Update Thursday: 2nd Week of July

We made up some ground this week.  Not much, and after all the money that has been spent (to date) on the pregnancy, I’m really not surprised…  (Kids cost a bundle, and he’s not even here yet!)

Start of the Month:	$3,932
Start of the Week:	3,945
Now:	3,914
Total Paid Off This Week:	31
Total Paid Off:	18
Goal:	80
Left to Pay Off for Goal:	62

 

If we can keep up the pace of $30+ a week this month, we’ll make our goal.  It is beginning to look more and more that I’ll need to get something going in the evenings, though.  The recession added to my debt isn’t helping anything.

Update Thursday: 1st Week of July

Well, nothing like starting the month in the hole!  I didn’t get a chance for a payment to hit, and one of the credit cards charged interest yesterday, so we start with a $13 hit to our goal.  Here’s the numbers:

Start of the Month:	$3,932
Start of the Week:	3,932
Now:	3,945
Total Paid Off This Week:	-13
Total Paid Off:	-13
Goal:	80
Left to Pay Off for Goal:	93

 

At least we are pretty well caught up everywhere else.  Medical could use some help, since I wasn’t anticipating a $55 bill for asthma medication this month, and we’ve apparently been spending more on gas lately, but everything else is just about even.  If we can get a little better handle on our grocery budget, we should be fine.  Hopefully by next week, we’ll have made decent positive progress against our goal, too.

July Goals

Well, we made our goal for June, even if only just barely.  This month will more than likely see the birth of our son, so I’m going extremely conservative on our debt reduction, and we’ll see what happens from there.

We had a few setbacks last month – nothing too major, and nothing impossible, but I’d still like to get a month in like the latter part of last year.  Chances are good that I’m going to be looking for second job again here pretty quick.

In the meantime, I’m setting a relatively low goal, just to be sure that we catch up on things this month.

So, my goal for July is $80 against the credit cards.  I’d really like to do at least that much, even on slow months.  Of course, this really means more than $80, because of the interest that gets put on the cards every month.

Update Thursday: 4th Week of June

Yech.  What a week.  I’ve started the “Couch-to-5k” program, and was on week 2 when one of my knees started acting up.  After talking with a few people, it was decided that it was my 12+ year old tennis shoes that were causing the problem.  Correcting for my foot cost me nearly $110, but hopefully this will allow me to continue on the program.  So that set me back a bit on catching up this week.  Still, we made our goal for debt reduction, so it wasn’t all bad…

Start of the Month:	$4,049
Start of the Week:	3,988
Now:	3,932
Total Paid Off This Week:	56
Total Paid Off:	117
Goal:	117
Left to Pay Off for Goal:	-0-

 

Now if we can just get caught up on bills.  I think I am about ready to invest in a timer for the sprinkler.  Two nights since we’ve moved in, I’ve forgotten about the sprinkler in the front yard.  I’m sure our water bill will be through the roof this month.

Update Thursday: 3rd Week of June

Well, this week saw my savings account getting zapped for service charges (due, I believe, for the balance dropping below $100).  As a result, although there was still forward progress made, it still wasn’t as much as I’d hoped.

Initially, our balance in our checking account dropped below $1,000 for the first time since fall of last year.  Coupled with the fact that we have no emergency fund in place makes things a bit sticky.  However, even with the transfer, we also had some extra income, and it allowed us to get current in all but two categories.  I anticipate getting caught up in those by week 1 of July.

Also, my current plan is to see about getting some passive streams of income going.  I’m not exactly sure what I’m going to do just yet, but I do know that I’m not happy with the amount of progress being made – I’d like to have an extra $1,000/month to throw against debt, and be done with it in the next 2-3 years.

Start of the Month:	$4,049
Start of the Week:	4,017
Now:	3,988
Total Paid Off This Week:	29
Total Paid Off:	61
Goal:	117
Left to Pay Off for Goal:	56

 

The economy being what it is, I’m grateful I’ve got a job and that the numbers continue to decrease, though.

 

Update Thursday: 2nd Week of June

Somehow, in the midst of everything, I forgot that we were taking an overnight trip out of town for my wife’s sister’s wedding.  So there was a lot of eating out, and a hotel stay thrown into our plans.  Needless to say, this was another pretty pathetic week.  All in all, though, I’m not displeased.  We still paid for the weekend and paid down our debt.  In addition, we made some good progress towards improving our checking account, so we are only down in 4 categories now, instead of 6.  I’m hoping to make some good progress against the debt this next week, and hopefully put two of the categories back in the black.  Then, in the final week of June, I want to get the final two categories back, and finish off the debt reduction goal.

Start of the Month:	$4,049
Start of the Week:	4,034
Now:	4,017
Total Paid Off This Week:	17
Total Paid Off:	32
Goal:	117
Left to Pay Off for Goal:	85

 

Update Thursday: 1st Week of June

Well, the interest charges hit the credit card this week, so over $25 of our reduction went to pay those back down.  yech.  Spending money every month in interest is definitely no fun.  But at least that card’s interest charges are out of the way for the month, and the rest of the debt reduction will be to actually reduce debt, instead of just cover the expenses.

Start of the Month:	$4,049
Start of the Week:	4,049
Now:	4,034
Total Paid Off This Week:	15
Total Paid Off:	15
Goal:	117
Left to Pay Off for Goal:	102

 

Hopefully, next week, we’ll have less than $4,000 in CC debt.

June Goals

With only 1 more month until the arrival of the baby, we’ve got to buckle down and really get things straightened out.

I think that part of our problem last month was that we made good progress at the beginning of the month and then burned out once the unexpected popped up at the end of the month.  After the unexpected hit us, we completely fell apart, abandoning budget, debt snowballing, and reason in order to get what we wanted when we wanted it.  The thing to do now is remember the experience, learn from it, and go on.

I read a blog post recently from Alan Schram over at Saving for Serenity (great blog – if you don’t subscribe, you should) explaining his personal goals on how much to spend repaying debt.  He makes several good points, but the part of the post that really caught my attention was when he said:

Saving For Serenity is about achieving a financial life free from stress or strain. Obviously, having no debt would be a significant stress release! However, I am not willing to sacrifice quality of life to become obsessed with debt repayment.

I think the point is valid, at least for us.  The whole point of reducing my debt was to be able to not think about money every second of every day and how it was dragging me down.  I think in my push to get out of debt the past two years (since we have paid off more than $46,000), I lost the purpose of getting out of debt.  Since we have been so “gazelle-intense”, we have paid down debt at an enormous rate, averaging over $50/day for 880 days, including holidays and weekends.  But that intensity is beginning to burn us out, since we have only progressed 3/5ths of the way through our debt.  Because of this, my goal for June is going to be a bit different.

Due to the last week, I’ve now got the balance of my credit cards spread across three different cards.  So, a total of five consumer debt vehicles.  I am going to aim to put $550 against the five, which, although it horribly reduces the amount I’m paying against the cards, it will allow some overflow to 1) rebuild my emergency fund from “breaking the glass” to cover most of the screw-up of last month (thanks, Jim), and 2) allow some “flex” to the rest of our budget so that we, hopefully, don’t have a repeat.

I am going to see an allergist on Tuesday, and don’t really have the money set aside for that, either, but hopefully there will be enough flex that we can pay for whatever the insurance doesn’t get.

The payment on the car and the student loans equal $433, so our goal against the credit cards is only $117.  However, there are a few holes in our budget that we will plug up this month, and hopefully make some progress to restoring our emergency fund as well.

Update Thursday: 4th Week of May

Not a good week at all.  We ended up spending way over and above what we actually paid off.  Fortunately, now we won’t have to buy tires for the car for a while, but it is frustrating when I don’t see any progress, or even backpedal.  My wife’s birthday was this week, too, so we ended up going to a nice place (not as expensive as last year’s anniversary dinner, but still pricey), and I got her a good, compact camera.  I got a great deal on the camera, but it wasn’t in the budget.  Unfortunately, neither were tires, and so this week undid all the progress we’ve made this month.  Unless I dip into the emergency fund to pay for the tires.  So frustrating.

Start of the Month:	$4,280
Start of the Week:	4,012
Now:	4,573
Total Paid Off This Week:	-561
Total Paid Off:	-293
Goal:	428
Left to Pay Off for Goal:	721

 

That just burns me up.

Update Thursday: 3rd Week of May

Well, this week went better, but still not good enough to reach the goals.  To further complicate issues, vehicular malfunctions created a mess.

Start of the Month:	$4,280
Start of the Week:	4,096
Now:	4,012
Total Paid Off This Week:	84
Total Paid Off:	268
Goal:	428
Left to Pay Off for Goal:	160

I thought I was going to have some extra money through selling a ticket that I wasn’t going to use…  Sold it for $40, got back to the truck, and it wouldn’t start.  Fortunately, my insurance covered the towing, but it was well after midnight before we got to bed.  The next morning, the dealership ran diagnostics and discovered it was a short in the battery.  They sold me an 8-year battery – diagnostics and battery cost me $135 with a $20 mail-in rebate.  Our Fusion was in the shop as well for an air conditioning problem, but they called and told us that there was very little tread left on our tires, so those needed replacing as well.  After the service and tires, the total soared to nearly $600, so we’ve overspent our budget by about $700, and only gotten an extra $40 in.  This is killing our budget this month, but perhaps we’ll figure a way out of that.

I’m beginning to get burned out on attacking the debt so heavily – truth be told, last year I was running out of steam, even after seeing the incredible progress we’ve made.  I’m just getting tired of the little rewards, and then spending all our discretionary income on things we need vs. having enough left over after debt reduction and paying the bills to do something fun.  And I shouldn’t say that – we’ve bought a house, gotten some extras – a 24” monitor dipped to $200, so I got it…  but by and large, there has been too little to really do something enjoyable with the money.

I’m sure the price we pay today will be worthwhile tomorrow – and I know we’ve come over halfway in less than two and a half years…  but I still wish I could treat my wife to a trip to Mexico for a few days – or even just spend some time away from finances and worry…

On another note, my asthma is back, so I’m sure that will play into the finances before long…

Update Thursday: 2nd Week of May

Ugh.  This week did not go as planned.  There were a few unexpected expenses, and that pretty well threw our entire week off…

Start of the Month:	$4,280
Start of the Week:	4,100
Now:	4,096
Total Paid Off This Week:	4
Total Paid Off:	184
Goal:	428
Left to Pay Off for Goal:	244

Now that we’ve only got two weeks left, the progress made this week really ups the ante, so to speak.  Now, I must come up with more than $120 both weeks to hit the goal.

Amazing how the truck payment just absorbed into our general expenses – I am allocating more for groceries since the wife not working will mean a hit there, but still!  Hopefully more progress is made next week…

Update Thursday: 1st Week of May

This was a decent week – if we can keep on top of everything else going on in our lives, we should still make our goals…

Start of the Month:	$4,280
Now:	4,100
Total Paid Off:	180
Goal:	428
Left to Pay Off for Goal:	248

Fortunately, a little extra income came in from my wife’s dwindling job, helping us get a good jump start on the month.  We only have 3 more weeks, and I’ve got less than $130 allocated, so we still have a ways to go, but, with her income, we should be able to get close or possibly even beat that goal.  Getting the total balance below $4,000 will put us back where we were the 2nd week of December, except that we now have a paid off truck in the mix.

One of the disgusting things about this is that our interest charges for the month on the two cards were over $32, which totals the amount of interest I was paying on the truck, which had almost twice the balance!

I’m very motivated to getting that balance down, especially since I could pay for a MUCH nicer internet connection or over half of a fiber TV package w/ DVR for that price…  youch!

May Goals

Well, its time that I set some goals again.  I now have over $4,000 in credit card debt, so I’ve got to attack that.  For the time being, I’d like to at least see 10% worth of progress every month against that number.  That’s fairly aggressive, since I’m only allocating about $160 against that in my budget.  So, I’ll need to figure out how to get the additional $264.  This pays the credit cards off by March of 2010.  I’d really like to be done with the credit cards this year, and be down to the student loan, our car, and our house.  We’ll see how this all works out.

So, I’ve got $4,280 in credit card debt.  My goal for May 2009 is $428.  We’ll see if its a doable goal, and adjust June as necessary.

The truck is PAID OFF!!!

Well, I went down to the credit union yesterday evening after work and wrote the check that pays off the truck!  I should get the title in a couple of weeks after they process the loan.

In the process of paying the truck off, I learned a few things.  First, I saw the difference that freeing up an additional $200/month can do.  Secondly, I noticed that when I am in “spending mode” (buying things for the house), I am not keeping as close track on our money as I am when I am in “pay it off” mode.  This year, I haven’t been making any extra payments against the credit card debt – we’ve been getting settled in the new house, buying things in preparation for the baby, etc., etc.  Buying a little of this, a little of that, eating out “just this once” because we’re “too tired to cook” can really wreak havoc on one’s finances.

Now we are back in “pay it off” mode.  We’ve pre-paid for the pregnancy, so there is a little more expense right before the baby comes, but not much, and we’ve got about two months to go before those expenses hit, giving me plenty of time to save up for it.  I took the money that was going to the truck every month, and, for a while, intend on putting it against the credit cards.   (You’ll notice that the balance on the credit cards jumped a little over $2,400 in correlation of the truck dropping to zero.)

If some expense begins to overwhelm us, or we have to adjust our debt reduction number a bit because of some unexpected expense, then so be it – currently we should be able to pay the minimum monthly payment against the credit card every week.

Another thing I plan on doing is going back to my goal setting and Thursday updates.  Now that I should be sending more against the credit card than the minimum payment, I should set goals for that, and I think the Thursday updates really helped with that aspect of it.  Of course, with my wife’s job trickling down to nothing here in the next few weeks, and me only working the one job, the days of $500+ weeks are gone, but it should still help motivate.

The cool thing is, I fully own one of the two vehicles we drive now!!

Where the Rubber Meets the Road

Well, today we got our tax return as a pending transaction in the bank.  Just over $7,300!!  The First-Time Homebuyer’s Credit that we took flipped our finances this year – instead of owing about $700, we got a LOT back.

But here’s where the rubber meets the road.  I’ve now got a few things on my Discover card that I wanted to push out a little to pay off.  About $2,000 worth – not a huge deal, but the house has cost a little more than I anticipated, and we’ve been getting some things for the baby that has helped that balance increase.

So, I can either pay for all the baby and house stuff, then get completely out of credit card debt with the remainder, and still have enough left over to really get set in several categories (like our emergency fund), or I can pay off the truck, freeing up $204/month.

Lately, I have been of the mindset to throw everything at the truck, free up the money every month, and then work on the other expenses as I can.  But now that the money is in the bank, I’m not so sure.

Stuck in the same position, what would you do?

Flexibility is Key

My wife and I have a cat.  This cat is just over a year old, but loves to play.  My wife was letting the cat chase a stick with feathers and a bell on the end of it the other day, and brought the stick up close to my chair.  At that same moment, I turned to ask her a question, and the cat was in mid-air within inches of my face!  Through some miraculous act of flexibility, the cat seems to turn in mid-air and avoided hitting me in the face.  She then ran out of the room like a scared rabbit, and calmly started cleaning herself in the the living room, as if nothing in the world had happened.

I was laughing so hard about it that I had trouble staying in the chair, but later got to thinking about it.  The cat has the ability to overcome difficult situations due in no small part to her flexibility.

That’s how I’d like my finances to be – flexible, and able to turn in mid-air.  Right now, my finances aren’t very flexible.  I’ve got a set amount that goes out every month – set expenses that drive what we do, and very much limits our discretionary spending.

So if my goal is flexibility, then, how do I attain that?  Obviously, having money provides flexibility, but, then, so does not having expenses.  In the short-term, having money will provide flexibility, but longer term, not having expenses is what will provide the most flexibility (at least in my mind).  Even if I have a hundred thousand dollars in the bank, if I’m spending $5,000/month, I’m only good for about a year and a half.  If I’m only spending $2,500/month, I’m good for almost 3 and a half years.  But the added benefit is that I get to a year and a half earning (and paying taxes on) half the money required in the $5,000 scenario.

With that said, my goal towards paying off debt is shifting slightly.  Rather than focusing on the credit cards and emergency fund (worthy goals, to be sure), I am going to focus most of my discretionary debt reduction towards paying off the Ranger, because that relieves me of a $200/month payment, and reduces my monthly payment obligation by about 13% (including only debt service – mortgage, student loan, car, credit card, and truck).  That’s a pretty good pay hike, especially these days.

Update Thursday: Socking It Away Edition

It’s been several weeks since I’ve posted an actual update, but for those of you looking at the bar graphs on the side, you’ll notice that there’s been little change in January.

However, there is more to the story than just the charts…  I have over $5k socked away in my checking account, I’m just keeping it there for the house closing and the moving expenses that will inevitably come up during that process.  We’ve already had a few expenses this month that would have slowed our progress anyway, coupled with the fact that my wife’s income has slowed a bit due to the weather and holidays this month.  We still have enough in the bank that I could completely wipe out the credit card – I’m just waiting for a few things to happen before I aggressively pay it down.

Still, month-to-date, I’ve paid nearly $400 off the credit card, and plan on putting at least that much against it each month, still getting it paid off by the time the baby comes.

50%!!!!

Today, we hit 50% of our debt paid off…  took us 739 days to get to this point, but we did it!  Sending the final $300 to get us to that point was well worth it!

We have significantly slowed our progress for the time being – choosing to work on building up our accounts and get a better emergency fund in place, but even that hasn’t been as fast as I would like – I got used to my second job’s income, which isn’t there any more, and my wife went back to work this week on Wednesday, after being off for two and a half weeks, so we’ve been operating on a single income this year.

Update Thursday: Early Edition

This is liable to be my last update for a while, and I’m even early on it…  We met with a personal finance advisor on Saturday, and we have some tweaking to do that really makes sense, but it will delay the time that we are out of debt by a bit.  On the flip side, it will also mean that our emergency fund will be established when we are out of debt, so that puts these updates to “I stockpiled some more cash this week”…  not a particularly interesting topic.

It has been encouraging to see my balances drop drastically on the credit cards, however, and I’m very excited to report that, as of Christmas Day, we will have less than $40,000 total debt and less than $2,500 left on the credit cards, meaning we beat our goal by about $500.  That puts us at nearly 92% paid off in 2 years!  Not too shabby!

The financial planner we met with suggested a few changes, and I’m still mulling over those changes before going ahead with the bulk of them.

First of all, he suggested that my wife and I get a will in place – this is a no-brainer, for sure, so we are sitting down right after Christmas to do just that.

Second, he suggested getting the foundation of income and asset protection in place prior to debt snowballing.  This means getting 3-6 months worth of expenses into an emergency fund, and getting term life insurance in place.  The term life will run us about $100/month – not a pleasant thing to think about, but, at the same time, were something to happen to me, my wife would be taken care of for a while.

Third, he suggested paying off our debts differently.  Rather than paying of the lowest balance first, he suggested paying off debt that frees up monthly cash flow the fastest, which, in our case, happens to be the truck, then car, credit card, and finally the student loan.

I don’t know that I agree with a couple of things about the approach, but I’m also not discounting his process as a whole, either.  Mainly, I’m ready to be done with the credit cards – I’m ready to just pay them off as quickly as I can.

The emergency fund confuses me a bit, since it must be higher now than it would need to be after we pay off debts.  The reason is simple…  Right now, we have a total debt repayment of nearly $700/month, which wouldn’t be required were we to be out of debt.  So a 3-month emergency fund must be at least $2100 higher now than it would need to be after we get everything paid off.  The other way to look at it is that I’m getting a good head start on a 6-month emergency fund at the beginning of the process, rather than waiting until the end.

He encouraged us to just start piling up cash for our next meeting (sometime in February or March), and hopefully accumulate enough to start working on the debt by having our emergency fund in place, but I’m tempted to cheat just long enough to be done with the last credit card, then start working the plan his way.  The last three debts aren’t going away in the next 6 months anyway, but I’m just ALMOST there with the credit card, and I want the emotional boost of being DONE with the credit cards.  (In fact, I just almost cheated and put all the money we have towards the pregnancy against the last credit card to just be done with it by the end of the year.)

I’m getting a full week and a half off starting Wednesday, and my wife and I have decided to set that time aside as an opportunity to set some goals for 2009, get our wills in place and figured out, and basically get set for the coming year.  Of course, no vacation would be complete without a little R&R in there, so we are planning on doing some local things that we haven’t done to this point – go to the aquarium, check out a museum or two – things like that.

I wish you all a very merry Christmas, and a happy new year!  Thank you for all the support you have given me over the past few months, and I’ll return from time to time to give updates as I have them!

Update Thursday: 3rd Week of December

This week went better than expected, mostly due to a bonus that we weren’t expecting from my wife’s primary job.  That will help when she doesn’t work from Christmas until after the new year, but we went ahead and used it to help pay down the debt a little extra.

This week, we came to within $300 of our goal by reducing our debt to the tune of over $575 this week.  We still have a paycheck coming next week from my secondary job, and then my normal paycheck and my wife’s primary paycheck, so we should be sitting pretty good next week and easily beat the $1500 goal we had set.

We are also meeting with a financial advisor on Saturday to see if there are some places we might be able to trim.  I’m interested to see just how much he’s going to be able to accomplish, since I consider myself fairly balanced when it comes to saving for the future vs. paying down existing debt.  We’ll see, though.  At least he doesn’t charge for this portion of his services…