Getting Out of Debt with DR, Oct 2009 - Page 5

[NWmt_mama]

Originally Posted by mtm

NWmt_mama, we were at a similar amount when we started too. Good job cancelling the vacation. Have you hidden/cut up/shredded your cards yet?

I got a scary email the other day, did you know its 11 weeks til Christmas I saw a sale in the window of the skateboard shop, have to go check it out as that is on older ds's list this year.

Yes, we have frozen one and hidden rest. We need to cancel one since it hasn't been used in 5 years. I've got an older one that I will keep for credit score purposes. We are going to stop paying into dd's college fund which will add 50$ to our savings and then snowball.

. . Wow! I can't believe that Christmas is that soon! eek! Need to get knitting!

Yah! Beansmama, Congrats! What a wonderful surprise.

[samandhenrysmom]

We went to see a DR ELP Financial Coach today! He really helped look at everything in a more objective way. We CAN do this!!!!

[Hedgehog Mtn]

I have my Emergency Fund :-)

Put me down for accomplishing the EF.

I started that goal on the 1st and made a couple awesome craigslist sales and hit 1090.00 today!!! I had budgeted 240.00 per week for this month for the EF out of paychecks so I planned on having 1200.00 by the 31st of October. If I can stick to that budget then I'll have 1810.00 (instead of the 1200.00 that I would have if I didn't sell anything.

I've just finished posting my goats for sale (long story but I can't keep them right now) for another 1000.00, 2 used cars that were becoming horrible lawn ornaments for 1300.00 total and an antique that someone offered 200.00 if they can take it tomorrow. If all that sells it would total another 2500.00 but I doubt I would get asking price for everything....and that's if it all sells. I told the kids and DH that if it isn't nailed down it's going on CL.

It also helps that I typically hit this huge purge mode about this period in all my pregnancies but in the past I usually just toss half the stuff IN the house. This time I'm hitting both inside AND out.

Sorry to blabber but I'm so excited - I'm not only cleaning my driveway which is seriously starting to look like a car lot thanks to DH but it's a huge motivator to keep going.



Sara

[eirual]

It is great to just lighten the load of "stuff". I feel so much calmer and more organized without so much "stuff" everywhere. I think it really does reflect your inner state to a degree. It's great to have such momentum, I hope it works out wonderfully for you and keeps up.

[major_mama11]

OK, I haven't been in on this in months, but I'll join up again! Still on Baby Step 2 here.

I really, really need to start doing the full- fledged cash envelope system again. I have kept up with tracking spending, but slipped into using the debit card again, and found that I spend more that way for sure. This month I've paid cash for groceries thus far, but need to take out cash to use for the other spending categories.

BS1 $1,000 to start an Emergency Fund- DONE

BS2 Pay off all debt using the Debt Snowball
2.1- $577 medical bill (making monthly payments- need to just bite the bullet and pay the whole thing off this month- just hate the thought of withdrawing $ from savings for it )
2.2- $13,000 car loan (need to check with DH to see how much we still owe at this point)

BS3 Three to six months of expenses in savings
$4700 / $7000 (67%) - paused this when we took out the car loan in April

BS4 Invest 15 percent of household income for retirement
(5% currently, DH plans to keep this up for now)

[major_mama11]

OK, question- anyone ever sold their wedding dress or similar sentimental item to put toward paying off debt?

I am not sentimental about this type thing, and don't see the point in my wedding dress sitting in my closet for 25 years, when someone else could get use out of it and I could get some $ for it!

I'm getting into a ruthless decluttering / selling mood...

[canuckgal]

count me in as a newbie...here's my (long) sob story...

I have completed baby step #1 a long time ago, actually we have almost 3000.00 of what we have always called a "nest egg", which is for those big emergencies like the car broke down, or the washer, or whatever. My goal has always been to save this up to a 3-6 mo fund or build it up to 10,000, but it has never happened. I do have a saving account with some stuff like a minor car repair fund/oil changes, clothing, gifts, etc. as well. We use the Budget map to keep track of stuff http://www.budgetmap.com

Time to get started on the other steps, but I am a bit confused how to tackle in what order. I'll explain more below. First of all, I will share my debt...as of now almost 30k (eek!). I am so ashamed to admit that. This is a visa bill, and a line of credit. The credit line has a used car on it (we got 2 years ago when dh went to school, for only 5000.00), some school related expenses/small loans, and what was left of a past smaller visa bill and our truck payment. We wanted to lump everything to have one payment. In our stupidity we let the Visa get up again over the last year, so of course that has to stop and it is time to tackle this. We have not put anything on credit card in the last 6 mo that we have not had the cash to pay immediately (like that day) so I am proud of that.

We have been living on a budget and getting things like groceries under control and paring down nonessentials, I have been able to take extra shifts outside of my regular part time job and dh now works full time evenings, making it easier for me to take extra work (we homeschool and work around each other, we have always been adamant that hs'ing would be the last thing we would ever give up) but of course life gets in the way. Last Friday I rear ended someone, and may have to write off my 10 year old Dodge Neon! I have the money for the deductible, but I can't remember if the car is collateral, so we will see what happens. It would KILL us to have to make a vehicle payment on top of what we try to put on the line of credit, unless of course I ask for a small increase like 3000.00 for another second vehicle (we live rural and need two with our varying schedules). we were just about to ask to roll the Visa and LOC together but now that is on hold. AND the same day I did this the municipal office phones and says we owe 700.00 more on property taxes. (we think this is a clericial error and hope to get it straightened out). Believe me I was a bawling blubbering MESS that day.

I feel like I will NEVER be able to get ahead here with the other steps, and am confused as to how to do it....

For instance, we used to be able to make a 130.00 biweekly investment contribution before the Visa got a balance on it again, (RESPS, RRSP's...we do have 60,000 in RRSP's currently) and cannot do that now. Dh is 42, and I am 39, so it makes me nervous that our investing is so "on hold" at our ages. So do we contribute what we can, then how can we ALSO tackle the debt, and ALSO chip in to a 3-6 mo fund for BS #3 Do you do that all at once, a little bit to everything??? Or do I just go gung ho on this 30,000.00?? I worry about not having at least 10,000 saved up for that step #3, especially with our history of illness and bad luck Dh had almost a year of being very sick and working in a very limited capacity and is now dealing with a chronic illness (sarcoidosis...no acute flareups now thank god but you never know), and I was off with an injury for 2 mo this year which set us back more...gov't sick benefits did not pay me much believe me. AND THE CAR.....AAAAaagh! We had just hatched a plan about saving 50 bucks or so a month and tax refunds and whatnot to have a bit of cash for the next vehicle while we eeked out (hopefully) 5 more years on this car....and now it is most likely GONE.

We also have the great misfortune of living in an about 80 yr old house that needs alot more work than we thought. We have been able to do a fair bit (like insulating the attic and blowing it in the walls plus the furnace/water tank all done through the utlility company, the roof was a gift from the inlaws, etc), but I have basement that we need to gut due to mold (most appears to be surface due to not having things like proper venting for the dryer or a bathroom fan), probably 40 year old windows, only half the house is sided etc ad nauseum! I have posted about my house woes before. I can't be concerned about the hideous lino in my bedroom, and the painted plywood cupboards, but I don't want to still be sitting 5 or more years from now with that mold in the basement and my leaky leaky tin windows. And there's other little things like that rusty well/water pump that could quit any minute! We were so focused on how low the mortgage payment was compared to renting that we didn't stop to think how much the repairs would cost in the end. We just walked in thinking we would do just a bit at a time, but I feel so pressured about it now! I have played with an online mortgage calculator or two, and 30-40,000 more on the mortgage is only 100.00 or so more a month roughly, not bad, but with so much other $$ stuff in our life now....aaaagh! When do we do all this stuff for the house as well, cause it feels like it would never happen?!?!?! We crunched some numbers recently with our Investors Group guy, and if we just up and sold we would lose major money again...!

Well, that is our finances in a very long nutshell...if anyone has read this epic tale thus far! If anyone can give me advice on in what order/manner to tackle more steps I would appreciate it!!!

[lalaland42]

Potentially good news!!!

I've really been sweating coming up with $8000 by November 15th and it seems like we might not have to.

Recap: We just moved to Switzerland and are in a sublet until Dec 1. I found *the* place but the rent is $2000/mo (cheap for here) and it is perfect for us. The problem is, it is standard to collect 3 months rent for deposit on top of first month's rent and we just don't have it. We could probably get it by dec 1 but the apt is available Nov 1 and the housing market is tight here. I'm afraid we'd lose the apt if we waited until Dec 1.

There is a sort of "deposit insurance" called SwissCaution that you can use instead of a deposit but I wasn't sure if we could use it because they require a certain type of residence permit and although we registered with the local authorities and applied for our residence permits, we haven't yet received our permanent ones. That takes up to 3 months.

I just made DH call SwissCaution and they said we could do it with our temporary contracts and employment contract.. I am cautiously optimistic.

This means I can buy DD a bike, which I promised her and didn't follow through on because I haven't been sure that we would have the money.

She brought almost no toys with her. Poor thing.

[Softmama]

lalaland42- that is great news!! I feel for you daughter. We moved from the US to Europe when I was little and we each got to bring one toy with us. I still remember mine. A little bear in a train conductors outfit named "Choo Choo". I actually still have him

[Softmama]

canuckgal- welcome!

So it seems like you have debt to pay off, a house to maintain, retirement that you are still contributing too, and an FFEF to build up. Is that right?

Since you already have the EF done for step one, I would focus now on the debt. You might want to introduce a savings envelope of a little each month to go towards the house repairs while you are focusing on the debt though, because some of that sounds like it is more than just cosmetic and needs to get done.
Since you are concerned about your history of illness, I might consider leaving the entire 3K in the EF instead of using some of it toward debt. But certainly don't put anymore into the EF until you've hammered out the debt.

Just take it one step at a time. If you try to throw a little money at each step simultaneously you will end up getting nowhere. Concentrate your resources on one step until you knock it down. THEN move on the next step.

HTH

edited for spelling.

[canuckgal]

Originally Posted by Softmama

canuckgal- welcome!

So it seems like you have debt to pay off, a house to maintain, retirement that you are still contributing too, and an FFEF to build up. Is that right?

Since you already have the EF done for step one, I would focus now on the debt. You might want to introduce a savings envelope of a little each month to go towards the house repairs while you are focusing on the debt though, because some of that sounds like it is more than just cosmetic and needs to get done.

That is what is so bloody frustrating about this house!!! Basically, we were stupid to buy it, and feel trapped in it...we would lose major money as I said to just up and leave it, with what rent costs here. Before this happened with my car, I was going to roll the visa and credit line together, putting the visa away of course (and we have not put anything on it in 6 mo as I said) and get lots of assessments for the bank and next summer get the mortgage raised just to do the windows (I actually have a rotted spot on the casing on the one living room window on the outside of the house that I could reach my hand down 6" between the window and wall when I pulled a piece of weathered looking casing off...it is plugged with spray foam and garbage bags!!!) and finish the siding with extra insulation underneath, and deal with the basement (gutting the one wall with mold, deal with the bathroom where I have discovered rotting previously wet framing behind an wall due to a previous leak from upstairs I think) and the rest, like the flooring and carpet (my dd room has plywood boards with a carpet roll on top, we have probably 50 yr old lino), updating the kitchen, putting in a new tub upstairs will have to wait.

Now with this car incident, I just don't know anymore! This sucks, as I said I don't want a basement and windows like that 5 years from now!!! And the little bit I set aside I think would have to go for stuff like carpet or flooring, that little bit seems like such a drop in the bucket compared to what those big things like the windows cost.

[/QUOTE]
Just take it one step at a time. If you try to throw a little money at each step simultaneously you will end up getting nowhere. Concentrate your resources on one step until you knock it down. THEN move on the next step.

HTH

edited for spelling.[/QUOTE]

As far as the retirement, we have NOT contributed to it at all....this is the growth of a pension payout from an old job of mine...literally not one dime in 15yrs. I was starting over the last 2 years off and on to chip in 50.00 a month, and 25.00 for RESPS, and 50.00 for another RRSP (here in Canada a LifeLong learning plan which dh accessed for school) now that is on hold too...which I shudder about, at our ages. Like you said I have my funds in too many things and need to just tackle the debt...however I like I said I feel sick about the lack of retirement funding right now when we were just getting started, and about the pretty major stuff in the house.


I can't help but think about all the "what if's" concentrating on JUST the 30,000.00 ...losing the job with not a total 3 mo expenses saved, for instance.

Yuk, this really sucks.

[Sarah8Jane]

Canuckgal -
To answer your question: Do one thing at a time, and do the steps in order. DR calls it "walking up the baby steps".
#1 $1000 in EF
You currently have $3000 which would be fine for you to hold onto since you have health, car, house issues currently.
#2 Pay off debt (except mortgage)
Get gazelle and pay off the $30k.

This is where you are. Don't worry about the next steps. Every thing extra should go to paying off the debt, not retirement, not extra payments on the mortgage.

[mtm]

beansmama, congrats to your dh, that's great news. I think you are smart to bank the raise and enjoy some small treats!

p1gg1e, how was the house? It sounds like the lower utilities and less coomute would help even if it is not on DRs schedule. Just make sure you don't get into too big a payment.

NWmt_mama, what are you knitting? My sil does socks and dish cloths for me every year

samandhenrysmom, glad it went well. We need to do that as we approach bs4.

Hedgehog Mtn you are doing great!

major_mama11, I was wondering how you are doing! Get back to your envelopes missy Oh and sell it, sell it!

canuckgal, I'd slow down and go in order. Save ef, check. If you are comfortable with 1000 (or 2000), I'd send off the other 2000 (or 1000) to bs 2. So its a line of credit and the visa? I'd hit the visa first assuming its smaller and then the l of c. I'd break the line of credit up into smaller chunks for my record keeping and for the quick win of seeing that line go. So I'd do:

property taxes (hopefully its a mistake)
visa
school
car (5000)
truck

But cut up the visa before you do anything, get rid of the temptation. Great job getting on budget and paring down teh bills, working overtime. You're off to a great start. I really hope you are covered with the car.

I'd halt the resp and rrsp payments if you are at all willing, I think spending the year to get out of debt makes more sense than adding to your retirement esp with what you're paying in interest. Speeding up bs2 will help your retirement in the long run.

No new money to bs3 until you are done bs2. That is your focus. All extra money gets put to bs2. Reading about your illnesses, keep your 3000 as a storm cloud. You hopefully won't need it but I'd keep it. I would honestly just hit bs2 hard this year and see what you can accomplish and not touch the house, I think you need some quick wins to see that you can do this.

lalaland42, that is good news, I hope it comes through. How are the thrift stores in Switzerland? It would be great to manage to get her some stuff!

[Sarah8Jane]

BeansMama - Congratulations on the raise! You are so inspiring; I've really enjoyed watching your journey this year. A wedding, a baby, debt free AND chugging along through Step 3. Way to go!

[mtm]

woot, its now officially mid-month. How is everyone doing? I managed to find good deals on our Halloween stuff and make it through Thanksgiving without going over budget so I'm happy. Next up is to get started with Christmas stuff.

[greenmom4]

We've had a great month. We have one more thing we'll need to get current on and then I expect that BS1 and BS2 should go relatively quickly. Here's what we've accomplished in just one short week (okay, week and a half).

* Dropped out of my raw milk share. This about killed me but $80/month on milk plus a 45 min drive to and from for pickup just didn't make sense right now.

* Cut cable in half - $30 savings

* Negotiated with comcast for internet - $35 savings

* Husband took on a paper route - $200 extra a month

* Negotiated scholarship with dd's preschool - $280/month savings.

* Actually stuck to a food budget of $100/week - this is HUGE for us! I don't even know how much we're saving because we never had a grocery budget. I think I'm saving at least $50-100 per WEEK (eek!)

* Enrolled in budget billing for utilities

* Have a really good working budget

* I'm taking the (free) bus to and from work each day.

* Have cooked at home every meal since starting

It's really exciting to me. We've lived paycheck to paycheck for so long and I can tell already that by making just a few cuts we'll really be able to get ahead, and we've really just hit the tip of the iceberg. I'm amazed by what all the mamas here think up in order to live frugally. It's so inspiring.

[annettemarie]

Wow! You really are doing things at gazelle intensity!

We had a bad month. I had another missed miscarriage which means more medical bills. And then our sewer backed up into the basement. I freaked out. But, we had $500 in the emergency fund. Which means we had the $100 to pay the plumber. So... it really wasn't a crisis, it just felt like one. We should be getting a big tax refund, and we're going to use it to pay off the medical bills and get the plumbing work done so we don't have to deal with this agaon.

[Hedgehog Mtn]

Mid Month Update

This was our first month with the new budget. We used DHs direct deposit from his first job for all household bills (mortgage, monthly bills, etc) and his second income we put in an envelope system....sounds complicated but we never know how much he will make at either one until about 6 days before he gets paid so for us using 2 separate budgets worked best and was the simplest.

For the direct deposit stuff we were surprised with a couple bills that I didn't expect (I always forget them and they only come every few months without a way to estimate) but had done the budget with an expectation of slightly lower income so they were covered (wahoooooooo). For the envelopes we did awesome. I have the following in envelopes - DH spending (coffee to keep him going for 2 jobs and a few rare snacks), gas money, savings, grocery, hay (animals) and 1 last envelope for above and beyond....so if he works extra hours it goes in the above one.

I still have some stuff on CL that may go this weekend but I figured on saving 240 each week (5 week month) for a total EF of 1200, with my CL sales I already have 1520.00 and 2 more paychecks this month for a grand total of 2000.00 by the end of the month.

Now the bad (well not bad but the not great I guess):

This week he had 1 day off for the holiday (no pay from second job), plus he had to come home 2x from his second job early so this week and the next will be super tight. The money for the envelopes will be about 170.00 less than every other week this month and 30.00 less than the minimum I needed.

I also under-budgeted grocery big time. I run an organic food co-op and have always ordered monthly from there. We have always eaten well for much less than other families our size (4 kids plus 1 due in Dec and DH eats here and takes 2 full meals to work each day) but we decided to skip a few monthly co-op orders and see if we could lower our grocery budget by eating less quality (as in not organic) foods. Nope. Shopping at the grocery store is much worse for us. I was spending about 500.00 per month with the co-op and this month I've given myself 60.00 per week so 300.00 total. I'm out of a ton of stuff and have already spent the entire next weeks budget. I used the above and beyond envelope to make the difference. I knew that 60.00 would be too little but we have 2 payments that are done as of the 31st so I was hoping we could squeak by and make it until the grocery budget could be larger next month.

We lost our breeding bull before he bred anyone :-(. He absolutely must be replaced because otherwise none of my cows will reproduce so I won't have meat or milk and I would be feeding the girls and getting nothing in return. He died in a freak accident and it will cost me 250.00 out of our savings to replace him.

I was able to mark where the budget is lacking and made notes so that next months budget will be a little better.

So the first half of the month was awesome and the rest will be tight but I know we can make it!

Sara

[RoadWorkAhead]

We're so blowing this months budget now I went to see DD's ped. and it looks like we need to go see her specialists, all of whom are quite a drive away. I didn't think we'd get in as quick as we did! We have to drive 5 hours (one way) to the GI and probably stay the night, then the next week we're carpooling 4 hours away to a different children's clinic - At least we're carpooling!! The meals out and gas were definitely not accounted for this month. We'll have to put off finishing BS2 and we'll have to put off our new dishwasher that was budgeted for next month most likely Also, we're getting run around from SSI (for DD) and its not making it easy to budget at all not knowing what to expect

[p1gg1e]

Originally Posted by samandhenrysmom

We went to see a DR ELP Financial Coach today! He really helped look at everything in a more objective way. We CAN do this!!!!

So glad you got great news!!


House hunting is going fine. So far nothing that we have liked and all have had MAJOR problems...lucky for DH I grew up with t a father in construction so I'm able to spot foundation issues and roof issues....tarps on the roof are a dead give away though

Don't worry about us getting into to much house.
We have house shopping poluza this weekend looking at 20 some houses all over the place...all under $135,000 asking price and DH makes about $60,000 so I think we should be fine. Snow ball is on hold but should be back here soon!

Wish us luck we can find a great place with good bones for under $100,000