Living Paycheck to Paycheck Sucks

We live paycheck to paycheck... and it sucks!

We are both college graduates who make good salaries but we can't seem to get ahead. No matter what we do, it feels like we can't catch a break.  Just when we think we are going to get one step ahead, something happens to knock us two steps back.  I know we dug this hole of debt all by ourselves, but sometimes it feels like the universe wants to make sure we stay there.

Living paycheck to paycheck is the worst feeling.  I never know when the next disaster is going to hit. We have saved up a $1000 emergency fund like Dave Ramsey suggests, but I'm always afraid it's not going to go far enough. If the washer and dryer both go out, that won't cover it. If we need a major car repair, $1000 isn't going to be enough. Money is a constant worry in the back of my mind. What if? What if? What if?

We  are ever so slowly digging ourselves out of the mess we created, but sometimes we make decisions that keep us in debt longer, too. For instance, we are remodeling our kitchen... completely - new floors, cabinets, counters, walls, electrical, appliances, you name it, we're doing it. And we aren't going further into debt to do it.  On the flip side, though, all the money that could have gone to helping us pay off our debt faster, is going to help us cash-flow our kitchen.

Every other Friday, which is how The Husband gets paid, I sit down and figure out what has to be paid within the next two weeks and pay it.  Ideally, I would like to only have to pay bills once a month, go to the bank once a month, and not have to worry about how this bill being due coincides with this big bill and we don't have enough money to pay for both of them. Although I haven't talked much about my goals yet, (I do plan on getting to that eventually), getting a month ahead with our finances is one of my main goals. I want to break the paycheck to paycheck cycle and start living on last month's income.

We aren't there yet, in fact, we aren't even close to there yet, but we are working on getting our financial house in order so that we can get there. More than anything, I want to get rid of the stress that living paycheck to paycheck brings. I want to stop spending tomorrow's dollars on today's things; that is no way to live. Living paycheck to paycheck makes it very difficult to meet any financial goals, let alone, audacious ones. How can I get out of debt, payoff my mortgage, save for a car, or do anything if I have no idea how much money is going to be in my bank account next week.

The idea of living on last month's income is so appealing to me because then I know exactly how much money I have to spend that month and I'm not banking on money that may or may not show up on payday. As it is, we hope we are going to get as much money on payday as we think we are. If that doesn't happen, then we are in real trouble. If The Husband's job goofs up and we don't get paid, because we live paycheck to paycheck, neither will our bills. If my work has a billing error and my paycheck doesn't go through, because we live paycheck to paycheck, my mortgage wouldn't get paid.

Those are sobering and scary thoughts, and more support for getting out of the paycheck to paycheck rat wheel!

No-spend-September

Starting today, is our family's fourth annual No-spend-September.

Many years ago, I was reading a blog and read about this concept of having a spending hiatus for an entire month.  With a little coaxing and cajoling, I was able to get my family on board too and now we are in our fourth year.

We chose September for a couple of reasons.  Due to my son's soccer schedule, we are home most of the month because he has practice during the week and games every weekend, school is newly back in session and summer credit card bills are coming due, and we don't have any family birthdays or commitments we need to meet during September.

No-spend-September is a family effort, even if sometimes The Kids wish it wasn't; for the month of September, we halt all unnecessary spending and try to keep our gas and grocery bill to a minimum. During this month, we don't go out to Starbucks or out to eat unless we have gift cards. We don't buy any lunches, and this includes the kids who buy lunch once a week at school.  We don't get haircuts or manicures or pedicures. We don't get massages. We don't go clothes shopping, or shopping at all really, unless it's for food.

The goal of No-spend-September is two-fold: to make us more mindful and conscious of our spending and to save money. (For the last couple years, there hasn't been much money saving going on, but it has helped us to cash-flow our home renovations.)

We have some ground rules that we follow, but all of our rules have exceptions.  We want No-spend-September to work with our lifestyle, not against it, because it's a tradition we want to continue. Every year during September I choose to still buy The Kids school pictures. To us, that's non-negotiable even if it is to other people. We also continue to buy gifts if it's necessary. We also pay for any school fees and kids activities fees that pop up during this time.

During the month, we try to find free activities we can do with The Kids; things like hiking, going to the park, or going to the library. We also save any gift cards we get throughout the year to use during September. We currently have Red Robin, Baskin Robbins, and movie theater cards.

Unfortunately No-spend-September does not mean we spend NO money throughout the month.  We still pay all of our bills: mortgage, utilities, car payment, credit card payments, cel phone, cable, etc. We also still need to drive to work and to eat.  The idea of No-spend-September is that we don't buy any extras.

Our normal grocery budget is $500 a month, for September we try to scale it back just a little and spend no more than $400. We also try to eat what we have in our freezer, fridge, and pantry. Some years we do better than others.

Our normal gas budget is $600 a month. Even in September this remains the same because we still have to do most of the same driving: to and from work for both of us, the grocery store, to and from The Kids school, and to and from all of their various activities.

Essentially, we just try to spend less and save more.  We don't stock up before the month begins or go crazy shopping once the month is over. It's just one month of mindful spending and purchasing.

As the month progresses, I will write updates about how much money we've spent and what we've spent it on. Wish us luck!

Kitchen Remodel

I started back to school last week and I am so happy I pre-wrote several posts because life is crazy hectic right now and this is the first time I've had a chance to sit down at the computer to write anything in almost two weeks!

Something I haven't written much about since I started this blog is the fact that we are completely remodeling our kitchen.  Over the last 5 years, we have renovated every room in our house, (except the bathroom, which we remodeled 8 years ago). We have taken each room down to the studs and started from scratch, now it's the kitchen's turn.

We ripped out the majority of our kitchen about 2 weeks ago.  We are going to rewire the whole kitchen, re-plumb it, and move almost everything. We are moving our fridge, our dishwasher, and our stove and are putting in a hood microwave.  We had laminate counter tops and are getting granite. We had linoleum flooring and are putting in tile. We took out a doorjamb and are getting "custom" cabinets made. It's going to be spectacular! And expensive!

As we have remodeled our house, we have cash flowed it all! We haven't carried a balance over on our credit card, (though we do use our credit card for points) and we've never borrowed or taken out a loan to pay for the improvements. We plan to do the same thing as we remodel our kitchen.

I have a huge family and this is one of those cases when it comes in handy. I have a brother who owns a plumbing company and who is going to move all the plumbing and gas lines for us as well as order all our plumbing supplies and fixtures at cost.  I also have a brother-in-law who lays flooring for a living so he's going to help us lay the tile for the floor. My dad was an electrician for 35 years and taught my husband all he would need to know about residential rewiring. Lastly, I have another brother-in-law who does woodworking on the side, and he is making our cabinets for us. (He's already made kitchen cabinets for his mother and my mother, plus a host of other products!)

Even with all this help, we know our kitchen is going to be expensive. We are hoping to keep the total under $15000. We have nowhere near that saved up so far, but we are hoping that by spreading the remodel out over several months, we will be able to pay cash for the whole thing. As of right now, we only have $2000 saved in cash, (we have another $1300 in an account for yearly expenses that we could use if we have to, and almost $3000 in our kids' accounts that we could use if needed, too).

We have already paid about $1500-$2000 for our kitchen. We have bought 4 new windows, a lot of "electrical" stuff, some odds and ends, and we've paid for about half of our cabinets so far.  It's not much, but it's a start. Our goal is to not carry a balance and not take out a loan, even if that makes the process last longer.

Our kitchen is going to be expensive, but I also think it's going to be worth it.  Our house is from 1948 and although the kitchen has been updated, the last update was from 1981. It is dated and old and I can't wait to see the finished product!

Our Debt Story Part 2

Thanks for returning for the continuing saga of our stupid financial decisions, or Our Debt Story, Part 2.

Like I said we had $26000 in credit card debt but that wasn't all of our debt. We also had a mortgage and a car payment.  This is the story of how we got out of debt, the first time.

About five years ago, (right in the middle of the Great Recession!) The Husband decided to change jobs.  It was nerve wracking to say the least and really hard for this Brunette in Debt who hates change to come to terms with. However, I didn't have to work 9 to 5 at a job I was unhappy with and where I didn't feel valued so I supported him 100% in his decision.

It's that change that got us out of debt, the first time. When The Husband switched jobs, he had a 401k that we rolled over to his new job and a pension that we couldn't decide what to do with.  Finally after breaking down the numbers, we decided to cash out his pension.  It was painful in that we had to pay crazy amounts in fees and taxes, but even after that, we had enough money to pay off both of our credit cards and get out of credit card debt.

We hated that we were sacrificing our future retirement income but we didn't see any other way out. That's why we save for retirement even though we are still in debt. Because of our prior debt we are playing catch up with our retirement savings. We all know how compound interest works and we sacrificed that to eliminate our credit card debt.

That's why I could kick myself that we somehow managed to get ourselves back into credit card debt.  We don't have near the debt we had the first go round, but we still have debt.  We continue to keep two credit cards. One we manage to pay off monthly and have every month since it was paid off almost five years ago. The other we used for a trip to Hawaii about four years ago and have carried a balance on it ever since. The balance has fluctuated anywhere from maxed out to about "half full". We currently sit at half full and that's the debt I'm actively trying to eliminate.

This time around our debt came about because even though we make great salaries, we have chosen to live beyond our means.  We buy gifts for friends and family members for birthdays and Christmas, even when we don't have the ready cash.  We buy when "we want" as opposed to when "we need" or saving for things first.  We want to give our kids experiences and don't pay attention to the cost.  All of these things are stupid and we are trying to change our habits so we don't fall prey to these pitfalls again.

There is a better way than using credit; and in the last few months I have been actively pursuing different options to satisfy our wants and still get out of debt. We are getting there. S.L.O.W.L.Y.

Costco takes Visa!

Holy Cow!!! Costco takes Visa. I feel like I could stop right there and everyone would understand exactly what that means! My life is changed! In general, it’s changed for the better, but financially, Costco taking Visa definitely falls into the negative category.

Before Costco took Visa, I kept to a very strict budget there because I never had a Discover or AMEX credit card that I could use there.  I always kept track of my running total and at checkout, my estimate was never off by more than $1-2 from the actual total. I either had to have the cash money in my hand or enough money in my checking account to cover my purchases.  Not anymore.  I saw the effects of this almost right away! On the first trip I made to Costco after they started accepting Visa credit cards, I spent $370. That is considerably higher than my normal spending of around $150 per trip.  Admittedly, I did buy a few Christmas presents, (two ammunition holders for my husband, totaling $40, and a packable down vest for myself (it’s going in my stocking) for $17), but the fact remains that I did not track my spending at all on that trip. I bought whatever I wanted.

I have since needed to go back to Costco a couple of times and spent more money. This is far above my normal $250 bi-weekly grocery budget.  In the past, I would have made do, but because Costco now takes Visa, I just went and spent willy-nilly. Costco taking Visa will not be good for my budget.

On an average, I spend $300-400 a month at Costco. The one bonus to them accepting Visa now, is that I will earn rewards for all those points.  But this is a case of because I’m charging it, I will spend more, which is something every study on it supports: you spend more money when you are paying by credit than you do when paying by cash. And as awesome as the points are, I know the points I earn will in no way make up for the overages on my budget. Discipline will be key when shopping at Costco from now on. Not gonna lie, self-discipline has always been in short supply over here!

With the kids back in school, I need to go to Costco and pick up after school snacks for them. I’ll be heading there this weekend and I hope I can keep the total down and only buy things on my list or at least only buy things we really need. The kitchen remodel is not really helping the food budget either.  I am always in the market for easy/quick meals these days and Costco has lots of those too!

In all honesty, after everything I’ve felt and everything I’ve written, I can’t decide if I’m happy or sad that Costco now accepts Visa. The jury is still out. One thing I do know is that unless I’m very, very careful and very, very diligent Costco taking Visa will not help me meet my financial goals!

Blog Obsessed

I have been reading personal finance blogs for going on three years. I love them; and when I find one I really love, I go back through their archives and read from their first post all the way to their most current post, and then of course, I follow them religiously!

About the time I started reading PF blogs, I started keeping my own financial journal. And for the last year, I've really considered starting my own PF blog. Well, I finally did it.  This blog is for me.  I don't plan to monetize it. I don't want to guest post. I'm not trying to become a freelance writer. I just want to participate in this medium and community I've fallen in love with.

I am PF blog obsessed!  I've also become obsessed with my new blog.  I don't know if the novelty is going to wear off or if I'm going to get sick of writing about this at some point. All I do know is that I love it right now and I think about it all the time! I have a notepad on my desk that I have jotted down notes on with posts I want to write. I keep a note on my phone where I jot ideas when I'm not home. When I go running, I think of post ideas. I'm having so much fun writing drafts, editing them, and figuring out what order I want to publish them in.

Long before I started my little ole' blog I was reading blogs. I started with blogs about getting out of debt (which are still my favorite) and then I branched out into other types of personal finance blogs.
Here is a list of some of my favorites with the link to their blog and why I love them.

Cait Flanders - when I started reading her blog, it was called Blonde on a Budget and it started out as a get out of debt blog. It has turned into so much more and is really more of a lifestyle blog now.

Disease Called Debt - I love her story and how honest she is!

Friday Night Shenanigans - She has a lot of debt to overcome but she's making a plan and putting in work.

Give Me Back My Five Bucks - Krystal hustled her way out of debt and has been debt free for years now! She doesn't post as often as she used to but it's still always a good read!

Mama Hustle - I just recently started reading and following her blog but I enjoy it and her writing style!

Six Figures Under - This is the MOST inspiring blog! She and her family hustled their way out of over $100,000 in debt in less than 3 years! What? And all along the way she stayed positive and faithful!

I promise, if you start reading some of these blogs, you'll become obsessed too!

A Happy Update!!!

I have a quick* update on my last post where I asked why do bad things always happen in threes?

We took our car into the dealership on Monday night and explained what the problem we were having was and what we thought was causing it.  Once we got this far, the clerk told The Husband that if it was in fact the water pump, as we believed then it would be covered by the dealership at no cost to us. (Apparently although there isn't an actual recall, if my make and model of car comes in with a broken water pump, the dealership has to replace it; I guess it's an internal recall.) When we heard this, we began praying (literally) that it was the water pump.  For the last two days we have prayed and prayed that the on-going problem with my car was the water pump and today we finally got the call that that was the problem!!!

Since the car was in for a repair anyway, we had a transmission flush done as a normal/preventative maintenance measure.  This we had to pay for to the tune of $228, but that beats the heck out of $700-900 which is what we would have had to pay if there wasn't an internal recall on our car! I'm still so happy and have thanked God so many times. This is a great time to remember to praise The One who delivered us this blessing.

One of our budget categories is car repair, which I guess is not the most aptly named category.  In addition to actual repairs we need we use this for maintenance and tires. In all honesty, we use it more often for regular maintenance. Anyway, in the category, we currently have $150. Although it won't cover the whole cost of the maintenance we had done, I only have to come up with $78 which isn't bad at all considering what I was worried about just a couple short days ago!

Also in that post, I talked about our water heater timer getting fried. We didn't have as much luck there as with the car, but we came out ahead of where I thought we would there too.  One of my brothers owns a plumbing company and he was able to get the timer for us for $120, that's about $30 than the cheapest price we were able to find online. The company overnighted it to us and we didn't have to pay shipping so that's another small win!

I'm so happy my financially tragic weekend has turned out better than I ever could have hoped just a few days removed from the actual events! Seriously, what a blessing: we expected to be out over $1000 from last weekend and we only have to pay about $350, of which we already have $150 saved. This is another great example of remembering when things work in my favor and when I'm the lucky one.

*PS - I guess this wasn't such a quick update after all.