are you heart broken but you are not prepared.  Funeral costs are high, close to $10,000 high.  We are fortunate to have life insurance but I have seen many folks not have the money to bury their loved ones.

Start your Emergency Fund today.

All of these things and many more can cause an otherwise stable situation to collapse, forcing you to tap into credit cards.  It’s stressful, it’s cause for worry but if you plan ahead and make a commitment to stash some money away every week or every two weeks you will be better off.

If you don’t have an emergency fun, start one.  I’m sure you’ll be glad you did.

 

 

 

 

 

 

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Budgets Can Be Sexy!

“It’s not your salary that makes you rich; it’s your spending habits. – Charles Jaffe

That is 100% true!  We’ve been tracking our spending habits over the last month and really looking at our money and our ugly debt and honestly the above statement couldn’t be further from the truth.

We had a wake up call in December. Seriously, it was so bad I cried.  And I cried some more.  This post started our get out of debt journey.

I learned the hard way that I am actually a spender.  I hate it and I vowed from that moment on to get us out of debt.

So what did we do? We created a budget!

 

Budgets can be sexy!

Budgets are not sexy until you start to really see what they can do for you.  A budget pretty much help you tell your money where it needs to go.  Before our wake up call we had a budget but we never really followed it.  And we have no excuse as to why we didn’t use it, I think the biggest excuse is that we didn’t care.  Now I am following it to the T.  I have a zero based budget, meaning all the money that comes in goes somewhere and will equal zero at the end.  So if there is money left over it is directed somewhere. It might be moved to our emergency fund or to a bill we really need to get out from under.

The first thing we did when we created our budget is to focus on paying ourselves.  In this case it was really about creating an emergency fund.  We were bad about this too.  I know there are probably at least five reasons why you need an emergency fund, one being a major bill coming your way that you did not expect like a car or home repair.  So we added this to the budget as our top item.  The goal is $1,000 because we are following Dave Ramsey’s baby steps.  If you haven’t read the Total Money Make over you should and really read it!  I read it before and I’m reading it again right now.  You know when you tell your kid “No!” at least two or three times and they finally stop doing something at the third No, that works for adults too.  I kept hearing it but didn’t pay attention until now.

The second thing we did was figure out how much we owe to everyone and wrote down the minimum payments for each debt and when each item was due.  From here we created a debt snowball strategy.  Another one of Dave Ramsey’s baby steps.  The idea is that the smallest bills get paid first.  I sort of tweaked this because my concern is that we have one credit card that has a time limit; a zero interest promotional period.  So that one has to be paid first as the promotional period ends October.  As much money as we can is going to go to this bill and then every other bill will get the minimum payment. Once the first bill is paid off the money we were allotting per month to the other goes to the second and so on.  You can learn a little more about how the debt snowball method works here.

Our spending habits have made us poor, very poor.  We both make very good money and here we are living paycheck to paycheck. Seriously, I graduated from college why is this so hard?  Because we weren’t following a plan; we weren’t following a budget. The amount of money we spend outside of the things we need to survive is ridiculous. The budget I created really shows a clear picture as to how rich we could really be if we did not owe money to other people.  It feels bad to know that we are in this situation.  I am honestly ashamed and wish I could turn back time but that is not possible so we have to own our decisions and work at keeping our heads in the game to get out of this mess. Debt just like gaining weight doesn’t happen over night and it sure isn’t go away over night.

I realize that many of us make this mistake but I also know that I am smarter than this and should have never gotten here in the first place. I used to read stories all of the times of folks digging themselves out of debt and now I know why it was reason to celebrate. I want freedom, freedom from the stress of worrying and freedom from being tied to someone else.

 

 

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Living Paycheck to Paycheck

I had talked about getting out of debt about a week or so ago and since writing that post I am seriously stressed out.

I started looking at our total debt and I wanted to cry.  OK, I did cry. And I cursed and I cried some more.

It’s daunting to really look at the numbers on paper and think how the hell did I get here?  How did I let things get so bad?

I started looking at our spending on our debit card and credits cards for the last three months.  I was like WTF?!! I learned that I am actually the spender.

I am a spender.  I didn’t think I was a spender but I am.  I hate knowing I am the spender.  Here I was blaming my Husband the whole time and I am actually the one that has been spending.  Not only have I been spending but I haven’t been managing our money very well.  I learned a hard lesson, don’t take a promotion for no interest deal if you can’t pay off the debt in the time allotted.  I cried today because I was writing down all of our debts and checking online to make sure everything we have is what we have. Guess what?  We have more than I thought because I am an idiot and didn’t make sure to get the balance from the windows we purchased at Home Depot paid off by this December.  I thought I had all the time in the world and now we are paying for it.  That balance has doubled now because of the interest.

I cried.  And I cried some more because I thought we are not doing too bad.  We have debt but it’s manageable.  Hell no, it’s damn near insane how much we have.  I don’t even want to write the numbers here but know that I am now going to really be watching these.

So what is a girl to do?

First, you gotta own your shit.  And right now this whole issue is a shit show.  I messed up and bad.  So now I have to figure out a strategy to get us out of this hole.  I thought the snowball method was going to work but after looking at all the numbers and interest that will accumulate I needed to come up with a different strategy. So I turned to Excel and I decided that I am going to do paycheck budgeting.  I have not ever felt like we lived paycheck to paycheck but after looking at the numbers we are not going to have a choice until we can get some breathing room.

I don’t have to worry about an emergency fund, I’ve got that already taken care of so instead of continuing to put $100 into an emergency fund every check I am going to redirect that money to the high interest bill.

I am going to budget every dollar down to zero and I am going to really stay away from spending.  I am cutting up my cards.  Yeap, cutting all of them up except for one.  Why keep one? Because I travel for work and I have to have a credit card in case a hotel or car rental place will not take a debit card.  It is very rare but it happens.

Next, I am going to watch our money like a hawk and I’m going to take out the cash for items like groceries, gas, household necessities, lunch money for the boys, giving (church), entertainment (although there will not be much), hair cut money and a little allowance for my Hubby and myself.  I think I am going to make him in charge of that stuff so that he can be the one to worry about shopping.  He says he is a better shopper and finds better deals so we’ll see.  The problem is he tends to never bring home the things we need to actually make a full meal.  He is great at the main course but his way of cooking consists of meats and no sides.

I have been debating whether or not to give us equal amounts for the his and her allowance. A part of me says we should have equal amounts but a part of me thinks that maybe he should get a little more.

The spreadsheet is going to have to be my map or my GPS. I am going to pay off two of the smaller debts tomorrow and then next month that money will be allotted to the larger balance with the high interest.  My hope is that I can cut down on the interest so we will not continue to be in that hole.

I seriously felt sick today, I couldn’t believe it.  I told my Husband what the situation was and he said “Everyone has debt.”  That has me freaking worried that he can be so nonchalant about this.  Remember in my previous post I had said I was the one managing the money, as you can see I am the one managing the money.  The only thing I can do is sit down with him monthly and show him what I am doing and see if he has any input.  I don’t know that he’s ever going to get involved with our money.  It scares me because I am honestly stressed and feeling like the problem is only on my shoulders.

So here it goes world, I’m holding myself accountable for getting out of debt.  I vow to keep my head straight and not allow my bad habit of spending mess us up.

Now I’ve got to get moving on my side hustles and get some more income coming in, that is probably going to have to be the thing that pushes us past this.

If you have any advice or some resources please leave a comment or send me a message. I am feeling alone in this and really would like some support.

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