Monday, January 4, 2016

End of 2015 Report

Starting point (Oct 2011):

Student Loan 1 (My fed loan): $38,339
Student Loan 2 (S' state loan): $21,719
Student Loan 3 (S' fed loan): $5,454
Car Loan: $11,684
Credit Card 1: $10,577
Credit Card 2: $3,635
Credit Card 3: $0
Misc. small debts (S' small debts in collections): $5,443
Medical expenses: $3,672
Parents: $600

Total: $101,123

And here's where we are today:

Student Loan 1: $34,040
Student Loan 2: $18,369
Student Loan 3: $0
Car Loan: $0
Credit Card 1: $4,362
Credit Card 2: $0
Credit Card 3: $0
Misc. small debts: $4,284
Medical expenses: $0
Parents: $3,185
Consolidation Loan: $7,273

Total: $71,513

Paid off to date: $29,610 paid off + $1,199 in savings

The final quarter of the year killed us. We were plagued with car troubles, an expensive move, and just plain lack of dedication to paying off debt. As a result, we have slightly more debt at the end of the year than we did at the end of last year. I really hope we can get moving back in the right direction in 2016.

Wednesday, December 23, 2015

Been a busy 6 months

I knew it had been awhile since I posted anything but was pretty shocked when I looked at the date of my last post! Soooo much has happened since July 31st and it's high time I get some record of the changes on here!

Let's start with the biggie: I got a promotion at work and we moved again! Probably right around the time that I last posted, my company advertised a position in the Louisville office (about an hour and half from where we were living). I immediately put my name in the ring even though it would have been a lateral move professionally. Moving to Louisville would get us in the same city as my family, a larger and more active market for S' work, and a more metropolitan lifestyle that we were used to having. Over the course of the conversations with my bosses about possibly moving, the manager of the Louisville office turned in her notice. So the conversations turned into a promotion opportunity rather than a lateral move! 

The negotiations took the month of August and we spent the month of September moving. Meanwhile, my workload increased quite a bit and I have been really overwhelmed by the new job... hence the lack of posts here even though there are a TON of things going on in our financial and debt world.  I would love to report that the majority of these financial things have been positive but that's just not the case. I'll do my best to summarize what's been happening the last three months but the truth is, I've been so busy and overwhelmed at work and with the move that the finances are a bit out of control right now. Now that we're settled in it's time to get our financial house back in order.

The big positive financial impact is the promotion which puts an extra $360 in the budget each month plus a phone reimbursement and some moving expenses. There is also the expectation (built into the offer) that there will be an additional increase after 6 months on the job. On the flip side of the move, we decided to overlap our rental houses by a month to give us some breathing room on making the move. I received some moving expenses but only enough to cover the actual move so the cost of having two places plus utilities for both for a month was on us. And since we still haven't replenished our emergency fund the cost for the overlap (around $1,300) was financed.

Another factor of the promotion is that I was immediately in front of clients on a daily basis and the atmosphere with the Louisville clients is more business attire than my past office. In the past I could get away with a couple dressier outfits and just dress nicer on days that I would be meeting with a client. Now I need to dress nice everyday so my wardrobe needed some immediate upgrading. I went ahead and purchased a few essentials, spending around $200, to stretch the more casual wear I have and will be adding a piece or two to my professional wear each month for the next few months.

Another big financial item we have been dealing with for the past few months is vehicle repairs. One of our cars started shifting very poorly and we were concerned the transmission was going out. Thankfully it is not the transmission but instead a number of smaller repairs plus some general maintenance that needed to get done. The price tag on all these repairs is approaching $1,500, all of which has been on the credit card. Additionally, I was rear-ended on the way to work right before the move by a hit and run driver. Since we don't have comprehensive the repairs to the bumpers (back where I got hit and also front where I was pushed into the car ahead of me) will be out of pocket if we decide to get the car fixed. 

I was fortunate to get a nice bonus this past week so we were able to replenish the emergency fund, put a bit aside for some upcoming one time expenses, and pay off some debt. But it wasn't enough to pay off everything so we're ending the year slightly more in debt than we were last year. I'm trying not to be too disappointed, the past 6 months have been pretty crazy and I think we are in a very good place to make some serious progress in 2016. 

I'll post again soon with our year-end finance report and our new budget going into 2016.

Friday, July 31, 2015

Spare change challenge update

Last July I started a “Spare Change Challenge”. Basically, for the last year, any money that I’ve found (outside of my house, car, and laundry), I’ve put in a jar. This experiment could also be aptly named “I am looking for ways to break up the monotony of slowly paying off the debt.”

Anyhoo, besides just setting aside any spare change, I also challenged myself to increase my chances of finding spare change. I started walking more, taking a short walk before work, on lunch if I could get away from my desk, and in the evenings with my boys. I also started paying more attention to my surroundings when I was walking. I quickly realized that I spend a LOT of time daydreaming, texting, looking at social media updates, and generally NOT paying attention to my surroundings when I’m walking about. It has been really refreshing to walk around and observe my surroundings. AND it has paid off….

In the past year, I’ve found $21.63 worth of dropped money including a $5 in a storm drain inlet, another $5 in a wad along a sidewalk, and a soggy $1 bill at the playground. My little experiment added more to my wallet than the interest on my emergency fund with the added benefit of getting me walking regularly. Aside from the cash I also found some cool and expensive sunglasses, a couple small car toys, a fitbit/ bracelet (the actual fitbit was broken but I kept the bracelet so I can have a spare), and a gas gift card with $2.96 left on it.

Here are a few tips I can give after my year of finding spare change:
·         Walk more!!
·         Increase path of travel such as parking farther away from building entries and creating walking loops instead of walking back and forth along the same route.
·         Walk along the edge of the sidewalk and pay attention to the edge of the road at the curb line especially at paid parking spots
·         Walk where people partied the night before… I feel pretty confident in saying that the $5s I found were dropped after an evening of excess as they were found around known nightlife spots.
·         Also, pay attention in places where people frequently have cash out like shops, festivals, parking meters, etc.

·         Keep your eyes open and mind on the surroundings, I was surprised at how easily I space out when I’m walking about and had to make a concerted effort to stay alert to my surroundings.  

Monday, July 27, 2015

Budget Assessment 5: Debt and revised budget

To rehash the previous assessment points, we were trying to come up with enough to cover the following:

$260 for pre-school
$140 additional for medical expenses/ savings
$150 for IRA plan

So far we’ve cut $45 from utilities budget by enrolling in balanced billing, getting water leaks fixed, and other energy saving techniques. We are working on cutting at least $30 in the diaper funding by starting potty training DS B (who proudly made his first pee pee in the potty this past weekend). We’ll be tracking our grocery and fun money expenditures closely over the next two months and seeing how we can reign in our spending or possibly even make cuts. And, for now, the $8 Netflix stays…. Got major pushback on proposing that cut!

The last budget area to assess is our minimum debt payments. Our minimum payments are as follows:
$205 consolidation loan
$183 to my parents
$225 my student loan
$210 S’ student loan
We’ve received all of the new medical bills from DS L’s seizures and owe $1,909 to many different organizations so there are many different minimum payments.

We’ve decided to put the two student loans in deferment and use my anticipated end of year bonus to cover the accumulated interest. This frees up $435 in our budget to cover the pre-school and medical savings. We’ve negotiated with two of the smaller medical bills organizations to get payment plans set up and will owe $114 for the next five months to pay those two off. There are four additional accounts that are all under the same parent company but since they are different departments, they cannot be combined and the minimum payments are unaffordable. We have been advised to let these four accounts go into default at which time they will be sent to the parent companies central billing department. Once the central billing department has all four, they can combine and offer more flexibility in repayment length. I’m anticipating this process will take several more months and hopefully our first payment will be due after we pay off the first two bills.

The adjusted budget we’re working towards is as follows:

$1,170  29%      Rent & Utilities: gas, electric, sewer, water
   $580  15%      Insurance: Health, life, disability
   $270    7%     Cars: insurance and fuel
   $135    3%     Tech: phones, internet, Netflix
   $620  15%      Household: Groceries, diapers, toiletries, pets, etc
   $180    5%     Extraneous/ Fun: haircuts, clothing, dining out, projects, gifts
   $200    5%     Medical/ Savings
   $260    7%     Pre-school
   $585  14%      Debt: minimum payments
$4,000              Total after tax income

The goal is to have fully implemented all of the cuts and re-organization from our assessment by the end of this quarter, September 30. We will need to re-assess at the end of the year when our loans are close to coming out of deferment. For now, retirement savings is still off the table but is a high priority once we get a handle on this medical debt.

Monday, July 20, 2015

Budget Assessment 4: Household Costs and Extraneous/ Fun Money

The $650/ month Household Category has a number of individual items so I’ll break down this category and assess each item separately. Included under household are groceries, toiletries, diapers and baby items, and pets. We also have $180/ month for extraneous/ fun money. Currently it breaks out like this:

  $60 diapers, wipes, diaper cream
  $25 pet food, cat litter
$565 groceries, toiletries, laundry, cleaning supplies, general house upkeep
$180 gifts, clothes, haircuts, projects, dining out

In the first category, $60 for diapers and such, one of our boys is showing readiness to begin potty training. Of course this will be a process and we can’t really put a target date on when he’ll be out of disposable diapers but I can expect sometime this year we’ll at least be able to cut this number in half. Who knows, maybe both boys will be done with diapers by the end of the year. Once we begin the potty training process, I’ll also introduce reusable cloth training pants so at the very least we’ll see a minor reduction in the amount we’re spending on diapers. We already buy the absolute cheapest diapers we can find so getting them out of diapers is the only way we can save any more in this category.

In the $25 pet category, we are at the bare minimum. We have found the Costco food is comparable in quality to the more expensive foods we were using and it’s about half the price. This is a category that I would love to increase when it becomes possible because right now we are not doing any monthly heartworm or flea prevention and have nothing being set aside for vet bills. For now, I just don’t see how we can increase the money in this category.

The next category, $565 household and grocery, is one that we tend to go over on each month. To be perfectly honest, my record keeping in this category is not great as it tends to get blurred with the next category. My initial thoughts were that this category needed to be increased but I’m thinking what I really need to do is keep a better track on the next two categories to really assess where we are going over and why. I know we could do some things better in this category. I’d like to see us cutting down on the pre-packaged foods like individually wrapped cheesesticks, frozen meals like those I take to work as a back-up meal, and other processed foods. We could also have more vegetarian meals, it seems like we’ve increased our meat intake over the past year and particularly once I started meal prepping, as almost all recipes I’ve tried center around a meat. For the next couple months, I will be more diligent about tracking expenses in this and the next category and do a better assessment afterwards.

The last category is the $180 “fun money” which covers gift giving, clothes, haircuts, dining out, and the occasional date night. As I discussed above, we go over in this category a lot. When I look at it on paper, I think $180 is a lot to be spending each month on extraneous stuff. But when I break it down into what it can actually cover, it doesn’t seem like much at all. Here’s an example of what $180 could cover in a month:

$20 1 take-out/ fast food meal out
$15 1 haircut
$30 gift for someone’s birthday/baby shower/wedding (this summer has been especially heavy on the special events)
$80 10 lunches out at approx. $8 each (we always try to pack food when we’re going out/ to work but aren’t always prepared)
$10 clothing item for 1 of us
$25 date night: movie tickets, drinks and popcorn

Perhaps I’m not prioritizing my debt pay-off appropriately and we should be forgoing most of the things on the list above. I think tracking for the next couple months to see how we really are spending in the grocery and extraneous category will help me understand where we can truly cut.

Friday, July 10, 2015

Budget Assessment 3: Housing, Insurance, Cars and Technology

I started a budget assessment in my last couple posts and today I’ll continue by looking at the first four categories in our budget: Household, Insurance, Cars, and Technology. These four categories make up 55% of our monthly expenses

The Housing categories include our rent, gas, electric, water, and sewer utilities. There’s very little we can do to reduce this category at the moment.  We are fairly diligent about energy savings although there are a few ways we could cut back a little more including:
-       Fixing the broken dryer timer, we have to set an alarm to remember to turn the dryer off since the timer is broken and there have definitely been a few times we forgot and over-dried our clothes/ wasted a bunch of electricity.
-       Fixing the small leak in our shower faucet and toilet. I’ve put in a work order with the rental management company so that should be fixed soon.
-       We can always look into moving into a cheaper place but probably won’t consider this until our lease is coming up next March as the termination penalty would outweigh any monthly savings.
-       More cold water washing, more line drying, shorter and cooler showers and other energy cutting things we can do to help reduce our energy use each month.

The Insurance category includes health, short and long term disability, life and rental insurances. I don’t feel that we are over-insured as we have very modest coverage for life and rental insurance; health insurance is what it is through my employer. Perhaps the disability insurance is a variable that could be cut however I think that would be a last resort and I honestly feel like keeping the insurance is a higher priority to me than paying off debt. It’s a fairly low cost of $31 a month and since my income is our only income and I have already experienced something (the pregnancy) that took me out of work, I feel it’s important to keep as a safety net until we are able to set aside a more substantial emergency fund.

In the Car category we have insurance, fuel and a small amount for maintenance. We perform almost all of our general maintenance for tire rotations and oil changes so there’s no reductions there. Bigger repair jobs we usually save up for out of our variable income and do it ourselves if possible. We have the lowest insurance rate I’ve been able to find so we’re also stuck there. The only thing I can think of that could help reduce these expenses is:
-       Riding our bikes more. I am working up to being able to bike ride to work and hopefully will feel comfortable in my ability by the end of summer. This is probably the least bike-friendly place I’ve ever lived (both my sister and my father have been hit by vehicles in this town) and my lack of confidence and skill on a bicycle need some more work before I’m willing to head out into serious rush hour traffic.
-       Walking or biking to the grocery more. There’s a store within walking distance and a bigger store within biking distance.
-       Be more diligent about combining errands and reduce the number of trips we take over to visit my family (about an hour and a half away from us).

For Technology we’ve got our cell phones, internet, and Netflix. We recently switched our internet provider and have the lowest rate we could find. We’re also fairly diligent about checking around for better cell phone rates but always end up staying with T-Mobile as the lowest cost provider. The last item in the category is Netflix. At $8 a month and our only set entertainment budget item, I hate to say goodbye to our cheap entertainment but I think we can cut it without too much pain.

In summary, I’d like to achieve at least a $10 cut in our utilities, a $10 cut in our fuel use, and the $8 cut for Netflix and get that $28 dollars allotted elsewhere.

Wednesday, July 8, 2015

Budget Assessment 2: What’s missing in the budget?

Before I really dive into each category and assess what we’re spending our money on, I’d like to take a moment to talk about what is currently missing from our budget. Several biggies jump right out from our recent experiences.

First, we do not have enough budgeted for medical expenses each month. I looked at the last three years and we needed an average of $200 a month for medical expenses. Our current budget has a mere $60 a month allocated towards medical expenses and that’s also supposed to cover savings if our emergency fund needs replenishing. So there’s the big, huge, right-there-in-my-face, obvious reason we continue to stay in medical debt despite “paying off” the debt a couple times. We need to stop planning for a great, healthy, uneventful year and start planning for more medical expenses.

Another biggie, we do not have anything budgeted for pre-school and yet we will owe $260 a month starting in August and continuing through April. Really, this will be an ongoing expense since we intend on keeping them in pre-school until they enter the public school system. There is the possible exception that next year one or both will be accepted into the early public pre-school program due to their developmental delays and there will not be a cost associated with pre-school. I don’t want to plan on that though because I am very hopeful all the hard work we are doing will have them caught back up with their peers soon. The most conservative approach is to plan on spending $2,800 a year on pre-school and start budgeting for it in a monthly basis.

I’ve become skeptical that $1,000 is enough of an emergency fund, seems like the emergencies we have carry a bigger price tag. The other concern I have looming in the back of my mind is what happens if I lose my job for some reason. $1,000 would not cover that type of emergency. We need to re-assess if we really feel comfortable having only $1,000 in the bank to fall back on and balance that against our debt free goals.

The last issue that’s been looming in my mind for the last year is retirement. S has absolutely nothing saved and I have a meager $15k in an IRA that I rolled over from previous employers. I have not enrolled into my current company’s plan which matches 3%.  We’d need to squeeze another $150 out of the budget each month in order to be able to at least put in the minimum for the company match.

So there are the items I’d really like to have in the budget as soon as possible.