This will be the first month I post actual numbers admitting how much we stayed (or not) within budget categories. Primarily because, to be completely honest, this is the first month I've even really looked at it that way. I have tracked my spending for a long time, but it was always more of an after the fact thing that just gave me a fuzzy idea of about how much we were spending in a given area. (Or how we had screwed ourselves once we were already screwed). We sometimes said things like "money is tight right now, so we should try not to buy anything we don't really need for a few weeks". But we did not say things like "We've already reached our entertainment budget allotment for the month so I guess we can't go see that movie we had wanted until next month."

Our new budget is still a work in progress. This is only the third month of our Total Money Makeover (TMM) and we're still kind of getting the hang of this. I haven't gotten a good feel yet for what the normal fluctuations are in certain categories, and although I very much want to set some goals, I'm unclear in some cases of just how to go about making it somehow be less than it used to be. And the month of Dec., with all it excesses and celebrations, is not a great month for learning about things like that. But I think Jan. will be. And I think we've make some headway none the less.

In a previous post I reported the entire budget, including fixed expenses. Here though I'm only going to report the things that were more discretionary (i.e. the ones we are more directly answerable for). So here goes:

Groceries $1,117 (spent) of $1,250 (budgeted)
Gasoline $208 of $270
Misc $686 of $500
Gifts $638 of $700
Auto Repairs $993 of $0
Leaf Service $0 of $150
Entertainment $235 of $250

Overall: $235 under-budget (not counting the car repair which came from the emergency fund)

And now, my assessment, though feel free to chip in with your own...

We came under-budget in our totally ridiculous grocery budget! Woo hoo!! Okay, so *maybe* that's not really all the impressive. Especially when you consider that that budget amount was set when I was still including some misc household purchases with our groceries, and I have since changed that. And on a related note, you may also notice that, lo and behold, our misc budget goal was not met. But, you will also recall that this past week was the first time we dispensed with our more expensive grocery delivery service to shop at our local super store instead. Additionally, both holiday baking and my daughter being home from college for the month have added to the bill. Plus there were 5 grocery days this month instead of 4.

Whatever, I could go on and on. But the main point here is just that next month should be better now that we are shopping in person rather than though a delivery service. I will be lowering this budget category next month but also raising the misc one a little now that we have shifted our expense accounting. May need another month or so to see how it all washes out.

Gas: Lower than expected again. I ended up not having to pick my daughter up from college at the end of the semester. Also, we don't travel nearly as much as we used to given we are spending less on entertainment, and a car repair we had done in late Sept. seems to have done wonders for our gas mileage as well. Additionally, the price of gas is pretty low right now. We are trying to help my daughter out with expenses over her break by allowing her to drive our vehicles to work without paying for gas herself since she is saving for college, so that will raise it some. Though at the same time, hubby has had time off for the holidays so that lowered it. But we had no problem meeting this goal this month and I think I will lower it a little more next month again.

Entertainment: We were a little under budget here again this month and if it had not been for the holidays, I think we would have spent quite a bit less. I have gotten a lot of negative comments about this budget of our in the past being very high. Perhaps this is one of the areas we are spoiled from our past life. Compared to our spending in this category before our TMM though, we are now spending less than half of what we used to and are getting more comfortable with further reductions. As mentioned before as well, quite bluntly, my husband is the main problem here. He has *mainly* been on board with this debt reduction plan, but he has limits to what he is willing to put up with and still be that way. Long story short, I may be able to reduce this a little more next month, but its near the bottom of where its going to get to I think.

Gifts: Ahh, Christmas. Thank goodness it only happens once a year! We did stay in budget, though party only because we had a $100 gift card we used as well. We didn't break out credit cards or anything though. Even despite not finding out until a month before hand that I would have a major loss in expected income this month, and also despite the huge unexpected car repair you see as well. In thinking over how we used to do things, I feel this Christmas is a win. In the past, we certainly would have gone further into debt this month, rather than continuing to make slow headway. I'm glad we're starting to get our priorities strait.

Auto Repair: Clearly we broke the bank on this one given we hadn't budgeted anything for it. Though even if we had, it wouldn't have been as much as we needed cause I think that is the biggest car repair bill I've ever paid! As discussed, it cleaned out our emergency fund, which we are now working on rebuilding. Someone make the comment on one of my blog posts that I didn't have to follow Dave Ramsey's $1000 emergency fund rule if I didn't feel comfortable keeping that little on hand, because personal finance is, well, personal. I liked that. And when we do come into some money this winter with our tax return and hubby's bonus, we will need to think long and hard about what we feel is best to do because I'm really not liking this current situation at all. Especially given that we are imminently in need of a dryer repair now as well. But that's a story for another day.

And finally, Leaf Service: We totally rocked on this category given that we didn't pay a thing! Mainly because, as suspected, he forgot to invoice us again. Too bad, so sad. Now that we've survived Xmas though, I am going to call and let him know that. He's a good guy and I wouldn't want to short change him. (Though seriously, he really needs to work on that.) Before people get all hot and bothered about this category again, please remember that this was a service we signed up for before we started our TMM. We are not currently getting it, but the prior work does need to be paid for. We have not yet decided what we will do this coming summer. There are a number of things it will depend on. And I will be willing to take more comments on it then.

In the next couple of days I will post our new budget for Jan. taking this assessment into account. This was predicted to be the hardest month of our TMM debt reduction plan though, and it's now over. We made it. And in another couple months the real progress will begin.

Well, we managed to get through Dec., the month I projected to be the tightest in our near future, with less financial distress than anticipated. The new side work hobby and I both had come in helped a lot. Jan. will still be a little tight, but without Xmas (and hopefully not another $1000 car repair), certainly much easier. And then come Feb we should finally be able to start making some real headway of this credit card/car loan debt. Can't wait to knock the first of those cards to the ground! Assuming we don't jump off a national fiscal cliff for more than a week or so. I predict a deal within 2 weeks from today. Who's with me?

I got a lot of great tips for cutting Christmas expenses in my blog comments. Unfortunately, the posts they referred to were old (from my old blog) and by the time I received them, we had already purchased everything but for the stockings. We did manage to keep within the budget we allotted ourselves though. And we also managed to temper costs a little by purposely asking family members who wanted gift suggestions for items that would have normally come out of the miscellaneous budget. So hubby got a not very exciting, but quite practical and needed belt, while I got sports bra and dust proof pillow cases (among other more fun things as well), and we were both pretty happy with it.

So strange to remember that as recently as 4 years ago, we were still willing to break out the credit cards for Christmas purchases this time of year, citing plans to pay it off "some time later". The idea of going further into to debt for something so non-essential is incredibly disturbing to me now. I am not entirely sure when this point of view changed for me but I am glad to realize it has. Now I just need to work more on better prioritizing the spending of money I do have as well.

As for our tapped out emergency fund...I don't want to get too ahead of myself given that the end of the month is still a few days away. I feel like this just invites disaster to come. But I *think*, that maybe, just possibly, if luck continues to shine upon us, we will be able to put about $650 back into it next week. And I feel fairly confident (but in a not at all cocky way fairies of fate!) that we will be able to put the remaining $350 back in by the end of Jan. as well. And once that's out of the way we are back to baby step 2 again! (Please forgive my paranoid ravings. There's just been too many bad turns of late.)

I'm interested to see what our grocery bill will be this week as well given it will be our first shopping trip at our superstore instead of the grocery delivery service. And given that I have put on at least 3 lbs in Xmas cookies alone over the past two weeks, perhaps we should go light on supplies this coming week anyways. Though not until after the annual family fondue dinner next week! Gosh I love the food this time of year.

Hope everyone is having a wonderful holiday!

This past week, I spent most of my free time either physically shopping for groceries (or xmas), comparison shopping for groceries, or entering data about my comparison shopping into a spread sheet. I swear, besides taking care of two sick kids and eating way too many Christmas cookies, that's ALL I did. I may have piles of boxes downstairs left to wrap for the kids, but I have grocery price data compiled for you dear readers!

I won't bore you all to tears though by listing things like the price of bananas and greek yogurt at 3 different stores. Instead, I'll just tell you the bottom line. We could reduce our weekly grocery bill by about 30% if we stop getting our groceries delivered. Thirty. Percent. That is a weekly savings of almost $50 or around $200/month. Or in other words, this single act alone would move us from the USDA's

http://www.cnpp.usda.gov/Publications/FoodPlans/2012/CostofF... liberal to moderate food cost budget (a previously stated goal of mine). Sigh. And now what to do with this new knowledge?

I must admit, I knew we were paying a premium for our grocery delivery service. I figured the convenience cost was probably around 10-15%, and my husband and I both felt that with twins boys under the age of 3, that extra cost was worth it. But looking at the numbers, it is clear now that it is costing us at least double, possibly triple what we had assumed. And I hate to even think about how much more than that it was costing us before we started using our discount warehouse store for frozen and non-perishable items. Holy. Crap.

The idea of adding another hour to hour and a half of shopping into my week makes me want to gag though. I loath shopping, especially for something boring like groceries. But 30% is just too much. In fact, the amount that we could save by me spending that extra time each week is roughly equivalent to the amount I would make if I put that much extra time into my home business. So if it pays as well as what I do for a living pays anyway, how could it not be worth it?

I still, however, can not wrap my head around the idea of bringing twin toddler boys with me during these weekly expeditions. I know some people do manage this somehow. If it were the difference between me eating or not I suppose I would too...maybe. If they were aged 3 and 1, where one could be in the child seat while the other held on to the cart, I think it could work. Or if they were even just a little older, 3 instead of 2, so that I could trust them to stay next to me instead of both running in opposite directions at the same time (or just plain sitting down and refusing to move anywhere), then it might work. But right now, they no longer both fit in the seat and they do NOT stay by the cart. It takes forever to dig one of those double seater carts they never have enough of out of the cart return bins (all the while blocking traffic) and its almost impossible to push them through the snow anyways. Our discount warehouse store has huge, two child cart seats that I love, and that I do manage with the boys occasionally. But these new weekly trips at the local super store -not possible yet.

Hubby, however, after looking over the numbers, has agreed to watch them for me on the weekends while I go. Normally this is the absolute last way I would like to be spending our precious family and personal down time on the weekends. But we have almost no money allotted for family outings during this year of debt reduction anyways, and the boys right now are at the age where during the winter they are almost as often sick as not, so many weeks (like this one) we can't do anything anyways. And by this time next year when we're out of this mess, I might finally be able to trust them to stay by the cart and hold mommy's hand.

So thank you everyone for this kick in the pants I needed to come to this difficult decision. It will probably save us over $2500 this coming year, and that gets us to our debt goal all the sooner.

This is my first real time post since moving my blog to this site! It's a little scarier to write now that I know other people may be reading and weighing in on what I say. I think that's way better for my accountability than me silently justifying things to myself. But also harder, because obviously, not everyone is going to agree with my assessments. Most everyone has been very friendly and helpful though and are giving me a lot of new things to think about, so thank you!

One of the things I have gotten the most comments on is our grocery budget. Not too shocking considering it's ridiculous right now. I've decided the first step is to separate out the things that are not really groceries from it (things like toothpaste and wet wipes, etc), so I have a better idea of what the real numbers I'm working with are. Then we can address why our misc budget is suddenly so high later!

I also found a few interesting studies about this topic on line. This one by Planet Money

http://www.npr.org/blogs/money/2012/06/08/154568945/what-ame... describes the average percent of income families spend on groceries, both over all and by cetegory (meats, grains, fruit & veg, etc). This Gallup Poll http://www.gallup.com/poll/156416/Americans-Spend-151-Week-F... describes the average amounts spent by region of the country and well as age group and other things like that. And this one http://www.cnpp.usda.gov/Publications/FoodPlans/2012/CostofF... by the USDA gives the cost of groceries for a family of 2 and 4 depending on whether you are going by a liberal, moderate, low-cost or thrifty budget plan. I figured my next step could be seeing how I compare to all those things.

So first off, my numbers for Dec will not be completely accurate due to some resistance my husband has been having about using the appropriate account for making purchases. He does not like the inconvenience to have to divide one shopping trip up into two payments so as to make it easier to separate our discretionary spending from our non-discretionary spending. He's also not great about giving me receipts though. After going back and forth about this a few times, I think I have finally convinced him that he is only making his life easier at the expense of making my life harder, since I am the one trying to keep track of all these things for us. Anyways, I think it will be better going forward. And for the big grocery trips I do have all the data from this month. But the accounting for the little side trips made during the week make not be accurate for this first half of the month.

So, as best I can tell, we have spent about $715 on groceries so far this month. We use our grocery delivery service once per week (though this month there are 5 Friday's instead of 4) and we use our discount warehouse store every other week, and this month there are two trips. I estimate then that we are about 57% done grocery shopping this month and therefore if spending stays the same, we will pay about $1025 on groceries this month. So, it looks like about 80% of our groceries+ budget really was for groceries, and the other 20% should probably be lumped in with misc expenses.

Now, how does that compare to the studies I mentioned? First off, percent of income. I am pretty sure this is based on gross rather than net pay. I don't really track our gross pay as carefully as our net pay, but I would sat it is roughly $8450/month. So, that means we are spending about 12% of our monthly gross income on food. It looks like the average american family is spending closer to 8.5% these days though, so this is high, unless I want to go back to 1982 when Americans were apparently spending more (which I do not). I'm actually a little surprised its not higher than that for us, considering how it feels each month. I guess that's probably because based on our net pay, its more like 16.5%.

Gallup says that, to no one's surprise, people making over $75K+ tend to spend more on groceries than people making less than that, and considerably more than people making below $30K. This suggests that it is normal we would be on the higher side of average, especially given what we may have been used to before we started all the debt reduction stuff. However, they also say that groceries cost a little less here in the midwest than other places, so maybe that's all cancelled out. Additionally my age group (30 somethings) tends to have higher grocery bills as well. These polls do not directly consider family size, however, which nationally is 3.14 (pi!) right now and we have more like 4.33 with my daughter at college). That would definitely make it higher as well. Regardless of what people tend to do in my situations though, that doesn't mean we might not need to do something different if we want to get out of debt faster.

And finally, and perhaps most importantly, the USDA says that a family of our size and age typically needs between $548 and $1067 to adequately provide for the nutritional needs of their family per month. Ahem. Apparently we're on the liberal plan, though at least we're not exceeding even that!

Well, it is clear after looking at all this data that there are changes that could be made. I don't ever see myself going on the thrifty plan. Food is just too important to me and I'm sure I will blog about that more later. And being only 2 1/2 months into this debt reduction thing, the low cost plan seems pretty far out to me as well. But I would like to make it a goal to start aiming to be within the moderate cost plan. That seems reasonable and frankly, necessary, if we want to make headway here.

I think I may visit a couple grocery stores soon with my weekly grocery delivery list and compare what I would have spent going there instead. I need to find out whether it is this service itself which is most increasing our costs or rather the types of items we are buying. And then we'll have to figure out what to do about that.

(Last old entry!)

I haven't posted our month's end update yet because our financial situation this past week has been so in flux. In a recent post I talked a bit about hoping our Xmas shortfall might "magically" fix itself. And believe it or not, we actually have had a fair bit of good fortune magic come our way recently in terms of income.

Hubby's writing/website management hobby is really taking off! He's just landed a new deal that should pay a minimum of $300/month starting next week, and possibly up to $500 or more. And that's in addition to the $220 he was already making through another deal, plus some smaller bits on the side. All together that is more than enough to make up for the back pay child support that is now ending (last check tomorrow!) and also enough to bridge the income gap we were expecting for Dec/Jan.

Additionally, I've had a little bit of work come my way as well! My worse case budget scenario was assuming I would continue to have only about $140/month of income (that used to be more like $600). For at least Dec/Jan though, I think I can count on that being around $400 instead, so that's another extra $260 that also kind of feels like it just magically appeared in time for Christmas.

Were in not for the car repair that suddenly fell into our laps as well then, we would probably feel we were raking in the dough. But alas, this was no ordinary car repair. This was a $992 doosey. I'm not even sure we've paid that much for a car repair before. Usually when the repairs start getting that expensive and close together, the car is old enough that we decide its probably not worth it and time for a newer one instead. But this is hubby's car and we are still making car payments on it as it is. It's also the newer of our two vehicles and therefore not allowed to reach the end of its life first!

Anyways, that completely cleaned out the emergency fund. All but $10.17. So that's a little scary. Cause it's a good two and a half months until tax rebate season. Additionally, our discretionary account has only $4.81 in it, while even our fixed checking, which we use for things like the mortgage, has only $728.42. Not cool. Luckily, hubby gets paid tomorrow, though there are still lots more gifts to get. I should point out here that the order these fluctuations came in as was: my income increase (Oh, good, that will help a little), then the car (Oh, f**k. We're screwed again.), then hubby's income increase (Woo hoooo!!! We're saved!). It's been a long week.

We ended last month with about $260 surplus, which we would have liked to use to pay down our credit card debts given that that is the point of this whole thing. Unfortunately, as the month ended, we were projecting a $750 shortfall for Dec./Jan., so I felt I needed to hold on to that extra to help somehow bridge the gap. When my extra income came in, we had high hopes that end of Dec or at least Jan. might afford us some surplus after all. But then the car crapped out, and Dave Ramsey says our first priority now should be going back to baby step 1 to replenish the emergency fund. I'm not quite sure yet where that puts us in terms of catching up again, but it may well be Feb still. In the meantime, we will continue making our roughly $500/month in minimum payments.

More good news; some very preliminary numbers I ran in the newly released 2012 Turbotax seem to predict that we will be getting back around $8000 this year! Holy s**t! I think that's even bigger than when we got our first time home buyer's credit, though I might be wrong about that. We only claimed 4 deductions rather than 5 on hubby's W-4, so as to cancel out my estimated business taxes, but I didn't make very much compared to normal, so it ending up being a lot more withholding than we really needed. Plus, we get some kind of a $2000 education credit for my daughter starting college, since she is still a dependent on our taxes for this year. Yay!! Until the car died, we were considering buying a new fridge with some of that. But at this point, we may just muddle through and try to just get done with this ASAP. Hopefully by next Xmas we'll be on baby step 3!

I haven't posted an actual numbers budget here yet, but I figure given how careful we will need to be these next few months, December is a good time to start. Explanations to follow. Here goes:

Income:
Hubby's Job (after tax): $5313
Hubby's Hobby Income: $220
My "Job": $120
Child Support Back-pay: $104

Total Income: $5757

Expenses:
Mortgage/Insurance: $1509
Auto Insurance: $73
Credit Card 1: $60
Student Loan: $619
Mozy: $10
Credit Card 2: $42
Gym Membership: $102
Credit Card 3: $119
Auto Loan: $198
Credit Card 4: $78
City Utilities: $82
Cell Phone Service: $151
Natural Gas: $90
Electric: $170
Garbage: $59
Groceries+: $1250
Gasoline: $320
Leaf Removal Service: $150
Misc: $500
Entertainment: $250
Christmas: $600

Total Expenses: $6532

Difference: -$775


Okay, so before my non-existent audience jumps down my neck about a few items on there, allow me to explain myself. First of all, our gym membership. A bit costly, I agree, and that is certainly one of those things they always recommend canceling at the beginning of any big get out of debt plan. But the assumption is usually that you're not using it enough for it to be worth it. And nothing could be farther from the truth in our case. You see, our gym provides 2 free hours of child care per day for stay at home mommies like me to take advantage of and not go crazy. Either my husband or I, and not uncommonly both, take a trip to the gym pretty much Every Single Day. No, I am not exaggerating, and we have both been doing this for over a year now so I'm pretty sure its not a phase. Additionally, since we started going to the gym, we have lost a combined total of over 100 pounds. This has brought both our BMIs into the healthy range and allows us to get a $1200/yr reduction in our health insurance premium costs. And guess what? That pays for the gym. So I think that's a valid expense.

The leaf removal service. Well, all I can say in defense is that my husband spent just about every moment of his weekend free time for a month last year trying to take care of this on his own, and we still did a completely half ass job. With two small boys who cannot be kept contained for any length of time without a fence, (nor kept in the cold that long), we just don't have the time for this right now. An extravagance, yes, but so, so worth it.
To be honest though, this is really an extension of the lawn mowing service we had this past summer. Also something we felt we did not have time for, though not as time consuming as the leaves I'll admit. And we had not yet started our Total Money Makeover then. Not sure what we're going to do about that next lawn season yet. If the boys are at the point where they can be outside with me while I do it, it might be possible again. I am hoping my business will pick up again by then though so that we won't need to feel bad about making that splurge again. Because we loved it and our yard looks so much better now.
One final note, while he does a great job, our lawn guy is horrible with his billing. We haven't yet actually received this leaf removal bill, and I have a feeling I am going to have to remind him he added us to his leaf list. He is a decent guy and I would not want to take advantage of him - but - if he did forget again, I may wait to remind him until late February or so.

Entertainment - that's the allowance hubby and I give ourselves so that we have at least a little fun money. I've actually cut this budget category down quite a bit from what it used to be because we've both been pretty good at cutting it back and we have agreed to let go of date nights out for a year. But if I give hubby any less than what it currently is, he will not be willing to do this anymore. He's struggling as it is. So that's that.

Yes, we have expensive iPhone data plans. All I can say is that we live on them. There was a time not long ago that I felt they were completely unnecessary (hubby likes to remind me of that from time to time). But now, everything from our recipes, to workout routines, to social networking, to downtime gaming is on them and I'm not even sure what I would do without mine anymore. For better or worse, my phone is like an extension of myself at this point. So extravagant or not, we're not getting rid of that. We did cancel our home phone a while back though.

Garbage - just a note that that is for two months worth of service.

Gasoline - This one might be considerably lower. Will depend on whether I need to get my daughter from college at the end of the semester or not. Its amazing how much less we spend on gas than we used to though now that we don't go anywhere! Still figuring out what a good number for it is now.

Groceries+ - as I've mentioned, we're working on it. Also, please note that the plus indicates this category contains other items too. Things like paper towels and tooth paste and really anything we usually buy at the grocery store. (Working on starting to separate out this category). We've started shopping at a discount ware house store every couple weeks for many things, but we're still using our more expensive grocery delivery service for most perishable things, though we have almost halved our bill most weeks with the cost reducing measures we're taking. I think there's more we can do here, but Xmas and having 5 grocery days in Dec. instead of 4 is going to make this month hard. Someday the boys will be big enough to make store shopping feel more doable again too I'm sure, but by then hopefully we'll be out of this mess.

We do have some leftover buffer from this month that will help us out a little with that $773 difference, as well as some other possibilities I've discussed, but its going to be a tough month. Without Xmas in there, Jan should be a little better.

(Only a couple old ones left...)

So bad news this week. That big job I usually get this time of year that has paid for the last couple Christmases will not be happening this year. Or anymore at all actually; it appears they have gone out of business. And given how much we were counting on it, that is quite a bummer.

The net effect of this is that Dec and Jan are not going to be just tight as I've mentioned, they are going to be negative in terms of cash flow. Even putting off getting the new tires we need, and even adding in the savings we scraped out of this month, I estimate we are still going to be about $500 short by the end of Jan. And given that bonuses and tax returns won't come in until the later half of Feb, the first half of that month is not going to be pretty either. Things have already felt so tight on this Total Money Makeover that it's hard for me to even picture how much more this is going to suck now.

Given all this, and in the spirit of maintaining gazelle intensity for our debts (I mentioned I hated that phrase, right?), it seems we probably should cancel Xmas this year. Or presents at least, that is. In fact, that would simple act alone would about take care of that $500 shortfall we have (so would winning that $500 million Powerball right now, but I digress). But we are not going to do that. Does this mean we are not really serious about our Total Money Makeover? I don't know, perhaps. But I just can't. It would be too sad for me and I think my husband would just lose it. We would lose our drive to do this because it just wouldn't feel worth it anymore. We're going to be smart about it and stick to our budget, but we're going to have Xmas, so tough.

So where is this $500 going to magically appear from then you ask? That's a good question. Cause we do have $1000 sitting in our emergency fund still, but we all know how Dave Ramsey feels about acting as if Xmas is an emergency. Well, one solution is that it might magically appear. Okay, okay, not magically. But so far hubby's side writing hobby has been bringing in a little more money than expected each month. I think its quite possible we could end up with up to $250 more from that then I currently have budgeted. Also, I could get another job through my business (hah!). I mean, probably not this month, but it could happen. At one time, I made over $20K/yr with this little side gig. (Will probably be lucky to hit even $6K this year.)

Other, less magical avenues include the possibility of me getting a very part-time job in the evenings. I'm looking into this and will in fact be putting in an application by the end of the week I hope. Not sure I will do it for any longer than necessary, but I feel I must do something. It just sucks because I will probably make only a quarter as much per hour for my efforts doing that then for my business. But a quarter as much still meets the gap my business is just not producing right now. I really hope that changes again eventually.

If worse comes to worse though and none of those things pan out, I guess we will be tapping into the emergency fund. All I can say in our defense is that I promise we will pay it back in February. Needless to say, there will be no extra credit card/car payments for the next 3 months. Our minimum payments total to almost $500/month though, and our credit cards are all no interest promotions, so as long as we don't use those, we'll still be chipping away at it.

One of the few topics in Dave Ramsey's Total Money Makeover that really irks me is his discussion of student loan debt. I'm not saying his points are all without merit. But when he talks about credit cards, he seems to understand that the mental/emotional game is just as important, perhaps even more important, than the financial one. And so he recommends paying off your lowest balance card before your highest interest card, purely so you can see results sooner. And I totally get that. But he does not allow for the same types of emotional weakness when it comes to student loans. Consider the rant of his in this link for instance:

http://www.daveramseyfan.com/dave-ramsey-rants-stupid-on-edu... Ouch. That's all I can say. And since I am one of those previously professional, now stay-at-home mom's with over $100K in debt he's ranting about, it can't get much more personal than that.

When I look back over my life, there is only place I can think of that I maybe should/would have made a different decision about my education. And that was when I chose to keep pursuing a PhD in a field I wasn't sure was a good fit for me, instead of being willing to start graduate school over, or at least stop with a masters. Given that my graduate tuition was paid for, however, and that I was receiving a stipend for most of my living expenses, cutting out that leg of the journey wouldn't have changed that much. Maybe $20K less at best.

Growing up, we were poor. Like free school lunch, hand me down clothes from cousins, can't afford a school yearbook poor. I vividly remember my mom dividing one family size can of spaghettios between the 4 of my sisters and I, plus a glass of milk, for lunch. I was a small, hungry, skinny and very active kid, who hung out a lot at my friend's houses bumming snacks. My mom and dad fought constantly, and would have no matter what, but certainly a major theme of their blowouts was money. There was never enough of it, and it seemed that would never change. My mom often grew wistful in private about how, despite how smart she had been, she had dropped out of college after only a year or so at her first husband's insistence (my father) and never found her way back once the babies started coming with her second. And worse, how she could never leave her abusive second husband because she could never support the 5 of us on her own.

I'm not sure how directly it was ever stated, but I grew up with the clear impression that it was absolutely imperative that I go to college some day so that I would be able to support myself without a man. But that there would be absolutely no financial help for me to do so. This was further complicated by my step-father's abusive put downs of me compared to my sisters, and his continuous proclamations that I was never going to be good enough for anything.

Given the trouble I was often into growing up in a home like that, there were many years it seemed like he was right. There were many years I didn't bother with homework. For a period of time, I was suicidal. And I was pregnant before I was out of high school. But I harbored a deep, driving need to prove him wrong as well. And despite his insults otherwise, I was actually quite intelligent. And seriously driven to believe that there was a way out of my childhood and into the type of future I had always dreamed of. Halfway through high school, I turned over a new leaf and started to show what I was capable of academically, though my new daughter senior year complicated things a bit.

When I was applying to colleges, the last thing on my mind was the amount of money I was taking out in student loans. Certainly I qualified for every need based option possible, not to mention a few merit based ones as well. Imagining what that payback would look like 5 to 10 years down the road when I finally had a real job and was out of this mess seemed besides the point. My burning questions were: Am I really capable of this? A 4 year degree at a respectable university with a child? What if they see only what my step-dad saw? What if I am doomed to repeat the same life for my daughter as the one that was given to me?

But I got in and I did my best. My first year I did outstanding actually, but the second year my young marriage began to fall apart and afterwards, it took a couple years of struggle before my daughter and I found a new equilibrium. My last two years of undergrad I did much better for the most part, and somewhere during that time, I realized that to become anything more than a lab rat with my degree, I would need to apply for graduate school. In this sense, Dave's rant doesn't completely apply to me. I did understand that I needed to be highly marketable to pay for all this.

At that point in life, I was pretty clear that I wanted to be a working mother. I loved my daughter dearly, and was very much looking forward to being done with school and having more time eventually. But I was the kind of person who got depressed without something intellectual to pursue. Something for myself separate from my role as a mother. Perhaps partly because I had become a mother before I had gotten time to be just myself. As exhausting as it was during the semesters, school holidays were often worse because I just got so depressed with nothing to work towards.

If you had told me that I would one day choose to be a stay at home mom, I would have laughed in your face. Dave can say that young women without kids yet have no idea how they're going to feel when they do, but I think that's overly simplistic and implies we all want to stay at home deep down. I'm a stay at home mom now, and I'm still not always sure its what I want to be doing. Furthermore, I already had a child at that point. I did know what it was like. If I could have had the option to work only part time with a young family, that probably would have been my first choice. But that is not a realistic possibility in most fields, least of all mine, and I was not unrealistic. I figured with a PhD, I could make enough that my future husband could stay home if we wanted.

Graduate school was hard though. Really hard. My fears about not being good enough were constantly at an edge when surrounded by so many other brilliant people. I had developed a fuzzy, idealistic picture of my doctoral field while leisurely pursuing undergraduate research with lower expectations I had no trouble meeting. This vision was shattered to make room for the more brutal and difficult reality of what higher academia really was. The relationship with my advisor slowly went from love to hate. Somewhere along the way, I began to question whether I was really doing this for myself, or just to prove that I could. Some days, I began to acknowledge that despite how far I had come, it was possible I was moving in the wrong direction.

That is the one point in my academic journey I regret. If I had been brave, or maybe even just less tired, I would have thrown in my first 2 1/2 years of research and allowed myself to start again in a new field. If I had done this, perhaps I would be happily pursuing my new career even now? I had an inkling of what at least some of those other possibilities could have been. It wouldn't have set me back more than a couple years (though that would have added even more to my debt!). But that light at the end of the tunnel I had been impossibly chasing for so long was finally so close. I had already passed my preliminary doctoral exam. I had my project all mapped out. I just needed to buckle down for 3 more years and do it.

And so that's what I did. I figured when I was done I could work on re-branding myself in an area of research I was more interested in for the job hunt. Instead, I found myself perfectly trained to do exactly the type of research I did not want to pursue. But it sure payed well. Even if it did necessitate moving halfway across the country.

It seemed like that would be enough, eventually. But it wasn't even close. And despite my husband (then boyfriend) being brave enough to come along with my daughter and I and start this new life together out west, it just never felt right there. We just couldn't get settled. We couldn't get to a place where the future we had pictured together seemed possible. We couldn't define what needed to shift. And despite crossing the 30's threshold, we couldn't possibly imagine starting a family in that life and place.

Through all of this, my daughter moved into her teenage years, and despite being very close when she was younger, she suddenly wanted nothing to do with me. It became painfully obvious that though my school was finally done and I was ready to focus more fully on her, she no longer had any interest in focusing on me. That ship had sailed, so to speak, and I had missed my boat. That was hard. That was very hard. And it made me reflect a lot on my plans to start a family again soon. The role I wanted to play in my new children's life and the type of mother I wanted to be. As my regret grew, I also stopped giving a crap what other people thought about how capable I was. I had gotten a PhD for cripe sakes. What more could they expect of me? And it was my right to decide what I wanted to do with that degree from that point on. Obviously, it was always my right. But that was when I finally realized it.

So anyways, long story short, with my boyfriend's blessing, I quit my high paying job and decided to become a stay at home mother with over $100K in student loans instead. It was a rough few years of transition. At this point, my husband finally makes a pretty decent income. Almost as much as I used to (and adjusted for the midwest, probably a lot more). But with three kids, primarily one income, and a student loan payment of over $600/month, it never goes as far as it seems like it should. It's going to take us a while to get out of this mess. And though we are now over 4 years into this new life path, it's hard sometimes to accept where we are now compared to where we used to be. Hard to know that we will probably never live in a beautiful home/location like that one ever again. That it will be years, eons, before we can afford another fancy trip. That given the realities of our budget, money is going to continue to feel like a struggle for probably at least another 5 or so years until I'm working again. My husband and I find that hard. And depressing. And Dave would probably just say "What did you expect!?!"

...A chance to live a life much different than the one my parent's gave me I guess. A chance to feel like I had enough money to never be trapped in a relationship that was bad for me. A certainty that my children would always have enough to eat, as well as year books and new clothes and maybe even stories about trips to Disney World with our family last summer. I probably didn't need a $100K education to secure all those things, but it was an emotional journey for me that took a while to figure out.

For now, I comfort myself with the fact that though this is not always the life of my dreams, it is finally the life of my choice. I am choosing to be much poorer than I could be. I am choosing to temporarily give up most personal and intellectual pursuits (though I did start a secret blog!) so that I will have fewer regrets next time about the mother I am to my children. I could do it differently, and from time to time I check in and make sure this is what I still want. So far it is.

Sometimes I’m a little surprised to find myself with debt troubles, because back when my husband (then boyfriend) and I were both working 6 years ago, there was a point where we were making quite a bit of money. During that two year period, we managed to pay off all the credit cards we had at that time (due to divorces and our big move west for my job) as well as the remainder of hubby’s student loan. We did not, however, manage to save a dime towards retirement or anything else. And we went on at least two fancy trips. And ate out a lot. And didn't even look at price tags in certain stores. We also did not own a home at that point, and were paying a small fortune to rent a very nice one (we needed one with with space for our huge dog to run!), while paying only the minimum on my student loans.

Each month we wondered how we could possibly make so much money (some months we brought in more than $10K total - after taxes) and still have nothing left to save towards a house or retirement by the end of the month. I have a few defenses for this. One is that I was less than two years out of graduate school (finally!) and after having been a young, poor, and mostly single mom for that difficult 11 year period, I had a big wish list for life. I needed some fun time. Additionally, my field was very specialized, and required us to live in a very expensive area on the west coast. We were both completely shell shocked by the cost of living adjustment our first year. The price of things like cheese always floored me. Plus, Hubby and I weren't actually married yet at that point, and despite entering our 30's, we were simply not ready yet to buckle down and get serious about financial planning.

So that’s my list of reasons, minus a lot of things I could say about hind sight that you can fill in for me if you like. That period of my life ended almost 5 years ago when hubby and I made the difficult, but long coming decision for me to quit my job (or really career in this case) and move back to our hometown in the Midwest. At that point, we did begin to reign it in a bit in preparation for the 60% reduction in income we would be undergoing in a few short months. We stop planning for the next big vacation and started planning for the journey home instead. We cut back on spending, and put a little away each month for the huge moving expenses we knew from experience that we would be racking up soon. Not nearly enough, but it helped. And I began to look into information on starting a new home business.

We made a mix of good and bad financial decisions over the next few years, but also worked very hard. That first year back, I often spent upwards of 50 hours a week laying the groundwork to get my business up and running, and even took on housecleaning jobs in the meantime until my cash flow became more regular. Thankfully, hubby's job was able to come with him on our move, but the recession had just kicked in and there would be no cost of living raises that year. We had a few thousand in credit card debt again from the move we had to pay on, but we put my student loans on temporary forbearance (which sadly wiped out all progress we had made thus far). My daughter had hit the difficult teenage years, and no matter how much we made, it could never be enough to acquire all the things she was certain she needed (and that every other person she knew already had). Additionally, I felt bad downgrading her too much from what she had become used to at that point, given that the second move was hard enough on her, and certainly not what she had wanted or expected. In all honesty, we had a bit of a hard time adjusting to all of that ourselves actually, and though our rent was much cheaper than it had been out west, it was still much more expensive that what we probably should have taken on. But we felt we needed to step into our new cost of living situation gradually, so as not to give up everything we'd had all at once.

Now that we were back in the much more affordable and homey midwest, we finally felt able to settle down and begin working towards our future together. We got officially engaged and started looking into homes and saving for a down payment. I settled in to my new work routine and despite how much tighter things were, we managed to put away at least $700/month during most of that first year. And though I feel our wedding was perfect, it was a small, elegant but inexpensive, at home affair that did not set us back too much more. Can't say the same for my amazing ring though. (I made it clear there was no way we were spending less than he spent on his ex and I still do not regret that!) We also had a short, but sweet honeymoon that added a little more. And within two months of all that shenanigans, we dropped all our saving and then some into our new house.

Despite putting a little more on the cards to get all settled in, I think our house was a good purchase. A huge step down from what we'd had out west, and more than $1000 per month less than our rent had been even after moving back to the midwest. But a respectable, comfortable, suburban home in a good neighborhood none the less, with a payment we could afford. We bought it at what was the market low (at that point) and with a great fixed interest rate, and it has plenty of room for a family. Therefore, we immediately jumped into the next stage of our long term life plan - babies! And what with that first "Holy Shit" ultrasound, and the later preterm birth that twins tend to bring, less than 12 mos after we said "I do" we had two of them! Not to mention a lot of unexpected time off from work (and savings) on my part due to bed rest.

Somewhere in all of that, there was also a long distance wedding trip, a number of car issues and more than one or two home owner issues as well. We did not have an emergency fund yet at that point, so anything extra was a problem. Plus, my daughter had turned 16 and began driving, and no matter how crappy a car you give them, the insurance still sucks. Its no secret that kids tend to be the most expensive at the bookends of your 18 years with them, and unfortunately we had some on each end. I had to keep my work hours while I was breastfeeding (and not sleeping) to less than half of what they had been pre-baby. We started getting a grocery delivery service rather than shopping ourselves, despite the extra expense, cause we couldn't figure out how to manage life without hating each other otherwise. And as thankful as we were for hubby's work from home job that came with us on our big move, it was far from competitive in pay (though excellent in health coverage thank goodness), and yet we just didn't feel like we could manage him finding something out of the home until we got closer to the boys first birthday.

Lest I mislead you, there were some toys in there too. We got a new flat screen tv, and we had cable, netflix and audible subscriptions. We both got iPhone 3's when the 4's came out and have since upgraded. We got a new laptop when the old one died. We ate out a couple times a week at least. We took a couple modest vacations. We purchased memberships to the zoo and museum. We weren't partying, but we weren't suffering.

None the less, fast forward to about 18 mos. later and we have finally begun to catch our breath again. Hubby did find a new job outside the home that pays much better (though that required me to cut my hours even more initially, and necessitated another car purchase). We stopped hemorrhaging expenses and started simply treading water instead. I think its been over a year since we even used a credit card,which means we have mostly gotten the hang of living within our means (pre-child support loss at least!). And we did finally get an emergency fund going. But its been pretty clear that we haven't made much of any real progress towards wiping out the debt we accumulated either. And as we slowly inch towards the end of our 30's, it is clear that the time to start planning for our financial future is now. Like, so right now, its yesterday.

So that's how we got here. Nothing completely stupid I don't think (well, maybe the ring. But since I'd do that one again, I don't think it counts), though lots of things we could have done a bit better. And today, on this Thanksgiving Day 2012, I am thankful that hubby and I have both the means and dedication to tackle this massive financial overhaul, so that our future can be a bright one.

I keep trying to find more things we can do, something we must be missing, to make this debt thing go faster. So far, no luck. If anything, the book I checked out from the library recently (did you hear that, the library not the book store) called "Your Money: The Missing Manual" made me feel like we're taking this more seriously than I sometimes feel we are. Consider all these recommended measures we have implemented:

Cancelling cable: As of last week, Check! My husband's company pays for the internet portion of our bill already. And our recent purchase of an Apple tv will pay for itself in less than two months of not paying for cable.

Get rid of home phone: We got rid of our home phone line a couple months ago since we were really only using our cell phones anyways. This has been causing us to use more of our cell phone roll over minutes though, so I'm hoping we won't have to up that eventually.

Cancel monthly subscriptions: To my surprise when we began this, hubby volunteered to cancel his Audible subscription until our debt was paid off and just re listen to old favorites instead. We also cancelled our Netflix a few months ago since we hardly ever used it and I've already decided not to renew Newsweek this coming year. Half the issues never get read anyways.

Make a Unit Price Grocery Spreadsheet: Still working on that but I have started to collect that info and I'm already getting the hang of when something is a good price. I have also learned to...

Use Coupons Wisely: I do not fall for buying things with coupons that a) I wouldn't usually get anyways b) are still more expensive than the store brand or another location. This also meets his suggestion to...
Discard Brand Loyalties: Even for toilet paper, I got over it.

Buy In Bulk - When it Makes Sense: Hello new big box warehouse store membership. Can't believe how much money we've saved there (per unit price at least!) so far.

Waste Not: Finally plugged in the big freezer downstairs again and started labeling and storing all left over canned and other items. I've even started buying things like yogurt in bulk, freezing it before it goes bad and then thawing it as needed. Its a little more liquidy than it would have been but still tastes fine (the boys don't know the difference!).

Shop Less: Not a problem. There's no money anyways and neither hubby or I were ever big shoppers. Probably the biggest success in this area though was when we separated our checking account into discretionary and non-discretionary expenses and then limited ourselves to a budgeted discretionary amount. In theory we were doing that before, but since I didn't track where each individual purchase went, it was hard to know how well we were sticking to it. I still don't always track it that closely. But now, when the discretionary money's gone, its gone. And so that takes care of that.

Replace Light Bulbs w/ Florescent: Done! We even got a Groupon for a home energy checkup a month or so ago in which we also got some weather stripping applied to a couple doors and well as thermometers to check refrigerator/freezer and water heater temps. We would have gotten more but they said we were already doing great on most everything else! Especially considering our gas energy company gave us a rebate to get our attic re-insulated this past summer which has already significantly impacted our energy bills.

Increase/decrease the setting on your programmable thermostat: We haven't made any huge sacrifices here compared to people I hear setting their winter thermostat to 65F or waiting until Halloween to even turn on heat but we have lowered our winter setting from 75F to 72F and raised our summer setting from 72F to 74F. It not much I know, but we do have two year old boys and I don't want them to be too cold or not sleep well. Bedroom space heaters make me nervous with such little ones (and I don't think they could be trusted with them once we switch to "big kid" beds), and we haven't had the money yet to invest in summer ceiling fans.

Play Board Games for Fun: We don't always play board games, but hubby and I have completely let go of our monthly night outs for the next year and turned all our date nights into at home affairs instead. We always make a nice dinner together after the boys are in bed and then talk or watch a movie or something.


So those are all the things we're doing right. Perhaps I will devote my next entry to all the things we could still improve though I worry it will just turn into a big excuse fest!

(Another old one from Nov)

We're half way though November and so I figured it'd be a good time to check in and see how on track we are. We're doing okay. The highlights:

Shopping: $454/$500
Entertainment: $109/$300
Groceries+ (includes misc things too): $626/$1200

While not included in the total above, we just finished grocery shopping for the week of Thanksgiving and still managed to keep the weekly total within $200 (no big box warehouse visit this week) so that's a good sign! I eventually want to lower the grocery budget a bit, but next month just happens to be another month with 5 grocery days instead of 4, plus Xmas, so I don't think it will be happening that month. Jan. for sure though!

Our shopping budget looks a little sad but it should be clarified that about $120 of that is for the Apple tv and antennae that have allowed us to cancel our cable service as of last Thurs. (Woo hoo!) Still a splurge, but one that will pay for itself within two month. Also, another $214 of it was from hubby's new iPhone 5 splurge, which he got $98 back for by selling his old phone. Though only as an amazon credit so we'll be using that for Xmas rather than credit cards.

The only number of here that really irks me is the entertainment budget. Despite that being the only flexible category we're not over in. What irks me is that hubby and I are each supposed to get $100/month individually do do with as well will ($20/wk), plus another $100 for joint splurges. Its half way though the month so that should be about $50 each individually at this point. Looking over the transactions though, I would say about $8 of that is mine, maybe $30 is joint and the rest is his. And that's just the things that weren't paid with by cash. And I wouldn't say this is atypical. I minded less when we weren't being so serious about this. But despite how pissy he gets sometimes about lack of funds, clearly I am sacrificing more here than he is.

Regardless, these next two months are going to be a lot of sacrifice for both of us. I have only 1 1/2 child support back pay checks left! That is about $500 less a month we are going to have to adjust to during a period when my home business is making about $500 less per month than usual as well. I have one big job that often comes in just before Xmas which I am anxiously waiting to hear on next week. If that doesn't come through though, Xmas is going to be rough this year and we may not be getting new tires for the SUV after all. I may even get a second part-time job soon. Just not sure how to meet the Dec/Jan gap otherwise. Gonna be a rough couple months until the tax return comes in, but we are not giving up!

This may be simply an exercise in idealistic dreaming, but I want to paint for you (or maybe mostly just me) a picture of how I see this new financial plan unfolding for us in the coming years. Cause I have big, unrealized but hopefully not unrealistic, dreams. In Dave Ramsey's book, he tells you that it takes most people about seven years to reach Baby Step 7: Build Wealth. Longer still to get to the Pinnacle Point where your money finally starts working harder than you have to. Certainly, that is the long term goal. And the short term goal is the credit card/car payment debt payoff I've already outlined. But it'd be nice to have a picture of our mid-term plan as well. Especially given that I don't think we will be following the Baby Steps precisely.

So, one year out, give or take a few months, and hopefully our small debts (non-mortgage/student loan) will be paid off. At that point we will hopefully be more used to getting by with a lot less monthly discretionary income. Maybe we can at least add enough back in to be able to go on monthly date nights again though. But I don't want to get too slack because we still have a lot or work to do. Baby Step 3 is to Finish the Emergency Fund, which he defines as 3-6 mos. worth of expenses. For us, that would roughly be $15K-$30K.

Projecting out both raises and expenses, once we get our small debts paid off, I think we could save roughly $25K/yr. So, that should take us 7-14 mos. depending on how much cushion we want. My thought is that we should save as much as possible, setting aside the minimum $15K to touch only for emergencies, but then factor in the fact that our family SUV will be 15 years old (already has 223K miles) by then. I am fine with driving it until it dies, but its pretty much a given that that is going to be before too much longer (please, please, please not this year!). I am also fine with not getting a new car when it does die. But I would prefer to get something gently used with at least a few more bells and whistles than our current one has. I think we could probably get something 5-6 years old for between $15-$20K.

That's not the only big ticket item we need to save for though. In a few more years, the boys will be ready to start school and I will be more than ready to jump back on the career train. But that is probably going to require a bit of retraining on my part, and I am not willing to take out any more student loans. (Above and beyond the $105K I already put my foot down on of course). So, if I want to go back, which I very much do right now, we will need to save for that too. I am conservatively estimating about $20K for that right now, plus after school daycare (maybe $5K? Though that will be more of an on-going expense), but given the rising cost of education these days, who knows?

The point of all this speculating is to point out that with these extra purchases, the time it takes up to save about $30K for an emergency fund is going to be more like 2-3/4 to 3 years rather than 14 mos. That's a long time. And who knows how many set backs there might be in the meantime. At some point, hubby's car will need to be replaced as well, though it is 5 years newer than the SUV at least. But I guess I'm okay with it as long as we get to Baby Step 4: Retirement Investing, by the time I re-graduate, which I am predicting will be in 5-6 years. If we get to that step before I graduate, then I guess we will start putting at least the company matching amount into hubby's 401K. Actually, if we don't get to that step before 40, we probably should do a lot more than that, and I kind of doubt we will. Once I do graduate and start working again though, we are going to kick step 4's butt.

And then we get to Baby Step 5: College Funding for the kids. Except we're going to re-package that one as college payoff for the adults. By then my daughter will be done with college (or darn well better be at least). Until we get fabulously wealthy, I have done the best I can for her by insisting that she go to a school where she would graduate with a maximum of $40K in debt. Still a lot I know, but less than half as much than me, and within the amount considered reasonable by the income to debt calculators. She hated me for it at the time, but now seems mostly happy.

I am hoping that with a new masters degree I will be able to make at least $50K, although about half of that will probably have to go towards retirement, and the rest will get taxed. But lets just say that after stocking up our emergency fund, we have about $25K/yr extra from hubby's income and $25K/yr from mine. So $50K/yr extra after I start working to do with what we will. (OMG, is that really possible?) What to do with all that cash?? Pay off my damn student loans!! If we stick to the plan, that should take us only two more years. At that point, we can look into some minimal investing for the boys' college (and maybe some back pay for my daughter). But they are going to be expected to chip in as well because we are heading off to...

...Baby Step 6: Pay Off the Mortgage! Honestly, not quite sure what's going to happen when we get to this step because you see, before we focus on paying off the mortgage, we'd like to focus instead of getting the house we'd really like to have. The exciting thing is, once the student loan is paid off, we could afford about $600 more per month for a mortgage without changing anything else. Assuming the market continues to improve, we should also have a fair amount of equity at this point, having lived here for about 11 years. I am not sure yet whether we would rather buy or remodel. It will probably depend a lot on the location of our jobs at that point. There are some things I really like about both this home and this area, but our home was built in the 1960's and it really needs some updating. I think it would take between $175K-$200K to get it to where we want it, and only about 60% of that could be recouped in re-sale value. Whether or not that's worth it will depend largely on what we could get for the same value given the housing market at the time.

I also really like Dave Ramsey's idea of taking out only a 15 year mortgage and keeping your mortgage payment to less than 25% of your take home pay. Whether we decide to buy or remodel, I do very much want to keep those rules in mind. After all our hard work, I certainly do not want to end up house poor. It will be hard to feel like we can't afford just about whatever we want once we've taken care of all that other debt. And I do love big, pretty homes. Nonetheless, regardless of what we choose to do, at that point it should be a maximum of 15 years until we are entirely debt free, and if we continue with the $50K/yr rule, I think we could take that down to 6 years.

Which means this is more like a 14 year than a 7 years plan for us, but by the time we enter our 50's, it is very possible we will have no debt remaining (maybe we'll bump up the boys college fund at that point) and hopefully by the time we hit our 60's we will have reached that fabled Pinnacle Point which will leave us set for a long, happy retirement. Its certainly not a get rich quick scheme. which makes it seem somewhat more believable. Though it will certainly require a lot of dedication and sacrifice. But it seems like by the time the boys graduate from high school, we will finally have both the time AND money to do all sorts of things.

So that's the big picture. And now back to Baby Step 2.

It is sad, but I was actually having trouble sleeping last night due to worrying about grocery day today. I feel doomed to over spending failure. I did finally manage to go one week last week without visiting our discount warehouse store for supplies. (You know, that big box store that's supposed to be saving us money, but so far seems to be costing us more instead due to the bulk amounts.) But it seems like that just means there will be twice as much this week instead, so I'm not that impressed with myself anymore.

Other than our mortgage, groceries is our single biggest monthly expense (followed by my student loan), and I really feel that getting control of our finances is going to require some soul searching in this area. Looking over warehouse store list (20 items!), I would say that close to half these items are things that are going to last us for quite a long time, so perhaps it is once again that we are just still in the bulk up phase. We've been in this phase for a month and a half now then though. And we really need to be out of it by next month because I am projecting Dec and Jan to both be particularly tight. And then I look at the news and see things about food cost increases due to the drought this past summer, and fiscal cliff payroll tax increases, and I just want to scream a throw things. A little help please??

My husband is not much emotional support this week either as he seem to be struggling with it worse than me. I think it is mostly brought on by his job kind of sucking right now. But he got really annoyed the other day when I said he'd need to wait until pay day to get another new charger cord for his new iPhone (of course the old ones are no longer compatible) because we used up all of last paycheck's discretionary budget getting the phone itself. He got annoyed and said that it sucks to work hard all day at a job he doesn't like to make all this money, and yet still not have $20 for a phone cord at the end of the day if he wants one. To which I was like, well we do have enough, if you want to prioritize that over credit card debt, but we can't do both. He grumbled and went downstairs and was moody for the rest of the night even though he said he did think we were doing the right thing.

My thoughts from upstairs were along the lines of, "Come on. You got an iPhone 5 this month. I got an iPhone 4. That's certainly not nothing. And you only need to wait 1 extra day!" He's not normally that whiny (though money issues does seem to be one of his buttons) so I think it's mostly work. And I think it's more generally the idea of not having enough money period that bothers him a lot more than the phone cord specifically. None the less, its hard to feel like a motivated, goal in site, on the ball team when faced with tirades like that. Also had to explain to him this week that planning a meal with beef instead of chicken because that's what we still have in the freezer doesn't actually save us money if we still have either chicken or beef every time in roughly the same ratios. To actually save money, we have to use less meat. He is a smart man. I'm not sure why that was hard for him to hear.

I, personally, have still been feeling quite motivated and very happy that we are working on this. I just wish it were not so mind numbingly slow! I've seen a number of blogs that mention the idea of "snow flaking" your way through your debt snowball. That is, finding lots of small ways to contribute regularly to the total sum. I think I need to look into more ways to do that, because I really need to find more chances to celebrate in what will undoubtedly be a long and somewhat frustrating year. I also need to get more comfortable with throwing this extra money immediately towards debt instead of holding on to it "in case", because it always gets spent that way. For instance, I realized out of the blue the other day that our bank check cards have been racking up points in one of those rewards programs for months (if not years) now. Turned out we had a little over $100 in cash back savings. Half of that went directly towards a credit card, but half of it got used for things like diapers and wipes this week due to funds being low after the phones. Should have just sent it in.

As long as we truly stick to our budget, that extra should still be there at the end of the month to pay then. But we all know what often happens with things like that. And it was mailing in the buffer at the end of last month that caused us to be too short for the phone cord this week, and just look how my husband reacted. Its hard to not want to keep some on hand to avoid situations like that. I think perhaps we need to have a discussion about keeping our state of mind in the right place for each other during this "small account buffer" period of our finances. I know it makes him uneasy, which in turn makes me uneasy, but this is how it's going to be for the next few month if we are going to make any real progress. We need to be each other's cheerleaders more often. We are doing something awesome and very worthwhile!

I wish my next money goal could be getting our grocery bill under a certain amount, but to be honest, until we get done with these initial bulk purchases (maybe this week?) I just don't think I can budget as well as I would like for that yet. One thing I am finally going to bite the bullet on though: a "best" price spreadsheet for groceries. We have up to 5 different stores we get things from at this point (though only 3 main ones) and trying to keep track of which place is best for which thing is driving me crazy, especially when sales come up. Granted, the idea of being the kind of crazy, price checking, coupon clipping, store hopping lady who has a list like that also makes me cringe. But as mentioned before, groceries is really the number one things we need to get a handle on in this house. Something must be done.

I already have two items I'm going to price check at two places before I purchase this week. As well as two coupons I printed and then discarded when I discovered the store brand is cheaper anyway. I did totally fall for a $5 store card with diaper purchase, only to realize as I was getting in my car that they had just marked up their regular diaper price by $5 (Bastards!). Actually, I think that was the very moment I finally accepted that I needed to make this spreadsheet. To redeem myself, I made sure to cut up and freeze the two extra bananas I didn't use after all this week, so that I can use them next week instead. To me, these are the true Baby Steps of Dave Ramsey's process right now. Because the distance between this Baby Step and the next one in the Total Money Makeover book feels more like an Olympic hurdle to me right now. But I am slowly finding small victories in this stage, and there are many milestones yet to come.

(From Nov.)

Its the first on the new month! Time to tally up last month and see how far we got! It didn't all go as stellar as I had hoped. But the most important number of everything I can tell you is this: $434.55. We paid $434.55 more this month towards our debt than we would have before we started this money makeover. That is not to say that is all we paid. We actually sent in a total of $935.79 including our minimum payments. Which means we now stand at a total credit card/car debt of $23,725.13.

I'm not gonna pretend that's awesome. But its certainly better. Especially when you consider that, just as I feared, we were hit with a double whammy this month in terms of car issues. Every time something acts up we seem to leave the repair shop down another $350. This month that happened twice, though the second time was a doosey - about $520. This last year we put away some extra money into our emergency fund to use when things like this came up. But being three quarters through the year at this point, we have already burned through most of it. Plus, I wanted to follow Dave Ramsey's advice of not keeping more than $1000 on hand so as to help light a fire under your debt motivation butt. Thus, $159.91 of the extra we paid off this month came from throwing in our "excess" savings.

Additionally, Ramsey makes the point that regular car maintenance and repairs are not really emergencies usually, but rather something you should be budgeting for. Given that out newest car is 8 years old, I'd have to agree with that to some extent. Twice in one month is a bit ridiculous (though it was only once for each car) but Quicken tells me that we spent $2453.88 last year on car repairs/maintenance and we're never really all that surprised when we need to bring in a car for some reason. I think it was a little higher last year given that my daughter's car was at the end of its life and luckily we no longer have that vehicle. Still, I decided that its something we should probably start budgeting for instead of always dipping in to the emergency fund. So I added a line item for it in our budget, which is unfortunately going to push off our debt end date by at least a month. Better to know about it now that be dejected by it later I suppose. And motivation for being able to get newer cars at the other end of all this!

Another thing that makes me feel not too bad about all this is that my Excel spreadsheet shows we actually brought in negative money this month. That's right, we actually had about $1300 less than we needed to cover all our expenses this month, and yet we still managed to reduce our credit card/car debt by 3.8%. Quicken also tells me that on average, we have spent about $1500/month on misc expenses and another $325/month on entertainment expenses this past year. This month though, we cut our misc expenses down to $471 and our entertainment down to $267. That's a 60% reduction, and I feel like it means we are serious about this, despite some hesitations.

It makes me realize as well that though the $1300 short fall probably would have happened no matter what, in previous times we would have just wondered what happened. Not being aware, we certainly would have dug ourselves in even further and made no additional debt progress what so ever. We may have even had to break out a credit card for that second car repair, thus again wiping out a considerable portion of what we paid off in the year leading up to this. Instead, I feel very aware now of just where our money is going and how it tends to get away from us. And we avoided more debt.

Our other biggest expense this month was groceries: a whopping $1700 got spent this way which was even more than the absurdly high $1250 I had initially budgeted for it. I think this will absolutely be lower next month. For one thing, there are only 4 grocery days instead of 5 next month. For another, I am getting better at finding less expensive substitutions and planning some things around what we already have. But mostly, I think we have already stocked up on just about everything possible from the discount wholesale store we have started doing half our grocery shopping at. We started shopping there at the beginning of Oct and it has taken longer than I thought it would to make the switch over. Each time you buy something in bulk, you save on the cost per unit, but you spend even more initially on the cost over all, since you're buying 4 times more. That added up a lot more than I realized it would.

If my home business continues to be sluggish, these next few months until Feb. are going to be hard. Especially come Dec. when my back child support finally ends (though Dec tends to be a good month for my business). That's about $500/month we are going to have to learn to do without. But come Feb, we should get a nice tax return. Then in March my husband's bonus will come, and if all goes as expected, in Apr. he should be getting a nice promotion, which will permanently make up the child support difference. Our goal at this point is still to be done with this step by the end of 2013. And then on to baby step 3!

(Another old one from Oct. that's a little out of date...)

I've been having a hard time finding the motivation to write again given the major Fail I feel like our money makeover ran into this week. It started out with good intentions. I wanted to feel more certain about Pulling the Trigger on our debt and making a big initial payment from my preliminary budget excess estimate. So I finally put it all down in a spreadsheet for the next year. All our fixed expenses, all our non-discretionary non-fixed expenses, and all the little extras we're still learning to trim. And I compared that with both our fixed and estimated sources of income. I've been doing this with Quicken for years actually, but somehow it looks different in Excel. Or at least, in this case, it looks much smaller. The excess that is. All I know is that somehow the $2000 I found before dissipated into only about $250. WTF?

Am I just that bad at this? I thought I was pretty good with math and estimating/projecting? Why do Quicken and Excel say such different things? The best I can come up with, (other than user error which I have repeatedly checked for) is that it has something to do with me doing month by month totals in Excel, whereas in Quicken its kind of a running average. For instance, the 30 day low balance projection in Quicken isn't much affected by the fact that grocery day will just happen to occur 5 time in Oct rather than 4 as usual. And the fact that some months get 2 paychecks, but a few months get 3 paychecks is sort of averaged out. In my spreadsheet though, each column gets only exactly what that month has (or doesn't) and so some months look much better than average, and others look much worse.

There's also a few things I realize now that I hadn't really included in Quicken. The new car tires we need before this winter. Xmas. The fact that, for whatever reason, my home business is totally sucking compared to normal right now. Basically all the things that tend to fluctuate a lot. I tend to use more average amounts in Quicken, but I wanted my spreadsheet to reflect the worst case scenario so that I would know what we could afford "no matter what". Be careful what you ask for.

Unfortunately, in terms of debt reducing motivation, these first few months seem kind of stacked against us. This month and Jan. look to be especially dismal, and Nov. and Dec. won't be much better. Feb and the spring should kick butt though, if we don't lose steam by then. Ugh. How to get this debt snow ball rolling? And not lose more traction in the meantime? The Total Money Makeover book answer is to start selling stuff. I repeat, Ugh. What if we're just...not that type? Lame, I know. Do I really want this or not? And if so, what am I willing to do for it? I'm still trying to answer that.

Hubby and I actually have talked a little about some things we could sell. Unfortunately, most of it would sell much better in the spring than now, but there are a few possibilities. I should stop sulking and start pricing. Sigh. Did I mention how little free time I have as it is, with two year old twin boys? This is seriously not how I want to be spending my time. There's a lot of things I don't like about the early part of this process though. Obviously, this isn't the fun part. The fun part is coming. Its just a few years out yet.

I need to keep the faith. I need to trust that this CAN happen for us. I need to believe that a stable, healthy and exciting financial future is a true possibility - no, Reality, for us. It's starting small. Very small. But it will get BIG. And it is going to start with this goal: No matter what else comes up this month, or how the numbers seem to change, I am going to pay at least $250 extra (above the $500 minimum we are required to pay already) towards our credit card debt by the end of this month. Hold me to it!

(Another old one...)

This is the very first month of our Total Money Makeover. The very first time I have created a zero dollar budget, and I have to admit I was pleasantly surprised to find out how much wiggle room we have right now, even on the tighter months for my home business. There have certainly been times in my earlier life when there just wasn't enough, period, regardless of how well you spent it. And so to be where I am now, I am very grateful. It also makes me a little disgusted with myself. Laying it all out on paper makes it pretty hard to deny that this is something we could have been making headway on for a while now. We've been pretty good for two years or so about not digging ourselves in any deeper. But we haven't made any real progress on filling the hole. That gaping $327,000 hole I mentioned previously.

When I calculate it all out, even allowing for about $400 of discretionary "fun money", this month we have about $680 extra we could throw towards debt. And actually, given that we used to try to keep a $1000 buffer in our main checking account, we probably have another $700 I could throw towards it if we can handle living more dangerously. This year we even managed to scrape together an emergency fund from our tax return that has lasted us for most of the year. It originally had about $4000 in it, though we are now down to about $1160, with quite a few months to go before refilling. Dave Ramsey says that for "gazelle intensity" we only "need" $1000 though, so that's another $160 I could throw in. And this is in addition to the minimum payment total of about $486/month we make to our credit cards and car loan debts anyways.

I should be elated here. Despite feeling like there is never enough, Dave Ramsey and our zero dollar budget have revealed to us that we actually have about $2025 available this month to throw at our $26,000 credit card/car loan debt problem. We could be down to less than $24,000 in our first month! And I do know just where I will mail it (figuratively speaking with online banking that is) when it comes time. But I feel something much closer to trepidation than elation. What happens when I mail in this check, and a week later our refrigerator dies (not unlikely) or our car breaks down? Okay yes, we would still have a $1000 emergency fund and that would probably cover it. But what if something happens the next month again before we have a chance to replenish it?

I'll tell you exactly what happens, because its happened before. Last Oct./Nov with a flooding issue to be exact. And what happened was that all the hard work of the previous month's extra payments towards credit cards were erased when we had to dig them out again to cover the $1000 insurance deductible, non-covered repairs and appliance replacements. It was incredibly disheartening and it really brought our efforts to a halt for a few months while our bruised egos recovered. I was elated though, when we actually managed to put away quite a bit more than usual the following spring for the next year's "emergencies". And although our emergency fund has now depleted down to barely more than $1000, it has come in handy many a time. Both for car/house issues, as well as the times our budget got away from us a bit due to unplanned circumstances, or yes, an occasional bout of frivolity.

My point is not that we always spent our emergency fund completely wisely. My point is that it was always there when we needed it, and it buffered us from a lot of the financial ups and downs previous years have brought, especially with part of our income being from my self-employment. My point is that is was a major source of financial peace to me this past year. I understand that part of the point of keeping only $1000 on hand is to light a fire under your ass so that you take care of your debt as soon as possible. But I have seen plenty of other years in my life when having only $1000 (or far less) in savings simply got us into more debt, not less. Life is not going to hold up a giant umbrella for us while we work through this. How do I trust that it is safe to write this check?

I will attempt to answer my own question, though I welcome any suggestions from anyone else who might happen upon this as well. I think what is most different about it this time is that out zero dollar budget has shown that, at least for now, even during tight months with my business, our income is still more than our non-discretionary expenses. It may seem like there is never enough money, but there is. We just overspend sometimes when things are good and then have to catch up, so it doesn't feel that way. To help curb this bad habit of ours, we have opened a second checking account that we are using for discretionary expenses and transferring only as much money into it as we allotted to ourselves. Ultimately, we alone are in charge of whether or not we use our money only in the way we have assigned it. We will have to be honest with ourselves about whether or not the activation fees for our new iPhone contracts are going to make it hard to buy diapers when we need them. We are going to have to adjust to a lot less fun money. But the numbers don't lie. The money is there. We just need to spend it correctly.

(Can't decide if I will move all of these entries over or not, some are out of date now, but I figured I'd try to get at least the ones with the background info.)

I’m not a big 12 step follower or anything. But I do believe that two very important steps for beginning a major life change, of most any sort, are acceptance and admission. You need to truly accept that there is a problem with something in your life. No more excuses, no more minimizing. And then, to fully define what the problem is, you need an open admission of your mistakes and current status. To that end..."Hi. My name is Anne, and I have a problem with Debt."

To be fair, my husband and I have known and admitted this for years. And we are not the type to drive around in a fancy new car we're leasing while uncertain how we're going to pay our credit cards this month. Actually, our newest car is 8 years old. And we always have enough on hand to pay our bills (which according to all the political talk you hear lately means we are somehow better off than 2/3 of Americans?!?). But that is not to say we don't have our frivolities. We have a gym membership, grocery delivery and a lawn service. My husband has weaseled his way into getting an iPhone 5 soon, though I will be settling for the 4 (I only have a 3 right now!). We have a 36" flat screen TV and a new laptop. We're not suffering. We're just not winning any achievement awards either. We are very effectively treading water, as we have been for many years.

The description I just gave creates the same moderately dismal view of debt that I think a lot of Americans have. Kind of a necessary evil in which you "do the best you can", trying to make some responsible headway while still allowing yourself some enjoyment of "the good things in life". And I think it is this minimizing, moderate view that has kept my husband and I in this situation for much longer than we have really needed to be here. We're smart people. We make a decent income. We should not be here. And so, like so many debt slashers before me, I have have just finished Dave Ramsey's "Total Money Makeover" book, and I am now in the mood to take a much more extreme (i.e. honest) stance about our current situation. (I know some people here are not big fans of his, totally okay. I have my qualms too. But he's working well to motivate us right now.)

Let's just start with a number. $327,758. As of Oct. 1, 2012, that is where our total debt stands. About 60% of this belongs to our mortgage. Another 32% to my student loans. (Boo!) The remaining 8% is a combination of credit cards and car loan. Keep in mind that 8% of $327,758 is over $26,000. Keep in mind also that although we may not be suffering, this total number is still more than three times our combined yearly income. Ugh. To top it all off, we're in our mid 30's and have not a dime saved for retirement or college for our boys, and we will probably end up co-signing on $40,000 in student loans by the time my daughter graduates from college (though hopefully that will be her problem, not mine). We are in deep s**t folks.

Despite our seeming record to the contrary, I am actually a big believer in Ramsey's assertion that debt of just about any sort is just no good. That we have all bought into a lie that serves the lenders rather than ourselves. And that mostly, the only excuse for using credit cards is poor planning and difficulty with impulse control. Ouch. We suck. I have lots of good excuses for our credit card debt that I have pulled out in the past to soothe these sharp criticisms. And I will say at least that my husband and I are generally not people who use credit cards for shiny new toys or entertainment much less basics like groceries and clothes. Mostly, these were one time or unplanned emergency expenses (that being said, I can think of at least one exception to pretty much each one of those things I just mentioned.) None the less, even the unplanned things were mostly due to not saving for an emergency fund the way we should have to begin with. There was some impulsiveness in there as well for sure. (And a very shiny toy indeed in the form of a ring that now sits upon my wedding finger.)

I want to be completely, un-sugar-coated honest about this because I am [i]tired[/] of being in credit card debt. I am tired of wondering what on earth we would do if one of our cars died. I am tired of feeling trapped in my home by having no home equity. I am tired of feeling too daunted by my student loans to even begin handling my retirement. And I am sick to death of feeling like this will be the year we're finally going to start getting ahead a little, only to somehow have all the extra trickle away again with no lasting effect on the bottom line. I am ready to get serious about this. I am ready to start making some sacrifices. I am not sure about "gazelle intensity" (maybe just cause I really hate that phrase?) but I am willing to begin exploring options I haven't been willing to consider before.

But I need something to keep me motivated. And I need a way to work out the serious anxiety I am feeling about all this. And a place to put down some of the things I learn and maybe even help someone else in the process. Thus, I started a blog!

I originally started this blog here

http://anotherfamilydebtblog.blogspot.com/ a few weeks ago. But, being new to this blog stuff, I don't really know how to drive traffic to a new blog, nor do I want to spend that much time trying to figure it out. However, the main purpose of blogging at all was to share my debt story and find some people in the same boat to make this a little easier. To get a little feedback. So, I've decided to take the easy way and move my blog over here where a community of people doing the same thing has already been established. I've moved most of the old posts over now, but just be aware that anything dated 12/13/12 or older is a bit out of date.

Hope to meet some of you soon!