New Series

I’m going to start writing a new series on the blog. (That makes me laugh, no one reads this but me, so who is this series really for?) At the beginning of each month I’m going to write a post detailing all the “unexpected” expenses we have each month. I’ll call it Unusual Expenses for ___________________ (fill in the month).

Each month, we all have “unexpected” expenses, but are they really unexpected? No, they are just unplanned for. I know that we need to come up with money for car registrations from January to April. I know we need haircuts. I know The Kids need new clothes and shoes. These things pop up occasionally and I need to start planning for them and making sure to include them in my budget for each month.

Some upcoming expenses we need to plan for in March are: car registrations (X2), a haircut for The Boy, family birthday parties we are hosting, The Husband’s birthday, and new baseball equipment (cleats, bag, uniform, bat) for The Boy.

The car registrations are already taken care of. The money for those will come from our planned annual expenses account. (Side note: if we buy a new home, we might need to reallocate how much money that we put into that account, depending on how we do taxes and insurance.)

In our March budget, I allocated money towards “haircare”. This will easily take care of The Boy’s haircut, leaving plenty of money to put towards The Girl’s hair care needs in May. On average, we need to include money towards haircuts for The Boy every month. He keeps his hair relatively short so he gets it cut every 5 weeks or so.

In March, we are hosting the family birthdays for my family. We have about 35-40 people coming over for dinner, cake, and ice cream. I will need to plan accordingly. We will do something relatively inexpensive for food… like spaghetti. We will need spaghetti, meatballs, sauce, salad, and bread. That will probably be about $125. We will also need to buy ice cream and soda. This will probably run us another $75. On my next two trips to Costco, I will start to buy the things we need for the party, thus spreading out the cost. I will still spend $200, but my plan is not to spend it all at once. (Our last trip to Costco was very expensive; we went well over budget. I don’t foresee super expensive trips in the near future so we should be able to add the food needed to the party without incurring too much hardship.) I also padded out grocery budget by $100 for the month. I put an extra $50 towards groceries for each of our budgeting periods. We are putting slightly less towards debt, but we aren’t accruing any more debt. And, with any leftover grocery money, it can go towards debt payment at the end of the month.

The Husband’s birthday is in March. I will need to get him a gift. We will also go out to dinner for his birthday. On his actual birthday, we are going to an NBA game. We will need money for this too. We are driving, but we will buy a quick dinner that night and maybe some snacks at the game. (I have no idea what I’m going to get my husband for his birthday… He is so hard to shop for!!! Any ideas? J)

Lastly, for March, baseball season is starting up. I know The Boy needs new cleats. He wore his last pair for two seasons and now they are too small. Along those lines, as he has grown, his bat is now too small for him, so he needs a new bat. He may or may not need a new uniform, we aren’t sure, it depends on what team he is and what color pants, socks, and belt they choose. We already bought him a new baseball bag. They were on sale on some website for $7 plus tax and shipping. We paid about $15. Not too bad. It’s actually the first new bag he’s ever had. His first season of baseball he used a hand-me down bag of his cousin’s and then his second year he used his dad’s bag from 30 years ago. I didn’t mind this purchase. And I was very happy to find baseball bags on sale for such a cheap price.

I’m sure during the course of the month, more unexpected expenses will pop up, and I will deal with them to the best of my ability. At least this way, I have a plan. I know each month brings non-normal expenses, and I’m hoping this series will help me remember to put them in my budget

Tidbits

You know our paycheck drama so imagine my surprise when I checked our bank account this morning and The Husband’s paycheck was deposited like normal. All our maneuvering and fudging of money was really for naught. But I’m still so happy that we had an emergency fund that we could move around as needed!

Not only was his paycheck deposited like normal, but it was also a little high; not much, only by about $70. That was a pleasant surprise. When I mentioned this to him, he told me he had a little overtime on his check. I didn’t know about it, but it was nice to finally have a little more money when we usually have less than we expected.

I’m also very thankful for that extra $70 because in order to pay back my friend this week, I was actually $160 short. This “extra” money brings us to only $90 that I need to come up with. I’m so happy that I will be able to strike one more debt off the list!

I also had to pay for a field trip for The Girl. The cost is $30 per person and as I am going, we had to pay $60. First of all, as I was gathering the money to pay yesterday, The Girl asked me if I had an envelope for “school” like I do for gas, food, etc. I showed her, that yes I do, but I told her it was currently empty. As I went to show her it was empty, I opened the envelope and found $20. I was so excited! I only had to come up with $40 instead of $60! I took money from the petty cash jar we had at home, but it is very low and there was only $20. I made up the difference with the left over money in my gas envelope for the week.  Which brings me to my next tidbit.

Due to various and sundry reasons, I had no money left over in any of my envelopes this week. We had to drive over an hour for soccer games two weekends in a row, we far exceeded our grocery budget (bought lunch snacks and meat which = $), and we met with realtors many nights making dinner a busy affair. Originally, my plan was to use extra envelope money to make up the deficit for what I owe my friend. That didn’t pan out, so the $70 extra work dollars will make a big difference.

I also got a great email from one of The Girl’s teachers today. I sent in her field trip money, $60 for the two of us, and her teacher told me they aren’t charging parents. She said she sent $30 home with my daughter. This helps to make up the deficit even more. Now, I’m only $60 short. I am going to completely pay my friend back and will use $60 from the 401K loan to make up the difference. Every little bit helps and once I write the check for this, that’s one more debt completely wiped away!

These are all random thoughts that weren’t enough, individually, to write a blog post about. Maybe I’ll make it a semi-regular occurrence to write about my tidbits… we’ll see.

Depressing Debt Totals

Now that I've put the depressing news out there... let's dissect it.

First of all, over $30000, that makes me want to be sick! And remember, we live in super-expensive-California, so that's not even including our mortgage.

Secondly, a couple of those small debts will be paid off relatively quickly so that's a bonus.

Thirdly, at least we are close enough to dropping our first digit down from a 3 to a 2 so that will show me some quick results and give me a quick psychological boost, sort of. That's if you don't count the 401k loan we just took out to pay for house-selling-costs.

Like I explained in my last post, we are getting ready to put our house on the market. It's been a little costly, to say the least. And, I'm afraid it's going to get even more costly.

We went to Home Depot the other day and spend $689 on house related "things". We bought all the trim we need to finish the kitchen: baseboards, window sills, door jambs, and crown molding. We also bought a cabinet to put in our laundry room to make it look more finished. Lastly, we bought blinds for every room in the house.

All the blinds are up (except one that had to be returned) and the house is looking pretty good.

Another house related cost is a storage unit. We had to rent a storage unit to put all of our stuff in so our house will be more "stageable".

Debt is never ending. I'm super sad that our debt totals continue to rise while never actually falling. I know that's not actually true, but it is how I feel today.

We will get there. We will get debt free. I truly believe that slow and steady wins the race, but right now I wish I had a get-rick-quick scheme that could get me out of this mess. However, the reality is, we got ourselves into this mess (again) and we need to get ourselves out of it. No magic wand, no money tree, just good old fashioned hard work and discipline.

Selling Our House Blues

As the numbers show, we only paid off a small amount of debt last month. From our January statement to our February statement, on our credit card, we paid off only $516.48 after stupid tax, er… interest was added. Combined with our car payment, our total debt payoff for the month was $861.48. Barely a drop in the bucket, only 2.8% of our debt total.

And more sadly, in the months going forward, we aren’t going to do much better. We are in the very beginning stages of selling our home. We live in a small 2 bed room home and we have two kids: a boy and a girl. Because of this, it was time to either buy a larger home or add-on. After weighing the pros and cons of each option, we decided that even though we love our home, the things we didn’t like about it out-weighed the things we did, mostly location and neighbors, two things we can’t change.

Because we are now looking to put our home on the market in the near future (<6 weeks), we need to start saving every penny to go towards some last minute home repairs and for good faith money when we are ready to put an offer in on another home.

In order to make our home sale ready we need to finish up a few things. Since the kitchen remodel, we haven’t yet finished the trim. We need baseboards and window sills in the kitchen, baseboards in the living area, window coverings in the whole house, and some small cosmetic issues in the front yard need to be taken care of.

The baseboards and window sills will probably take the longest. They need to be painted, measured, and installed. Then, after installation, they will need to be touched up. For the window coverings, we are going to go to Home Depot and buy the 2-inch faux wood blinds, in white, and put them throughout the house. Lastly, for the exterior, we need to take down a dilapidated fence, patch some siding, possibly paint, and add some landscaping: flowers, mulch, etc.  The only other thing we will probably do before we sell is rototill and put sod in the backyard.

In order to finance these home improvements, and in order to give us some money in the bank, we are taking out a loan against The Husband’s 401K. We are trying to take out $15000 over 5 years with the intent to pay it back, at least mostly, with the sale of our current home.  We are planning to spend about $5000 to get our house ready for sale and then the remainder will be money in the bank that we can use as good faith money or just as an emergency fund. Again, we plan to pay the 401K loan back pretty quickly.

We met with three realtors in the last week. Each of them had some pros and cons. Interestingly, each of them will only charge us 5% commission (as opposed to the industry norm of 6%). There was one lady who was very kind, but she failed to tell us how she would market our house. That left us with two options. We are still debating them both, but are leaning one way.

Due to the size of our house, namely the fact that is only has 2 bedrooms, we have to sell and buy something larger. In addition to being in the early stages of starting to get ready to list our home, we are starting to look, very casually, at homes.

We have a wish list. We have to have a minimum of a 3 bedroom, 2 bathrooms. We want a fireplace. It has to be on a pretty quiet street. It has to have a 2 car attached garage. Overall, we aren’t too picky. It just has to meet our current needs.

We are hoping to make enough money of the sale of our current home, to put 10% on whatever we choose to buy. We need to sell our home for a minimum of $310,000 in order to be able to do that. Looking at current market conditions, we should be able to make right around that, and with any luck, more.

We are very casually looking at homes online. It is giving us a barometer for what we want and need.

This crazy time is making debt payments nearly impossible. I will still pay all my normal monthly bills, but I won’t be throwing everything extra at my debt. I do want to pay the small debt to my friend, and the bill to my brother, but after that, I will only be making minimum payments. All extra money will be funneled into our savings account for the short term. Once we are pre-approved for a house and put an offer in, we will get back to paying off our debt.

Emergency Fund to the Rescue

Thank you, Dave Ramsey!

Today, The Husband emailed me and told me he made a mistake filing his time sheet last week and he wasn’t going to get paid on Friday like he normally would. He said his check won’t be direct deposited this week and they will cut him a paper check by Monday or Tuesday… of next week. We have bills due this week that can’t wait.

We have four bills due this week that can’t wait until a paper check can be deposited next week. We have to pay our electric bill, our home phone and internet bill, our cell phone bill, and our car payment.

I’m so grateful that I was able to quickly transfer the money from our savings account to our checking account to cover the upcoming bills. I don’t know if other people would consider this a true emergency that warranted using their emergency fund, but to me, it did. By transferring this money, we saved over $50 in late fees.

In my mind, this is what emergency funds are for. Currently, we only have a baby emergency fund of $1000, but that was enough to cover us for the week. I transferred $800 to my checking account, leaving us only $200 in our emergency fund. However, as soon as we receive the paper check, we will deposit it and transfer the money back into our savings account, right away. Additionally, this account, and the accounts of The Kids, will continue to grow by $50 a month.

Because of my emergency fund, as long as something catastrophic doesn’t happen in the next week, we should be fine.

I enjoy the feeling of peace I get from having even that small amount of protection. The whole point of that $1000 sitting in the bank is to cover us in the event of an emergency and to give us peace of mind. Today, it’s totally doing its job! That is why Dave Ramsey’s baby steps work. Each step builds on the other.

Step 1, save for a baby emergency fund, is there so you don’t have to rely on your credit card in an emergency. In the case of today, I couldn’t have used credit cards. I would have been unable to pay my bills and forced to pay late fees. In essence, my emergency fund helped me to keep more of my money in my pocket and take care of all the obligations I had to take care of.

My emergency fund saved me; and I’m so glad!

New Debt

Let’s talk for a minute about where our new debts came from, shall we? Basically, it was a whole lot of this, a little of that, and some more of this all rolled together to make our big mess even bigger!

We went to Universal Studios in December. Our friend booked the hotel room and hasn’t told me yet how much it cost. I think it was around $500. She booked and paid for both rooms to make sure we would be able to be at the same hotel. I’m anxious to get that debt paid off so I can start working on the rest. In addition to the $500 we owe her, we charged our whole trip: tickets, food, souvenirs, etc. The trip probably cost us about $2000, including our hotel room, and it all went on the credit card.

We also have an outstanding bill for our kitchen. December was a killer; between Christmas and paying the final bills for our kitchen, we struggled. The outstanding bill is for plumbing supplies and fixtures.  We got a hot water dispenser, garbage disposal, sink, faucet, and various plumbing supplies. Obviously, those need to be paid for. And the sooner, the better. Like I said, the fewer bills I have to pay, the more I can throw towards each bill.

The credit card bill has no excuse other than we charged more than we could afford; part Christmas, part kitchen, part stupidity. No excuses. We charged our trip to Universal Studios. We charged our granite counter tops. We charged all our new appliances. We charged the remainder of our Christmas presents. Push came to shove and we couldn’t afford to pay it off. We were able to pay about $6000 towards our debt, total. That would have been half of our credit card bill, but I decided to pay off our other credit card in full.

The loans from our kids went towards paying off a different credit card. The amount of our debt would have been the same if we paid $4600 towards our monster December credit card or if we paid off the smaller credit card that we had been working on for a few years. I chose to pay off the credit card I did, even though it had a better interest rate, because I couldn’t pay that bill online. I had to physically go to the bank by the 26^th of each month and pay the bill. It was a pain. I also never sent extra small payments to this bill because I had to go there and write a check. By choosing to pay this bill off in full, we also have one fewer creditor that we need to make payments to. Again, it didn’t change the total of our debt, just the way it was allocated. The bonus of this approach is that I can pay small extra amounts without having to go to the bank; I’m able to schedule payments online which is easier. It also enables me to make more frequent, smaller payments that can eat away at the daily interest rate.

We are choosing to pay our kids back nearly last because we can. It would be great to pay them back in order, but then I would have $3000 sitting in the bank earning nearly 0% interest and I would still have outstanding credit card debt. It just doesn’t make sense to me to do it that way. They will be paid back. Hopefully, we will be able to pay them back by the end of the year, too, but I know that is a stretch.

However, if I meet my financial goal of having $10000 in the bank by the end of the year, we will have paid them back. We’ll have to wait and see!

Anyway, this is where all our added debt came from. It was mostly stupid and avoidable but we chose to spend. Now we have to pay it all back. Sadly, it takes much longer to pay back than it does to accrue. But pay it back we will. Slow and steady wins the race. All the extra bits we can throw at our debt are great, but it’s what we do on a daily basis that makes the most difference. Things like saying no, saving for purchases instead of swiping plastic, planning ahead. Those are the strategies that will get us out of this mess!

Debt Totals 2-18-17

As you know, unfortunately, my debt total rose for the first time in 12 months last month. I’m very sad, but now, I’m more determined than ever to get out of debt. We are going to continue to live our life, but we are going to get out of credit card debt!

Not only has our debt total increased, but so has the amount of creditors we have. We have several small debts now that we didn’t have before.

I’m going to list them all here for you to see. I’m also going to list them in the order we intend to pay them off. In many ways we are working Dave Ramsey’s baby steps, but as you’ll see when I list our debts, we aren’t following them 100%. We are going to pay off some debts in a different order than he would recommend.

As of my last debt update, we owed $18774.63. That was back in November. Things have definitely changed since then.

Here are our debts:

            $500-ish            Personal friend (she booked our hotel room for a trip).

            $1969.62           Outstanding bill from our kitchen remodel

            $12314.86         Credit Card at 14.99% - current minimum payment is $

            $1500               The Boy (To pay off our other credit card, we borrowed from him.)

            $1500               The Girl (To pay off our other credit card, we borrowed from her.)

            $12745.25         Car loan at 0% - payment is $345

If you’re keeping track, (I know I am!) that’s a grand total of $30529.97.  That’s about at $12000 increase over our last debt total up date. EEEKKK!!! That makes me want to cry.

In the next month, I’m going to knock out the two small debts at the top of the list, then I really need to get to work on our credit card debt. Looking at these numbers, it seems very unlikely that I will be able to become credit card debt free by March or even by my goal of May, but I should still be able to get out of credit card debt by the end of this year, so that is what I am going to keep working on.

Looking at my budgets going forward, we should be able to pay off the first two debts by March 10 and then we can start throwing all our extra money towards our credit card debt.  We still charge on that credit card because, unfortunately, we are financing our lifestyle with our future earnings, so our credit card debt will likely increase before it starts to go down. Does that make sense? After we pay off a couple debts, any extra money can go towards our credit card.

I’m hoping that paying off these two small debts will give me the psychological boost I so need to keep motivated and really work to get out of debt.  Although we still charge on our credit card, I’m really going to try to charge less in the coming months. We aren’t going for no-spend months, but we are definitely working towards low-spend months.  We do have some planned spending that can’t be avoided, but hopefully we won’t overspend.

Also, now that we are back to working the envelope system, I need to work really hard on staying on budget. That would go a long way towards helping us get out of debt. We went WAY over on our food budget just this past week. Major budgeting fail, but going forward, we are really trying to stay in budget so we don’t have to charge any shortfall. In addition to not having to charge a shortfall, tightening our budgeting belt might give us a small surplus each pay period that we can throw towards debt or add to our surplus envelopes at home.

Another complication for our finances right now, is our living situation. We are looking to sell our house and buy a new one. Because we have a boy and a girl, our two bedroom house is no longer practical for us, but the explanation is a post for another day; as is the explanation for our new debts… Until then, wish us luck in paying off some debts!

Thinking about... Debt

I’ve been thinking a lot about my debt; specifically, how I have more than I thought.

Now that I’m actually starting to list them out, I’m realizing I had more than I remembered. Granted some of them are relatively small, but they are still debts. I thought about the trip we took in December to Universal Studios and how I owe my friend for the hotel. I thought about our kitchen and that we still have an outstanding bill for the plumber (my brother) that needs to be paid. I, of course, thought about our credit card and car. I remembered we owe our kids a bunch of money that we used to pay off our other credit card.

In other words, the debts just started piling up, and with them, my sadness.

It would be so easy to say some debts “don’t count”, but I would be lying. All our debts count. Even the small ones. Even the ones to friends. Even the ones to family.

All debts count! The small ones might even count more than the big ones because they are easier to pretend they don’t exist.

A lot of stuff is coming up in the next few months, the biggie being that we are seriously looking into selling our house (and therefor increasing our debt for a bigger house). This will definitely make our finances look different over the next few months. We’ll have to see what happens!

2017 Goals Check In

In January, I made three financial goals for this year: first was to get out of credit card debt, second was to end the year with $10000 in the bank, and third was to get one month ahead with our finances.

So far, I haven’t met any of these goals. :(

But, that doesn’t mean I haven’t made any progress because I have. First of all, I have created our baby emergency fun which will help to keep us from falling further into debt. We also have not added to our overall debt and have even actually paid down a little bit from where we were on the first of the year.  We’ve even added a small pittance to our savings.

The way I have structured my goals, it makes it really hard to reach goals 2 and 3 until I have completed goal 1. However, in many ways, goals 2 and 3 will also be reached simultaneously. $10000 is just about the amount of money we need to be a month ahead.

Each paycheck we receive I am transferring $50 into our savings account. It’s a small amount, but with that amount, we are slowly increasing our savings and slowly paying back our children’s accounts. We owe both of our kids’ money, however, they are at the bottom of the list to be paid back because their accounts aren’t accruing any interest against us. We get three paychecks a month. With each one, I deposit $50 into one of our three savings accounts: mine, The Boy’s and The Girl’s. These slow deposits are helping us reach our goal 2.

Of course, we are working towards goal 1, too, but that is slow going. We send all our extra money at the end of the month to the credit card. Sometimes the extra money is a lot. For example, this month, it will be over $500. Some months, we have just a few dollars extra to throw towards our debt. I still have a super stretch goal of being debt free by our anniversary in May, but I don’t know if it’s feasible. We’ll have to wait and see.

When I picked my goals this year, I really tried to choose goals that would be reachable and work at the same time. I also didn’t want to have so many goals that by trying to reach them all, I wouldn’t reach any of them. While it remains to be seen if I was successful or not, I definitely think I am on the right track. If I am lucky enough to reach any or all of these goals, I can always reevaluate and add or change my goals as necessary in the future; but one step at a time.

A New Budgeting Idea

In order to work on getting out of debt, I’m really making an effort to get back to budgeting and the envelope system. To that end, as I started to plan my March budget, I put $500 into different categories that I haven’t been funding. By not funding envelopes, I am setting myself up for failure. Just because I don’t put money into those envelopes, doesn’t mean I don’t spend in that category.

Whether or not we put money in our “toiletries” envelope, we have purchases in that category that need to be made, things like toilet paper, dish detergent, dish soap, shampoo, soap, hairspray, etc. In an effort to not fall further in debt, I’m trying to fund all our envelopes as necessary. Unfortunately, this plan may keep us in debt a little while longer, but it will keep us from falling further into debt, if that makes any sense to you, reader.

For the month of March, we have earmarked $500 into envelopes. We are putting money towards: toiletries, hair care, clothes, school, and kids’ activities. We are also putting $200 for the month into savings and $200 into our car repair/tires envelope. In all, that adds up to $900 in March not going towards debt, but it also leads to less money being put on our credit card.

There are always “unexpected” expenses that come up and I’m trying to be more prepared for these expenses. The competition dance season will be in full swing come March, as well baseball and there are always little expenses associated with the kids’ activities that need to be paid.  I recently started reading a new-to-me blog that has given me a great idea about how I handle our expenses. It’s called shaking the money tree and she has been blogging since 2008. I’m currently working my way through the archives and love what she does with “left over money” from her envelopes at the end of each month. She takes the left over money and puts it in another envelope labeled the same way to use on those months when expenses just seem to be higher.  She continued putting the left over money in the envelope until each of them reached whatever threshold she believed made a good amount for that category.

I really like that idea. Sometimes, $100 is more than enough money for toiletries in a month and sometimes, we spend nearly twice that because we run out of everything at the same time. I think I am going to follow her example. I will create envelopes for my envelopes (I know that sounds silly, but hear me out) and put left over money in the new envelopes, to a certain point, to help pay for the months where what I budgeted is just not enough. That will also keep me from carrying around too much cash, which is always a worry. If I ever spend everything in the first envelope, I can always pay the remainder using my credit card and then run to the bank with the left over envelope and transfer the money from there. I know it sounds complicated, but I think it might work for me.

We won’t put gobs of money in the new envelopes. I will only put an extra $100 - $200 in each envelope depending on the category. The hair care extra envelope will top off at $100. The clothes extra envelope will go up to $300 and so on. Each category will be different and all the envelopes will be labeled. This has the added bonus of giving us a little extra cash around the house. I always worry that we don’t have enough ready cash so this will get rid of that worry too!

I’m already excited about next month’s budget and I can’t wait to transfer money from envelope to envelope!

DEBT

In the next week I’m going to write a debt update, but not today. Today, I just want to complain about debt and how much it sucks!!!

When all is said and done, we are actually going to pay a little more debt off this month than I thought we would be able to, but it’s still not enough.

With my next payment, which will be on Friday, we will have paid $3200 towards our credit card, but because we are still using it, it doesn’t all go towards our debt. In total, we will have only paid off $1100 worth of actual debt. I am hopeful for next month, because hopefully, we won’t have any unexpected out of town trips to pay for. For our trip to Oregon for my grandma’s funeral, we paid $215 for our hotel and $300 (or so) for food. That all went onto our credit card.

Although a decrease of $1100 in debt is good, it’s not good enough. I can’t wait to receive my “lump sum” payment on March 20 so I can plunk the whole thing down on our credit card. That check should be in the neighborhood of $2000. We are also hoping to get a small tax refund that could go totally towards debt as well.

Every time we get close to being out of debt, I do something to screw it up. We were doing so well paying for our kitchen and then we got our granite and December hit and our budget went out the window… now, we’re paying for it… literally. I know we only have ourselves to blame, but it still drives me bonkers!!!

Debt is a monster! It takes just minutes to accrue but months or years to slay. That, more than anything, is what I wish we could instill in our kids. Debt is not a tool. Debt is only a hindrance. Debt does not “help” you. Debt only helps the lender. Debt is not the best way to build credit. Debt is not your friend. Debt is only your enemy. Debt is baggage. It is a weight constantly pushing down on your chest making it hard to breathe.

Going forward, I’m hoping that, on average, we will be able to pay off $2000 a month (this is including March, which is going to be our best month). If that’s the case, we won’t be debt free until August. Ideally, we would be able to pay more, but we do have some planned expenses coming up. We have a trip to Washington D.C. in two months and a trip to the Grand Canyon coming up this summer. Both of these will be doable if we are frugal the rest of the time. I’ve said this before, and I want to reiterate it, as badly as we want to get out of debt, we don’t want to get out of debt at the sacrifice of our children’s childhood. 

So, the trips will be made and then we will reevaluate where we are and make a plan, or just keep working this plan. Pay as much as we can out of our paychecks and any extra each month that we can scrape together towards our debt. 

Payday High to Next Day Low

I read this sentiment a lot in personal finance blogs, or more specifically, in debt blogs. Payday comes and you have a high for 10 minutes then… *poof* all your money is gone and you are waiting for payday again.

I love logging into my account and seeing money there. I check it religiously EVERY payday. Then I sit down and pay all our bills and debts and the money is gone. I can’t wait for the day when payday is just another day. Or when I log into payday and instead of transferring my money to other people, I can transfer it into my savings account.

I know we dug this hole ourselves, but the “daily” grind of being in debt gets old. And not just any old debt, credit card debt. I cannot wait to be credit card debt free. With any luck, I just have a few more months of that self-created hell left.

On another note, we have received all of our tax documents so we can begin to do our taxes. I’m really hoping to receive a return that will take a chunk out of our credit card debt. Our tax return, combined with my “lump sum” payment from my raise, and our regularly scheduled payments, should bring our credit card debt down to a much more manageable amount. Here’s hoping to credit card debt freedom.

Emergency Fund... Check!

Although it isn’t one of my stated financial goals for 2017, I did reach an important milestone towards financial freedom today. We achieved Dave Ramsey’s baby step #1 today. We have $1000 in the bank to be used as our baby emergency fund. Obviously, it won’t cover everything, but it will cover most, if not all, minor emergencies.

Last month I paid off one credit card balance. Now, I need to sit down and really list our debts to decide how to pay them off. We owe several smaller debts (including to our kids, which we will pay last, I’ll explain that in a later post), and one monster credit card debt.

Until we fully decide how to proceed, I’m going to continue to pay the most money towards our credit card debt. I plan to list our debts and their amounts near the middle of the month.

In the past, Dave Ramsey and his baby steps really worked for us. I don’t know why we went away from them, but our finances definitely suffered for it. The baby steps break debt and personal finance down into manageable chunks. We don’t follow him 100% as we have debt but still continue to contribute to our retirement, but we definitely use his steps as our guiding principle of debt and finance management.

Baby step number 1: build a $1000 emergency fund, is complete. This will help to keep us from falling further into debt. If the washer goes out, we’re covered. If we have car troubles, we won’t have to worry. I think the $1000 is as much about peace of mind as it is about financial security. Not only will I not have to use my credit card as an emergency fund, but I have a little cushion between me and fear; a little cushion between me and uncertainty; a little cushion between me and sleepless nights. It’s not much, but it’s comforting nevertheless.

Now that we have reached this milestone, it’s time to really work on our goals. We want to squash our credit card debt, get $10,000 in the bank, and start living off of last month’s income. None of these goals are unreachable, but to achieve them will take hard work and discipline.

Slow and steady wins the race. We didn’t get into debt overnight so we won’t be able to get out of debt overnight, but we will get out of debt!