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Archive for March, 2013

Save Now, Live Later

March 30th, 2013 at 03:46 pm

We're making awesome progress on our debt. In the last 6 months we have paid off $16,406 in credit cards/car loans and we now have only $5900 to go. On paper, it looks really good. In life- it looks kind of bleak.

I have always struggled with living my life more in the past or future than in the present. The Now. I am good at putting off short term reward for long term gain. Hubby has a harder time with this, which is one reason he is so good for me in this regard. He helps to balance me out and remind me that life IS now. In turn, I help to give him direction so that he moves towards his longer term goals. This tug of war plays out in our total money makeover all the time, as it does with most everything in our marriage.

Recently though, I have hit an emotional wall that makes me realize I need to start focusing more on the Now. To put it bluntly, I am not enjoying my life right now. I miss working and having space for intellectual pursuits in my life outside of two year old play dates and fish sticks. I feel that me being home is what's best for them and I love them to pieces. But I am coming to accept that it is not what's best for me. None the less, they don't have a lot of part-time options for women with PhDs in science fields, and I didn't like what I did much before anyways, and I will need to be retrained before I can begin a new career path. Which will only be affordable if we stick to our financial plan and cut expenses now. For now, and the next few years, I'm stuck here.

And hubby and I have been working our butts off for this money makeover. I run after our darling boys all day while he works his day job. And then by night, once the boys are tucked in, we both spend at least half the nights a week doing our side jobs, which has created the surplus for our finances. But we have almost no time for ourselves or each other. We've turned all date nights into at home affairs and cut all plans for family vacations. We don't buy clothes, or toys or really anything that's not required. We stick to the plan. And it blows.

Part of why we have felt the need to push this hard in the short term is that we have been treading water financially for years now. With every increase in funds getting eaten up by something else unplanned for, I watched my goal of going back to school slip further and further away. We were always barely making ends meet. Always "a little bit short this month but next month should be better." Looking into the near future we could already see the big raise hubby was expecting being eaten up by needing to replace the family car that is on its last leg. And we have nothing for retirement. We needed to do something Now.

So we're doing this. And the credit cards part of it is almost done. Which is awesome. But if we don't want to just replace all that work with another car loan then we need to start saving pretty aggressively for a car as well. And there are a whole ton a medical expenses that have crept up recently that I don't even want to think about factoring in to the plan yet. And yet - life is NOW. Not when we finish saving for a "new" car or finally start that retirement fund or get money pulled together for me to go back to school. But now. And Now - I am miserable.

Clearly there has to be some balance here. It does no good to live high on the hog now and just be miserable in the future instead. But it is not healthy to put off everything Now for a future that may never come either. They used to say money doesn't buy you happiness. Though they're finding that's not actually true! (

Text is http://www.forbes.com/sites/learnvest/2013/01/25/money-does-buy-happiness-we-were-shocked-too/ and Link is
http://www.forbes.com/sites/learnvest/2013/01/25/money-does-...,
Text is http://www.time.com/time/magazine/article/0,9171,2019628,00.html and Link is
http://www.time.com/time/magazine/article/0,9171,2019628,00....,
Text is http://www.wired.com/business/2012/12/wealth-happiness/ and Link is
http://www.wired.com/business/2012/12/wealth-happiness/). Regardless, I have never been a collector of things for my happiness. But money does buy experiences. And experiences are the stuff of life in my opinion.

In times past, I know it has definitely made me happier to have a fun family vacation to look forward to, or a fancy night out with hubby taking in dinner, wine and a show somewhere. It made me happy when I was able to splurge on a massage or a special outing with the boys. Though these things are fleeting without knowing they are financially backed by having the longer term goals of ones life fully funded as well. Again, I recognize there must be balance. But right now the balance is clearly too far to the future game, and we need to adjust that.

In the very short term we are going to restart monthly date night outs, though nothing too fancy until the credit cards are done (only 3 more months!). Then, we'll have to decide what additional changes we can make at that point, and which ones we need to put off at least until a new car, and the increased emergency fund, and the 401K and all that have been saved for. I don't know what the right balance is here because all these things are important. But my emotional outlook is making it very clear to me that our current answer is not where it needs to be right now. I will be working on sorting that out this coming month.

PS Please, please, pretty please, do not respond to this post with a list of low cost entertainment options that I could "fix" my problem with. And no, we do not have good options with family or friends for child care swapping right now. I am aware that these options exist and we are considering them too, but we want to feel able to enjoy some of the "finer" things in life as well. This is really more about giving myself permission to enjoy than it is about the actual solution. Once I feel it's allowed, coming up with the options should be the fun part!

March Madness Ends

March 26th, 2013 at 01:15 am

Well, probably not the March Madness you're thinking of. But our March madness - the one where all the money came in, that one is finally wrapping up. And we have *mostly* been very, very good.

As you'll recall, hubby got a $5K bonus in Feb, a raise that translates in to $250 extra per paycheck starting mid-March, and a tax return total around $6200. Yeah, it was pretty sweet. But, unlike every other year in prior history, we applied ALL this money towards our debts. The checks came in, and I mailed another out.

And now, that's it. No more extra money. But only ONE credit card left! Wow. And I think we have about an extra $1000 left over from this month's budget that I'll be able to put towards it at month's end. If we keep sticking to the plan, I believe we'll be done with baby step 2 finally come July. Thank. Goodness. Cause we are sooooo sick of this.

Granted, we're not out of the water yet. Before I feel good about where we're at, we're going to need to save up for a "new" family car (preferably BEFORE the old one dies), start contributing enough to hubby's 401K to take full advantage of the employer matching, and save up at least $15K into an emergency fund. I feel like those are the bare minimum financial things I need to feel like a financially respectable adult. Hubby agrees, and until we reach those goals, we are both willing to do some more sacrificing (some of us less reluctantly than others, but we're not naming names here!).

Really though, that's just the bottom line because eventually, when the boys are finally in school I want to go back to school myself and start a second career. And given that we've barely made a dent in my previous student loans, I'd rather not take out more if possible. And we want to pay off our mortgage. And before too terribly much longer hubby will need a newer car too. And it's going to take a lot more than just hubby's 401K to make up for the Absolutely Nothing we have saved for retirement yet.

But, all in good time. The good news is that I think we will actually have reached my bottom line by this time next year, and that will be amazing. Hubby and I do have a few rewards we will be giving ourselves along the way as we reach our intermediate goals. To start with, once the credit cards are finished, our monthly entertainment budget goes up. We get to start having real date nights again! Also, there will be a new refrigerator and a new lap top ASAP, both of which will replace objects that we are just praying will hold out until July right now. But for now, baby step 2 continues...

Making Progress

March 2nd, 2013 at 11:07 pm

I am frustrated that I have not been able to keep up with this blog very well lately due to some other projects I have been working on. I think it is a really good outlet for the stress this financial overhaul creates in our lives sometimes. And I think its a really good tool for keeping us accountable. Should be able to put more time into it again by the end of this month though I think, so I'll have to be content with that for now.

As for where we're at right now, do you see that side bar?! Talk about progress! Yes, the windfall has finally begun. Hubby got his bonus from work, which was about $5K after taxes got done with it. Originally, I had planned on paying off credit cards first with that, but after reading A LOT of material of financial planning recently, I decided a better use would be to pay off the car first, due to its higher interest rate. So, that one is done! And that payoff alone increases our monthly income by $198/month. Yay!

We also got our state return, a little under $500, and with that and some other surplus, I did pay off 1 of our 4 credit cards as well, though that one only increases out bottom line by about $30/month so not as exciting. But still progress! Supposedly, the IRS is going to finally start processing returns for people with mortgage interest credits within the next week. So hopefully, we will get that soon too (assuming no audit as discussed previously:

Text is http://annereesedebtblog.savingadvice.com/2013/02/09/death-and-taxes_100945/ and Link is
http://annereesedebtblog.savingadvice.com/2013/02/09/death-a...). And when we do, I plan to knock off a couple more cards, this raising our bottom line another $180/month. Wow, were we ever wasting a lot of money of this crap.

After that, it will just be the one big one left, which I'm hoping to have taken care of by the end of the summer, maybe sooner depending on how my business goes (summers tend to be slower). And then, we finally get to start the more fun part of personal finance: investing in ourselves.

Certainly we still have a lot of debt to pay off, between my student loans and our mortgage. Actually, even after paying off the the rest of the credit cards, I was disappointed to find that our net worth will still be around -$84K. Ouch. Though it is above the -$100K mark now for the first time in years. But as one financial planner I read stated, we're working really hard just to be worthless right now (ie $0 net worth).

None the less, after receiving some comments about how silly we are to not be taking advantage of the 401K matching hubby's company offers, I did a bit of research and decided in the end that, yes, we are being incredibly stupid not taking this free money and we need to get on that train ASAP, Dave Ramsey be damned. If we were being completely logical rather than emotional about it in fact, we would probably be prioritizing that even above our credit cards given that they have very low promotional interest rates. After much discussion though, we have decided we simply cannot bring ourselves to make this credit card thing go any slower. We feel spread much too thin as it is, and we need to be done with those debts and never use credit that way again. Our emotional sanity depends on it. Especially given how close we are.

If it were going to be something that was a few years away from being accomplished, like our mortgage and student loans, it might make sense to do it with more of a long view in mind. But we are literally within 3-5 months of our goal and our monthly income will increase by another $300 compared to now, once we sunset this. And that will certainly help our long term bottom line as well. That's our thinking at least. But at least we're almost there!

Anyways, very happy to be making some definite progress finally and looking forward to a 3 paycheck March this month as well!