Monday, October 20, 2014

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.

Wednesday, October 15, 2014

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.

Wednesday, October 8, 2014

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.