Debt Kicking Mama

Two Weeks: From Pay Cut to Telecommute

2010-07-21T20:09:00.001-07:00

It's hard to believe that since my last post, I've actually had some minor miracles happen in my life. After getting our temporary layoff news, my initial reaction was gloom and doom. The more I thought about it, the more I realized that (1) I love my job, (2) I travel 3/4 of my week around the state, and (3) the rest of my job is done in front of a computer. It seemed like the perfect storm. With the budget woes being at the top of everyone's concerns, I went out on a limb and approached my boss with a novel (for my agency) idea: telecommuting!

Putting my skepticism aside, I decided to just go for it. The worst that would happen would be that the boss would nix the idea, and I'd be back to living 2.5 hours away from my husband, maintaining 2 households, and being stupidly broke considering the kind of income we bring in.

Because I am a researcher, I started with a trusty Google search. I compiled a list of interesting documents that talked about the benefits of telecommuting arrangements. For employers, research has shown that they benefit from the employee's increased productivity, a drop in absenteeism, cost savings from not having to maintain a full-time office space, and reduced training expenses due to lower turnover. Knowing that I had less than 2 weeks to push this entire idea through from start to finish, I ended up purchasing a customizable telecommute proposal from http://www.workoptions.com/. It was a great start for my proposal.

The next step was pulling all of the supporting documents from my employer's employee manual, as well as the state proclamations in support of telework arrangements since I am a state employee. It was encouraging to see how pro-telework the documents were.

I carefully crafted my telework proposal to reflect the specifics of my position. My typical work week includes anywhere from 2 - 4 days spent out of the office teaching classes in remote locations across the state, or attending meetings in our state's capitol. In light of this, and because the only way for us to save money and absorb the salary decrease from the temporary layoff/furlough days was to have me move back to our primary house, I crafted a proposal for a maximum of 4 days a week of telecommuting. If I didn't live 2.5 hours away from the office, I probably would have proposed more like 2 - 3 days telecommuting.

In addition to the proposal itself (done very closely to Pat Katepoo's Work Options template), I submitted a packet of supporting documentation. One was the agency's telecommute regulation from the employee manual. Another critical document was a calendar of my prior month that I printed with the appointments and locations I traveled on each day. That supported the fact that I was mostly out of the office teaching and networking anyway.

A surprise ally arose in the form of my grant manager. She spent 15 years telecommuting while her children were young. I think her assistance in encouraging my boss to consider the arrangement was critical in its easy acceptance.

My boss hemmed and hawed for a couple of days, and then asked me to come to his office to discuss my proposal. His ominous tone had me concerned. When I sat down, he had a list of questions and highlights on my proposal. We went through each one, and I answered them with either clarifications or compromise for his position.

Once I redrafted the proposal to reflect those clarifications and compromises, it was submitted the same day to HR for filing. I'm still in awe that it was so easy. Of course, there is still a 4 month trial period to get through, so I will continue to update the blog with how it's all going. All in all, I will now cancel the need to pay $1500 a month rent, double utilities, separate groceries from my husband, and much of our ferry/gas costs from maintaining the two households. I will still pay full-time daycare (which was included in my proposal so the boss didn't think I'd be playing with my 2 year old instead of working), but the savings are still monumental! We can breath again, and all systems are moving forward to finish our remodel on the other house and continue walking through the Baby Steps to reach Debt Freedom!!

The “L” Word

2010-06-11T15:06:00.001-07:00

Layoffs

Last night I spent some time online doing an adjustment of our increasingly tight budget, and seeing where we could possibly shave off some costs. I researched selling my leased car (a poor decision I made before discovering Dave Ramsey) to drive an older vehicle, as well as some smaller changes that taken as a whole may help us save a couple hundred dollars per month. I didn't make any decisions, and honestly, didn't find too much that wouldn't potentially also cost us money (e.g. what if the car didn't sell?).

Today I came to work for just another Friday. Instead, I received an email stating that my position was going to be subject to a 10 day temporary layoff spread out over the next year. That is another way to say I'm being furloughed, and facing a 5% reduction in salary, effective immediately. My income will drop more than $250 per month. This does not come at a good time.

I took my current job knowing that it would be a financial strain. I accepted the job only once the salary was increased to reflect the higher cost of living in my new city to cover the new costs. Now, I am effectively below my previous salary, particularly in light of the additional costs associated with holding this position.

It's happening all over the state, and the country. I'm not in a unique situation, but it is still extremely scary and disappointing. It's very hard not to be going through the "what ifs" right now. "What if I had just stayed in my last job and not moved away from my home and husband?" "What if I had discovered the Total Money Makeover a year or two sooner?" "What if I'd never bought the stupid condo that I now rent out for an $800 per month loss?"

For now, I have a $1000 Baby Emergency Fund, and will continue to look at ways we can shrink our outgoing costs. Things are tight right now, but we have many luxuries. The hard part is the stress from all of this uncertainty. When will our home remodel be completed? Will the house sell? When will the hubby get a job closer to where I am living?

My focus is to be thankful that I have found Dave Ramsey, and have not gotten myself into too much further of a financial mess. I am also thankful that I still have a job! It's time to tighten the purse strings, and make some hard choices! With faith, optimism, and hard work, I trust that we will be taken care of.

FPU Lessons on CD, Oh, How I Love You!

2010-06-08T10:14:00.001-07:00

I recently ordered the full set of Dave Ramsey's Financial Peace University CDs on eBay. The full set, in its snazzy DR case, was $26 with shipping. The sale price of each CD is generally $10 per CD, so this seemed like a great deal.

My job requires lots of in-state travel, with many drives that last from 2 – 4 hours at a time. Having these CDs to listen to is wonderful! My only concern is that I'm going through them too fast. Although I've already read the Financial Peace University book and filled in the workbook sheets, I think there is probably some merit to listening to the CDs one at a time. Ideally I would listen to the CD, and then read the accompanying chapter in the book and redo the worksheets. Maybe I will still do that.

What I've concluded after listening to the first 5 CDs this week is that I am ready to jumpstart our snowball. Things have slowed considerably due to our stretched 2-mortgage budget and the home renovations. I need to do something to generate a little additional income, and throw some snow.

My ideas so far: selling some baby gear that I was holding on to for our next (as yet unplanned!) baby; selling more clothes and jeans that I like but don't wear much; and selling our trailer. The last one is a little sad, since I don't anticipate being able to find another awesome trailer for the low price we purchased this one for. On the other hand, we've been too busy to use it for the last couple of months, with no end to that in sight. These ideas should generate close to $2500 profit. Enough to fully pay off our current snowball, and make a huge dent in the next one. That would leave us with one and a half credit cards, our HELOC, and the cars. I'm keeping student loans out of this part of Baby Step 2. To me, they're Baby Step 2(b). I need to focus on the consumer debt separately so I don't lose motivation or focus. The student loans are large, but should go down relatively quickly once the consumer debt is out of the way!

If you've read the books and done the work, I would still suggest finding a copy of Dave's lessons on CDs either through your local used book source, eBay, a friend, or your local library. Hearing the lessons out loud is great, and Dave is an entertaining speaker.

What’s Smaller than a Baby Step?

2010-05-19T15:03:00.001-07:00

Today was great: another minimum payment dropped! Our snowball has taken effect, and the balance on that card dropped significantly enough to cut the required minimum payment nearly in half!

That success is definitely motivating me to keep a tighter rein on our budget. The recent months I've gotten somewhat lazy with tracking every penny that comes in or out. Although we are doing relatively well financially thanks to DR and our TMMO, I'm embarrassed to say that I don't know how much extra money is floating in our account each month. We have definitely not followed Dave's advice to tell every dollar where it needs to go.

The next couple of months are going to be really tight. As in, scary, "can we pay the bills and still eat well" tight due to the continued home renovations on house #1, the hubby's job search in my city, and a little summer work/pleasure travel. I can literally no longer afford to be so casual about our budget. For some reason, once I got off track a few months ago, I just haven't been able to get it all back together. I'm not sure what exactly I need to do, but something tells me it's going to involve pulling out a chunk of cash to pay the everyday bills/incidentals, and then letting our accounts sit dormant for an entire 2 week pay cycle.

It sounds ridiculous to be so disorganized when we're already almost a year into DR. I'm disappointed, but also realistic that sometimes life happens and you have to deal with the setbacks. Luckily the setbacks haven't caused us to revert back to our old ways of the hubby's spending hundreds per month on eating out, and my continually funding the economy through eBay purchases!

I had some lofty goals a couple of months ago when I first realized that we were off track in a bad way. Today I'm restructuring those goals into more manageable baby steps.

This week's goal: pull out the old handwritten calendar and re-enter our auto pay bills and transfers.

This weekend's goal: make sure all bills are current (the insurance/medical billing cycle has me very confused with some recent appointments we had with our son), and pay anything that is still outstanding.

Monday will begin our next pay cycle, so I am going to try to convince the husband to not use the debit card for an entire two weeks. I'm no angel there either, but his are the incessant $3 – $10 charges that drive me nuts! That should get us back on track for June….just shy of our 1 year anniversary of discovering DR and the TMMO!

A Little Surprise in the Mail

2010-05-18T12:22:00.001-07:00

Changing Minimum Payments

Last night I had a random surprise when I opened up an email from one of my credit cards. Apparently all of our snowballing has paid off….our minimum payment dropped $40 from one month to the next! How amazing is that?

Initially I was just going to continue the original payment on that account since I'd already set up the auto-payment through my bank. It occurred to me this morning that the additional $40 will have more of an impact if I redirect it to the card that is currently receiving the focus of the snowball. We're slowly but surely knocking that one out, despite the major slow down while we throw most of our extra cash into finishing up the house remodel to get the big house on the market.

Sometimes just when this whole debt-free journey feels like a marathon into eternity you get the small boost that keeps you motivated to keep going! Just what we needed right now as we burn the midnight oil with stressful home renovations, double mortgages, and the building nerves about getting our house up for sale.

A Step Backwards

2010-05-03T10:02:00.001-07:00

When the Progress Slows

Recently we've had to take a few steps backwards in our Debt-Free Journey. We decided to make these changes in order to improve the quality of our lives. No, we haven't gone out to buy "things" or take lavish vacations. For the last 9 months, we have lived in separate cities and separate homes for work. Although my new job has been exceptionally rewarding, I won't go so far as to say that it has been worth the stress that it has put on my family. Our son is just 18 months old, but I can already see that he is affected by not having his father living in the same house. Consistency is important for little ones (and adults) to feel secure and happy.

My husband has begun a job search closer to where I now work. Since I have a higher earning potential, and his job is very flexible, this was the plan that works for us. We are focusing our funds and extra hours to finishing up the renovation of our home, with plans to get it on the market in the next couple of months. Part of me wants to be impatient and just take out another loan for all of the house repairs and upgrades so we can get out of it sooner. I know that a little bit of patience will really pay off in the long run, but patience is not at the top of my personal "virtues" list!

Given all of these expenditures, and the recent addition of rental payments for a new house, I'm once again feeling that almost-forgotten money stress! Progress on our debt snowball has stopped, and if anything, we're going to end up actually accruing a bit more debt to finish up the house projects on a shortened timeline.

I'm trying very hard to be patient and stay motivated. I remind myself daily that a few slip-ups, particularly ones that are reasoned out and necessary for our current situation, are not cause to throw the plan away. Instead, we are doing the best we can to keep within budget, and remaining proud of all of the progress we've made up to this point.

Once we sell the old house, our snowball will start back up with a vengeance. When I'm sad about our current lack of progress on the snowball, I open up my snowball calculator and play with the numbers when we can use an entire mortgage payment as a snowball! We aren't gazelle right now, but at least we're being mindful of our money and not just throwing it away like the old days!

8 Cost Cutting Moving Tips

2010-04-26T15:19:00.001-07:00

Saving Money on Moving Costs

We've moved several times in the last couple of years. Our coming move is from a 1 bedroom condo into a 3 bedroom rental house. The plan is to live in the rental for a year or two until my husband gets a job in my city and we can sell our other house. Once those two things happen, our debt snowball will be a debt avalanche! We should be able to quickly pay off all of our consumer debts, bulk up our emergency fund, and start saving for a down payment.

But first we have to do the move…..

In the past, I've relied on friends and family to assist in moving. Now that we're in our early 30s, and I've moved way more than my fair share, it just doesn't seem right to rely on the charity of others. Moving is a terrible experience. In order to minimize the stress, hard labor, and time required, we've decided to hire movers.

How Can We Save Money on Our Move?

Participate in the move. My husband and I will both be moving boxes right alongside our hired movers. That will make the job go quicker.

Post an ad on Craigslist for labor. We moved me into our condo last summer, so we know that it takes under an hour to unload. Since we need to load the truck, drive to the new place, and get the big stuff unpacked, I am planning that it will take about 3 hours. We offered $40 cash guaranteed for up to 3 hours of assistance. If for some reason it takes longer, I'll pay $12/hour after that. Our ad had 15 responses within 2 hours of posting.

Reuse boxes. Packing supplies add up quickly. When we last moved, I was able to get boxes from friends. I purchased two of the large wardrobe boxes for moving my work clothes. All of those boxes are being reused for this move. If you don't have boxes, advertise on a local Freecycle, Craigslist, or ask around to your friends.

Consider plastic totes. The up-front cost of purchasing 22 gallon plastic lidded bins at Target or Home Depot on sale is barely more than the cost of purchasing a brand new cardboard box. Once you're done with the move, they can be used for various storage purposes in your new house (off season clothes, toys, sporting equipment, craft supplies, etc). I love bins! When I see the large, clear style on sale for under $5, I snap a couple up.

Don't buy bubble wrap. Save box space and wrap your breakables for free by using your towels, washcloths, pillow cases and sheets instead of bubble wrap. Sweaters, cotton t shirts and sweats also make excellent wrap for vases, in between picture frames, or around dishes.

Use your sheets. Protect your mattresses and couch cushions by slipping a fitted sheet over them when you move rather than buying the big plastic wrap. You have to move them anyway, and if a sheet gets a little dirty, it's much easier to toss that in the wash than have to clean your upholstery!

Rent a large enough truck. There is typically very little cost difference between the various sizes of rental trucks. Mileage will be the same regardless of the size of truck that you rent. Do not underestimate how much stuff you are moving. Multiple trips are always more expensive than upgrading to the next size truck and doing a single trip.

Clean out and sell while you pack. As I've been packing my belongings, I've found several things to list on Craigslist. I'm busy packing, but every once in a while I take a 10 minute break and list one of those items. I've made some extra cash that I can use to buy needed items for the new house, and lessened the amount of stuff I have to move!

Our move total should be around $150. We could save ourselves more than half of that if we did all of the hard labor ourselves, but honestly, the extra expense is beyond worth it if it makes our move faster and easier!

A Little Detour

2010-04-22T11:14:00.001-07:00

Spending to Save?

We have been in a tough situation lately due to our work. I took a job in another city (where I used to live), but my husband has still been living and working 2.5 hours away. We own properties in each location. After much soul-searching, my husband has decided to apply for jobs closer to where I'm working since I have the greater income, and by relocating, his salary will also increase significantly.

The tricky thing is now trying to get our big house ready to sell. Once we sell it, our snowball will skyrocket to about $2000 a month. We will be debt free in an amazingly short time frame (with the added benefit of living under the same roof as a family again)! Unfortunately, the HELOC we took out (pre-DR) is not enough to complete the necessary remodeling projects on this newly shortened time frame. I'm now realizing that the reality is that we are going to have to incur some short-term debt in order to complete these projects and get the house on the market in the next month or two.

It is difficult to think of credit cards that we've worked so hard to pay off over the last year will once again carry a balance. Granted, the balance will only be there for hopefully 6 months or less, but it's still a little sad. It's very anti-DR to use debt to do home projects, but in this instance we are confident that it is the right choice for our family. We tried to sell the house "as-is" but it wasn't successful. Once we finish up all of the currently half-completed projects (powder room, baseboard moldings, new carpet in bedrooms, and the kitchen), the house should sell relatively well. We're still going to be minding our pennies and doing as much work as we can ourselves, but it was time to accept the reality that we needed a boost right now to get this house done and off of our plates.

Pre-DR we would have gone hog wild and not had a plan. Now, although we do have to resort to some credit, it is as limited as possible, and even if the house doesn't sell, we will be able to pay it off by January. Progress, not perfection! There may be a detour on our DR debt free plan, but we're keeping ourselves just a few steps off of the path so we don't get lost!

Feeling the Snowball Fear

2010-03-27T17:11:00.000-07:00

We are making great progress on our consumer debt and student loans. Since July 09, we've paid off at least $13k in debt. That may not be mind-blowing compared to what a lot of people can accomplish with DR, but considering our recent circumstances, it's been pretty great for us. For most of that time, we've been separated in two cities (and paying 2 mortgages).

Recently we got our tax return back, and paid off a couple of our smaller cards. The target of our snowball is getting an additional $300 minimum per month. If we keep at it, it should be paid off by the end of the summer. That schedule doesn't put us anywhere near the limit of our potential gazelle intensity. The issue is that I'm getting a big pull for the security of actually holding on to that cash instead of throwing it in the snowball.

My thought it going back to the conservative way I was first able to work up to snowballing. I used to hold on to the money until the end of the month and then throw it once I knew we were about to get paid again. That way, in case there were unexpected expenses, we'd have the cash on hand. The only concern was that I had to be extra vigilant to not spend it on frivilous "wants" that I confused with "needs."

We have our BEF in place, so there's no issue for basic small emergencies. I guess it's better to stockpile money right now if it makes me feel more secure, rather than be stressed out if we send it to the debt.

Weekend Spending

2010-03-22T15:24:00.001-07:00

Weekend Spending

Just like keeping a food journal is recommended for a dieter, I am going to try to do a money journal to track my daily spending. Using cash is totally foreign to me, and I think I tend to spend more right when I first pull it out. Here's an example of this past weekend (everything rounded up to avoid having to count change):

Saturday: $40 cash (had $4.00) = total $44.00

Weekend latte - $4.00

Drugstore - $19.00 (Ziploc bags, TP, hot chocolate for office, candy, crackers)

Fast Food - $4.00 (chicken nuggets for the wee one who currently refuses all other meat products!)

Goodwill - $10.00 (baby clothes: track jacket, tshirt, cargo pants)

Membership fee - $2.00

-------------------------------------

$5.00 remaining

Wow. Hard to believe I spent nearly $40 in two days.

One of my biggest mistakes was that I didn't take our full envelope amounts out in advance of going about our weekend. I thought my husband was being paid on Monday, so when I visited the bank, I thought I was pulling out the $40 to cover groceries and weekend spending until payday when we'd get back on the envelope system. Now I have to parcel out the fact that I blew cash on items we have separate budgets for (e.g. drugstore spending on Ziplocs and TP) in the same transaction as I bought "blow money" items with (hot chocolate, candy) and grocery items (crackers). Clothes for the baby also don't usually come out of my blow money, but honestly, these were just "wants" and not needs, so I think I'll leave that as is. Looking at my receipt for the drugstore, I will reimburse my blow budget for $11.00 that I spent on TP, Ziplocs and crackers. I'll have $16 for the rest of the week (and another $10 for next week since we do $50 each per two week pay period).

This is the perfect example of how the envelope system really only works when you plan for it. Not having my ducks in a row should've prevented me from spending anything until I had the envelopes filled. The reality of being near the store and having a relatively happy toddler and a few extra minutes meant that I just got the errands done at the sacrifice of my perfect budget. I also hit the grocery store, and gasp, used my debit card! The hubby thought that was pretty funny, but I just adjusted what I took out for our grocery envelopes minus the amount I'd just spent. Sometimes you just have to do the best that you can!

Sinking Funds for Spenders

2010-03-19T15:36:00.001-07:00

SINKING FUNDS

One of the areas that we've been lax on in our budgeting has been sinking funds. Typically our income is such that we can cover those quarterly or yearly expenses when they come up by simply reducing our monthly snowball.

In reading advice from other personal finance bloggers, and my beloved Dave Ramsey, it seems that common sinking fund categories include: gifts/Christmas, car tabs, property and auto insurance premiums, car maintenance, membership dues, and a vacation fund if you're lucky enough to have one. We already have our property insurance built into our mortgage, so that isn't a category that we need. I've come up with this basic plan for the sinking funds that we need:

This year we've already paid our car tabs, and our property taxes are rolled into our mortgage payments. Our auto insurance is on a monthly bill rather than a lump sum payment. Typically we've been setting monthly budget amounts for gifts and clothing, but that isn't always firm. I've calculated the goal amounts based on what I see as our cap for the remainder of the year on those sinking funds.

Where Do I Keep the Sinking Funds?

Many people suggest using an online bank such as ING to store your sinking funds. Apparently ING lets you have as many savings accounts or subcategories as you like, and links them all to your primary checking account. That sounds great, but I just haven't gotten around to it.

I still have my pre-marriage checking and savings accounts from my old bank. Those accounts are already set up, and I find it very easy to use their online banking features or find a local brick and mortar bank (or mom-friendly drive through bank teller!).

Emergency Fund: This is already filled, and sits in the primary savings attached to our primary checking account. That makes it easy to transfer funds if we have an emergency.

Gifts/Christmas: This is going to be one of the few sinking funds that I plan to keep in a cash envelope. I will put $50-$100 a month into our Gifts/Christmas fund envelope. I'll use this money to cover birthday gifts, Mother's Day/Father's Day, and Christmas.

Work Expenses: I learned this tip from Simple Life's blog. I often travel for work. My expenses are submitted after the fact and I am reimbursed with a check. So as to avoid using our budgeted income on these expenditures, I've deposited one of my reimbursements checks into what used to be my pre-marriage checking account. I already have an ATM card and checks for that account, so I can easily use it for expenses when I'm travelling and not dip into our primary checking account. When the reimbursement checks come in, I will "refill" the account.

Tenant Account: This is the rental deposit our tenant paid us. It sits in the savings account attached to the "rental" checking account where the tenant deposits her rent payment (but isn't attached to any of our "real" checking accounts should she suddenly turn from adorable co-ed into a crafty thief). I've found that if I don't keep it separate, I spend it, and then end up scrambling when they move out. (Bad landlord!)

Clothes: I try to limit my shopping to only when I sell something I already own. As an Ebay and Craigslist junkie, I'm a frequent user of Paypal. I've decided to use my Paypal account as the sinking funds for our clothing budget for the year. A lot of people will find $100/month excessive for a clothing budget, but I'm being realistic. I will continue to sell things in order to buy more, so it's not as if I'm actually taking $100 out of our budget a month just to buy clothes for the family. Many months I actually make more than $100 selling items. I think you can also get Paypal to issue a debit card to draw directly from your account. I'll be exploring that option.

Camera Fund: I really, really want a nice digital SLR camera. My husband and I have decided that this is a priority for us. We should've had enough money left over from our tax refund, but we have blown it after a couple irresponsible months. Back to the drawing board! This money is going to go into a jar in our house so I can watch it grow and hopefully be motivated to keep increasing it. Technically since we're still on Baby Step 2, we shouldn't be saving for this yet, but our son is growing right before our eyes, and this special treat is helping me motivate to stay on budget (or under) in other areas.

That rather complicated scheme is the solution we've come up with for our sinking funds. The other basics we will cash flow as needed.

Getting Back on Track

2010-03-14T13:16:00.001-07:00

I am far from perfect on the whole debt reduction thing. My life has gotten super crazy with lots of travel for work, and a busy toddler who has suddenly decided that being awake for a couple of hours in the middle of the night is cool. As a result, I've fallen off the budget/DR bandwagon the last couple of weeks.
Most notably, I haven't been keeping track of what we're spending or bringing in. Normally I'm mildly obsessed with tracking everything in my Excel spreadsheet, and reworking the numbers umpteen times throughout the month. The past month or so that just hasn't happened. Now it's all a mess, and I have no idea where we're at on our budget and snowball.
I'd like to figure out exactly how and why I got off course. After that, the key is obviously getting back on board with the budget and increasing our snowball.

How:
Well, that one is kind of obvious. As I mentioned above, life has just been very, very busy for me in the last month and a half. I haven't had a week where I didn't travel for work. That makes for a very tired mama.

Why:
This is more complicated. While I can blame the business of "how," I don't believe that's the whole story. We received a nice sized tax return last month. It was $2k more than we'd planned. I promptly paid off 2 of our smaller credit cards, and then reserved the rest to cut our next card in half and to buy a nice digital camera. Here's where it gets interesting.....
I think paying off all that debt, and "spending" all that money, made me nervous! The crazy thing is that when I'm nervous, I tend to SPEND! How ridiculous is that?! In the end, holding on to that last extra snowball (probably about $1000) was adventageous. My work reimburses me for travel and business expenses, and currently those reimbursements are about $1,000 behind. It didn't affect our cash flow, however, because we had that extra $1,000 buffer left over from the tax refund.

Getting Back on the Wagon:

Reread Total Money Makeover by Dave Ramsey. (This should provide the inspiration I need).
Download the entire last 2 months of bank statements into Excel and track where every penny went. (This retroactive budgeting was the unsuccessful way I used to do it, but given the current state of affairs, it's the best I can do for now).
Get 100% back to the budget as of our next pay period (next week).
Commit to starting the Cash Envelope system as of our 1st April pay period.
Re-configure the snowball calculator given our current debt load (and feel proud by how much debt we've killed off in the last 9 months....at least $13,000!!!.....all while living in 2 separate cities and shoveling out for 2 full mortgages).

Just like a diet, when you fall off the wagon, you have to brush yourself off and get right back on. It's not an excuse to just give up and eat only desserts and candy for the next 6 weeks! And now for some quality time with my spreadsheets.....

4 Easy (and Cheap) Weeknight Meals in 15 Minutes or Less

2010-02-24T16:35:00.001-08:00

Did you know that fixing a healthy weeknight meal can often be faster than ordering takeout? These are some of the easy weeknight meals that I like to fix from basic ingredients we typically have in our pantry, fridge or freezer. I can literally be sitting down to eat within 15 minutes of starting each of these. The flavors are great for kids as well, and to accommodate my dairy-allergic toddler, I can easily leave the cheese or sour cream out of his portions while not sacrificing the flavor for the adults.

Pasta e Fagioli soup
Cook a diced onion and crushed garlic cloves in olive oil until translucent, stir in sliced carrots, add 1 can diced tomatoes, 4 cups chicken broth (or scoop of bouillon and water), 1 can cannelloni beans, diced zucchini (or red bell peppers or whatever is in your fridge), handful of frozen spinach, and 2 cups of dried pasta (shells, rotini, penne, orichette, orzo). Season with oregano, basil, red pepper flakes, and salt and pepper. Cook until pasta is al dente. Serve with grated parmesan cheese, crusty bread, and a green salad.
Grilled Cheese and Soup
Traditionally served with tomato soup (which repulses me), but I generally serve Progresso Split Pea or Lentil soup to ensure plenty of fiber and protein. Try mixing up your grilled cheese by incorporating the left over loaf of fancy bread from an earlier meal, or put roasted red peppers or olives on your grilled cheese.
Chicken Teriyaki
Saute fresh or frozen chicken breast strips in bottled teriyaki sauce (we love the Soy Vay Veri Veri Teriyaki sauce, which I only buy on sale). Add in a handful of frozen broccoli once the chicken seems cooked through. Serve with brown or white steamed rice.
Chili Stuffed Baked Potatoes
Clean outside of potatoes, prick with holes, toss in microwave for about 8 minutes (or until soft). Heat can of turkey chili (or use leftovers from an earlier weeknight meal). Split baked potatoes, mash insides with sour cream or butter, top with turkey chili, shredded cheddar, onions, and fresh cilantro. Return to microwave or pre-heated oven to melt cheese on top. Great served with steamed broccoli or a green salad.

Styling Your Toddler on Pennies

2010-02-05T16:17:00.001-08:00

One of a mother's greatest joys in life is her children. In my case, I have one sweet toddler son. He's just too adorable to not also have stylish little jeans and hoodies to rock at preschool. OK, I can admit that baby clothes are less of a "need" than a want, at least at the volume at which I have for my son. However, I just love for my little guy to look cute and be comfortable.

First, let me say that there is nothing wrong with non-brand name clothes. I am certainly not obsessed with only buying Gymboree or Baby Gap. With that said, I do tend to prefer the extra soft cottons and modern styles I find with brands like Old Navy, Baby Gap, Gymboree, and Carters, or the organic cotton onesies and yoga pants. I'm also a big proponent of starting your child's feet off right in flexible soled shoes that support muscle development and easy walking.

Where do I shop?

My local mom's message group
Craigslist
Ebay
Thrift Stores
My friend's closets
Old Navy and Target clearance racks (50% off or more only)

Strategies for Savings

Search for multiple items being sold in a lot.
- This tends to be a better deal, and if you're purchasing from eBay, it definitely saves you in shipping costs.
Buy off season
- End of season clearance sales at Old Navy and Target are great for super deals. I generally won't pay more than $3.50 for shirts or $5.00 for pants.
- If you can guess your child's size the following warm (or cold) season, then you can save a ton.
Post a "wanted" ad on your local mom's message board/website/Yahoo Group.
- This tends to be much easier than Craigslist.
- You can potential find your "pipeline" for next size up clothing if you connect with a mom who has a child older than yours with a same-season birthday. Then as her child outgrows one size, you can arrange to buy it from her.
Don't be Afraid of Thrift Stores
- If you find the right one, and aren't afraid to visit with some regularity, you will find a place to get great quality kid's items in awesome condition for pennies on the dollar.
Beware the Ebay addiction and overbuying.
- Remember, you have to spend to save! Don't get caught up in getting great deals, only to find you've seriously exceeded your budget.
- Set a monthly or seasonal budget for clothing your children and stick to it.
Request clothing as gifts.
- Family members will love to buy your little one clothes for his or her birthdays or holidays. Just remember to specify the sizes you need and maybe suggest specifics.
Layer and extend the wear.
- Behold the long sleeved white onesie. It's a mythic creature, often hard to track down, but try to purchase a pack of 5 at the beginning of the chilly season.
- The long sleeved onesies can extend all of your child's currently-fitting short sleeve onesies and t-shirts out through the Fall and Winter, saving you from having to buy a bunch of new long sleeved shirts. For older toddlers/kids, this same idea applies to long sleeved, solid color, slim fit tshirts.
- Added bonus is how cute and trendy your child will look in his or her layered tees.

It's actually pretty easy to save money on your children's clothes without spending an arm and a leg. We get compliments everywhere we go on how cute my son is dressed, and I take secret pride in knowing that his designer outfits were purchased without breaking our budget.

Saving Money with Grocery Delivery

2010-02-04T05:49:00.000-08:00

It's hard to believe, but I've found that my recent switch to ordering my groceries online is actually savings us money! My original reason for trying grocery delivery was to save some time during my busy work weeks, and avoid the stress of trying to take a toddler through the grocery store at 5:30 at night.

We try to eat mostly organic fruits and veggies. I was able to search online and find a small, local company that does a year-round delivery of organic fruits and veggies. The standard box is $35. I signed up for an every other week delivery. Our first box came loaded with apples, tangelos, lettuce, red peppers, and tons more. When I priced out those same veggies and fruits at our local grocery stores, the price would have easily been the same. It's a ton of produce that lasts us 2 weeks, and also encourages me to get creative with some recipes when new foods are introduced in our box. Last week I learned what a sunchoke was, and have to say they are really tasty!

My next step was to order our "regular" groceries. I know that Amazon Fresh delivers in my area, so I tried there. I did my meal planning for the week, and got to work crafting my shopping list. One huge bonus was that when I wasn't sure if we had a can of diced tomatoes, or if I needed to buy basil, I just ran into the kitchen or pantry to check before I added it to my cart. In the actual grocery store, I generally err on the side of just buying that item, and end up with duplicates that I don't need and money that doesn't need to be spent. Amazon Fresh had a coupon for free delivery with your first order, and I was also surprised with a welcome kit that included a grocery list pad and a bouquet of fresh flowers. It was great to order in the evening once my son was asleep, and schedule next evening delivery right to my door! No lugging heavy grocery bags to the house!

I've since learned that our local Safeway does delivery of groceries. I'm going to try there next because they offer the same prices that the local store is featuring that week. That will probably save me even more.

Why does grocery delivery save us money?
- No impulse buying while wandering in the store.
- No duplicate buying because you can check ahead of time in your pantry or fridge.
- Promotes meal planning.
- Calculates your total as you go, so you can make adjustments if you go over budget.
- Cost savings of not having to drive to the grocery store (time and money).

The only cons I can see are a slight delivery charge (around $5 - $6 dollars for most places), and most don't allow you to use manufacturer coupons. So far so good on my end, however, and I think I just might keep tinkering with this experiment.

My Favorite Site for Quick Coupon Savings

2010-01-30T11:12:00.000-08:00

I have to confess that I am not particularly good at using coupons. I get disorganized even when I try to follow the Coupon 101 advice of amazing sites like CouponMom.

Scenario:

Hubby mentions this morning as he's getting ready for work that he needs new razors for shaving his head. Apparently my attempt to bargain hunt the last time was unsuccessful. He commended me for the savings, but sweetly mentioned that the cheap razors were hell on his head. He currently has a 1 inch gash where his skin got caught in the razor. Ouch! Apparently the 3 or 4 blade disposable razors are the best head-shaving razors. Good to know.

I want to get him what he wants (especially since it's not like he's high-maintenance or spendy in any other health or drugstore category), but I also don't want to pay full price.

Step 1: get specifics on what he wants. In this case, it's disposable razors from a brand name (ideally Schick or Gillette) with 3 or 4 blades.

Step 2: find what stores are having sales on these items without spending a lot of time. I simply go to my favorite site for drugstore deals: Savings Cents with Sense.

Step 3: I scan the Walgreens and Rite Aid posts for the week on Saving Cents with Sense. I find a BOGO deal on Bic Flex 4 disposable razors. Two packs for $6.99. Hubby is happy with that, so that's what we will end up with.

Step 4: Go to Walgreens to buy the razors without needing a coupon or making a trip to some store that's out of the way. Quick savings!

Bonus: Savings Cents with Sense also includes the bonus info that if you'd been clipping your coupons from the weekly ad circulars, you could attempt to use the BOGO coupon in the paper to try to get the razors completely free. That's outside of what I'm currently willing to do, so I settle on my $6.99 savings.

Find the website that works best for you and your area by doing some easy Google searches. I subscribe to the Savings Cents with Sense newsletter, so I get a pretty much daily email with all kinds of quick tips on where the deals are, without having to do too much research myself. Because I am super busy, this is the perfect compromise for me between savings and my time.

Tax Time

2010-01-27T13:59:00.001-08:00

I am absolutely salivating to get to our 2009 taxes. Most people groan when I say that, but for us, the tax refund we are getting should (in our most conservative estimates) fully pay off at least one of our credit cards. Woohoo! Although we did adjust our withholdings over the past year so we won't be getting the windfall tax refund we got last year, we should still get about $3,000 to maybe $4,000. If that's the case, the current target of the snowball (formerly DH's pre-marriage 29% Chase card that we transferred to a much friendlier 0% interest USAA account) will be long gone, as well as potentially our next "on deck" card. The goal on the USAA card was to get it to $1700 by the end of the year. It started in the summer of 2009 at $2800, and was second on our snowball "kill" list. We ended up taking it down to $1450!!

The problem I am having is that although I'm 100% committed to paying off CC#1, there is a HUGE part of me that wants to use some of the rest of the tax refund to buy a new camera. Yes, we have a functioning digital Canon that works perfectly well to capture every day shots of our little guy. But every single day I salivate over the thought of having a digital SLR. It doesn't have to be the fanciest thing in the world, just one that will take more professional photos and allow me to play with shutter speed. If I truly want to blog (not to mention capture frame-worthy shots of the little man), I definitely "need" a digital SLR. I can hear the ladies on my favorite Dave Ramsey board laughing from here. "Need?," they cackle. "As if!"

So what do I do? Treat myself to this major luxury (probably $550 - $600 minimum), or use that money to have the next up credit card cut in half and ready to be eliminated by May? Aaargh. I know the right thing to do is to dump the entire tax refund into debt elimination, but frankly, that's just REALLY hard to accept! Lucky for me, this decision will have to wait until we actually have the refund in our account, and any spending plan on the refund will have to be jointly made with the husband. Temptation thwarted. At least for now....

Sky Meals for the Budget Gourmet

2010-01-25T18:52:00.000-08:00

Since I'm traveling out of state for work this week, I knew that there would be unavoidable eating out. Once place that I'm not keen to spend my hard earned dollars (or even my company per diem), is on plane food. Gone are the days of a gross (but free) meal of mystery meat choice along with microwaved veggies. My domestic flights today offered a bag of Peanut M&Ms for $2, a small can of Pringles for $3, or some little box of random snacks for $5 or so.

With a little planning, and some online inspiration, I had a full days worth of snacks and meals for under $20.

I first double-checked with TSA to make sure that the random restrictions on what can and cannot be carried on a flight hadn't changed too drastically since the last time I had looked. Nope. Still the basics: no gel or liquid type things in over 3 ounce sizes for US flights, and currently that means no water bottles as well.

Next I hit up Google, and came up with some great ideas courtesy of Apartment Therapy. The sandwich idea, along with snacks (cheese/crackers, fruit, chocolate) sounded like the right choice for my 7+ hour day of flights and layovers. I wanted something that would work from morning to night.

Sandwich: I went for the classic, and incredibly portable, French jambon sandwich. Half a baguette spread with butter and topped with some yummy quality ham from my local fancy grocery store. Total: $4
Snacks: cheese and crackers (since I only used about 1/2 of the Drunken Goat hard cheese and 1/2 the box of fancy crackers, this was less than $5); some bulk roasted almonds ($2.50); a Theo's dark chocolate bar ($3.50); and fruit leathers ($1.50). I also cut up an apple that I had in the fridge and dripped in some lemon juice so it wouldn't brown.

At the airport I indulged in one of my 3x weekly lattes (another $3.50). The 2 flights were long, and I was so glad to have my yummy snacks. The sandwich was really big, so I actually ended up eating a bit of it throughout the day. My snacks and sandwich lasted me from 8am to 8pm when I finally got into my hotel. $20 for an entire day of food (and I still have most of the chocolate bar and 2 of the fruit leathers to snack on while I'm on my trip).

You are definitely better off packing yourself some snacks to save money and have a much more enjoyable, healthy trip. Even after a layover delay and an entire day of travel, I feel great since I didn't assault my stomach with expensive and unhealthy airport food.

I am a cheater

2010-01-22T10:17:00.000-08:00

I've realized that my accounting of our money isn't always perfectly honest. Yep. I'm a cheater!

My husband doesn't have much to do with the finances at all. I tell him what bills I'm paying, and how much money we have at any given time. Other than that, he spends whatever money I give him on whatever it is that he likes to buy.

I, on the other hand, know exactly how much we have in our account due to my near obsessive reliance on the bank's handy text your balance feature, and nightly reviews of the account. While it would certainly be easier to do a cash-only system, the husband is never on board, and I just get annoyed.

The way I cheat is all about moving money around. Much like a tax-evading business owner, I am constantly shifting around our budgeted money into the categories I would like it to go into. Some of this happens because I have responsibility for buying 99% of the baby's things (including diapers, wipes, formula, food, clothes). Often my "blow" money ends up going toward these necessities. Sure, I should be more vigilant about the categories, but it can be really hard to juggle one more trip to the cash machine in the midst of working full time and caring for my son.

For this 2 week pay period, I am vowing to be transparent about how I spend my $50 blow money! (This also means being honest about how I'm spending the money I earn from selling on Craigslist. My eBay sales are still "free" money that I let myself spend on clothes for my son and me - it's what I like to think of as recycling....our old stuff for new stuff.)

Jan 21 - Dec 7 Pay period:
Blow Money = $50
$23.45 Starbucks (reloading my card for the next 2 weeks of lattes, which I get 3x per week)
Remaining: $26.55

Thrift Store Shopping for Snobs

2010-01-20T21:08:00.000-08:00

Let me start by admitting to being a snob. I like nice things. I like nice, brand name things that seem to cost a lot. What I do not like is paying a lot for these nice things. People often comment that I must spend a ton of money on clothes, shoes, baby items, etc. Well, in the past I did. It wasn't that I spent a lot on each individual item, but the cumulative effect of my serious shopping addiction was bad.

In order to appease my need for "new" things, I have found alternative means to satisfy my hunger. Instead of a $300 foray into Nordstrom Rack or TJ Maxx, I can now take $20 to Value Village (a local thrift chain), and come away with some good scores without too much damage to the budget.

Here is the deal, people. Thrift stores don't just sell junk. It's hard to believe, but lurking in the racks are some killer deals on designer items. Sure, the thrift stores can be a touch gross or smelly, and I definitely recommend lots of washing of hands and hot water for washing the clothes, but it will be worth the effort.

1. You need to visit several of the thrift stores in your area to figure out which one has the best selection, and is the nicest. This will be your Thrift Store of Choice ("TSOC"). Do not rely on the the idea that the nicest area = the nicest store.

2. Shop early and shop often. Thrift stores are continually putting out new merchandise. If you go early in the morning when they open, you will often find the best deals.

3. Watch for advertised sales. If you happen to regularly drive past your TSOC, check out the signs advertising 50% off everything days.

4. See if your store has coupons. Value Village (my TSOC) has a yearly calendar of coupon deals available for a super small cost. Your first big savings will cover the cost of purchasing the coupon book.

5. Visit your TSOC alone. Thrift store shopping takes a little more hunting and concentration than shopping at Nordstrom. You need to concentrate so you find the best deals.

6. Just because a designer item is $5.99 does NOT mean that you need to buy it. Unless you have a track record of actually selling those items for a profit on eBay, don't con yourself into thinking you will do it.

7. Pay attention to brand labels to get the best quality goods for the best prices. (I've admitted I am a snob. This holds true even when I'm carefully pawing through the racks at my TSOC.)

8. Bring Purel, don't touch anything you don't have to, and don't try on clothes unless you have to. (Some people aren't bothered by other people's germs. I am not one of them. However, I do not let that stand in the way of being able to still shop for new clothes even when I'm on a strict budget!)

Just to pump you up, I will give you the rundown of my 2 most recent trips to my TSOC. Keep in mind that these were random trips (5 minutes to 30 minutes) when I miraculously wasn't at work and didn't have my 15 month old son in tow. I'm way too busy to have a regular shopping day or time.

Trip 1: Early on Martin Luther King Day holiday
$25: I pair black Miss Sixty skinny jeans in my size for $0.99 (retail $180), 1 pair Anlo dark denim trouser jeans in my size for $9.99 (retail $198), 1 pair like new black J Crew cotton sateen wide leg trousers in my size for $6.99 (retail at least $60), 1 espresso wood framed magnetic chalkboard (18"x18") for $4.99!

Trip 2: Rainy weekday evening on my way home from work (with son!)
$14: 2 Baby Gap sweatshirts, 2 Carter's fleece footed sleepers, 1 The children's place layered long sleeve onesie, 1 Target striped baby sweatshirt - all in like new condition and in son's current size.

Other items I've scored in the last few months: $9.99 like new black Old Navy puffy coat from last season, $2.99 ornately carved wooden tray from Horchow (retails for over $125!!), giant woven bin for $4.99 (selling at Cost Plus World Market for $38), and small picture frames for Christmas gifts for $1.99 each.

The bottom line: you can find designer clothes at the thrift store. All you need is patience, a solid TSOC, and a healthy supply of Purel!

Get Out of Debt with the Debt Snowball Plan

2010-01-03T05:43:00.000-08:00

There are many ways to pay off debt. One of the simplest and most effective is the Debt Snowball. I'd heard of this concept, but once I read Dave Ramsey's Total Money Makeover, I knew that I had to give it a try.

This is how we are currently working to get ourselves out of debt. I've linked the article below that gives you the complete DR "How to Snowball." The basic version is that you list all of your debts from smallest to largest. Then you pay the minimum payment on every one except the very smallest. On that smallest one, you pay the minimum, PLUS every penny you can scrimp and save and earn. That amount is your snowball. Once you pay the smallest debt off, you will be bolstered by your initial success. You then roll that amount over to the next smallest card (Card 1's minimum + snowball + Card 2's minimum) and go through your debts in that fashion. You build so much momentum after you pay off that first card. We went slightly out of order since we had a nagging, "hate it" debt that was a little higher than our smallest. Since we wanted that one gone like no one's business, we made it the initial focus of our snowball. When we knocked that debt out, it was a very happy day indeed!

For a fun and motivating way to see what this will look like as you execute the plan, try filling out this Snowball Spreadsheet:
http://thebathroomdoor.com/debt-snowball-spreadsheet/

Dave's full article explaining the snowball principle in detail:
Get Out of Debt with the Debt Snowball Plan - Debt - daveramsey.com

Reflecting on 2009’s accomplishments and looking forward to 2010 goals!

2010-01-02T07:45:00.000-08:00

Another year has come and gone! For the first time in years, I can say that I've ended this year on a more positive financial standing than when it started. To build on my initial success, I hope to have a good plan in place come January 1, 2010.

Rather than making just another resolution that will overwhelm me, I will be implementing small changes to continue to gain control of my financial health. Getting honest about my financial situation and spending issues was the first step. Creating this blog to chronicle my progress (and admit my failings) was the next. The past several months I have read DR and other PF blogs and books, created budgets and learned to (mostly) stick to them, and made changes to my spending habits and financial goals. This work has already had a significant impact on my financial wellbeing!

What did I do in 2009?

Read Total Money Makeover from cover to cover and completed the Financial Peace Planner.
Created my first budget spreadsheet on Excel. Revised it many times.
Stopped using my credit cards to cover overdrafts.
Adjusted tax withholding to add about $250 a paycheck to my income!
Changed jobs (and moved 2.5 hours away from my husband) in order to make $10k more a year and be more satisfied.
Tried to coupon for groceries (only a very moderate success with this one) and went to store brands/non-organic where it didn't matter to us as much.
Saved up $1,000 in a Baby Emergency Fund, and then started throwing any extra money into our monthly snowball going towards the smallest debt.
Opened up a joint checking account with my husband to keep us accountable to each other.
Stopped shopping as entertainment, and instead focused on selling everything we had but didn't need or weren't using - furniture, baby items, clothes, etc.
Cut back my latte habit to 3 lattes per week (used to be 2 per day!) saving $37 A WEEK!!!!! Also started packing leftover for lunch.
Tried (and failed many times) to do a cash-only system for non-bill purchases.
Paid off about $1,000 in medical bills and about $6,000 in credit card debt since July 09 (not including minimum payments).
Did all of the above while paying 2 full mortgages (approx. $4,000 a month total) because DH and I are currently living in different cities for our jobs (and my son and I are currently living in what was formerly our rental).

What am I planning to do in 2010?

File our tax return as soon as possible, and keep my fingers crossed for a $4k refund.
Use any tax refund to pay off credit cards.

Get House #1 on the market (goal is to sell by September 2010). A sale will free up $2k a month in our budget!
Revise and revisit the budget monthly. Include DH in the process.

Not acquire any new debt.

Set a snowball goal at the beginning of each month.

Geographically reunite our family with DH taking a job in the city where I am now working, and then start knocking out our debt with the money saved from no double mortgages!

I haven't set any specific financial goal for X amount of debt to be paid off in 2010. I don't want to set us up for failure, and there are currently too many variables in our lives to know exactly how things will play out. Rather than have false expectations and be disappointed, I want to encourage DH and I to continue on the path of DR and our Total Money Makeover by focusing on our successes and being proud of all we can accomplish.

Credit Card Debt Without Shopping

2010-01-01T06:57:00.000-08:00

One of the little lies I used to tell myself was that using my credit cards wasn't bad because I wasn't using it for shopping or buying random stuff. I always used my debit card when I hit the Nordstrom Rack or my favorites - TJ Maxx, Marshalls, or Target. I wouldn't feel overly guilty because I was paying for those new Citizens jeans with my hard earned cash, and not a credit card.

The lie was that all of that excess spending meant that I wasn't saving. At the end of the month when an unexpected expense arose, I didn't have any fall back. It was those times that I whipped out my credit card to put that big expense onto it. I had every intention of paying off the balance over the next month or so, but that just never happened. Each time I got a paycheck, I would find myself stopping in to shop or getting on eBay. The earned money went out the door, and my savings account remained a revolving door back into my checking account. Money never lasted in there. The cycle was always put a few hundred in savings at each pay period. A couple of weeks later, that money was being transferred back into checking to cover the rest of the month.

Now I try to follow DR's advice to "tell every dollar where it needs to go." I don't achieve this with 100% success every month, but getting there 80% of the time is good enough for me today. I funded my Baby Emergency Fund with DR's recommended $1000. It has generally been sitting in my savings account since July 2009 with a couple of use/replenish the next month cycles. Because I'm a little afraid of overdraft, we have our savings account attached to our checking. Out of paranoia, I am currently also splitting my BEF to be $500 in Checking (as the floater money) and $500+ in Savings.

Now I just don't use the credit cards. In the past some of the big ticket items that ended up there but then weren't paid off were (1) overdrafts from my first mortgage when I was having it autowithdrawn before my payday (duh!), (2) a year's worth of taxes owed, (3) surgery for my dog, and (4) the down payment for our current house. Yep - WE PUT THE DOWN PAYMENT FOR OUR HOUSE ON A CREDIT CARD!!!! That is hand's down the dumbest financial move that we've made. We kept deluding ourselves that we had the money to pay off our cards, so we would just do that. Now we know that we can't do that. Those balances would just sit there with the tiny minimum payments going mostly to interest and the balances never getting a dent, while we spent our paychecks on needs and lots of wants each month.

Like any addict, the urge to shop and spend is a daily struggle for me. I loves clothes and shoes and Target! When I get those urges, I try to be productive by doing something free and fun with my son, logging in to a good DR message board (try http://www.llnoe.com/) or other Personal Finance site, or if I really, really want something, I make sure to sell something of mine first and then use the money earned to buy the new thing.

My $500 January Challenge

2009-12-31T11:50:00.001-08:00

One of the negative things about New Year's resolutions is that we tend to overburden ourselves with lofty, unattainable goals. When we subsequently fail to completely revamp our lives in a week or a month, we feel bad about ourselves and give up. I would like to do the opposite with the fresh start of 2010. For the month of January, I am going to challenge myself to earn an additional $500. The goal isn't outrageous, but it will definitely require some time and dedication to accomplish. Hopefully achieving this goal will motivate me even more for the rest of the year.

This challenge has the added bonus of encouraging me to declutter. I figure the fastest way for me to make $500 is to sell off items that I own. For others, this could be accomplished by working overtime or picking up a second job babysitting, tutoring, or working off hours from your regular job. Since my days are packed with a full-time, demanding career and sole care of a fifteen month old, those options won't work for me right now. On the other hand, our garage is stuffed to the gills with many things that haven't been touched since we moved into the house last December. Another area ripe with promise is the baby's room. He seems to be a constant fountain of "stuff" that is outgrown or underused.

Normally I would add the entire bulk of what extra money I earn to our January snowball. This month, however, we need to purchase a second convertible car seat for our son. He's finally (at 15 months!!) grown too tall for the KeyFit 30 infant carrier we were using for our backup seat. The giant convertible seat just isn't practical to be taking in and out of my car and transferring to dad's, especially when we have to walk across on the ferry with it! Considering I won my Britax Adventure CS for free, this is really something we had planned to cash flow anyway.* Although I love our Adventure CS, we are planning to spend under $200 for this second seat. It looks like we may be able to buy a slightly less fancy Britax model for that amount if we don't worry too much about the cover color.

* I entered a contest on www.mommytracked.com and won the Britax Adventure CS car seat! It retails for $369, and is so amazingly plush and sturdy. Our son seems to love it, and I feel like he's very safe.

The (Financial) Year in Review and 2010 Goals

2009-12-31T08:02:00.000-08:00

It's hard to believe that it's already the end of 2009. The year has been amazing in that it was the year that I discovered Dave Ramsey, and began my serious journey into becoming debt free. Thinking back to the stress I had in December 2008, with a newborn son and buying a new fixer-upper house, I can't believe where I am today.

I started DR's Total Money Makeover in June 2009. The first step was to come up with the $1000 Baby Emergency Fund. We had our BEF in place by July 2009. It was so gratifying to see the $1000 in our savings account. July 2009 was also the month that we completed our written budget and saw exactly how we'd been blowing our money. We adjusted our tax witholdings, and I took a job paying $10k more per year than I was making.

There were several missteps along the way, but overall since July of 2009, we have paid off over $6000 in credit card debt and nearly $1000 in medical debts, not including our minimum payments. All of that was done without major changes to our lifestyle (other than tightening up on the random spending), and while I moved 2 hours away from my husband requiring us to maintain two mortgages (that total about 50% of our take home income). Knowing that we have accomplished so much in such a short time, I am very excited to see what else we can accomplish in the coming year.

We hope to get back about $4,ooo on our income tax return. That will pay off our current snowball card as well as the next in line. If there is anything left after those payments are made, we will fund our sinking funds for 2010 (gifts/Christmas and home repairs).

The biggest goal of the year is to sell our other house. The husband is living in a 4 bedroom 3 bath house all by himself except for 2 - 3 weekends a month when our son and I are in town. The rest of the time I live in what used to be our rental in the city to be closer to my work. If we can sell the house and just break even, then the hubby will get a job closer to me, and we will start shoveling all of that money that used to go to the house mortgage towards our debt. Fingers crossed that the house will be sold by September 2010.

I want to be motivated for 2010, but I also don't want to be discouraged if things don't work out as planned. I'm cautiously optimistic, and will at the very least be extremely proud if we keep up on our budgeting and don't incur any new debt.

Getting Started

2009-12-30T08:06:00.000-08:00

The first step in Dave Ramsey is to get a full picture of what your exact financial picture looks like. I found a used copy of the Financial Peace Planner on eBay to guide me through this process. Although you really only need the Total Money Makeover to get a pretty good idea of Dave's principles, I'm the type who likes to read every book on the subject and fill out all the forms and questionnaires. Dave often refers to Nerds and Free Spirits when talking about the different kinds of spenders. I seem to have both of these personalities - often competing with one another like the angel and devil sitting on your shoulders. While I love clothes, shopping and stuff, I also love Excel spreadsheets, filling out forms and organization.

I knew it was going to be scary, but every penny of debt needed to be accounted for in determining my financial net worth. For months, or maybe years, I had been dutifully sending off generally minimum payments and throwing away the statements on my credit cards. By June 2009, it had been almost a year since we'd used credit, so at least I knew I wasn't adding to the debts, but I also knew those balances weren't being reduced by minimum payments.

I settled in for the evening with my laptop opened to Excel, a nice legal pad and pen, and my copy of the FPU Planner. Just like Dave says, I went through each page of the book and answered every single question and filled out every single form. It is so important to see your finances in black and white. What I came out with in the end was horrifying, but it cemented my commitment to change my behavior and get control of my financial life.

5 Years of Doing Stupid

2009-12-29T08:46:00.000-08:00

Instead of buckling down with a budget and a plan after getting into my first credit card debt, the stress of owing money led me to shop more and spend, spend, spend. Since I had plenty of equity in my first house, I decided to sell it and move back to the city where I used to live. Instead of paying off the credit card with the home sale earnings, I decided I should teach myself a lesson, and pay that off with hard work instead of a bail out. Good plan, but poor follow through. Instead I used the money for a down payment on a PRICIER house in my new city (what was I thinking??), and to pay off a couple of my small student loans (that had 2.5% fixed interest!!). Suffice it to say that my new plan didn't work.

Over the last 4 years my credit debt has slowly grown. The creeping debt finally exploded when I got married, had my son, and purchased another home (while still owning the other one, and renting it out for a $600/month loss) all within a year.

One day I woke up and decided I was done with debt and worrying about money. Between my husband and I, we take home over $9,000 a month. I know that amount should definitely be enough to be living debt free with a very comfortable life style, even in a high cost of living area. We've made so many stupid money choices in the last couple of years, and the weight of it all had started to overwhelm me. Due to putting the down payment for our new house on a credit card (definitely my number 1 dumb-money-moment), working only part-time after the birth of our son, and my continued irresponsibility with money, we found ourselves in nearly $25,000 of credit card debt by June 2009. That number doesn't even touch on our cars, mortgages (yep, plural), and $50,000 of student loans between the two of us.

The crushing debt, and wanting to make changes in my life to ensure that my son would have the best life possible, I found my way to Dave Ramsey. I'd heard his name, and knew he had a show on Fox. (That freaked me out a little at first, but as I've heard many times before, even if I don't agree with everything someone says, I can always take what I like and leave the rest!). I started with a copy of Total Money Makeover that I purchased (with my debit card, of course) on Dave's website. It was the best $10 I've ever spent! Dave's method isn't complicated, but it's also not about easy money. It's about holding yourself accountable for your financial health, employing common sense, and not trying to "keep up with the Jonses."

Introductions - Me and DR

2009-12-28T20:58:00.000-08:00

After months of lurking around on the various debt and Dave Ramsey blogs, I've finally decided to take the plunge and create my own. This blog will serve to motivate me and keep me accountable on my journey to being debt free, and maybe motivate a few readers along the way. I've always believed in the power of accountability, and a public blog definitely fits that bill!

About me: I'm a 32 year old lawyer. I have an amazing one year old son. Although I'm married, and have joint finances with my husband, we are currently living in different cities. My two constant addictions in life are shopping and the internet. A dangerous combination since I can now shop day or night without ever leaving home!

Until maybe 5 years ago, I managed to get through life without any debt other than school loans and a car loan. It was when I purchased my first home as a single girl that things started to get out from under me. Initially it was one mortgage payment that came out on autopay before my pay date, and thus went onto my overdraft protection card. It was $1105 (very reasonable for the high cost of living area where I live). I never quite got around to paying that down before another small charge ended up overdrawing my checking and adding on to that card. In short, I was living beyond my means. Buying a house that required tons of repairs and improvements should have meant no more shopping. Unfortunately, I didn't tame my shopping beast. Pretty soon I was horrified to realize that I had $6,000 of debt within a year. In the four years since then, I continued to make one horrible financial decision after the next, which I'll detail in this blog for your reading pleasure.

Lucky for me, I discovered Dave Ramsey through an online message board post in July 2009. It was perfect timing. I was so tired of stressing out every month over bills, and being disappointed in myself for shopping instead of saving when the stress got overwhelming. One night I bit the bullet and ordered a copy of the Total Money Makeover. When I got the book the following week, I devoured it from cover to cover. It was so easy to read, and very inspiring. Many of the stories in the book are of men and women climbing out of tens of thousands of dollars of debt on incomes half of my own. I knew that with a few changes to my lifestyle, I could make a significant impact in my finances. That impact has already trickled out into the rest of my life as well.

In the few short months since I first heard about Dave Ramsey, I took a new job making $10k more per year, cut my shopping and latte habits drastically, began to weed out the clutter in my life, and no longer feel stress and anxiety at bill time. Saving and bill paying has become a game, and I'm constantly amazed at my ability to stick to the plan and walk past the glittery stores and new clothes without being tempted to spend. I still have a LOOOOONG way to go, but there is finally a light at the end of the tunnel. My current goal is to be debt free except the mortgage before I'm 40. That gives me 8 years to pay off $25,000 in credit cards, my $20,000 car loan, and $44,000 in student loans. Thanks to DR, I have a plan, and my future looks bright (and debt free!!).