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

http://www.beboldbeblessed.com/2016/12/28/living-paycheck-to-paycheck/

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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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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Goals for 2017

I’m not going to create resolutions this year.

Why?  Because I never keep them.  Every year I decide that on January 1st I am going to set some resolutions that I try very hard to achieve in the first month and then about two months into the year I’ve already quit. I’m not going to do that this year.  Instead I am going to focus on creating goals for 2017 and I’m going to focus on adding them to my to do list daily so that I can create a habit.

I heard that it takes 30 days to create a habit so if I focus on doing these things every day I will have created a good habit.

Here’s my list of goals for 2017:

  • Have a closer relationship with God.
  • Be a better blogger.
  • Exercise more.
  • Pay down our debt.
  • Be more organized
  • Spend more time with my Hubby.

So here’s a little detail for each of these items.

Closer relationship with God.- this one is probably going to be my biggest challenge.  I seriously feel like I have a great relationship with my dear Lord but I know I tend to have more wants and requests than just appreciate for His love for me. So I’m going to start being more grateful. How am I going to do that?  I am going to start writing posts specifically about the blessings I have received.  It is not just about asking for what I need or want from God but it’s also about sharing all of my blessings and being more grateful for all He has given me.

Be a better blogger.– I will admit previously I was not great at consistently posting on my blog so now I’m going to commit to writing more and spending more time learning how to build a better blog.  I want this blog to be awesome and I want people to actually read it so the only way that is going to happen is if I focus on creating more content.

Exercise More. – This one is going to be about exercising more and not focused on losing weight. I’ve always tried to “lose weight” and it ends up being hard and frustrating so instead I’m going to add exercise and eating better to my to do list.  I figure if I add at least 30 minutes per day of exercise it won’t be so bad and it is about building a new habit. So I’m adding this one to my to do list as well.

Pay down our debt.– This one is pretty self explanatory, I truly have been really looking at our debt and I’m feeling overwhelmed.  I’m going to start out by working on a plan to start paying down the debt and that is going to start with a budget.  I will have more posts with follow up details on this but my plan is to really look at our current spending and see where we can cut.

Be more organized. – This one is probably going to be the hardest but I am hoping that I will be more organized once I can move in to my office and the paper clutter will be centralized as compared to it being all over the house.  We’ll see. I am also going to focus on tr

Spend more time with my Hubby.– I am going to start adding a date night into our schedule and making more of an effort to spend more time with him.  Football will be starting again soon and that means we will be spending more time away from each other so I am going to focus on creating more time for him and for us.

I am hoping by setting these goals I will be more focused on achieving them versus not ever achieving those New Year resolutions.  I plan on adding these to my to do list daily as well so that I have these top of mind and I know I need to make sure they are getting done.  I also believe by putting them out there for all the world to see I am holding myself more accountable.

What are your goals for 2017 or are you making New Years Resolutions?

 

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Getting Out of Debt

Debt.

That is a terrible word.

Seriously the word debt stresses me out beyond belief.  The problem is we have debt.  I’m being real here and I am holding myself accountable to the fact that most of the debt is mine.  Most of it is student loan debt.  So when I talk about most of it being mine it is because of that. We have a mortgage, a vehicle loan and our RV as well as a few debts on credit cards.  Dumb I know but we have it.  So I’m working on getting us out of debt.

I follow quite a few personal finance bloggers and they all have different philosophies to paying off debt.

  • The snowball method which means to pay the smallest balances off first.  I think the thought is that you get to see the rewards a little faster and feel like you are making progress.
  • Highest interest first- this one makes sense because you will decrease the debt that keeps accumulating fast.
  • Highest balance first

I’m sure there are many others but these are the three I see most often.

I like to read other folks talk about their get out of debt journey, not only because it helps me to not feel alone but it helps me to find strategies that will help us dig out of debt.

Here’s a few of the folks I am reading right now.

I’ve been following Dave Ramsey for quite a while, I listen to his podcasts quite often to keep me motivated and I think the snowball method seems like a good idea.  The steps he mentions seem easy to follow but what I struggle with most with is the budget part.  I struggle with starting a budget and keeping it because I’m not the only one spending and there might be things I am not including in the budget that might be important to another member of our family.

I have to say that the part of the debt that stresses me out most is that I’m the only one managing it.  Hubby and I have regular conversations about the fact that I handle all the bills and money and he is not involved.  So when he asks if we have the money to spend on something (specifically if it’s a big purchase) and I have to say no it makes me feel terrible.  He knows what bills we have and he knows about how much we make but I don’t know that he really understands that if we really focused together on getting the debt paid off we could have more money to do what we want.

My Aha moment!

Over the last few months I sat down I created a list of all of our debt.  It was exactly what it should be.  And then after reading a post about spending I decided to go back at least 3 to 6 months and track what we were spending.  So I took out my computer and downloaded transaction history from our bank for the last 6 months and put it into an excel spreadsheet.

Guess what?

I realized over the last year and really looking at our spending habits that I am a spender. So imagine that?  The person that is handling the money is actually the one spending more often.

You see the big issue is that no one is telling me NO!

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So this post is really meant as a way for me to be accountable.  Accountable to our budget and to the debt that we owe.  So from here on out if I want to spend money on something I have to ask the Hubby.  This will help us be more engaged in our budgeting talks.  It is going to suck and I am going to have to learn that there may be things I want to buy that I cannot.  I like to buy clothes, jewelry, purses and things for the house quite a bit.  That is going to have to change if we want to see a change.

If you read my about page you probably read that I shared the fact that I am by no means perfect. This is my biggest downfall, I am a spender.  I like nice things and I like to spoil my family.

NO MORE!

It is time for me to be an adult and realize that if we want to get out of debt there has to be sacrifice.  So today is the day I start watching what I spend and start talking about my spending.  Wow, that was hard.  I just totally put it out there that my biggest weakness is my spending.  Now the hard part turning that spending into saving and paying off debt.

I’ll post more on my progress, let’s just hope I don’t go crazy while getting there.

 

 

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