For the most part, I like Dave Ramsey's TMM plan. We're working hard on baby step 2 (debt snowball for non-house/student loan debts) and are hoping to be on to baby step 3 (beef up the $1000 emergency fund from baby step 1) before the end of the year. This is our 4th month on this plan. Unfortunately, I feel like our accumulated debt snowball at this point could still easily fit in the palm of one hand. And just last month we had to regress to baby step 1 for a bit while we took care of some car/business income troubles we had.

And now this month yet again, one of our cars is going to keep us from being able to get traction on our debt snowball yet again. This is the 3rd month out of the last 4 that we have had car expenses over $800, and is already easily more than we paid the entire year before. WTF? We were long overdue though for 4 new tires that we were hoping to put off until next month's tax return came in. An unexpected flat (and consequent tow) made that happen this month instead though and altogether we are out another $850. The only good thing I can say about this is that we managed to trim enough excess off our spending this month that we did not have to tap in to the emergency fund to pay for that again. But I'm not sure how much extra there will be now to apply to our credit cards once again.

So we will probably continue to pay only slightly above the minimums on all our cards for yet another month. Luckily they are all on no interest promotional periods right now, but those will gradually expire this year and balance transfers cost 3-4% of the balance. In truth, it is not as bad as all that because we do have our big tax return and hubby's bonus coming our way soon, and once we get those we should be about 2/3 of the way done already. But I guess I feel like that's cheating.

I wanted this debt snowball to get started through our own budgeting successes and not just a once a year cash windfall. And I suppose one could argue that that's still true here. In a parallel life, one where we did not start our Total Money Makeover, I am certain hubby and I's straits would be much more dire right now. We would have spent a lot more money than we should have on other things and we would have ended up adding more to credit cards when the emergencies came in. We would have planned to throw and little at the credit cards with our tax return/bonus, but also prioritized a new fridge and laptop above our debt payoffs. We would have had a lot more fun going on monthly date night like we used to, but we'd also be a lot more in debt and certainly no closer to our long term financial goals.

At least that's what I like to tell myself. And its probably true. But who knows what my old self would have done for sure. I'm not a complete idiot, just a little desirous of short term rewards at the expense of long term gains. And I was a little fuzzy on the overall game plan long term. But still, on weeks like this, I wish there were a way to see my bank accounts in that parallel life next to this one, so I could know that we truly are making progress.

End of month accounting to follow soon.

Hubby has seemed down the past couple weeks. Just always tired and distant and with a shorter fuse than normal. Money things especially seemed to set him off, and it got me thinking...maybe he feels I'm pushing him too hard with this Money Makeover thing I've roped us into? Maybe he thinks that money is all I care about?

So last night I asked him whether something was wrong. And I got the usual answer about work being hard right now, but he also slipped in a single sentence about being worried he wouldn't get the promotion he should have coming next month. The one we've been looking forward to and planning for all year. The one I have financial forecast spreadsheets already built around. And I thought, hmmm, I haven't heard him say that before. Could this fear be behind the mood of late?

So I probed a bit further. And here's where I'll have to back up a bit and give you some detail on his work situation. Hubby works for a large fortune 500 company that has a policy of testing out new managers by generally giving them a small team to work with for a year and then officially promoting them (ie pay grade level raise) and expanding their team the following year if all goes well. Hubby started out last March with a team of 3 underneath him. One who turned out to be a rock star, one who's your average joe schmo, and one who is the devil incarnate.

His boss told him he was getting a lemon who was transferred to them because she had issues with her last manager already (and the one before that, and...) but he wanted him to see what he could do with her. He had no idea what was really in store. I can't even begin to go in to everything this woman did, it would just go on forever. All I will say is that she knew how to work the system of a large company, knew how to complicate things further with unverifiable health issues, and had the entire human resource department involved in her case besides themselves with dread. For hubby, this meant headache after headache as he jumped through all the hoops and appeals of the employee corrective action process, the end result being that something/someone which should have been maybe 10% the focus of his job became more like 60%. She was going to be out of his hair soon (more on that in a bit) but the months prior had taken their toll.

So hubby was concerned about his promotion status. He knew he had accomplished less in other areas than he would have without that situation. He knew his direct supervisor felt he was doing very well given the situation, but he didn't know who all needed to approve the promotion and he didn't know what criteria they would be using to evaluate that decision. And he knew how much I had been looking forward to that money. About my spreadsheets. About my assumptions. And he silently worried. Poor hubby.

It has been a long, tight few months for our budget since back child support ended in Dec, my home business floundered all Summer/Fall, the car broke down big time, and Xmas arrived. And that was all just after we had started getting our feet wet with this debt reduction stuff to begin with! It helped a lot during that time that hubby's hobby was steadily earning him some initially unexpected income as well. I kind of made it clear to him though that for Dec and Jan at least, as great as it was that he was getting paid for something he loved, we really needed the money as well. Although it had started out that way, it wasn't really optional anymore - at least not for those two months. He didn't like the fun that took out of it for him, though he understood the constraints we were under and he did what he needed to do to make that happen. With everything going on at work as well though, I think it was all just too much for him.

So, I've done my best to back off set his heart at ease. I reassured him that now that my business has picked up again, we don't need that money anymore, and if he stopped making another penny of it, it would only set us back two months in our debt plan. I also told him that whether or not his company is able to recognize his efforts this year, given the ridiculous situation he was put in, I know he did an amazing job with what he had to work with and in one more year without her in the picture, he was going to knock their socks off. And I truly believe this. My hubby is a very capable and competent man that is really good at what he does. It was just a crappy situation.

I think he felt some relief from that. I think he was happy to know I did care about more than just the money, though I think I need to work even harder in the future to make sure he knows that. It's just so much a focus of mine right now as we work through all this debt. I think he felt down right elated this morning though when he came in to find her letter or resignation in his inbox. Truthfully, she was finally on a final warning and it was really only a matter of time one way or another, but that was probably the best outcome possible. Additionally, his boss mentioned at a team meeting later that day that all requests for promotions have been initially approved - and he knows he's one of them.

Its been a good day.

So here's where we're at with our Jan budget so far:

Income:

Hubby's Job (after tax): $5271 / $5271
Hubby's Hobby Income: $492 / $592 (revised up from $520)
My PT-WFH Job: $265 / $617 (revised up from $385)
Last Month's Extra (held for EF): $593 / $593

Total Monthly Income: $7073 (revised up from $6769)

Expenses:

Non-Fixed Expenses
Groceries: $609 / $861
Gasoline: $249 / $230 (over budget)
Misc: $261 / $700
Entertainment: $163 / $250
Gifts: $52 / $50 (close enough!)
Emergency Fund: $990 / $990

Also, our water bill was higher than expected:

Fixed Expenses:
City Utilities (water/sewer,etc): $97.90 / $81.90

Most of the other utility/service bills will come in the second half of the month. At this point I am projecting a difference in income vs expenses of at least:

Difference (to be applied towards credit cards): $225

So far within budget on the new grocery budget! Though just barely. I have two trips left this month and to not go over, they both need to be $125 or under. Luckily that is about how much I'm expecting them to be so hopefully that will work.

I think I need to start making a list of recipes that are healthy and cheap. Food is kind of a splurge for us, not because we buy lots of snacks, but because we buy lots of fresh produce and fish and extra lean meats and whole grain items that just seem to cost a little more. Plus, I do a lot of cooking. Eating a highly nutritious, diverse and balanced diet is very important to me and my long term health goals. Which is one of the reasons this budget area has been so hard for me. You can't just not get more food when you see your funds are running low like you can for other budget categories.

But I think a list of low cost recipes would be an easy way to reduce costs when I see that I'm starting to get too close for comfort to my budget limit. In the long run, maybe I'll even get enough of these low cost recipes that I love that I can move my budget down to the low cost level! (

http://www.cnpp.usda.gov/Publications/FoodPlans/2012/CostofF...

The miscellaneous category is still doing great as well. I think what I have it at is probably too high right now but I'm still figuring it out. Some of that category used to be lumped in with food, and Xmas made a mess of things too. We just haven't been doing this long enough yet to know what's reasonable there. Also, my feet are starting to hurt when I run which I think is due to the fact that my running shoes are well past the point of needing replacement. That's probably going to cost at least $80 for a decent pair and I need to do it before I end up injuring myself. And then there's the meat thermometer I caught on fire in the broiler this week. Don't ask. But it needs replacing as well.

Gas was higher because I did end up having to take my daughter back to college at the end of her break, and because we let her use our vehicle for driving to work while she was here. I think I have a pretty good idea of what that budget should be now, so next month I will adjust for that.

And finally the utility bill...apparently we have a toilet that is running water constantly. (At least I've been tracking closely enough to realize something was wrong!) After almost getting completely ripped off by one plumber earlier this week, (he was going to charge me quite a bit more than an entire new toilet would cost!), I have another much more reasonable person coming today to fix it. Hopefully that won't cut in to our bottom line too much because other than our emergency fund, we don't have a budget for home repairs yet.

We are less than a month away now from finding out what hubby's raise/bonus will be, as well as finalizing our taxes for our big expected return. I am on pins and needles, with spreadsheets just waiting for that data to come in! Sad, huh? Also, as you can see, my home business has finally picked up again! I think my slump is finally over and hopefully we can count on more steady cash flow for the next few months.

Here's this month's fully allocated spending plan:

Income:

Hubby's Job (after tax): $5271
Hubby's Hobby Income: $520*
My PT-WFH Job: $385*
Last Month's Extra (held for EF): $593
(*subject to change, though usually for the better!)

Total Monthly Income: $6769

Expenses:

Non-Fixed Expenses (i.e. the things we can control the most from month to month):
Groceries: $861 (striving for the USDA's moderate spending plan this month!)
Gasoline: $230
Misc: $700
Entertainment: $250
Gifts: $50
Emergency Fund*: $990
(*only this month since we need to restock it)

Fixed Expenses:
Mortgage/Insurance: $1509
Student Loan: $619
Utilities (water/sewer, gas, electric, etc): $342
Services (phone, computer backup, cable*, etc.: $386
(*reimbursed through hubby's company)
Leftover Leaf Cleanup Bill: $150
Auto Insurance: $73
Credit Cards (minimum payments): $299
Auto Loan: $198

Total Expenses: $6657

Difference (to be applied towards credit cards): $112

Here's to staying on track!

This is it! The year we're going to conquer our credit card and car loan debt. Time to layout the plan so I can hold myself to it!

We are still only 3 months in to our Total Money Makeover. So far, getting our debt "snowball" rolling has been really slow going due to a number of unfortunate factors. Child support back-pay ended last month, and as glad as I am to finally be done with my ex-husband, it left a new $500 hole in our budget. We knew this was coming though, and could have handled it alone, but unfortunately, it overlapped with a slow quarter for me in my home business. I have been making only about 1/3 of my usual profits for this time of year. And then to make matters worse, just a month before Xmas my normally biggest contract of the year cancelled on me due to going out of business. That left us short another $1600, and was pretty much our Xmas "budget" out the window. The same week our newer car need a $1000 repair. Needless to say, its been rough.

The amazing part of all this though, (as I tried to explain to hubby tonight when he got all forlorn about how little actual credit card progress we've made so far), is that we have not dug ourselves in any deeper for once! Had we not started a budget and drastically reduced our spending in recent months, these problems would have crept up on as as they always did. With us already overspent and not knowing where we were going to come up with these extra funds. I would not have been at all surprised if we ended up putting at least $1000 or so on a credit card, even after wiping our emergency fund out. Nor would we have had any plan to restock the emergency fund before our tax return came in late Feb. But that's not how we're doing things these days.

Today, I can honestly say that we have not used a credit card in over a year, even for emergencies. That's a first. And that as of this Monday, despite Xmas being barely over, our emergency fund will be restocked with $1000. And that even after all that, if we stick to our budget, we may still have about $50 extra to put towards credit cards in Jan. That may not be much, but it's a heck of a lot better than where we would have been before all this.

But then Feb is where the real fun begins. The month we finally start getting some momentum on this debt snowball. Because due to circumstances previously discussed, we will be getting a huge tax return. Probably around $8000. And then come March hubby should be getting his annual bonus, which will probably be around $4500. And then in Apr., hubby's new promotion raise will kick in and he should start bringing home about $500 more a month (which BTW, cancels out that child support that ended. Sweet.).

In the past, we would have initially *said* we were going to put a large amount of this extra towards our credit cards. But as it got closer, our wish list would have grown and grown. We may have ended up throwing $1500 towards it, but the rest would have gotten set aside for "in case" or spent this way or that. Our goal this year though, is to send no less than $13,000 to our credit cards for the months of Feb & March combined. Hold me to this!

By the end of all this fortune we should have wiped out three of our four credit cards and will already be about 2/3 of the way to our 2013 debt goal. From that point on it will be more slow and steady progress. If we stick to it though, that last credit card should be gone by the end of June, and our car loan will follow at the end of Sept. And that will be it! Almost one year after we started to the date. And then on to baby step 3 we'll go!

If we stick to this plan, about 28% of our take home pay over the course of a year will go towards our credit card and car loan debts. Compare that with the only 7% progress we were making before. (And we were wondering why we were never getting anywhere?) A four fold increase. Not too shabby for only 3 months of restructuring. And who knows what else we'll come up with by then?

All of this, of course, is subject to change. I'll feel a lot more confident once the tax return, bonus and raise are in hand. Until then, they are only projections, not realities. (At least the fiscal cliff is done!) Also, who knows what else will happen with cars and appliances and goodness knows what else in the months ahead. I have estimated my business income a little on the low side to help offset this, but it being on the low side has been a reality for me as well lately, though one that is starting to improve. If necessary, we still have a 3 month buffer to make it to the end of 2013 credit card/car loan debt free!

All said and done, we have a plan, and now its time to get to it.