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.