Our Total Money Makeover is in need of a makeover itself. It's been a pretty crazy year for us financially speaking. We started off 2014 with a lot of monthly surplus after having finally paid off all our credit cards in 2013. A surplus we may have gotten a bit too used too because it didn't last for long.

I started back to college (approx $2000/semester), we bought a "new" car (approx $175/month), we got slammed with unexpected medical bills after our identical twin boys' autism diagnosis (approx $8000/yr), and most importantly, we finally started a 401K for retirement (approx $500/month+match). All said and done, we're spread pretty thin these days, but we're still spending discretionary money as if that were not the case.

In fact, although we haven't yet had to carry an interest bearing balance from one month to the next on the card we use for most discretionary purchases (due to the 3% cash back we get), we've certainly come close. And at this point I'd say we're actually carrying about $1500 in credit that just hasn't come due before we could pay it yet. In short, we've jumped back on to that dangerous spiral of spending slightly more than we make each month.

Additionally, Xmas is around the corner, next semester's tuition is due in a month, and we're pretty sure that this is the winter we're finally going to have to buck up and buy a new furnace. It's feeling a little overwhelming at the moment.

It's time to reign it in and accept the financial reality of our current situation. After talking about it, hubby and I have decided that despite having less surplus than before, we should still be aiming to save at least enough per month to replenish our $5000/yr emergency fund (ie about $415/month). Unfortunately, we haven't been doing that these past few months, and after I pay this next tuition bill (my aunt is no longer helping me), the EF will be pretty much empty. We'll restock it when hubby gets his bonus in Feb, but that will be a big chunk of the bonus, and we certainly won't be paying off the car too like we had once planned.

We're going to make paying off that current $1500 credit debt a priority, and we're going to cut our Xmas budget in half too. I'm going to start printing out weekly reports of where we're at in our spending categories so that we can see if we're on track or not. And since we haven't been sticking very well to those limits the past few months, that's going to feel like a big cut at first. We've done it before though, we can do it again.

Hopefully hubby will get a nice raise this March, like he's been promised, and things will get a little less tight, but we can't wait for (or count on) that to fix it. Thankfully, in only two more years I should be done with school and we can finally kick our TMM into high gear again. In the meantime, home prices rising is at least helping our net worth to look less depressing. Still negative, but not nearly so much as in the past. Will be so exciting to get to an even $0 some day!

I was feeling a bit lonely and neglected today, but then hubby brought me home flowers (most unlike him) and it made the whole rest of my day better. Just needed to tell someone that. Things have been so busy lately and I've just been stressed.

Got the final medical insurance refund check today from all the crazy bills we had to pay before the TEFRA coverage for our twin boys' autism disability came through. We're still going to have to plan for fairly high medical expenses. Probably about $5000/yr for the TEFRA and at least another $2K/yr for hubby and I, if not $5K to max it out and be safe. This is in addition to our regular monthly insurance premium mind you. But at least we know everything is covered now, and the payments will be more spread out and manageable. Additionally, the refunds will allow us to payoff the balance transfer we did in Jan of this year in order to max out our HSA.

Tuition for fall semester is paid, though I still have one text book left to buy. My aunt hasn't said anything yet about helping us out again with it like she has the last two times. I'm guessing she will, but I would never ask. Regardless, we had to dip into our emergency fund to cover it which is why it's still looking pretty tepid. If you count our slowly growing 401(k) though it looks a little better!

We had a series of misfortunate plumbing issues this past Aug, almost all of which were related to one of our "darling" boys. All said and done we spent over $700 on repairs. Ugh. It seems like such a paradox to me that at the same time in a child's life that you would prefer to keep the bathroom off limits, you also need to be teaching them independence in potty training. No bueno.

I calculated out that even if we apply my hubby's entire after tax bonus this winter to the car loan we got in May, we will still be $1000 short of paying it off. We probably still will but this bums me out as it means the payments won't be done like I had hoped. What with tuition around every corner though, I just can't see how to do it any faster right now. And with my student loans on deferment right now, we should really take advantage of any "extra" cash to pay that primary down. Will reaccess come Jan though.

Also have been really bummed about the dive our home price is taking again lately. We have a couple new foreclosures in our neighborhood which is probably why, but it still makes my net worth look sad(er). Easy come, easy go.

That's all for now!

Gosh it's been forever since I wrote! Actually, I did write a post a few months back, but it got deleted accidentally and I was too annoyed to retype it (don't know why, but I always have to post a new entry twice for it to work correctly). Going to be more careful this time!

Part of why I haven't written for a while is that, to be honest, we haven't been working very hard on our TMM since April. We started hubby's 401K at the end of March and are adding the full amount each month to get the maximum company max (6% for us, 4.5% for them). It feels great to have started that, and with the matching it is growing nicely. But it is also untappable money that has really lowered how much extra we have to throw at other goals each month, and that has slowed some of our momentum.

The other thing that has taken some wind out of our sales is medical related, which is what the post that got deleted was about. Basically, our identicals twins have been diagnosed with asperger's (ASD) and we suddenly have very high medical costs that were not factored in to our original planning. Long story short, despite our medical insurance, back in April we thought we were going to start needing about twice as much as we had budgeted for medical expenses each year (including 2013, which we were still getting bills for). So, $10K/yr instead of $5K budgeted. And what with the prior year, the current year, and trying to better prepare for the coming year (2015), we were trying to figure out where the hell to come up with $15K all of a sudden.

We started by getting a no monthly interest balance txfr on a CC for one year (though the txfr itself cost 3% that we paid off right away). Our thinking being that while, yes, it is a credit card, we have regular payroll deductions deposited to our HSA that can be used to pay it off over the course of the year. We also started setting aside an additional $315 each month to be more ready for next year. Which still left us short $5K, but we downgraded our expected May car purchase by $10K to help it all work out better eventually.

The good news, come May we found out that due to having a certified "mental disability", the boys qualify for some federal medical disability funding that is going to help us out. I'm still not sure how it's all going to work out eventually, since everything takes a year and a day to get "processed", but my best guess is that it will be better than our worst fears, but worse than before this all started. In the meantime, we are still working on paying off the CC balance txfr and saving for next year, but we're assuming that the money from the gov't will at least cover last year's extra medical expenses (about $5,900).

Unfortunately, this all began to balloon as we were preparing to make the "new" car purchase we've been planning for over a year now (to replace our 1999 family SUV). Had it not been for already promising my daughter the old SUV come this summer, so that she could look for a summer job over her college break, and sign for a new lease for housing next year without having to be limited by bus transportation issues, we may have tried to put that off for another year. Though in the end, it's probably good that we didn't because within a month of our purchase, the SUV came up with another $1800 in repairs it could use (only $600 of which was decided was worth it, and which has been a good lesson in helping our daughter plan for financial emergencies!).

Anyways, another long story short, we love our new car (which is actually 3 years old, but that's the newest car I've ever owned!). It was about $15K total and we had save about $4K prior to purchase. We also dipped into our emergency fund a little to get our monthly payments down to about $175, which felt safe and doable. We're working on restocking our emergency fund (still about $1800 to go) and plan to pay off whatever balance is remaining on the car come Feb 2015 when hubby gets his annual bonus. The car we got is rated as very reliable and is in great running condition (pre-certified even, and with a 7 year warranty), and I feel like it will be great family car for years to come.

So, it's been a pretty financially disorienting few months. Really hard to gain traction when we're still dealing with some medical unknowns. Looking ahead to about $2350 in tuition/books that will be due in a couple months too for my fall term of school. We have enough if we dip into our emergency fund again, (and I certainly don't want to be taking out any more school loans at this point when we still have $100K of them that we've barely make a dent in), but in all likelihood we will have to, at least a little bit. Hoping that by the end of the summer we'll have a better sense of our financial position again so that we can feel more confident about where we're steering.

It's been forever, I know. Not sure what the deal is with all this crazy /// nonsense in my info section since I left either. Anywho...

This Oct marks the beginning of the second year for hubby and I's Total Money Makeover. And how far have we gotten in a year? Well, considerably farther than we pictured ourselves one year ago for sure. We originally thought we'd be nearing the end of our credit card payments about now, and just starting to work on the car loan. The was before we discovered what the power of a budget and willpower can actually do. So instead we finished both by the end of July.

On the other hand...we are considerably less far than we had pictured ourselves being by now last June. Our revised goal was to have the initial $5000 for our emergency fund fully stocked by now, as well as kicking off the retirement 401k we need so badly and also making headway towards the "new" car we need. Instead we are in a much more dangerous no man's land somewhere between Baby Step 2 and Baby Step 3. I don't feel we are derailed from our TMM, but we do need to start getting this show on the road again soon.

So what have we been doing instead of all those June goals? Well, a lot of home stuff actually. Things we put off forever while dealing with our CC debt. We finally got a new toilet for downstairs (which lowered out water bill by $35/month!). We got a few trees cut down that had died and got our gutters cleaned out. We are also getting a large rip in our kitchen linolium repaired as well as some baseboards re-added that we never replaced after our mold damage issue a couple years ago.

We're getting our radon remitigation system installed this week ($1200). And we also had to take care of a couple big car repairs as well as buying hubby a new suit for job interviewing after all the weight he lost. Additionally, we finally replaced a few items that were wearing out. Like hubby's desk chair that was held together by duct tape and the kitchen rug that was coming apart at the seams. And we also spent more than typical on entertainment too, given it was summer and we had more family outings than usual.

Some of that stuff qualifies as emergency fund type things. Some doesn't. But it's all stuff we've been wanting to take care of forever and I'm glad we did it. By the end of this month we should be done with all that and ready to begin on Baby Step 3 for real. Trouble is, the boys are finally in preschool and I am finally going back to school myself to begin a second career. My first tuition/books payment will be due this Dec (just in time for Xmas) and is probably going to be around $2000. Long story short, I don't think we're going to be able to start the 401k until about Jan instead of Sept like we had planned and that sucks.

Regardless, compared to where we saw ourselves a year ago, we are doing much, much better indeed. Hopefully by this time next year we will be finished with Baby Step 4 and be looking ahead to a bright financial future!

Almost at the finish line for TMM baby step 2: debt snowball. Actually, we could have been there on July 19th, but, the laptop hubby has been wanting for so long went on sale for the 4th of July week. We saved $100 by buying it now and pushing the fridge payoff out one more paycheck (Aug 2). Which I think is fine given it's no interest for 3 more months and definitely will be paid off on the 2nd. We chose snail speed shipping though to save on that part, so it will still be another week or so before he gets it, but I'm sure he will be very happy when it finally arrives!

We are starting to look into what the next financial steps are. Dave Ramsey says baby step 3 should be saving a 3-6 month emergency fund (building on the $1000 one from baby step 1). That would be about $18,000 for us and would take quite some time. And in the meantime, we would still not be taking advantage of the 3% 401K matching hubby's company offers (not to mention just plain starting to save for retirement period, even though we're both entering our late 30's.) Additionally, our '99 SUV is probably not going to last much longer and certainly will be an emergency when it dies. And we want our next car purchase to be a slightly used, reliable family vehicle with low miles that we can count on driving for at least 8-10 years.

So, we're thinking of taking a middle of the road approach. I've opened a money market account with Ally bank and transferred our $1000 emergency fund there. As soon as the fridge is done we are going to work on building that up to $5000 as fast as possible. After that, we have some home maintenance issues we have been putting off forever that we need to take care of. Getting all of that accomplished is going to push us well into the end of Oct.

But once we're there, we are going to start putting 6% of hubby's paychecks into the company 401K (the maximum matching amount). And come open enrollment in Nov we are also going to up our HSA/FSA medical contributions to the max for the coming year. That's going to take quite a dent out of our monthly income, but with all the debt we've now paid off (as well as the decrease in taxable income from the 401K/HSA/FSA), we should still be able to raise our entertainment budget from what it has been these past 9 months, and still work towards saving for a new vehicle.

We originally wanted to save for it completely before purchasing, which would have taken about a year, but our daughter really needs a car for the college internship she wants to do next summer. Assuming the SUV is still running then, we'd like to pass it off to her by next May so she can do that. That said, we should be 80% of the way there by May with hubby's bonus, so it shouldn't be too bad to take out a small loan at that point and pay it off in 4-6 months.

At that point, I will be starting school again (just a few classes at a community college to begin with) so there will be some tuition to take care of. But we will also need to start kicking up our savings as well. I'm looking into a Roth IRA for that, and Ally bank seems like a good place to help us with it. Given that you can withdraw contributions without penalty if needed, I feel like this could double with retirement and most of our remaining 3-6 month emergency fund. Short of job loss, I doubt we will ever need more than the $5K we will already have set aside in the money market (which I will keep separate). And $18K seems like too much money to just have sitting in a low interest account, when it will likely never be used, while we make no progress on retirement. Dave Ramsey would not approve, and I'm still looking into the details, but right now that's the plan.

We are so, so close to our credit card debt payoff. Only $1482 more to go! (Not counting the new fridge, as discussed). Our expected payoff date is June 7th but the closer we get, the more things that seem to be creeping up. Our printer has stopped working, and our router is acting up and has to be restarted multiple times a day. We have 3 medical bills that came in at once and only enough money in the HSA for 2 of them (even after setting up payment plans). Our family car's air conditioner seems to need recharging. We have a plumbing issue with the water line to our new fridge. And to top it all off, we just found out our home has moderately high levels (6.2 pCi/L) of radon gas (common in this area) and that we need to install a mitigation system, which is going to run about $1600. We have $1000 in our emergency fund.

Hubby is chomping at the bit for the new lap top he's been promised when our last credit card is taken care of. And it would really help him with the side job he does that has helped pay down this debt faster. I don't think he's going to take no for an answer again if we have to push that last payment off a bit longer. But I really don't want to add anything else to credit. We need to take care of the new fridge still as it is.

I'm trying to decide what we can put off, and what we must do. I never pay bills late, so I think I will have an anxiety attack if I don't take care of the dental bill. Though I am going to call tomorrow and beg for a later due date (sad). As long as we don't start hitting 90's constantly it seems like we should be able to squeak by on the car's air conditioner for another month or so. My 2 year old boys sure looked hot back there today though. They were so flushed I was worried about over heating.

If hubby is going to demand the lap top then maybe he will have to wait on the fridge water line instead. We managed to get water from the sink for the last how many years. Shouldn't kill us to go a little longer. Hopefully we can figure out what's wrong with the printer and as long as the router doesn't completely die, we can deal with restarting it constantly a month or so longer. The radon mitigation system is the one that has me stuck though.

My daughter's bedroom is in the basement where the concentration is the highest. If she hadn't just gotten home for the summer from college then I think we would definitely put this off a few months. But she is home, and she sleeps down there (well, when she's not at her boyfriend's at least.) Long term exposure to radon increases your chances of lung cancer. 3 months isn't really that long of exposure (though this must have been a problem before too). To be honest, her risk of getting colon cancer from not eating any fruits and vegetables is probably higher, but I just don't feel good about it. Whether or not we take care of that right away though will probably be the difference between finishing the debt payoff in June or not.

Need to have a discussion with hubby I think. Hopefully one that entails more problem solving than whining.

Last post

http://annereesedebtblog.savingadvice.com/2013/03/30/save-no..., I was feeling pretty down about the state of our penny pinching lives right now. We've made great progress, but it's been all work, little play for quite a while now. This past couple weeks, I've been "running the numbers" and trying to figure out IF/WHEN and HOW MUCH fun money we might be able to squeeze in, while trying to meet our many financial goals over these next few years.

We're still putting most everything extra on hold until we finish paying off the credit cards in the next couple months or so. But I would like to start going on date night's out once every couple months again despite not being there yet. I'm fine with it just being something like TGIF's and a movie. Right now even McDonald's would be a splurge for us so that sounds great to me! But I want to get an actual baby sitter and not have to cook the meal myself. To watch an actual new release in movie seats rather than a rental on the couch. And to be able to start spending time with hubby before 8pm when the boys are finally in bed and our eyes are already getting droopy. This particular splurge, I am not willing to put off any longer. Even it it adds a little extra time to our goal. I need a life again. And once every two months hardly seems over the top.

The trickier part is what to allow when we do finally finish paying off all this debt. Not throwing hundreds, and even thousands into our credit cards each month will certainly free up some funds! But as discussed http://annereesedebtblog.savingadvice.com/2013/03/25/march-m..., there are a lot of prudent ways those funds could and should be allocated. So we decided to determine which financial goals were our most important ones to meet in the first year after paying off our credit card/car loan debts. And to set aside the money for those things each month first. Here's what we came up with:

1) To replace the ancient fridge that is probably costing us a small fortune to operate and can barely hold a food safe temperature anymore. Also, all of the drawers are broken and every time the cheese drawer is pulled out it smooshes everything below. This was the single hardest item for me not to "splurge" on spending to replace.



2) Replace hubby's ancient desktop computer that needs rebooting at least once a day to even barely run these days. Preferably with a moderately priced and more portable laptop. Hopefully before, rather than after it bites the dust, but it's going to be close.

3) Get that $800 car repair for hubby's car that our mechanic mentioned is going to sneak up on us any day now.

4) Start putting in the maximum employer matching 401K contribution. At least it's pre-tax and won't be quite as big a chunk as it seems, but like it or not, it's the most important thing we can be spending our money on at this point.

5) Increase emergency fund from $1000 to $5000. Still far short of our long term goal, but it should be enough to cover, say, an ancient furnace that we were just glad made it through one more winter. Thankfully hubby's job is very stable right now.

6) Come re-enrollment this fall, up our HSA contributions to max that out too. That will be more than double what we're doing now but not doing so has totally bit us in the butt this year with unforeseen dental expenses (given that dental insurance is pretty much a joke). Long story short, I am going to be without a bottom right tooth for a while, and I would like to get that fixed soon.

7) Save about $12,500 for a "new" car. Again, preferably before the current one dies but that will also be cutting it close. In truth, we are going to rely on hubby's bonus next spring for about half of this. At the fortune 500 company he works for, it's a pretty sure bet. We even know pretty much how much it will be. If we're wrong though, we'd still rather get a small car loan that we paid off ASAP rather than wait any longer for any of these other things.


So those are the goals. There will be no family vacations in the foreseeable future, and we're going to keep date nights out at once every other month for now as well. We also will have not yet started saving for me to go back to school, and that will certainly need to be a priority in the year following. To say nothing of our longer term investing goals.

But thankfully, there is some wiggle room in there. A little cash for lunch with friends. Maybe a shirt from Kohl's and a new book once a month. Perhaps I can finally replace that pitcher I use every day that I'm missing the lid for? And we're definitely starting our Audible subscription again. We're going to have more fun. Ahh, the good life! Let me never take these small luxuries for granted again!

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...

Income:

Hubby's Job (after tax): $5271
Hubby's Hobby Income: $550*
My PT-WFH Job: $670*
Hubby's Bonus (after tax): $5104
(*subject to change, though usually for the better!)

Total Monthly Income: $11598 (umm...holy crap!)

Expenses:

Non-Fixed Expenses:
Groceries: $861
Gasoline: $188
Misc: $500
Entertainment: $250
Gifts: $10 (Valentine's Day Treat!)

Fixed Expenses:
Mortgage/Insurance: $1509
Student Loan: $619
Utilities (water/sewer, gas, electric, etc): $349
Services (phone, computer backup, garbage, cable*, etc.): $285
(*reimbursed through hubby's company)
Leftover Leaf Cleanup Bill: $150*
(*he still has not billed us and I'm not calling again. This is his last chance.)
Auto Insurance: $73
Credit Cards (minimum payments): $299
Auto Loan: $198
Early Childhood Program (spring session fee): $120

Total Expenses: $5525

Difference (to be applied towards credit cards): $6073 (woo hoo!)


Still need to do an accounting for how we did in Jan but I think I'm out of time this morning so it looks like it will have to wait again.

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.

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.

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.

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.

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.