2015 Planning: Income Goals

I received a great raise at the end of 2014 which came into effect for my January 1^st paycheck. However, I had to adjust my federal withholding for 2015 which led to an increase in taxes taken out. Also, the company has added disability insurance in the benefits package which I elected to enroll in so that reduces my take home pay as well. I end up with a net loss of $13 a paycheck or $26 a month which makes me so grateful for the raise because I was expecting a $200 a month loss.

Looking back on last year I feel like I spent a LOT of time trying to hustle extra money through my side etsy businesses, yard sales, consignment sales, craigslist sales, etc. Sure, all the extra work brought in a little extra money but I know that it led to some increased spending too. Being super busy all the time led to a lot more prepackaged food/ eating out, buying needed items at a higher price either because I didn’t have time to research a better price or because I didn’t have time to go to multiple stores, and just general “too tired to fight my inner battle and say no to things I want but don’t need” purchases.

In retrospect, my time might have been more valuable had I spent it on diligently reducing how much we spend across the budget instead of bringing in more. I’m not saying I won’t do anything in 2015 to bring in a little extra, especially when it comes to getting rid of unused kids stuff. I am saying that I need to place a higher priority on reducing expenditures particularly in the food categories.

Income Goals:

Spend more time stretching existing dollars and less time making extra dollars. I’ll write more when I look at budgeting goals.

Compress selling into two months, ie one month in spring and one month in fall do all craigslisting, ebaying, yard selling, consigning, etc instead of dragging it out all year which got really tiring.

Be a better employee. I feel extremely fortunate to have landed in such a great company. There are several areas that I’d like to focus on for my own professional growth but it will also translate into being more valuable to the company and perhaps more bonus/ raises in the future.

2015 Planning: Budget Goals

Last year was a major transition for us, going from two incomes to one and putting money towards starting a new business. There was a lot of scrambling to adjust and to make ends meet each month. There was a lot of money shuffling and juggling to get bills paid and deal with some of the unforeseen events. Add in all the extra hours spent at my “real” job, my side jobs, and hustling money and it led to a lot less tracking of actual expenses than I would have liked and a whole lot more spending than we should have done.

For 2015, I intend to do a better job of tracking exactly where all the dollars are going. Hopefully, I can uncover some ways to reduce expenditures by taking a closer look at how and on what we are spending our hard earned money on. I would have thought by three years into the budget/ debt reduction mission things would have been set, instead I have learned over the years that there is a constant need to track, assess, reallocate, and reduce as possible.

Budget Goals:

Track actual expenditures across our budget categories for each month and make adjustments/ goals for each coming month.

Do a thorough review off all budget line items for reductions. Focus on bulk meal planning, reducing grocery costs, eliminating food wastes (it drives me crazy having to toss things that have gone bad sitting in our fridge), and cutting back eating out.

Cut spending on wants. Slowly but surely some of my old habits of giving into my wants has crept back into my lifestyle. Time to buckle down and keep my eye on the debt elimination prize.

2015 Planning: Savings Goals

We were able to get our emergency savings back up to $1000. We also started using a “partitioned” savings account to set money aside for the bigger one-time items that occur. The online account has a reserved list that allow us to set up a reserve item such as “tires” and then fund that item which partitions the money out of the general pot. In the past I was allocating funds in our savings towards various items in an excel spreadsheet but so far the online version has been a lot better, somehow I feel more accountable to the reserve list plus it’s a lot easier to manage.

We’ve also started funding certain monthly expenses in advance to reduce the fees associated with them or to take advantage of great bargains as they are available (like diapers).  For instance, our car insurance has a reduced monthly cost if six months are paid at a time. At first we had to pay each month because we couldn’t afford the full six month payment but slowly over the year we’ve been able to transition to paying the full six months at a time. Now we put the reduced monthly expense amount in the partitioned account each month so it is ready and waiting when the six month payment is due.

Savings Goals

Maintain 1k emergency fund

Increase use of portioned account to fund upcoming one-time expenses out of budget and with any extra money earned.

Re-asses savings quarterly. Don’t want too much money sitting in savings that should be going towards debt.

2015 Planning: Debt Goals

2014 was not a great year for our mission to get out of debt.  I am resolved to get back on track and see some major debt reduction again. I’ve set my sights on CC #3. It’s not our smallest debt but the medical debt has no interest and is not on our credit reports so I don’t feel it’s the highest priority. It’s also not our highest interest debt, the consolidation loan currently has the highest interest. However, on CC#3 the promotional 0% interest rate will expire this summer and it will become the highest interest debt. The amount of $4,730 is small enough that it could be paid off in one year if we work really hard at it. It will be a challenge to get it paid off over the next twelve months and rests on some assumptions that we’ll have a relatively calm year in terms of emergency fund usage but I getting this paid off would be a major milestone for us.

Debt Goals

Pay off CC #3 balance of $4,730

Continue to pay minimums on all other debt for a total of $11,300 in debt reduction (including CC#3).

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.