Feeling Optimistic

I’m feeling optimistic about our debt.

I don’t know why. Nothing has changed. No windfalls to put towards our debt.

Just steady progress and a feeling of hope.

Because life went sideways for a while, our debt journey was no longer a priority. I stopped tracking our debt. I stopped strictly following our budget. I “bounced” three (three!) checks. (They didn’t actually bounce as our bank covered the check for us, at a fee of $36 each! It was entirely my fault, I was just not in a place of caring where we were financially.)

I am feeling reinvigorated to get out of debt. Although we still owe a ton of money, I see a glimmer of light at the end of the tunnel.

Our credit card debt is the lowest it has been in 18 months and going down. We still owe $16,000 to our credit card, but we are making definite downward progress! In just a couple of months, we will have the lowest credit card debt that we have had in three years. It will be a milestone month for sure! I’m not counting my chickens, I’m just looking ahead to where we are going and where we will be soon.

In February 2016 we were still living in our old house and had just finished a kitchen remodel. We had over $13,000 of credit card debt and for several years, the outlook only got worse. Moving was very expensive and although our bills and obligations increased, we never changed out lifestyle. We continued to live “high on the hog” and didn’t adjust for an increase in our cost of living. Now, we are more comfortable with our monthly obligations and what we need to do.  I feel like we can get out of debt. We can be diligent with our finances.

The Husband came to me one year ago with a plan to get out of debt. It didn’t work out the way we would have liked, but in that one year, we have paid off $5600 worth of credit card debt, continued to make progress on our car loan, and made many “big” purchases. Our debt is down by over $5000 and it will keep going down. Even with purchases that we made: computer, phone, jewelry… we were able to make progress. We are going to continue making progress and we are going to get out of debt.

I feel rejuvenated and ready to get out of debt. I don’t know why or what it is, but I’m all in. Progress is the biggest motivator! We had a good month last month. I didn’t have a “monthly debt update” to compare it to, but I had my totals from the previous month. We paid of 11.5% of our debt in one month. I know that’s not a normal month and certainly not sustainable, but it is repeatable. It was also great to see those numbers in black and white and to know that we did that. We made that progress. Each month, we are going to owe less and less debt and eventually we will be able to payoff 10+% of our debt every month!

We will get there! We will get out of debt!

I found my motivation: progress. What’s yours?

Quick Post

This is going to be just a quick post…

I plan to do a debt update in just a couple of days. I think it might be slightly more positive than I expected. (Thank God for No-Spend September!)

My life has been crazy and debt payoff has not been a priority, but I still want to see the small blessings I see.

Recently, we bought tickets to a show for a group of 12 people. I commented to two of them that they owed me money. Both said I was wrong and they didn’t owe me anything. (They were not being rude or mean about it. They truly didn’t know.) Then their husbands stepped in and said, yes, we do. They paid me on the spot. That was unexpected and I was able to send the money right to our credit card.

I have also bought a lot of stuff for my mom recently. She is so busy caring for my dad right now that she doesn’t get out much. I love my mom but she usually takes months to pay me back. She paid me back everything she owed me within two weeks of my buying it and I was able to send the money straight to the credit card.

As it is September and inching closer to Christmas, I have found my “Christmas” envelope so helpful! It has never held more than about $600 at a time because as money goes in, money comes out. But, it has been so wonderful to be able to pay for things using the envelope. I don’t know why it took me nearly 40 years to plan for Christmas but I’m so glad I did and I will never go back to the old way! I love having a Christmas budget and having money to pay for the things we need to buy!

I feel like God has really blessed us the last week. Because it is No-Spend September, we were able to make a little progress on our credit card bill this month. Between being paid back a lot of the money we were owed and our payments we made a pretty good dent, but I knew I wanted to pay more, but I had no more funds coming in. I even thought about transferring money from our savings account but had to stop myself.  Fast forward a couple of days and I logged into my bank account and had more money than I expected, (which is always nice!). I received an “extra” paycheck from a day I worked last month that I forgot about! YAY!!!! $170 straight to the credit card! Then, we had to donate a car as it was breaking down more often than it worked, (☹, it was the first new car I ever bought and almost 17 years old. It was a great car!), when The Husband called to have it taken off of the insurance, they said we would be getting a refund check fro $298. It went straight to the credit card! Lastly, I had some returns that I needed to take back and I finally did that for another $49.

Each day when I pray, I pray to God about improving our financial situation and getting out of debt. I pray for wisdom and restraint with our finances. This last week I have tried and tried to figure out a way to come up with more money to give us a chance to bring our credit card bill under $16,000 when it closes. I had exhausted all the avenues I could think of and then God gave us a $515 swing in our finances! In just two days! It’s still going to be really close to see where our credit card actually closes at after interest, but because of these blessings, we have a chance of our balance being below $16,000. That will be the least money we have owed in credit card debt in about 18 months!

These are all small wins but added together made for some good financial progress!

Wow, this post ended up being longer, and more detailed, than I expected it to be!

Have you had any wins lately?

Debt Update September

This is my first debt update since March! EEEEKKKK! Unfortunately, things haven’t changed nearly as much as I would have liked, but on the plus side, we do have less debt than we did then. After this update, our debt increased. We made some big and unplanned purchases that we put on credit. Some of them were necessary and some of them were not, but they were all expensive.

We had a crazy summer and have been slowly digging our way out.

This debt update will be based on our current totals. I will compare our current credit card to debt to our last month’s statement. I will include our car loan. We do have a couple of other debts that I don’t really talk about here. We have a 401K loan on my husband’s account that we took out 2 ½ years ago when we planned to move. We also have a 10 year loan for our solar that we are only one year into paying. I probably should include these, but for whatever reason I don’t.

For various and sundry reasons, we still have a ton of credit card debt. But, (for the millionth time we are starting again!) we are going to get out of credit card debt. We are going to keep decreasing our credit card balance until it reaches $0! Even though we are mired in debt, at least our car loan has continued to decrease. We have a 0% loan so it’s nice to see the payment actually affect the bottom line; to that end, I don’t really focus on paying extra towards our car payment because it’s at 0% interest. I know that goes against what Dave Ramsey teaches, but I can’t see paying more interest on my credit card balance just to get an interest free loan paid off quicker.

Although we are not paying off our debt as fast as I would like, I am happy to say that for the first month in a row, (hahaha) our overall debt decreased! (I am so happy to get to be writing that instead of having to say that our debt went up! Quite honestly, we kind of took a blogging and debt update hiatus when our debt was increasing, and not because it was increasing, life just went sideways!) Usually we are not making giant leaps and bounds in our debt repayment, but believe that slow and steady wins the race, but last month was actually pretty good as far as debt progress goes.

Our last credit card statement had a balance of $17,887.61. Being real here, it wasn’t pretty.  

Here are our current debt totals:

            $16,020.28     Credit Card at 16.74% interest

            $1990.00         Car Loan at 0% interest    

      

Our total debt stands at: $18,010.28. YIKES! I can still hardly wrap my head around that number, but at least we are finally under $20,000 in debt. It’s still a lot, but I’m a little sad that falling under the $20,000 mark happened without any fanfare. In fact, in all the craziness of our life, I didn’t even realize we had gotten below that number until I was writing this debt update. That’s just another reason that I think keeping this blog is so important. It keeps me aware and accountable!

Plus side: we started actively tracking our debt again! Our debt decreased! We paid off almost $1867.33 of credit card debt in actual dollars, plus another $345 towards our car, which amounted to about *11.5% of our total debt. With our last payment, we dropped another thousand on our car loan! The fact that we haven’t borrowed any more money from The Kids is a plus. We continue to make progress towards our retirement and to contribute $50 a month to our kids’ bank accounts.

*We actually had a great month for debt payoff! 11.5% is nothing to sneeze at! If we could do that every month, our debt would be gone in 9 months. If only… However, I’m pretty excited to see we had double digit decreases and am hoping to have another good month next month. We had some unexpected “windfalls” of money that helped get us here: a car insurance refund, an expected, but forgotten, small extra paycheck, some returns, and of course, No-Spend September. All-in-all, a pretty good month.

Down side: No matter how much debt we pay off, it’s never enough. We also had a few months of backsliding and not keeping track of where we were. L Also, we did still charge on our credit card. Of course I also hate that several hundreds of dollars went towards interest on our credit instead of towards the principal.

Looking forward to: getting our credit card debt below $16,000 and keeping it that way, also making continued progress on our car loan. I’m also looking forward to getting back on the debt pay-off and blogging band wagon! I was off of it for too long and it feels good to be making progress again! If we truly have an exceptional month of debt payoff, we could potentially skip the $15K range altogether and barely break into the $14K range. Honestly, that will be a stretch, but it won’t be impossible. I’m also hoping that with our next debt update, we can totally skip the $17K range and fall into the $16K range. Again, that is a stretch, but not totally unrealistic. Wish us luck!

Clearly, 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.

WOW! Another long post!  If you stayed around until the end, thank you! If you got bored and moved on, I totally understand.

I'm Back... Again

Well, hello there. Remember me? Brunette Getting Out of Debt? I’m back…

All I can say is it’s been a doozy of a summer over here! Very early in my summer break, my dad was diagnosed with terminal cancer. Let’s just say that threw everything for a loop! Vacation plans, kids’ schedules, paying down debt, it all flew out the window and my summer was dedicated to helping my parents as much as I could in any way I could. My parents live about 30 minutes away from us and I was going out to their house to help them about 6 days a week. I would spend a couple of hours in traffic each day and anywhere from 6 – 8 hours at their house doing various chores for them or just keeping them company. Obviously, that left very little time for blogging.

Now that we are back in school, it brings routine back into my life. I have a regular lunch time where I can sit and jot a few lines. I have some dedicated time to pay bills and add up our debt (which, by the way, I really don’t want to do… I think we backslid over the last few months and I don’t think I want to see the results). Although because of work I become busier, I have specific time set aside to do things.

I’m hoping to get back into blogging. It probably won’t be consistent, and I don’t know how long or detailed my posts will be. But I want to get back to it and I want to feel accountable again. I want to get out of debt and I want to chronicle my journey.

The last few months we have made several large purchases that we didn’t plan for: a new phone (for me, because we gave The Daughter our old one), a new computer (because as The Husband put it, “ours was giving us the black screen of death”) a new ring (for our anniversary), concert and show tickets, the list goes on and on. Some of our purchases were necessary while other were completely frivolous and worse yet, we didn’t plan for those purchases so we put them on our credit card.

Our credit card balance had gone up since our last debt update and has almost sat stagnant over the last two statements. We have made payments, but we have charged so much that the payments have made a negligible difference in the actual balance.

BLEH! I’m so sick of debt! And the cycle I perpetuate to keep us in it!

BLEH! Hopefully my next post isn’t 3+ months away and hopefully it will be a little more positive!

Japan is Expensive!

Last year The Boy and I were afforded the opportunity to travel to Japan as part of our city’s Sister City organization. It was a wonderful experience, truly once in a lifetime, and even though we are in debt, I’m so glad we went. This year, The Daughter is going on the same trip.

The program is actually a home exchange program, 10 Japanese students travel to America for 9 days in March, and then our 10 kids travel to Japan in June. This past weekend we hosted a student from Japan. She was wonderful! I loved having her and it we made so many wonderful memories. But, they weren’t frugal memories.

Although they spend 5 nights at our house, we really only “get” them from Friday night to Monday morning. The Sister City Association calendars the rest of their time.

On Friday night we took her bowling and to In’n’Out. Cha-ching!

On Saturday, we took her to the Santa Cruz Beach Boardwalk and Blaze Pizza. Cha-ching!

Sunday was more frugal and we spent the day at The Daughter’s dance competition and we only had to buy food that day. Food for 5 people… cha-ching!

We also bought her many souvenirs: several tee shirts, many different candies, a small-stuffed animal, and a couple gifts for her to bring home to her parents. Cha-ching!

She was beyond appreciative and gracious but it was a spendy weekend to say the least!

I don’t know how much debt we are going to pay off this month! I think we are going to come very close to breaking even on our credit card, which, in a way, is a win. We should be able to pay off everything we charged on the card, but we won’t make much headway on our debt.

In addition to treating our foreign exchange student, we are sending our daughter to Japan in a few months. We are fundraising for the trip but we pay all the fees upfront and then get reimbursed if we fundraise over our need. We also pay for airfare, spending money, and gifts for The Daughter to take when she goes to stay with her host family.

Her airfare was $1500 and we will send her with (at least) $250 of spending money. Since we found out she was accepted into the program to go to Japan, we have been buying gifts for her host family, so we are mostly done with that aspect of it.

It has been a wonderful experience for my children and I’m so grateful they have this opportunity, but it is expensive; both the hosting and the sending!

Plugging Away

As far as our debt and debt payoff goes, we are just kind of plugging away. We haven’t made any significant strides, but neither have we made any huge goofs.

We did have a very expensive weekend but paid for that using our savings. To that end, we do need to work on replenishing our savings a little bit now. Some of our expensive weekend will also be paid for using our Christmas money as we bought some gifts over the weekend.

Last month was our best debt payoff month ever, which will be followed by one of our worst! Right now, we are just plodding along. Our anniversary is next month, as is my birthday, and Mother’s Day. My poor husband, right?

The Husband bought all my gifts this past weekend. He bought me gifts for my 40^th and everything else. It ended up being an expensive weekend. Because of these expenses, our credit card debt is barely going to go down. We no longer owe our kids any money (YAY!!!) so that is $100 of debt that we aren’t paying off. We will make our normal progress on our car payment, however. I think we are only going to decrease our debt by 1-2%, however, I’m thankful that there will be a decrease.

With our May debt report, I’m hoping it will be better and I’m hoping we will be able to get our credit card debt into the $15,000. (Honestly, that’s such a crazy thing to say, “I’m hoping we can get our credit card debt into the $15,000?”

Net Worth vs. Debt Worth (updated 4/11/19)

I was writing a blog post the other day and as I was writing about my debt, the idea of a “debt worth” came to me. Now I imagine somewhere in the blogoshere and the internet somebody has coined and copyrighted that phrase, but it was the first time it occurred to me. And it got me thinking, what is my net worth compared to my debt worth.

Let’s start with a simple definition.

To me, a net worth is everything you have, all your assets: house, car, bank accounts, jewelry, cash on hand, etc.

Debt worth is everything you owe, and some of those things could be repeats: house, car, credit card debt, solar loans, 401K loans, personal loans, etc., any money that you owe anybody else.

Sometimes in our society, I think people confuse net worth and debt worth with their personal worth. People who have a huge net worth are not better people than people who have a lot of debt. Financial wealth does not equate to “good people”.

Lately, I have been comparing my worth, net worth and my debt worth.

Worth:

4 cars                             $20,000

1 house                        $591,000

1 401K                          $210,000         

1 403B                            $60,000

Bank accounts                $12,000

                                    ________

                                    $893,000

On the surface, it looks like we have a very healthy financial worth, but I only showed you one side of the picture. This only takes into account our assets, and assets are only half of what determines a net worth.

Now let’s take a look at the other side and see a more accurate picture.

Debt worth:

1 car loan                         $3700

1 house loan                 $455,000

1 401K loan                      $8500

1 Solar loan                    $26,000

Credit Card debt              $16,600

                                    ________

                                    $509,800

We have a lot of liabilities so our “worth” isn’t nearly as good as it looks.

Taking away our liabilities, or our debt worth, brings our total net worth down to around $383,200

These are all new, updated numbers for this post. Periodically, I think it’s important to look back at where we were just so we can see how far we’ve come. And we have come far.

Our net worth has increased by over $33,000 since I originally posted this in February of this year. That means we are going in the right direction. A lot of this is market fluctuations: especially for our retirement accounts, but some of it is progress. We are making progress. We are going to decrease our “debt worth” and continue to increase our net worth.

Debt worth is a bigger story than just numbers. Debt, and finances in general, bring so much emotion to the table that it becomes difficult to determine our true “debt worth”.

Debt makes me feel inadequate, ashamed, irresponsible. These feelings factor into my debt worth just as much as the actual numbers do.

Having debt doesn’t make you a bad person, but it often makes you feel like one.

Taking control of our finances and making progress towards our debt makes me feel like I’m getting it right. Making a plan for my money, and sticking to it, makes me feel like I am on the right track and makes the weight of my debt worth more manageable.

I am one of the lucky ones, even taking into account the huge amount of debt that we have, we have a positive net worth, that’s mostly in part to our retirement accounts. Our retirement accounts are nowhere near where we wish they were. In fact, we changed our contributions to help us get out of debt. I can’t wait until we are credit card debt free and can max out our contributions to our 401K again. Then we will really see our net worth grow!

Remember, you are not your debt, even if feels that way sometimes. Your debt worth does not determine your worth as a person, child, parent, friend. You are more than your debt.