End of 2014 Report

Starting point:

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 were we are today:

Student Loan 1: $34,961

Student Loan 2: $19,351

Student Loan 3: $0

Car Loan: $0

Credit Card 1: $0

Credit Card 2: $0

Credit Card 3: $4,730

Misc. small debts: $4,349

Medical expenses: $1,887

Parents: $0

Consolidation Loan: $9,037

Total: $74,315

Paid off to date: $26,808 paid off + $1,348 in savings

The final quarter of 2014 got us moving back in the right direction. After three quarters of debt increases, I was feeling like we may never get back on track and that we might have made the wrong decision in changing up our lives so dramatically with the move. But here we are at the end of 2014 and I have hope again that we can pay off our debt! We’re ending the year with roughly $1000 more in debt than at the same time last year. It’s disappointing but given the year we had I’m ready to get over it, forgive the past and just focus on what we can accomplish in 2015.

Year in review

I had three goals for 2014:

No.1: Stick with a tiny, one salary budget so S could stay home with the boys and restart his pottery studio.

No 2: Get emergency fund back up to $1000.

No 3: Pay off remainder of medical bills (which was $550 when I made the goal), pay off as much cc debt as possible, and continue to chip away at all other debts with minimum payments for a grand total of $7,000 in total debt reduction.

Looking back on the year, I have to laugh at how naïve I was when I made goal number 1. The transition to one income was much more difficult than I had ever imagined. It required a level of cooperation and communication between S and I that was way beyond our ability when the goal was made. It took months of growing pains before I really felt like we were in synch about the budget and many more months after that before we could reign in our spending to conform with the new budget. We were also ridiculously naïve about how much work S would really be able to get done with the boys at home and how much time/ money it would really take to get a business off the ground. Taking the year as a whole, we bombed goal number 1. But in the final quarter we were able to launch S’ business, have been able to stick with our budget and start making a dent in debt again. We have also grown immensely in our relationship, as parents, and as financially responsible people so I’m thinking we didn’t totally fail at goal number 1.

We met goal number 2 in the final quarter, which is such a relief. Overall we are doing a much better job at forecasting, budgeting, and saving for upcoming major, one-time expenses but it’s good to have some money set aside for real emergencies like the ones we have faced this year.

Lastly, there’s no way to sugar coat goal number 3: we failed miserably. We failed to understand what goal number 1 meant and ended up acquiring new debt trying to figure it out. We failed at estimating just how much the move would cost us and acquired new debt trying to make the transition. We wiped out our emergency fund in the move which meant we had no way to pay for the unexpected medical expenses and acquired new medical debt. It just wasn’t a great year financially until the last quarter, when we finally got our act together. I guess I should be thankful we are ending the year with only an additional $1000 in debt given all the failures along the way.

2014 was a major learning experience, yes, we increased our debt, but in the end I am proud of how well we have dealt with the setbacks. I am anticipating 2015 will be a great year for us, we’ll continue to grow and learn how to manage this new lifestyle, we’ll start seeing major decreases in debt again, and we’ll better predict and manage upcoming expense. Here’s hoping for an uneventful year, at least in the financial aspect!

Busy, busy, busy

I don’t think I’ve ever been busier in my life than I am these days. In some ways it’s good, it’s nice to feel productive and it distracts me from the fact that I’m not making much progress on the debt.  In other ways it’s bad, I am experiencing some negative side effects on my health and tend to feel overwhelmed a bit more lately particularly about our tight finances. But there’s not much I can do about it at the moment so I’m just trying to roll with it and hope that someday soon I’ll be able to relax a bit. Here’s what is keeping me busy these days…

Boys: They are 18 months and just a whirlwind of activity. They are truly becoming little independent people and, even though I’ve said this about every stage they’ve gone through, so far this is my favorite stage! Keeping up with them is exhausting and exhilarating all at once.

Family: The move to be closer to my family has been wonderful in most respects but it has added a whole level of demand on my time that I wasn’t considering. Seems like most weekends have some sort of family gathering going on and there’s a level of expectation that we will be attending all of them even though we live an hour and a half away. Lately I’ve been saying “no” more frequently and with a lot less guilt. I figure they were used to only seeing us a couple times a year, they will survive if they only see us a couple times a month!

Work: Business is booming, which is great but also stressful. Work days are flying by lately in a flurry of deadlines and 8 hour days are stretching into 10-12 hour days a little too frequently these days. Thankfully, we’ve brought on another person so once they are up to speed it should help calm the rest of our work loads.

Side work: December is my busiest time of the year for my etsy businesses. I participate in holiday craft fairs and typically see a pretty big increase in online sales both of which add to the strain on my time. I usually close down the shops for a few weeks once the Christmas rush is over and right now I’m just counting down the days until I can shut that part of my life down for a few weeks!

Daily Life: Living on such a tight budget means every dollar has to go as far as possible.  Even though I’ve learned a lot in my relatively short quest to pay off my debt, frugal living still doesn’t come naturally.  Also, I think frugal living just takes more time, a lot of my money used to go to convenience like prepared food or replacing things instead of fixing. Either way, I spend a considerable amount of time planning, reviewing, and researching ways in which to make my dollar stretch. Hunting down deals, making things myself that I otherwise just would have bought prepared, repairing things that I would have replaced, and all of the other things I have to do now to get more for my dollar keep me busy. Plus all the hustling to sell off stuff we don’t need any more like outgrown clothes or bring in money in some other way adds to the strain.

I’m thinking that I might just reserve the month of January as a “no family events, no side jobs, and no hustling” month.

Three years of debt reduction

Today marks the third anniversary of my beginning this blog and my debt reduction journey. It's been a tough year financially: S and I made an expensive move, transitioned to one income, have been investing in his business, and racked up some more medical debt. All told we increased our debt a little over $1,600 in the past year. I've been trying to stay the course and see the positives in the setbacks we've had over the last year and remind myself that we will get back on track. 

Although debt reduction did not happen here are some of the more positive things that did occur in our financial world:

• We've made a transition to one income and aren't starving, deprived, or destitute. Making the leap to one income to allow S the opportunity to restart his ceramics business and stay home with our boys was a major hurdle this past year. I had major anxiety that we wouldn’t be able to make it work, that we wouldn’t be able or willing to make the sacrifices we would need to make in order for it to work. I was worried that ultimately the boys would end up back in some cut-rate daycare and S would be forced to abandon his dream and take some minimum wage dead end job just to make ends meet. Fortunately, we have made the adjustment relatively well and have been living on one salary without feeling too deprived with all the cuts we have had to make although it has added to the halt in debt reduction and increased debt.
• S’ business is fully funded and ready to launch. S has been working diligently on getting his business back up and running, which required a significant amount of our discretionary funds that otherwise would have gone into debt reduction or at least not accruing the new debt.  But now the business is fully funded and is going to be “launched” right before the holiday shopping season. We have high hopes that the business will be able to support itself in its infancy and eventually will bring in a profit.  In the meantime, now that the biggest hurdle is almost over S has been talking about getting an evening/ weekend job to bring in some extra income but still be able to be with the boys during the day.
• We should see a reduction in our taxes this year from the moving expenses which were not covered by my employer as well as the business investments. Although any tax return wouldn’t happen until early next year, it’s still on the horizon and can go towards debt reduction.

The road ahead is going to be tough as we still have a ton of debt to tackle but I'm hopeful that the last of the debt increases are behind us and we will start making headway on debt reduction again.

Yard sale prepping

This weekend I'm participating in a yard sale with my mom and one of my sisters. I'd like to say I'm looking forward to it but I'm really not. It seemed like a great idea when I agreed to it a month ago, I had been on a purging binge for a couple months and was ready to get rid of more stuff. But then life happened and I just haven't had as much time to go through all our stuff as I would have liked.

I do have quite a bit of stuff set aside and tagged. I already had boxes of baby stuff ready to go and I've made my way through all of my clothing, shoes, and accessories. I've managed to sift through some kitchen wares, books, my sewing and craft supplies, and grabbed random stuff from around the house. What I haven't tackled is the attic, which became a catch all for random boxes from the move that were not critical to unpack and were getting in the way. Since we've now lived in our new place for 6 months it's fair to say that we don't need most or any of the stuff in these boxes.

I'm going to try to get through as much as possible before Friday evening, when I have to pack up the car and head to my moms (an hour and a half away). Since most of the stuff I've pulled together is small, cheap, and not the best type stuff for yard sales, I'll be glad if I can walk away with $20 extra bucks. I guess I'll just keep the stuff labeled and in boxes and have another yard sale in the spring. Surely I'll be able to get through all of our belongings over the next 6 months.

What to do with won money?

I didn’t win anything but I did recently enter an online sweepstakes and it got me dreaming about what I would do if I won the $350k cash prize. Just for giggles, let’s assume I won and now have $350,000 in cash. And since we’re dreaming let’s say that’s after taxes…

The #1 first thing I would do with my cash is get a mani/ pedi. Kidding, sort of. It is the one thing from my easy spending life that I really do miss. The real first thing I would do is, duh, pay off all debts! Secondly, I would set aside 6 months living expenses in an emergency fund, finding the highest yield savings account available or perhaps a CD ladder. $100 K would go straight into college savings for the boys and another $100 k would go into retirement accounts for S and me.

I’d also want to set aside a 20% down payment on a house so there’s another 40k (a 200k house in this area would be more than enough for us to grow in). The remainder I would invest, something about peer to peer lending appeals to me, perhaps because we got our consolidation loans through peer to peer to help us out of our debt mess.

$77,117.00 Debt

$24,000.00 Emergency Savings

$100,000.00 College Fund

$100,000.00 Retirement

$40,000.00 House

$8,883.00 Invest

$350,000.00 Total

But wait, all the money is going to debt or to some sort of savings?  Where’s the party, where’s the new car and big screen, what about the mani/ pedi? Yep, I feel pretty comfortable saying that I would put everything into savings after the debt is gone. After a decade of owing money all over the place and having gone through several major life events that would have been a lot less traumatic had there been savings to fall back on, I absolutely would put it all towards financial stability. Besides, paying off the debt would free up at least $800 a month to put towards having a bit more spending cash each month for the luxuries in life.

Now if only I could just win that cash… until then I just have to keep doing this the old-fashioned way and keep chipping away at the debt.

3rd Q 2014 Report

Starting point:

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 were we are today:

Student Loan 1: $35,319
Student Loan 2: $19,837
Student Loan 3: $0

Car Loan: $0

Credit Card 1: $0

Credit Card 2: $0

Credit Card 3: $5,939
Misc. small debts: $4,349
Medical expenses: $2,218

Parents: $0
Consolidation Loan: $9,458

Total: $77,120

Paid off to date: $24,003 paid off + $655 in savings

Let's get the bad news out of the way: we increased our debt for the second quarter in a row. We're another $688 higher than we were last quarter. The good news is: that's all we increased despite having over $2,300 in medical bills this past quarter. If I'm trying to see the glass half full, it's also good that all of the medical debt we've added over the last quarter is interest free and is in the process of being consolidated into one low monthly payment.

Other good news, we've finally got some cash in savings, some of which is "emergency" and some of which is being set aside for our car insurance payment. Barring any major unforeseen events, I am hopeful that the coming quarter we will finally start making a dent in debt again as well as finally get our emergency fund back up to $1000.

Unexpected bonus

I've been really busting my butt at work for the past couple months, working long hours and at a fairly frantic pace. My company has more work than we know what to do with and, so far, have not had any luck in finding another person to bring onto the team. S has been so patient with the overtime even though it often means super long days with two active toddlers and putting his own work on the back burner.

A couple days ago the three partners at the company pulled me into the only space in the office that has a door and closed it behind me. First thought, oh crap, I've been here almost 6 months, maybe they think I'm not measuring up to their expectations when they hired me!  Gulp!

The convo started with the usual review type questions, how do you feel you are settling in, how has the transition been, etc. Quickly though they started singing me praises and said they just wanted to take a break out of the busy schedule to let me know they appreciate the hard work... and if that wasn't enough of a boost for me, they handed me an envelope on my way out the door with a nice little bonus check in it.

It's been a long time since I've been in a work environment where I feel that my knowledge, efforts, and hard work are valued and even longer since I've received a random bonus. It really makes all the difficulties S and I have faced since the move seem like they are worth it! And honestly, the check couldn't have come at a better time. The boys are at the upper limit of the height class for their infant seats and it's time to get the bigger seats. With no savings and very little extra cash in our budget I didn't know how we were going to afford two expensive car seats that would fit in our compact cars.  

So $500 of the bonus is going into savings so we can finally have a little bit of an emergency fund and the rest will go to car seats! What a relief!

Selling spree

I’ve been on a selling spree this past month, going throughout the house and listing unused and unneeded stuff on Craigslist, Ebay, and at a children’s consignment event. Things I uncovered to get rid of included old video games, furniture, my wedding dress, and all the boys clothes, toys, and items that they’ve outgrown.

After all was said and done we brought in $293 which is great since we had some unexpected medical bills and auto parts that were needed over the past month. $100 went towards buying the clothes, shoes, and coats the boys need to get them through the fall and winter which we picked up used at the consignment event.

Some of the stuff I uncovered, like my wedding dress, didn’t sell during the course of the last month and while I still intend on selling this stuff, it’s a ton of work to stay on top of all the listings and people contacting me for more info. For now I need to focus my attention elsewhere for a while and maybe I can do another month selling spree towards the end of the year or perhaps near the spring children’s consignment event.

Medical debt

Life has been moving along at warp speed and I haven’t been able to post as much as I’d like about what’s happening financially in my life.  Little financial things have been going on like selling off stuff on craigslist/ ebay and preparing for the big kids consignment sale this weekend.  But also one major thing has occurred that really puts a kink in the financial plan: medical expenses.

One of the twins had a trip to the ER (he’s fine, just a little infection) which means a $150 co-pay and I ended up needing a minor surgery (I’m also fine).   Since we hadn’t met any of my deductible yet for the year and have a 20% patient responsibility we owe a little over $2,000 for that.  Unfortunately, the need for these medical services were totally unexpected and since we still don’t have any money set aside in an emergency fund this all means we have more debt now. 

I’m really bummed out about the med expenses for a number of reasons.  The first is that it just drives home how important the emergency fund really is and it has been so frustrating trying to get money set aside for emergencies. All that debt consolidating/ shuffling and putting my student loan in deferment a couple months ago have only allowed us to cover some of the smaller medical bills and other unexpected expenses we’ve had lately.  And every time I bring a little extra in via my side businesses or by selling something off we have some unexpected expense so nothing makes it into savings.   

I’m also bummed because we were only two monthly payments away from paying off all the medical debt from the boys’ birth.  Now we’re right back in medical debt and almost as much as we started with.  Just feels like another big step backwards.

The biggest reason I’m bummed out is that we can’t afford to make additional debt payments on anything right now.  We’re on an extremely tight budget as it is and there’s nothing left to pay towards new debt.  When I tried to set up payment plans for the medical debt, the minimum payments to the three different accounts that make up the bulk of the balance were no were near affordable with our budget.  And even though the three accounts are all through the same umbrella company because they are from different locations and people they can’t combine the accounts to try and get a lower monthly payment.

After talking with the billing department for a while and explaining our situation the lady suggested we take another approach.  Apparently after the bills go unpaid for two billing cycles they will be transferred to the internal collections department (which is not reported to the credit bureaus).  She advised us to let the bills go to internal collections at which point we can consolidate those three accounts into one.  She said that the collections department also has a lot more flexibility on repayment terms so we can get a much lower monthly payment.  The only saving grace in this situation is that by the time these new bills go to collections we will have made our last payment on the birth debt.  Hopefully we can get a repayment plan at or lower than the medical payments we are currently paying but we won't know that for another couple months.

I certainly hope I can start posting more positive news soon and start seeing some debt reduction again.

Found change challenge

"Find a penny, pick it up, the rest of the day you'll have good luck"

A silly saying but good words to live by in my opinion.  I was out in the field for work the other day which involved me walking up and down a busy street in my town, cataloging the condition of the public right-of-way.  Over the course of the day I found a dime and three pennies.  The next morning I found a dime left over in the checkout at the U-scan and a penny in the parking lot when I went grocery shopping.  Yet another dime appeared on my walk around the neighborhood later that day.  It occurred to me that I find a lot of spare change as I walk around.

I asked S how much change he finds throughout the year and he says he rarely finds any. I don't think it's because I am extra lucky that I stumble across free money more than other people.  I think the following things lead me to find free change:

1. I notice it when I see it.  My sister used to call me hawk-eye when we were little because I could always find dropped earring backs, needles, and other tiny objects that get lost when dropped onto a busy backdrop.  But I don't think I have keener eyes than others, I think I just recognize the value in loose change where others would blindly pass over a spare penny because it is worth so little.

2. I go out of my way to pick up spare change.  It's one thing to notice dropped change, it's another thing to walk over and pick it up if it's not in your direct path.  I always go out of my way to pick up spare change.

3. There's no shame in my game.  I'm not embarrassed to pick up a penny on the road just because I happen to be walking with a co-worker or because it's on the floor in a busy grocery store.  

Sunday evening I decided to do a little found change challenge.  For the next year I'm not only going to pick up any loose change I randomly come across, I'm actually going to start looking for it (I'll do some posts along the way on ways to find spare change).  I'm going to set aside all this found change in a jar.  Next July I'll count up the change and see how much free money I can find in a year.  I've even convinced S to participate so hopefully he'll start keeping his eyes open for loose change too.

Doing some late "spring" cleaning

Rounding up all our spare change last week put me in the purging mood and got me wondering how much money we have lying around in things we don't use/ need.  Over the next month I plan to go through the house with a fine tooth comb rooting out these unneeded objects and selling them via Ebay, Craigslist, and a large kids stuff consignment sale I will be participating in next month.  

I made an initial sweep this past weekend and currently have the following stuff listed on Craigslist and Ebay:

- Baby stuff including a large automatic swing, a floor mat entertainer, a carrier, and some maternity stuff: this is just the big ticket stuff, I have boxes and boxes of smaller value stuff that I will sell at the consignment sale a month from now.
- A futon frame: we're keeping the mattress but honestly it's so much more comfortable on the floor than on this metal futon frame... besides the mattress on the floor just adds to the Japanese motif the guest room seems to be taking on.
- Video games: yep, I like to play video games (which I buy used) but with two toddlers I almost never get to play and the likelyhood of me going back and replaying ones I've already beaten is pretty slim.
- Wedding dress: not going to use it again and I had two boys soooo... do I really need to hang onto it?

Obviously I don't know if all of the stuff listed will sell or how much it will sell for but if everything sold for a price around what I expect there is $450 in unneeded stuff lying around the house.  I'll be keeping track of everything I "find" over the next month to get rid of and how much it sold for.  Once the kids consignment sale is over I'll write a post on how much money we had lying around in unused stuff.

Counting the coin jar

Last week I was catching up on one of my favorite blogs, http://www.bloggingawaydebt.com/.  In one post the writer mentioned it was time to go around the house and collect all the spare money which he estimated would be between $60-90 bucks (accumulated over the past few months).  My initial reaction to reading this was “Yikes, how could someone have that much lying around and not know about it!” $90 (even $60) seems like a lot of money to me these days and I feel like over the past few years I have become so much more aware of where my money is, how much is being saved/ spent, and what every nickel is working towards.  But then I started wondering… how much money do we have just lying around in coin?  Is it possible we have that much in loose change?

This past weekend I went around the house collecting all our change.  There’s a bowl in the kitchen and on S’ dresser for collecting spare change.  We also have two little piggy banks in the boys room that we got as party favors at a baby shower that we sometimes put change into as a demonstration to our boys the importance of saving.  I dumped my coin purse and the little stash of quarters I keep in the cars for meters.  I also rooted through the cars, couch cushions, and picked up a few stray pennies randomly located throughout the house as I cleaned.  On a roll, I went through all our coat pockets and extra wallets/ purses.  

The final tally $33.08 plus a shiny golden 20 cent Euro.  I was honestly surprised that it came to that much.  I always try to use exact change and even empty my coin purse into the self scan checkout whenever there's not a line behind me.  S' dips into the coin jar for a gourmet coffee treat every once in a while and we always use quarters up at the meters downtown.  Also we only use cash for our discretionary spending, the small amount of pocket cash we get each week and for our monthly household random expenses.  Everything else is paid for either through online auto pays and bill pay or by debit card.  I can imagine if we were an all cash family that number would easily be double, possibly even triple.

It wasn't till I went to roll up the loot and couldn't find our coin sleeves that I realized that there's a gallon ziplock baggie still packed somewhere with all our pre-move coins (and the sleeves).  Eventually we'll get the rest of our stuff unpacked (why we even have so much stuff that we can have it sitting in boxes for three months and not need it is a whole other story) and we'll find the mystery money.  But for now, I just walked over to the bank on my lunch break to get some more sleeves... and found a dime on sidewalk, bringing our total to $33.18!  

Update: Found the missing bag o' change... add another $1.72 to the total loose money tally we had lying around our house.

2nd Quarter 2014

Starting point:

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 were we are today:

Student Loan 1: $35,251
Student Loan 2: $19,511
Student Loan 3: $295

Car Loan: $0

Credit Card 1: $0

Credit Card 2: $122

Credit Card 3: $6,212
Misc. small debts: $4,284
Medical expenses: $300

Parents: $0
Consolidation Loan: $9,865

Total: $75,840

Paid off to date: $24,402 paid off + $5 in savings

This past quarter was by far the worst we've had since we started the debt reduction journey. Not only did we increase our debt by $1,695 over the last three months but we also drained what was left of our emergency fund.  As bad as it looks to see it all laid out like this there are some positives coming out of the past quarter.  First and biggest, is S' student loan (#2 in the list) has officially been rehabilitated and is no longer in default.  The number shown was from his last statement but we don't know for sure what the current balance is because we are waiting to hear from the lender that bought his loan from the collections company.

Secondly, we consolidated the credit card debt we accumulated during the move on the 15.99% card with S' student loan #3 with a private 8.39% loan from Lending Club.  With a $300 loan fee, it cost more up front (and contributed to the increase in debt) but it will cost us less in the long run by not paying 15.99% interest on that credit card debt.  Unfortunately, I forgot to factor in that fee when requesting the amount of the loan so we still have a couple more payments on the student loan and credit card before we will be done.

It was a rough 3 months financially but as I posted recently, we've finally gotten our act together and should be back on track to continue our debt reduction journey.  Our first step is to build our emergency fund back up, which is targeted to be back to $1000 by the end of the next quarter.

Morale booster from unexpected source

It's no secret that I've been a little down on the debt front since we moved.  In my last post I talked about how we were getting back on track which was immensely helpful in regaining a positive feeling about our debt reduction efforts.  Something else happened last week that was also key to my turnaround in attitude...

Someone left me a comment on one of my posts!  The comment went something like this:  "Dear Person in Debt, I want to inform you of an amazing opportunity to borrow money at an insanely low interest rate from my top notch international firm."  Except the actual comment was full of improper grammar and misspellings. Sounds a little too good to be true and a little too much like the e-mails I get from time to time from royal foreigners who would like to send me millions of dollars for helping them with some small task.  (I did not publish the comment if you were wondering or looking for it, btw)

Anyhoo, why did that give me a morale boost, you ask?  Because it reminded me that my bottom was not as bad as it could have been.  I realized I had a problem before the problem got so out of control that I had missed payments, bankruptcy, ruined credit, collections, turned to cash advance places or shady loan propositions, or started hitting up relatives for loans (minus the small $600 my parents lent me).  Looking back I know I was on the brink of those things when I started this journey back in 2011.  I could have just as easily stayed on the path I was on.  In many ways staying on the path I had been on would have been way easier, changing my long ingrained habits and discovering uncomfortable truths about myself has been a difficult journey.  

It reminds me of something a friend once told me about struggling with addiction, she believed you didn't have to hit bottom to make a change, that the struggle was more like an elevator where you could choose to get off on any floor instead a free falling all the way to the sub-sub-basement.  Although her situation was different than mine, that analogy has stuck with me and seems fitting of my journey.  I'm thankful that I got off the elevator three years ago and have been "climbing the stairs" back up to the top floor ever since.  There will be times that I have to stop and take a breather but eventually I'll make it!

Getting back on track

Since the move in March we've been going through a lot of adjustments in our lives and specifically in our financial situation.  There have been plenty of hurdles but I think we're finally back on solid footing. Here's the run down of how we've getting back on track and how we're moving forward:

1. Consolidated the high interest credit card debt we racked up during the move/ adjustment period and S' higher interest student loan into one loan from Lending Club.  We were able to reduce the overall APR and, by going with a 5 year loan, reduce the monthly payment to this debt.  This allows us to allocate more of our budget to higher priority savings and debt reduction.

2. Put my student loan in forbearance.  This is our lowest interest rate debt at 2.5% but one of the largest minimum monthly payments, by putting it on hold we are able to put more each month to our higher priorities.

3. Lower medical bill payment. We're not paying any interest on the medical debt from the boys' birth and while it's super annoying to have this little $300 debt still hanging around, it's more important right now to focus efforts elsewhere.  I've heard somewhere that as long as you send something in, the medical billing won't send you to collections.  I'm hoping that's true because until the medical billing people tell me otherwise they are only getting a $25 payment each month!

4. Build up our emergency savings to $1000.  The three previous steps freed up an extra $330 to pour elsewhere.  By end of summer we should have our emergency fund re-established (barring any emergencies along the way!) and be ready to hit the debt hard.

5. Our first priority debt is the remaining $6,270 in credit card debt.  This debt was refinanced through a balance transfer last year to a 0% APR that expires in June of 2015.  Our goal is to have as much paid off before the interest rate goes back up to 8.99%.  I'm projecting that we should at least be able to pay off 60% of the debt before the rate hikes.  Once that rate expires we may look for another balance transfer offer or refinance it with the debt from step 1 above with a shorter repayment period/ lower interest rate or maybe we'll just keep paying it at the higher rate.  We'll examine all options and pick the lowest cost option next year.

Feels good to have a plan in place again!

Regrouping after the last year of monumental changes

This past year has been one of monumental changes (the babies, the move, S becoming a stay at home parent and trying to restart his business, the major unexpected expenses that have cropped up along the way) coupled with some extremely sad events including the passing of my uncle, S's uncle, and our beloved pup.  I'm not going to lie, I made some costly mistakes and have also caught myself resuming some of my past bad financial behaviors, especially during the move and transition to living in Kentucky.  But I can't dwell on those things I can't go back and change, and in retrospect, we have really dealt with a lot in the past year and mostly handled the finances well.

Since the move we have been scrambling to adjust to our new one income situation.  We've finally stopped the hemorrhaging of money that was rapidly increasing our debt and I feel like we've come up with a workable budget that will prevent us from accumulating any more debt this year.  My full time job income covers all of our regular monthly expenses which are:

Mandatory expenses (everything we absolutely must have):

• Housing expenses: rent, renter’s insurance, utilities including our phones
• Groceries and household expenses: food, toiletries, diapers, pet food
• Cars: insurance and fuel
• Health and Life Insurances
• Debt: Student loans, credit cards and medical debts

Plus the following somewhat optional expenses (we could live without these in a pinch but it would be unwise/ difficult for us):

• Emergency savings- this one is not really optional
• Fun Fund money for the occasional lunch/ dinner out, beer, haircuts, clothes, or whatever (sometimes used for unexpected bills but mostly just to cover the extra "wants" we have)
• Internet and Netflix- we could live without internet but it would be extremely hard to run our businesses which are mostly web based… and Netflix is a very inexpensive form of entertainment
• YMCA membership- we could live without this one but it provides S a break in the day with the babies and supports a healthier lifestyle for us so we're sticking with it

My full time salary does NOT cover the one time expenses (my professional membership fees, some medical expenses we are expecting to have for the boys, etc) or anything beyond the minimum debt payments.  There are some additional sources of income I'm expecting this year including a end of year bonus, some reimbursements from taxes/ insurance paid in Massachusetts, and the sale of baby items which will hopefully cover the one-time expenses.  Plus my side businesses on Etsy are becoming more and more stable and bringing in a little extra cash each month.  S hopes to have his business up and running by the end of the year but may end up getting a small part time job to bring in a little cash and also get some adult socialization time.

In short, our plan for the rest of 2014 is to hold steady on our monthly expenses living off of my full time salary and whatever we can hustle up each month will go to savings to cover one time expenses and extra debt payments.  I can't say I'm feeling great that the debt reduction has taken such a backseat to just getting the bills paid but I do feel better than I have in months about where our finances stand.

Farewell to an old friend

A very short post today.  Our elderly dog, Otto, that I mentioned in my last post did indeed have cancer and declined very rapidly.  We said goodbye to him a couple days ago and are feeling the loss very deeply right now.  He had a great life and was S' best friend for over 16 years and I loved him the 4 years that I got to spend with him.

Farewell, sweet Otto... you will be missed.

Gah! Feeling really overwhelmed since the move!

Before we made the move from Boston to Kentucky (AKA from ridiculously high cost of living to nice and affordable) I did some number crunching to see if my salary could support us while S got his art work back up and running and bringing in some funds.  I knew things would be tight but on paper it looked like it would work.  Maybe not putting away the savings or paying off as much debt as I had hoped but at least we could make ends meet without taking on new debt.

But so far everything about the transition has cost a lot more than I anticipated and the extra cash that I factored into the equation to cover our expenses has been falling short.  One of the biggies is that our old landlord kept $1200 of our deposit leaving us only $90 returned.  The list of "repairs" he had to make to the place after we left is quite lengthy and most of it could be argued but he's a lawyer and kind of jerk and I don't have the energy or time to fight him.  So there's a big hit.  

As for the move, a friend ended up flying up to help us drive/ handle the babies (which was amazing of her to do) but it meant we were paying for an extra hotel room and her food.  We had a late start and ended up needing two nights stay.  I did not do a very good job of estimating the fuel a fully loaded truck pulling a car through the mountains would gobble up.  And I failed to factor in how much we would spend on deposits for utilities and getting the fridge and pantry restocked.  All in all, I think the move was a good $1000 more than I expected.

On top of all that, our elderly dog got really sick as soon as we got here and we've been battling to get him better.  The prognosis probably isn't good but I can't justify spending the $600 for full diagnostic testing to confirm that he has cancer and he's dying and there's nothing we can do.  The vet agreed that the best course of action is to give him some meds (kind of expensive steroids) daily to help keep his appetite up and just enjoy what are most likely our last months with him.  Which is a horrible blow after having just found new homes for some of our other fur babies before we moved.  

So the bottom line is that the transition to our new life has been more difficult than I anticipated, I don't even have a clear picture of our finances at the moment since bank accounts, bills, and paychecks are all in flux which stresses me out to no end but I think we're potentially looking at a shortfall of around $500 a month. 

Kind of feeling like a financial failure since I did such a crappy job of estimating what our new life would cost.  I don't want S to have to scrap his dream of getting his business back up and running so soon out of the gate but unless things change and soon, he's going to have to get a job.  And of course that means he's either working in the evening or weekends and we won't see each other or he's working during the day and we're back to paying someone else almost a full salary to raise our kids.

Gah.  

1st Quarter 2014 report

Starting point:

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 were we are today:

Student Loan 1: $35,478
Student Loan 2: $19,496
Student Loan 3: $4,759

Car Loan: $0

Credit Card 1: $0

Credit Card 2: $3,171

Credit Card 3: $6,407
Misc. small debts: $4,284
Medical expenses: $550

Parents: $0

Total: $74,145

Paid off to date: $26,978 paid off + $523 in savings

This is kind of a weird quarterly report... the credit card debt balance is a bit deceiving.  Since we just moved we have a lot of money in flux.  We have a deposit from our last place we're waiting for, various small refunds, balances from multiple bank accounts being sent to us since we had to close our Massachusetts bank and set up a Kentucky bank account.  We also didn't know when my new jobs pay cycles would be or when we would have access to our new bank account so we decided to put all the moving expenses on the Credit Card.  Once all our money is consolidated into one account again, we'll make a big payment to the Credit Card debt.

Moving expenses

Just a short post today...

We made our big move from Massachusetts to Kentucky this past weekend and are busily settling into our new life.  With the move and the settling comes expenses.  As many times as I've moved in my life you'd think I would have a better handle on the expenses that come along with moving.  However, the last time I moved was pre-financially responsible days so my memories of how much should be budgeted were pretty useless.  

I haven't sat down and actually counted up how much the move cost but here are some things that I did NOT budget for:

• An extra set of hands. At the last minute one of S' friends offered to drive with us to help with the babies.  Without her help I think we'd probably still be on the road struggling to make the drive!  However, I hadn't budgeted anything for extra food and lodging for a helper.
• An extra day of travel/ extra night of lodging.  We got a late start and couldn't make up the time which ended up costing us an extra night.
• How much fuel the truck would gobble up fully weighted down.  We packed that Uhaul like a sardine can AND towed a car on the back so I'm sure my calculations for fuel costs were thrown off. 
• Restocking the fridge.  I never really considered that we'd be starting over, almost from square one, at the new house.  I think we've spent over $250 at grocery stores over the past week and we still don't have much to show for it besides all new condiments and essentials!
• Deposits for utilities.  These haven't hit us yet but the first utility bills are going to be painful.
• Stuff for the new house.  I didn't budget anything for new furnishings, decor, or odds and ends to help us get situated in new our new home.  Our new place is much larger than the last and we are going to have to work very hard to resist the temptations to fill it with more stuff.  

Once things get a little more routine and I've got the major items figured out, I'll try to go back and figure out how much the move really cost us.

2014 outlook

Since I spent all of January struggling to overcome hardships and most of February preparing for the awesome transition we are about to make, it's high time I got around to thinking about what I want the REST of 2014 to hold for our finances! 

I'm having trouble remembering how much I've written about S and my plan for him to be a stay at home dad and get back into his pottery studio.  We've been kicking around the idea/ hope that we can live mostly off of my salary which would allow him to get back to doing what he loves- making/ selling/ teaching pottery.  We've been trying to figure out how to make this happen since before the babies were born but never could come up with a feasible plan that met all our financial goals and obligations if we stayed in the Boston area.  

But with this move to Kentucky, we might actually be able to make it work!  We've gotten the math to work on paper but we will have to stick to a very skimpy budget until he starts pulling in some money from his art work/ teaching classes.  So Goal Number 1 for the remainder of 2014 is to stick with the slimmest budget we've ever had to give S the opportunity to reestablish his pottery studio and be able to stay at home with our boys!  (This is a major topic so I'll write more about it later)

Goal Number 2 is to get our emergency fund back up to $1000 by the end of the year.  As for our debt, Goal Number 3 is to pay off the remainder of the medical bills ($550), pay off as much remaining credit card debt as possible and to chip away at the rest of the debt with the regular monthly payments for a total debt reduction of $7000.

On the road again

February has been a busy month!  Somewhere around the end of of January, when things were looking so bleak, S and I kind of threw in the towel and decided it might be a good idea to think about moving nearer to my family and somewhere cheaper.  Our initial thoughts were to get somewhere in the one easy day's driving range of Kentucky so that travel for holidays and emergencies would be more doable and perhaps family would be tempted to visit us more often to lend a helping hand with the twins.  We figured it would take several months to land a new job which put us moving somewhere in the late spring/ early summer right before the boys' 1st birthday.

With marching orders in hand, I spent the first weekend in February putting together my resume and portfolio of work examples.  Over the first week of February, I sent out some e-mails to my friends in the profession and started scouring the job postings.  Mid-week a friend from college wrote me back to let me know her company was hiring for their office only an hour or so away from my parent's house!  I sent off my stuff and got an immediate call back.  A week later I was flying down to interview and now, only 19 days after starting my job search, I have officially accepted a position with them and start on March 17!

My head is still spinning with this sudden change but I have such an optimistic feeling about the move.  It seems serendipitous that just when we have reached our breaking point, an opportunity presents itself.  The move means we will be within arms reach of my entire family and most of my closest friends, a whole battalion of helping hands for when things get a little too much to handle on our own.  The move also means a much cheaper cost of living, and with a comparable salary to what I have now, equates to roughly a 30% raise!  Lastly, the move puts me in a job that I believe is much more in line with what I enjoy professionally so I'm hoping there will be a level of job satisfaction I don't currently have.

Fortunately, I did our taxes as early as possible and we have already received our mega return (since we didn't adjust our withholdings after the babies came last year).  I had initially thought it would go towards debt, which would have been nice, but now it looks like it will help us make this unexpected transition!  So many things to get done in a very short amount of time!  

January Do-Over

This month has seriously been one of the worst I’ve had in recent history in terms of Murphy’s Law.  Just trying to keep up with all the things that have gone wrong (ie dealing with dead rodents in the heating ducts, the great dryer fire of 2014, and a multitude of car repairs just to name a hand full of things that January dished out) has not left much time or energy to deal with the bigger picture of life and finances.  With a little over a week left until the end of the month and much of the mess from the past weeks cleaned up, I am declaring a New Year’s Do-Over.   I will be popping open a bottle of champagne and singing Auld Lang Syne come midnight next Friday and treating February like the new January!  

Lemons, lemons, and more lemons

It's only 2 weeks into 2014 and I'm already OVER this year!  I know the little saying about what to do when life gives you lemons but I am SICK of lemonade!  Let me just elaborate on what the past 14 days has dished out to me, S and the babies:

• We brought back a washer and dryer from my family when we went to visit them for the holidays (YAY), however the hookups at our rental place, being basically held together with bubble gum and zip ties, all but disintegrated when we tried to uninstall the cruddy old washer and dryer.  We have spent the last two weeks replacing the outflow water line when it failed, mopping up the basement when the incoming water line failed, replacing the dryer outlet pipe when that failed, and last but not least, rewiring the dryer plug when the faulty outflow pipe dripped water onto the wiring and caused the wiring to CATCH ON FIRE!  All said we spent around $300 hauling and hooking up our "Free" washer and dryer.
• There was a blizzard. Not surprising my work did not get closed.  After our street finally got plowed (it's a private street and gets plowed whenever my A-hole landlord decides to call someone to do it), S and I dug out my car.  It wouldn't start.  So then we dug out his car.  I almost got to work before it broke down on the side of the interstate.  Accepted a ride from a stranger, which I would never, ever do under normal circumstances but given that it was 7 degrees out and I had no one else that could pick me up including a tow company since they were all busy dealing with the snow emergency.  Stranger was nice and took me all the way to work.  Finally found a tow truck that came and picked me up and took the car to a shop.  S was able to get my car running but it cost us $300 to get his running (tow plus repair).
• And speaking of cars, it turns out the vehicles we purchased from our families for super cheap have not had basic maintenance performed on them, like, ever.  One of them is 80k overdue for a timing belt replacement.  That's like driving around in a time bomb.  And it's going to cost us around $900 to get it fixed.
• Our dental check ups uncovered quite a bit of dental work that needs to be done... pretty much every one of S' old fillings is failing and must be replaced as well as a cavity for me (thanks a lot soda addiction).  So far $400 spent and not even half way through the list of tooth repairs.
• Something died in our duct work and every time the heat kicks on the sweet, sweet smell of death gets blasted through the house.  Kind of like a the Glade Plug In from Hell.  In the course of trying to figure out where the smell was coming from, S went in the attic and discovered that a family of rodents has been using the insulated duct work for bedding.  All the duct work going to the bedrooms and bathroom upstairs is full of holes with the babies room being almost completely disconnected.  So for who knows how long, we've been pumping a/c and heat into the un-insulated attic.  What a complete waste of energy and $$$!  At least the landlord sent someone over to fix it this a.m.
• And lastly, the most horrible of all, we finally came to terms with our inability to provide for all of our pets (and babies and us) and decided to find a new home for one of our sweet pups.  We had already found great homes for the two lizards and one cat with friends but could not find a home for the high-needs pup.  We decided to use a rescue adoption service and this past weekend was the drop-off.  I am completely heartbroken, even though I know she will find a great home with a family who can give her what she needs.

I really hope things turn around soon because all this stress is really taking it's toll on me (and our finances)