August Unusual Spending Recap

How did I do on guestimating my unusual spending for August you ask? Not too shabby.

Things I need to plan for in August are: back-to-school haircuts, school pictures, ring repairs, and a soccer tournament for me. (This came directly from my Unusual Spending post.)

We did pretty well estimating what we were going to need, but only “okay” at funding everything.

Haircuts and (forgotten) back-to-school manis/pedis were paid for in cash out of our “hair” envelope. Going forward, it will be a hair and nails envelope. Every year The Kids and I go get manicures and pedicures right before school starts. We’ve done it every year since they started Kindergarten (with the exception of one where I was injured) and I would love to carry on the tradition as long as they will allow me too! Don’t tell any of his friends, but even The Boy goes. I look forward to the time with my kids every year and I have never paid cash for it before. Going forward, I would like for that to change; and as I said, adding $25 extra per month to the “hair” envelope is an easy way to do that.

School pictures have been a bit tricky… The Boy took his pictures at orientation, but we haven’t been sent home anything to buy them yet. The Girl’s will be on the last day of August and we currently have $0 in our “school” envelope. I might be able to roll coins from our “house petty cash” to cover school pictures.

I currently have $650 sitting in the bank waiting to pay for the repair on my rings. The total repair will be closer to $900. The remainder will come from our “annual expenses” account. I originally had more money but we had a couple of small unexpected expenses that I paid for using our debit card. The con: I don’t have enough money to pay for the whole repair in my checking account. The pro: I paid those extra expenses using my debit card!

One thing I forgot to budget for was my soccer fees. They went up this year to $75 from $65. I play a fall and spring season and for some reason, I always forget to budget for it. I have $45 in cash that wasn’t intended for anything. I think I will pay for the remaining $30 out of the “kids’ activities” envelope. It’s not technically a kids’ activity, but it does fall under the same category.

Overall I’ve done worse, but I’ve also done better.

Next month should be pretty low-key and well in budget as it is our annual “No-Spend September”.

I am putting half our usual amounts to fund envelopes so that there is some money in there for when October hits, but the majority of any extra money next month will go to paying off debt.

As always, wish us luck.

The Disneyland Trip That Wasn't

We had an opportunity to go to Disneyland… in No-Spend September over Labor Day weekend… when we are supposed to be focusing on paying off debt, and we were going to take it.

My sister and her family have annual passes to Disneyland. Their passes had a promotion that would have allowed us to purchase 1 day passes for $109 instead of the regular price of $185 each. Gas would have been covered by our gas envelope, just barely, and we planned to do food super cheap. We were going to bring breakfasts, lunches, and snacks with us and only eat dinners out.

Even so, we figured it would still be nearly a $1000 weekend.

Then, we asked my mom to give The Husband and The Kids their Disneyland tickets for Christmas. That would have saved us $330.

We figured gas at $150. Hotel at $300 ($125 per night/2 nights, plus taxes and fees). My ticket at $109. Lastly we estimated 2 dinner meals out at $100 ($50 per dinner).

Even working the trip as frugally as we could we were looking at $650.

And we were going to do it.

We haven’t been to Disneyland in 5 years and an opportunity to go, at a discounted price, fell into our lap and we were ready to jump on it!

I know that wasn’t the smartest financial decision but that goes back to where getting out of debt meets life.  This was life. We really struggled with the decision of whether or not to go but finally decided the opportunity was too good to pass up. After a few days and several conversations we committed.

But then again, life had other plans.

The same day we finally committed, The Boy came home from football practice and told us he had practice on Labor Day. He didn’t know what time, but the coaches said it would be earlier than normal. First of all, we (wrongly) assumed there wouldn’t be practice on the Monday of Labor Day weekend. Secondly, we figured even if there was, we could be home in time for a 3:30 practice. We would just leave Southern California early in the morning. But, no. There is football practice. At 8:00 in the morning.

Clearly these football coaches have no life! J This is how the post came to be titled “The Disneyland Trip That Wasn’t”.

The upshot is, we are staying home and saving money and not taking a trip during No-Spend September. The downside is we aren’t going to Disneyland. L

This will enable us to pay off more debt than if we went because we either had to funnel money from debt repayment to our trip or we would have had to transfer money over from savings to pay for the trip.  It also keeps us in-line with our goals for No-Spend September.

Of course I wanted to go to Disneyland, but I’m trying to see the silver lining. In the long run, this will be better for us and when we are debt free (someday) we’ll be able to take a multi-day trip to Disneyland and not have to worry about the money.

Happy Labor Day!

Unusual Spending for September

I actually can’t think of any… That doesn’t mean there aren’t or won’t be any, but that I can’t think of any!

The Boy took his school pictures before school at freshman orientation and we haven’t been sent home anything to buy them yet. I’m not really quite sure when that will be.

The Girl’s school pictures are on August 31 this year, so not a September expense.

Any expenses I can think of are all for before or after September.

Here’s hoping to an extremely frugal No-Spend September!

Planning for Christmas

I have not planned for Christmas this year like I should have. However, I’m starting to plan now. Better late than never, right?

My union recently came to an agreement with our district for a raise, part of which was retroactive to last year. We also negotiated a higher cap on our healthcare costs. After all is said and done, I am expecting a retro check of about $1000. We also have about $200 in Amazon gift cards waiting to be redeemed.

Part of my retro check will be used to top my emergency fund back over $10000 and then the rest will be used for Christmas shopping.

All told, I should have about $900 to work with for Christmas, which isn’t too bad as I’ve already purchased several gifts. I’m done with my dad, almost done with my mom, and have bought about 15 other peoples gifts. I’m estimating I have about 40 people left to buy for. (I know that sounds like a ton, and it is!)

I’m planning to do joint gifts for couple this year. Once the retro check actually comes through (probably in late October or November) I will actually be able to make the purchases and finish up Christmas shopping.

The only problem with my plan? I’m spending money I don’t have. This is all hypothetical. My union needs to approve the contract. My district needs to disburse the retro checks in a “timely” manner and I would need to be diligent with the money I receive.

If I stick to this plan, our Christmas shopping will be paid for in cash. We will not add to our debt for Christmas this year and that would be awesome.

For once, I hope my plan works out exactly as it is planned! I hope we get the money when we should and it’s as much as I’m expecting and it’s enough to cover the rest of our Christmas shopping!

As always, wish us luck!

Getting Out of Debt vs Living Life

It’s so easy to say “cut back, spend less” but so hard to do.

In addition to wanting to pay off debt, we want to live our life.

Admittedly, if we stopped doing anything fun or ever having treats, we would get out of debt faster… but what kind of life would we live? So many financial blogs talk about buying second hand or paying off their house in 5 years, or getting debt free in just 9 months, etc. I feel like so many of these are unrealistic examples. Where we live, in the central valley of California, we have very few second hand stores and even fewer that ever have anything worthwhile. Also, the cost of living and house prices are astronomical! According to a recent article, in order to buy a house in San Jose or San Francisco (each pretty easily accessible from where we live) the average median income needed was $213,000/per year, for a monthly mortgage of over $6000 a month. With monthly mortgages that high, there is no way we can pay our house off in 5 years. People/bloggers who do that don’t live in California or near the Bay Area; those are always people in the South or Mid-West. And don’t get me wrong, that is awesome for them, but not realistic where we live. Even people who get out of debt in 9 months don’t have the amount of debt or obligations we have.

I don’t want to come off like I’m whining or complaining or even trying to say it’s not our own fault because we absolutely dug this hole for ourselves; but we are also trying to dig ourselves out too. And it’s our fault, not the fault of our children so we don’t think they should suffer when it was our doing. Just because we got ourselves into debt doesn’t mean The Boy shouldn’t be able to play football and The Girl shouldn’t be able to dance, or they shouldn’t be able to go to birthday parties they are invited to or get new clothes for the first day of school, or have a new game or toy, or, or, or… The Kids shouldn’t pay for our mistakes.

Having said that, I don’t want my kids to come off sounding spoiled because they do hear the word “no”. They do have chores. They do hear “we can’t afford that right now”. They do hear “we have to save up for it”. And they do hear “if you want it so badly, buy it for yourself”. But we do provide all needs for our children and we try to provide experiences for them. We go places and we do things as a family: zoos, hiking, vacations, etc.

For us, that is where getting out of debt gets difficult; where getting out of debt, frugality, and life meet.

For that last few weeks (I know it’s not been a super long time) we have been doing better. We haven’t been perfect, but we have been making improvements.

Our debt is the highest it has been in 7 years and that is depressing! But hopefully it is the highest it will ever be and we will start making progress while still living life. We are hoping to have a very frugal No-Spend September with some plans to do some fun, but inexpensive, family time. We plan to go to a couple of national parks, some hiking, and a few day trips, but all of it should be done pretty frugally.

We want to get out of debt but we also want to live our lives and make memories with The Kids.

Wish us luck… We are going to decrease our debt next month but we are also going to make some family memories in the process! We will keep searching for the happy medium where getting out of debt meets life!

Solar

I know this post was a long time coming as I told you several months ago I would write a whole post devoted to solar… a long time coming, but here it finally is!

Since I let the cat out of the bag in a previous post, I guess I’ll fill you in on our decision to go solar.

First of all, believe me, I know it sounds counterintuitive to take on more debt when we are already so deep in debt; but in the long run, it’s definitely going to save us money.

We actually started to look into solar because some guy was going door-to-door pitching solar and we said we’d be interested to see how solar would work for us and to find out how much it would cost. (In December and January, we had some astronomically high electric bills… like $725 high!)

He worked up a proposal and presented us with a plan that covered our ENTIRE roof and had a bargain-basement price of $73,000. After seeing the look on our face, he must have realized that was never going to happen because he then told us with some “special pricing that he would need to get approval for” he could get the cost down to $57,000. That was still a no-go for us. We didn’t tell him outright no, but we did tell him we needed to meet with some more companies and get some more quotes.

And boy, are we glad we did!

After our first meeting, where we were quoted with special pricing of $57,000, The Husband quickly contacted other solar companies and we had to meet with them in a compressed timeline, which actually worked in our favor because it kept us from lollygagging!

We met with three more companies and they all came in with a much lower cost. They all ranged from $27,000 - $35,000. Much more reasonable. And these quotes did not include the 30% refund from the federal government (and the other quote DID).

We spend about 1.5 – 2 hours with each company that we met with; and although I wouldn’t call us experts by any means, our knowledge of solar did grow exponentially!

Each of the companies had pros and cons and then we were left to decide what was the most important to us. They each had different financing options (both in terms and length), they all used different solar panels, they all had warranties (at least to some extent), and they all had “plan” for our house and our usage.

In the end, we went with a company that quoted us $33,000. But they did throw in “free” rodent netting! We decided to do a 10 year loan at 2.99%. Our payments are going to be $234 a month, which is considerably less that the $725 we paid in December, and even less than our average PG&E payment of $400 per month.

Going back to the pool pump issue… our pool pump was old and not energy efficient, therefor it was costing us a lot of money to run it and if we didn’t upgrade it, it would require a larger solar package and thus a more expensive package. By upgrading our pump now, at a cost of (roughly) $2000, we lowered the monthly payment on the loan by $65 every month. Spread out over a year, that is a savings of $780, and over three years, it’s a savings of over $2300. Essentially, the pool pump will pay for itself in less than 3 years and after that we are “making money”. Believe me, I know I’m rationalizing this!

When all is said and done, upgrading to solar, including the new pump and tax incentives, we will be paying about $25,000. The solar alone will run us $23,000. That is what we will be financing over 10 years. The payments are more than reasonable and our goal is to pay it off in no more than 7 years. The first year we are going to be very cautious and set any “extra payments” aside until we get our “true bill” from PG&E. We don’t want to be caught in a pickle when the true bill shows up.

Hopefully, this will affect our budget in a positive way and we will be able to send more money towards our credit card debt each month!

*I actually wrote this post about 3 months ago and never published it. Since then, we have started paying for our solar and seen a drastic change in our PG&E bill. Our bill averaged $350 a month for PG&E with some months higher and some months lower. Our solar has now been hooked up since the end of June. Our last PG&E bill was $36. Coupling that with our monthly solar payment of $234 makes for a total of $270. Monthly, that is an average savings of $80 per month. That adds up to almost $1000 a year. And once our solar is paid off, IN 10 YEARS (eek), it will be a savings of $300 a month and over $3500 per year. Long term it definitely will save us a lot of money!

With our first, ridiculously high, solar quote our breakeven year wasn’t until year 19 and the warranty was only 20 years. With the quote we went with, our breakeven year is year 8 and it came with a 25 year warranty.

In the long run, it should be a good choice for us, but in the short run it just added to our debt. And it did add to our debt about $23000! But ironically, by adding to our debt we are saving $80 a month. I know it doesn’t make sense or sound right, but by the numbers, we have $80 more dollars to send to our credit card every month.

This was a super long post, maybe the longest I’ve ever written, so if you stuck around until the end, thank you!

August Debt Update

The last few months have not been kind to our budget but as I’ve been saying, I am recommitting to getting out of debt. I’m actually afraid to find out what our credit card debt stands at. For the last two months, I have been sticking my head in the sand and figuring if I don’t check it, I can play ignorant for a little longer. I know that is no sort of plan!

The debt we owe our children has continued to (ever so slowly) decrease. We borrowed almost $1500 from each child and have paid back $1000 to each of them, which means we are two-thirds of the way through paying them back! Although once we have fully paid them back, we will continue to deposit $50 into their bank accounts, I will be so happy when I can no longer consider them a debt! Our car loan has continued to decrease as well. We have a 0% loan so it’s nice to see the payment actually affect the bottom line.

Our constant struggle is our credit card. I have only been trying to do a cash only budget for 3 weeks and The Husband is not on board, but I’m hoping to see some slow progress. Our credit card debt had increased mightily since my last debt update, but our loan to our kids and the car loan are slowly decreasing. However, the decrease is definitely slower than the increase, hence the overall debt hike!

Here are our current debt totals:

            $20845.56         Credit Card at 15.74% interest

            $500                 The Girl

            $500                 The Boy

            $6510.00           Car Loan at 0% interest

Our total debt stands at: $28,355.56. YIKES! I can hardly wrap my head around that number. I absolutely HATE seeing a 2 as the first number on our credit card and that is my first priority… get that number back under $20000. In the grand scheme of things, the actual amount of debt is not that much less but psychologically there is a huge difference!

Obviously all my financial goals for the year have been thrown out the window. There are only 4 months of the year left and I’m nowhere near where I wanted to be. However, I can’t change the past, all I can do is improve my future. Since our credit card debt is nearly $21000, my goal for the end of 2018 is to be under $18000 in credit card debt. My other debts will continue to decrease at their slow and steady pace, but I am going to payoff $3000 in credit card debt by the end of the year. That’s my goal. This is another one of these realistic stretch goals.

In order to be successful, some things will have to fall in place for us. My raise and retro pay will have to go into effect as that is how I am planning to pay for Christmas this year, coupled with some Amazon gift cards. November’s three paycheck month extra check will be able to primarily go towards credit card debt. And The Husband will have to fully max out his 401K two weeks into December as we are anticipating so we will get extra money in his paychecks in the end of December.

Obviously, I’m not in an ideal situation. But if I have to get out of debt one baby step at a time, I can do that.

Look out goal #1: below $18000 in credit card debt by 12/31/18… I’m coming for you!