Another Family Debt Blog

I admit we're not doing much with our TMM right now given me being in school. But I still feel the need to post occasionally given how prevalent our long-term financial situation still sits in my mind. And besides, I only have 9 months of school left! My goal is to be working by Feb of next year, and I am pretty sure I will be starting around $59K.

I want to dump as much of that new income as possible into my student loans so that we can finally be done with them once and for all. Even still, I'm guessing that's going to take about 5 years. Because I owe A LOT. Currently $121K and counting. Thankfully, there is a union work program I will qualify for that will pay off about $25K of that over 5 years, starting after 1 year of work. But, that's still $96K and I'm barely keeping up with the interest payments right now.

We could probably get it done in 4 years if we were really strict about it. But then I would lose $10K of the tuition repayment benefit. And we're going to be trying to save for a house down payment for part of that time as well. The boys are in kindergarten right now, and by the time they're in middle school (6th grade), we want to be in a better school district. So that again gives us about 5 years. (2021 should be an interesting year for us!) We have a fair amount of equity in our current home right now, but I don't want any PMI next time and who knows what the market will do by then.

Right now we're kind of treading water financially. I'm not working anymore now that I'm in school fulltime. And we have new before/after school care expenses on top of it. Medical expenses have gone down a little, but tuition/fees have gone way, way up. I managed to avoid taking out more student loans while doing just my pre-reqs part-time, but at this point its costing about $12K/semester and there's just no way around it. Ugh, ugh, ugh.
On the bright side, the amount I paid/borrowed for this career change is equal to or less than the gross amount I will make in just one year of working. And I will have a pension. So I think it will all be financially worth it in the end. And emotionally it's not even a question. A change was necessary.

Hubby got a nice bonus again this year, but not a very nice raise. We had kind of figured that due to the job hopping he did this year (3 different positions within the same company in 1 year). He seems happy now in his new position and hopefully next year will be a little better. But this new position is not as demanding as before, and therefore it is unlikely to come with the large pay increases he was getting for a few years while working his butt off. We'll manage though. Work/life balance is more important to us than higher paychecks.

This year, the bonus money was spend in some fairly unexciting ways. A lot of it just went into our emergency fund, to top it back up after the dips we had been making into it since I quit my job. Hopefully a combination of hubby's pay increase and some further belt tightening will keep that from happening again this year.
We also got a new water softener, which has been sorely needed for over a year now. We set aside some money for summer daycare since it will be double what we're used to paying during the school year. And then with the remaining amount we bought new deck furniture (our last set was about 14 years old and in poor shape) and new beds/dressers for the boys. They were finally getting too big for all their old toddler/preschool stuff. Now they have big boy beds and are no longer sharing an old dresser. All grown up!
Oh wait, and I got a new laptop. My old one was about 5 years old and died. The new one is nothing fancy, but a must for school. But that reminds me, the boys broke our old TV so we got a new one of those too. So I guess we did get a few fun things after all, even if they were mainly replacements. Hubby wanted one that was about 10 inches bigger than our last one, but I think TVs that big are just ridiculous. We compromised on one that was 5 inches bigger and it seems like a good fit for our living room, even though I can't, for the life of me, figure out how to use it. (Gosh that makes me sound old.)

Looking ahead to next year, a "new" car for hubby is on the horizon once I get a job. His car is about 12 years old now and is starting to show it. I know I had posted previously about planning to pay off my current car loan with last year's bonus, but somehow that didn't happen. Probably because of all the medical expenses we had for the boys back then. It's hard to remember now. By this time next year, I think we will still owe about $7K. Which, after taxes, is going to eat up most of hubby's next bonus, but so be it. I don't want to take out another car loan until we have that one paid off.

Someday, somehow, I really, really want to be able to take an awesome family vacation together to someplace like the Grand Canyon or Disney World. Not to mention a romantic vacation with just hubby to someplace like Greece or Machu Picchu too. But it's really hard to picture that being in the cards anytime in the next 5 years. Especially when I start thinking about retirement on top of it. None the less, I need to at least throw that wish out there.

We're both turning 40 this year, and should have at minimum about 2 years worth of income saved at this point. Instead, we have more like a quarter of 1 years income. In 5 years, I think we'll finally be ready to start tackling that head on, but by then we should have 3 years saved! Pretty sure retirement is going to have to be closer to 70 than 65 at this point. Just need to stay healthy so that I can still enjoy it!

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.

I'm usually pretty positive about our TMM, even after 15 tedious months in the trenches. But today, this week, ugh. Maybe it's just too cold and dark for a brighter outlook right now. I am frustrated though that we are clearly not going to make our Jan. 31st goal date for scraping together a $5000 emergency fund. Right now we're about $913 short and the best we can hope for is maybe on Feb. 14th.

This wouldn't be so bad if it weren't for the fact that our original goal for this was late Aug. last year. I've discussed some of the setbacks in other posts. And this month the setback is mostly due to my home business going very slowly this past month. But it's always something, ya know? I feel like we're never going to actually get there. Somehow it's always another month or two out.

Even this would not be so horrible if it wasn't the case that despite my hubby and I entering our late thirties, we still have not a dime saved towards our retirement. I am literally starting to panic. We need to get going on this. But we also need to have at least a few thousand set aside for an emergency first, because heaven knows those certainly seem to keep creeping up on us.

So right now our TMM timeline has shifted thus:

Finish stocking $5K EF: Aug 2013----->Feb 2014
Start 6% 401K withdrawals: Sept 2013----->Feb/Mar 2014
Save for/Pay off "new" car: May 2014----->Feb 2015

As I said: Ugh.

A new reflection though: I saw on FB recently that an old friend of mine I've lost touch with the past few years, is selling her house. She has been dying for a bigger house for years, and her husband had a well paying job. But they also had a lot of debt and not the best of spending habits, and with the housing market crash they felt completely stuck.

About 4 months back, her husband's department was downsized and he was laid off. He had a few months severance though and lots of job interview lined up, so they weren't too concerned at the time. Thus, when I saw her recent FB posting, I at first assumed he had found something even better and that with the housing market upswing they were finally able to afford the new home they have been wanting.

But then I read further. Turns out, they are not buying a new one, just selling the old one. She didn't elaborate more but a quick check on LinkedIn confirmed what I feared; her husband has been out of work since Oct. Now I am purely speculating at this point, but given what I know of their past financial situation, it's not at all hard to draw a line that without a high paying job, the large debts have are going to sink them once the severance pay ends, and they are trying to find a source for more funds.

I say all this not to gossip or point fingers (presumably, you have no idea who I'm even talking about), and I actually feel very bad for her, though not really close enough anymore to question her about such a personal matter. But for me, she is such a stunning reminder of why hubby and I are doing all this.

Our financial situations were close enough at one time that it is easy for me to picture how something very similar could have happened to us, had we not begun to exercise financial restraint. But I admit that it was very hard for me to hear about their fancy trips, and see their pretty new cars and how beautifully decorated the inside of her home was. I wanted those things too. I wanted to look that good as well. But we were pouring all our extra cash into debt and had nothing visual to show for it.

We are still a long way from where we want to be. And without more savings, we are still not even insulated from going through something similar ourselves were hubby to lose his job. But we have no credit card or car debt dragging us down anymore. And we have a very clear picture of our budget and of the steps we need to take to get from A to B. So, even though this is a total drag, and even though I feel like it's taking way longer than it should, reflecting on where we could be instead leaves me still feeling thankful about where we are. Maybe not happy, but thankful.

We've finally finished wading through all the home maintenance projects (including an unexpected $1000 repair on the roof a couple weeks ago) and even set aside $1000 for Christmas. We've reached our family health deductible for the year and are scheduling appts like mad for these next few weeks to take full advantage of paying only 20% rather than 100% for the rest of the year. And we were also incredibly blessed to have my aunt unexpectedly send me a check to cover my first semester of tuition and books for the community college I will be starting at in Jan. And so, with that all finally behind us, it's time to commence on our TMM baby step 3 (beef up emergency fund to cover 3-6 months of expenses).

It has been almost 4 months since we finished baby step 2, so I am relieved to finally be getting back on track again. We made a lot of prudent purchases and repairs, but as the money kept flowing out rather than in, I worried that our financial plan had become derailed. Apparently though, even without CC debt, we do still have some motivation and dedication to this plan after all. And it's time to buckle down again.

My main goal for this coming financial year is to see our next worth begin to rise finally. Although given it is currently -$46K, it might be more accurate to say we want to see our gaping net worth hole begin to be filled in. It's actually much better now that it was a year ago. Partly because of paying off the CC's and car loan. But also in a large part due to home values bouncing back again finally, and we can't really take credit for that. Plus that part could go again as easy as it came.

But I was realizing the other day that we are at an exciting point none that less because from here on out, we will mainly be investing in ourselves. Even the $25K we hope to save for a "new" vehicle over the next year and a half will be savings converted into an asset, rather than simply blown out the window. And yes, yes, I know their will be depreciation, but you get my point. We're finally investing in our own net worth. And that is exciting!

Plus, during the open enrollment period this year we made sure to max out our HSA contribution for next year, as well as bump up the life insurance and disability policies a little bit. And it feels wonderful to know we are getting an adequate financial safety net into place. Almost like we're becoming real adults finally!

From this point on though, we're going to be breaking a bit from strict compliance to the TMM plan. For instance, we're going to start baby step 4 (retirement savings) as soon as we get $5000 towards baby step 3. Which should be by the end of Jan if we practice restraint over Xmas. We are way too old to be putting it off any longer and we're going to be doing baby step 3 for quite some time. We want our final emergency fund to be around $20K, but we need to buy a car along the way, so almost as soon as we get it we're going to empty it out and start again.

I consider this an EF worthy purchase though because, as discussed previously, our current family vehicle is a 1999 and has over 225K miles. It's just not going to be around much longer, and when it does finally die, it will certainly be an emergency. After doing a lot of research we decided that the most financially wise options were to either buy a cheap 7-8 year old car in decent condition and plan to cover fairly regular repairs until we can afford an upgrade. Or to buy a reliable low mileage 1-2 year old vehicle that shouldn't need much work for a few years, and which would be just as affordable as long as we keep driving it at least 10 years. And given how very tired we are of highly used vehicles at this point, we have decided to go for the 2nd option.

We're going to save as much as we can for it until May and then get a loan for the remainder. We want to give the old one to our daughter when she comes home from college for the summer so that she will have her own vehicle to get to and from her summer job. And then we're going to pay off the car loan as fast as possible, though right now it's looking like Feb 2015 before we get there.

So that's the plan right now. Hubby is in the process of applying for new jobs that pays more though, and if one of them pans out, maybe we can even do this without a car loan. Hoping for the best!

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.

The end of this month has been a bit of a let down in terms of the last leg of our debt payoff plan. We did make a $592 payment at the beginning of the month towards our last old credit card. But between the plumbing issues and car issues we had mid-month, there isn't anything left to do more. We just barely succeeded in not having to tap the emergency fund for the repairs, and now we're wiped. But even that is a success compared to our old way of life.

Still though, I think we will be able to send in another big chunk towards the fridge on the 5th of July. And our new estimated final payoff day is Aug 2. And then hubby can finally get that laptop he's been pining over for so long.

Another bit of good news; we canceled 3 old credit cards this month and are about to close another as well. We applied for one new one with our warehouse discount store so that we can get the cash back on our purchases there. And we are keeping one other one to make sure we have enough available credit to keep our credit score rating up should something befall us before our souped up emergency fund is fully formed. But the plan from this point out is to pay them off at the end of each billing cycle and never carry a balance.

Now to just keep on trucking...

Just a quick note to say: We Paid Off Our LAST Credit Card last week!! We reached our goal a full 7 months early! I am so happy to be done!!

Of course, now that the old debt is done, it is time to acknowledge the new debt for the fridge we purchased on store credit. It has no interest for 6 months and we plan to be done in half that time. I have updated my debt stats accordingly. This debt milestone would feel a lot more exciting though if we didn't now have this to take care of that debt too. But at least it's debt for only one physical object that we use literally every day, rather than for a whole bunch of things transferred from card to card for so long that we had no idea what it was we were even paying for anymore. It is also nice to look at my wedding ring now and know that it is completely paid for.

We may or may not make much headway on the fridge debt this month. Depends how my home business goes this month; this tends to be a slow time of year. Our car was in need of a $675 repair this week and we have a plumbing issue too now that is probably going to be at least $300. But guess what? For the first time, we don't have to tap into our emergency fund to pay for that. The mechanic told us the amount and we just sighed and said, well, at least we know we've got it. That is a very nice feeling.

Really looking forward to the end of the summer when we will have taken care of the back log of expenses we put off forever while doing our debt payoff. Because that's when the real fun begins. The accumulation phase that will (finally!) prepare us for our future.

Many of you have pointed out to me that my hubby seems to be a reluctant partner in this Total Money Makeover of ours. To which I could not agree more. And it's certainly not as if that's something he and I haven't discussed. But its been a difficult topic for him. He feels like he works and works and works and yet has nothing to show for it (there's some truth to that right now). And generally speaking, since he lets me decide how to spend most of the money even though he makes most of the money, I try not to be too hard on him.

I did get annoyed enough the other night to bring it up again though. I was trying to have just a strategic, non-emotional discussion about what we should prioritize first once we finish paying off the last* credit card next month (*please ignore the fridge for now. I need that to be separate so I can be done, or I will implode.) But it once again turned in to a whine fest.

I managed to mostly keep my cool and said that while this certainly is hard, and there certainly is reason to whine about it occasionally, that shouldn't have to be the case every time money is discussed. That it made me feel like I was making him do this even though he has agreed many times that he feels it is what's best for us as well. That in order to feel like partners in it, I needed to just be able to talk strategy with him sometimes so that we could figure out how to best prioritize things together. I didn't say it all quite that nicely, but I did my best.

He didn't take it all that well at the time (it had been a long day and perhaps was not the best time to bring it up in retrospect). But later that night he did seem to come around some. And since then he has actually been much better. He even offered to put off getting the new laptop he so wants until the fridge payoff is done. We talked about how we might generate a report for him to look over after each paycheck so that he has a better understanding of how the numbers are moving (we're nerds like that). I told him that I was actually frustrated about it all the time too, and that if I didn't have my spreadsheet to look over and fiddle with almost daily I would probably be a wreck. Simple tasks like changing box shading from yellow to green to show it's completed do wonders for keeping me sane.

So, hopefully that was the talk that will finally change things. And we are so, so close. One more paycheck (don't talk to me about the fridge yet). It's really hard to not fixate on it. To a level of being unhealthy probably, but it's just been soooo long and part of me just can't believe that we're really about to frickin' do this. I keep checking and re-checking because it seems surreal. As if any moment a large, unforeseen expense will rise up and swallow us whole. But so far, the spreadsheet says we're on track. It says we're okay. Just one more paycheck...

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.

One more month of operation wipe out credit card/car debt completed. And as long and tedious as it has been, we are in the final stretch now. Only $3341 left. In fact, we have an estimated payoff date of June 7th! Just gotta keep putting one foot in front of the other for a little longer...

Actually, I have a confession. Two days ago, we bought a fridge. With a store credit card. So, to be completely honest about it, out debt total is actually at $5279.08 now. I know, I know, we maybe shouldn't have. We're so close. But- we were absolutely going to do this as soon as possible after we finished in June, and -the store had a sale on them this month that saved us $200, and- there's no interest for 6 months and we should have it paid off 3-4 months from now. And also- we were sick to death of that stupid drawer always falling down and pulverizing our fruit! And just to throw in one more good excuse, it was so ancient that I'm certain our energy bill will go down by a noticeable amount once the new eco-friendly one arrives. And it's bigger. It might actually fit all our stuff!

This doesn't actually change our payment plan at all really because given there's no interest, we're still going to put all our focus into the last credit card first and then start paying for the new lap top and fridge we need. We'll finish paying it off in the same time we would have saved for it, but this way I get the new fridge while we're doing it. At this point, I trust myself to deal with this new debt ASAP, so I am not too worried about it. I don't plan on paying interest to credit card companies EVER again.

So, one more month down. And I keep wondering, what will it feel like when the last debt is paid? If we were planning on adding all the extra money we'll have to our regular spending, I'd probably assume it'd feel pretty awesome. Instead we're mostly going to be doing much more practical things with it, like starting a 401k, increasing contributions to our HSA and saving for a new family car. So in terms of spending, it won't feel that much different. But I would assume there will be a mental shift of some sort? A different feeling when you know you are finally creating a hill rather than digging out of a hole? I don't know for sure. I guess we'll see when we get there. I sure hope it feels different! Would love to hear how it was for others when they reached this turning point.

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!

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

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

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

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

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

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

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

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

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

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

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

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...

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

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

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

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

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

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

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

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

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

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.

I had this entry all written last week, but the blog site was acting funny that day, and when I submitted it, it just went off into the oblivion somewhere. Was too annoyed to retype something right away, but I am trying really hard to get caught up today.

So anyways, apparently our $8000 some dollar tax return was a bit too good to be true after all. You see, that tax form our DD said was from her school, the one we thought we already had, was really from her 529K that we just opened this year. Entering that form changed the picture a bit because apparently, you do not qualify for education tax credits if you pay for education expenses using a 529K. Huh? What the heck is the point then? Well okay, I get that they are tax deferred and gain interest if you start when they're young. Ours was more of a savings account tool that would penalize withdrawing funds for non-education expenses. A disincentive we felt our spend thrifty daughter needed. (To be fair, she's done quite well with it.) None the less, our tax return will be at least $2000 less than we had thought due to losing the credit. And I have to amend.

Really, it hardly matters because due to our mortgage interest credit and congress's ineptitude, our pending tax return will be delayed until lord only knows when anyways. I just hope they don't realize our mistake and allow me to fix it instead of holding the fund until I do (or auditing us!) because who knows how much longer that will take then. Had originally thought that check would be coming late this month but now we're thinking more like April. Boo!

Eventually I need to figure out how to adjust our with holdings so that our returns aren't so big. Our tax situation has changed so much over the past 4 years though that its hard to sort it all out. Buying a home, starting a small business, getting married, changing jobs, promotions, having twins, sending a child to college (while still paying on my own student loans). Turbo tax informs me that due to all these things, our effective tax rate is only 4.4% right now. So our checkbook may have taken quite a hit from all that, but we're beating Warren Buffet's tax rate, so we must be good! Probably makes us part of Romney's 47% though.

The day we have been waiting for all year is finally here! Many of you pointed out previously that in the future we should probably not count so many of our eggs before they hatch so to speak. And yes, I know what you mean. I tend to always be about 5 years ahead of myself. That works well for some things in life, though not for others. This one was particularly hard because we *thought* this promotion was going to happen last year. His boss had suggested as much. Then we came to find that the company likes to get new managers feet wet for a year by giving them most of the new duties they will have, without the pay increase until the following year, after they see how it goes.

I get the logic that they don't want to end up promoting people who aren't going to be a good fit for management. But man that was an annoying year. We had thought it was already in the bag. And Hubby worked his butt off and understandably felt uncompensated for it. But no more! He broke the six figure income ceiling in fact! Well, more like scuffed it: he's getting exactly $100K now. But he also got a sweet $8000 bonus, though that'll be about $5100 once taxes get pulled out. Additionally, he gets an office and a garage parking spot. And he will now be eligible for even larger bonuses going forward. Possibly as much as 15% if he keeps "exceeding expectations".

But okay, okay, let's not go there yet. Let's let next years chickens come next year. How 'bout them eggs this year though! We should be getting the bonus check next week. And once we do, CC#1 and #2 that you see on the side bar there should finally be gone! And just in time too, one of our balance txfr promotions is about to expire.

It may seem like a simple thing to send in a big check like this to a credit card that needs paying, but for us, this in and of itself is a debt victory. We were never disciplined enough to make that much headway before. We *might* have ended up paying off the smaller of the two. But we certainly wouldn't have knocked out that second one also (with some spare to throw at the third as well). So this is a big money management win for us.

Additionally, we should start seeing about $250 more each paycheck after taxes, and that will certainly help as well. Credit Card Free 2013, here we come!

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

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

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

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

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

End of month accounting to follow soon.

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

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

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

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

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

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

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

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

Its been a good day.

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

Income:

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

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

Expenses:

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

Also, our water bill was higher than expected:

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

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

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

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

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

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

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

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

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

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

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

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

Income:

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

Total Monthly Income: $6769

Expenses:

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

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

Total Expenses: $6657

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

Here's to staying on track!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Hope everyone is having a wonderful holiday!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Last old entry!)

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

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

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

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

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

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

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