Wednesday, December 31, 2014

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.

Sunday, December 28, 2014

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!

Thursday, December 4, 2014

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.