No new car, but car payment, either!

We decided not to buy the vehicle from family.  After some serious consideration, we decided that if we were going to spend thousands of dollars on a new-to-us vehicle, it should be one that really meets our needs, not one that is just better than what we’re currently driving.  The SUV we were going to buy would have a little bit more space, but the gas mileage wouldn’t be great and we would want to replace it with a van sometime in the near future.

Making that decision was actually a relief to both of us.  We’re still making payments on Perry’s car and only had enough saved to pay for half of the cost of the SUV.  We really didn’t want to owe his family money or have a second car payment.

Now we’re back to our original plan.  We will pay off Perry’s car and save up for a van.  In the meantime, I will keep driving my 10+ year old car and repairs will be made as needed.  I’ve tracked down maintenance manuals for both of our vehicles in the hopes that we can learn how to do some basic repairs ourselves.  Any skills we can acquire will mean money saved in the future!  For repairs that are more involved than we can confidently handle, we've found a fantastic (and trustworthy!) auto shop within walking distance of our house.

Balance update!

We decided to consolidate two credit card balances that had 22.4% interest onto one with a 10% rate.  The lower rate may not make a huge difference if we get it paid off as quickly as we hope to, but it is one less payment to send out each month and the minimum payment with the new rate is lower than the combined minimum of the two old cards.  There was a long debate about whether or not moving our debt was a good idea, but in the end, we decided that we are still working hard to pay things off and have enough impulse control to keep the credit cards put away and just use cash or debit.

Direct Deposit Advance - $0/$550
Store Card 1 - $0/$323
Credit Card 1 - $0/$400
Line of Credit 1 - $0/$510
Credit Card 2 - $0/$685
Store Card 2 - $0/$2,798
Auto Loan 1 - $0/$4,140
Student Loan 1 - $0/$1,951
Student Loan 2 - $0/$3,148
Credit Card 4 - $0/$2,577
Credit Card 5 - $0/$3,700
Credit Card 3 - $320/$5,150

Line of Credit 2 - $2,830/$5,000

Credit Consolidation – $7,100/$7,100

Student Loan 4 - $4,471/$6,048
Auto Loan 2 - $3,435/$10,000

401k Loan - $1,171/$2,400

Student Loan 3 - $2,552/$5,614

TOTAL REMAINING - $21,879/$56,094

We'll be paying off another credit card this month, then work on tackling the line of credit.  We anticipate some extra income in the coming months from freelance jobs and bonuses, so that will add some snowflakes to our debt snowball.  I've gotten seriously house hungry as of late, so we've been talking more in-depth about long-term financial goals.  Once all debts are paid, we intend to save as aggressively as we have paid down our debt.  We want to have enough cash saved for a healthy down payment.  We also hope that the sale of our townhouse will bring a small profit to add to our down payment.

Here's to fifteen years together!

Goodbye, student loan!  I won't miss you at all!

I just sent the final payment for a student loan that has been a part of my life since 1997.  Fifteen years after dropping out of a private college, those general requirement classes are finally paid off.

Direct Deposit Advance - $0/$550
Store Card 1 - $0/$323
Credit Card 1 - $0/$400
Line of Credit 1 - $0/$510
Credit Card 2 - $0/$685
Store Card 2 - $0/$2,798
Auto Loan 1 - $0/$4,140
Student Loan 1 - $0/$1,951
Student Loan 2 - $886/$3,148
Credit Card 5 - $1,716/$1,700
Credit Card 4 - $2,713/$4,577
401k Loan - $1,772/$2,400
Line of Credit 2 - $3,052/$5,000
Student Loan 3 - $3,209/$5,614
Credit Card 3 - $4.718/$5,150
Student Loan 4 - $4,820/$6,048
Auto Loan 2 - $4,978/$10,000

TOTAL REMAINING - $27,864/$54,944


Our "July Fund" of $3,500 is complete as well. This will cover Perry's missing income and our mostly-camping vacation with the family. We're going to have so much fun!

We are planning to buy a vehicle from a family member in June. My 10+ year old sedan is still running well, but it is getting harder and harder to squeeze three kids (all with booster seats) into the back. I've been putting off even thinking about getting a different vehicle because I hate the idea of having a car payment. I grew up one of three kids who shared the back seat of a sedan, but A) we weren't all the same size, so we didn't all need the same amount of space like our three almost-seven-year-olds, and B) the sedans of the 1980's were significantly roomier. We hope to save up enough to pay in full, but that may not be feasible without dipping into our savings. If that is the case, we plan to fork over everything we've saved and pay off the rest as quickly as possible. We're still debating what will happen with my car.

More good news!  I had my annual review last week and I am getting a small raise. Working hard pays off, kids!

Beginning the Next Chapter

We did it!  We survived wedding planning and we got hitched!  And we did it all without adding to our debt!  It was incredibly stressful at times, but mostly we had a lot of fun creating a day that was purely "us."  We threw convention out the window and wrote a ceremony that was meaningful for our family and created a reception that was relaxed and fun.  It couldn't have gone better.

Now that our nuptials have been completed, we're working toward combining our finances.  I'm finally leaving my big chain bank and moving everything to Perry's credit union.  We've worked through our monthly budget expectations and September is the first month that we're using a joint budget.  We planned not only for all of our living expenses, bills, and debts, but also for Christmas gifts, Perry's annual month of unemployment, and a small family trip next summer.  We underestimated our income (we didn't count overtime) and overestimated the things we need to pay.  We both have additional income from overtime and freelance projects, so we feel like we've set ourselves up to be successful.

Perry works at the local high school, but is not technically a teacher (more like an assistant teacher and AV tech).  He has been financially strapped every July/August because his contract includes 11 months of employment.  Unlike regular teachers, he cannot distribute his pay over 12 months.  Every July, he is off work without pay.  While he has always gotten by, his month off from work has required spending less money on fun than he normally would rather than taking full advantage of the time off.  Next year will be different.  We'll have enough saved to replace his income and we're taking the kids camping.

We've prioritized our saving and spending and have decided that it makes the most sense for us to save not only our $1,000 emergency fund, but also enough to replace his July income before we delve back into debt repayment.  We'll aim to have $3,500 in our savings account at all times.  We'll have to dip into it every July, but we'll continue to contribute to it monthly so that by the following July, it is replenished.

I'm really excited to dig into our finances and work toward long-term financial stability.  Perry isn't excited quite yet, but he's not unwilling.  Seeing some progress is what got me excited, but he hasn't yet been a part of those exciting moments when the final payment is made on a debt that has been a part of the family for years.  I'm sure that he'll love seeing the numbers drop and the bills dwindle despite not a big nerd about math and spreadsheets like me.

I'll update soon with our combined debt load.  Eek!

It's about time I take another one down!!

It has been a while since I was last able to make one of these posts!! I sent off the final payment for Store Card 2 this morning! Goodbye, 29% interest rate!!

Direct Deposit Advance - $0/$550
Store Card 1 - $0/$323
Credit Card 1 - $0/$400
Line of Credit - $0/$510
Credit Card 2 - $0/$685
Store Card 2 - $0/$2,798 - PAID!!
Credit Card 4 - $4,098/$5,150
Credit Card 3 - $4,064/$4,577
Auto Loan - $3,195/$4,140
Student Loan 1 - $1,876/$1951
Student Loan 2 - $2,650/$3,148
Student Loan 3 - $5,407/$5,614
Student Loan 4 - $5,748/$6,048

Total paid to date (including interest): $9,283.15

Next on the chopping block is another credit card. After I paid off all of my smaller balances (those under $1,000), I decided to stray from the Dave Ramsey plan a bit. My momentum and my financial discipline are pretty well established at this point, so I'm comfortable tweaking my plan.to pay off the higher interest rates first. September should bump me over the $10k mark! Woohoo!!

In apartment-deck-gardening news, we picked over two pints of cherry tomatoes yesterday. They're growing faster than the girls can eat them now, so there are finally enough for me and some to share! The green peppers are getting big and I can't wait to chomp into those. A squirrel has taken a liking to our peas (and nothing else), so we haven't gotten any of those yet. There's still time before the end of the season. I hope s/he's enjoying having some fresh produce. Especially since I usually only feed the wildlife moldy bread. Mmmmmm.... Spores...

Half-Way Goal Met!!

We've met our half-way goal of $7,500 paid off at the six-month mark!  To be more specific, In the last six months, I have paid off...

$7,753.61

I've pretty well settled into my budget now and it's not much of a struggle to stick to it.  An interesting thing has begun to happen since I have started to really think about my purchases; I have a newfound desire to purge the junk from my apartment.  There is just so much stuff everywhere.  I have had a few friends hold garage sales over the last month and I have donated some items and sold a few things.  It has been nice to make a little bit of money, but even better to just have literally truckloads of things removed from my living space.  I'm hoping for a few more garage sale opportunities throughout the summer.

I sold most of the CDs and DVDs that I didn't want anymore to SecondSpin a few years ago.  I like that they tell me exactly what they'll give me for each disc so I can decide if it's worth shipping to them or not.

I've taken tons of kids' stuff to Once Upon a Child once the girls have outgrown them.  They can be a little picky about brands and how worn things can be because they want to be a retail store, not a thrift store.  Check out what they're currently accepting on their website.

My local Once Upon a Child is next to Half-Price Books, so I drop off a load of books to sell and browse while I'm waiting to hear about the kids' stuff.  Half-Price will recycle books if you are looking to get rid of them and they choose not to buy them, but more often, I'll take whatever doesn't sell along with the items that Once Upon a Child doesn't want and swing by Goodwill on my way home.  I love that the store near my place does drive-thru donations.  I just pop the trunk and it all disappears.  I don't even have to get out of the car!

These little snowflakes add up fast and have kept the debt snowball rolling along at a pretty good pace.  I'm on track to pay off another credit card in August!  Woohoo!

KID PIC: Here's a picture of me riding a motorcycle inside a whale.  Kids think their parents can do anything. :)

Aiming for $7,500 by the end of July!

I took my first step in this journey on February 5th of this year when I put $1,000 in an Emergency Fund and made my first big payments toward my debt. It is now almost five months later and I have paid off a grand total of...

$6,279.94

Wooohooo!!! I broke $6k!! I'm going to aim for $7,500 to be paid off by the end of July. It is an aggressive goal for the next month, but I want to be half-way to my $15,000 goal by the end of my first six months of really working at this. I haven't been working as hard as I could have been at times, but I need to keep my nose to the proverbial grindstone.

Speaking of challenges, have you read the most recent report on the cost of raising a child? The average American family spends $222,360 to raise a child from birth to age 18. My cherubs being born a mere two minutes apart means that I have the divine privilege of spending somewhere in the vicinity of $444,720 before I give them the boot. I'm pretty sure they're mostly going to eat nine of the next fourteen years of my income with the way they go through pints of berries and cherry tomatoes. We're going to have to find a way to expand our farm off of this little apartment deck.

Don't get me wrong. They're worth every penny, but the girls were born as a two-for-one deal and I'm going to do everything I can to keep those deals going. Either I'm going to have to be diligent about my frugality or they're going to have to find a way to break into showbiz. Maybe we should try a two-fold approach. That's it. We're starting a band. Please leave your band name suggestions in the comments below.

We've crossed another threshold!

Total paid since starting this project on February 5th, 2010: $5,068!!

and my $1,000 Emergency Fund is still actively preventing emergencies from occuring. It's amazing how few emergencies happen when you're prepared.

I'm one-third of the way to my 2010 goal. I am right on track to pay off $15k this year! Maybe I can achieve a -0- net worth by the end of the year. I could be worthless! : )


Thank you so much for the comments and kudos! I think I'm a pretty average American debt story. All I've done differently is choose to talk about the financial mess I've created and the hard work and sacrifices that it is now taking to make a better life for myself and my girls. Having the support of regular readers and those just passing through keeps helps to keep me motivated, so thank you, thank you, thank you!!

If we someday adopt the metric system, will I have to call these kilometerstones?

As of this morning, I've made two big accomplishments.

1. I paid off another credit card!  This is the last card from my college credit card debt and I am so happy to finally be rid of it.
2. With the payments made today, I've crossed the next big marker on my debt-o-meter.  I have now crossed the $4k threshold for debt paid off.  That means I've paid off more than 11% of my debt in under three months!

So, here's the update in numbers:

Direct Deposit Advance - $0/$550
Store Card 1 - $0/$323
Credit Card 1 - $0/$400
Line of Credit - $0/$510
Credit Card 2 - $0/$685 - PAID!!
Student Loan 1 - $1950/$1951
Store Card 2 - $2,638/$2,800
Student Loan 2 - $2,765/$3,148
Auto Loan - $3,735/$4,140
Credit Card 3 - $4,376/$4,577
Credit Card 4 - $4,910/$5,150
Student Loan 3 - $5,610/$5,614
Student Loan 4 - $5,904/$6,048

Total paid to date:  $4,131.05

(plus I have my $1,000 Emergency Fund in the bank, which didn't exist before this process started)

All of those little balances are out of the way.  The remaining larger balances look a little daunting, but I'm determined to keep the momentum going.  I'm going to skip over Student Loan 1 for now and knock out Store Card 2.  Student Loan 1 has a whopping $6 monthly payment which must be spread over about 72 years or so, but it has an incredibly low 3.25% interest rate.  Store Card 2, meanwhile, sports a 25.24% interest rate and a $80 minimum payment, $56+ of which goes to interest every month.  I'm looking forward to the day that I never again have to look at a statement with a double-digit APR.  In fact, when I'm through paying off this debt, the only interest rate I ever intend to see again might be for a mortgage.  Maybe, but we'll see.  Maybe I'll just save up for a house and pay cash.  Or maybe I'll build one a little at a time as I can afford whatever Lincoln Logs are needed to build a real-people house.

If I can keep going at this rate, I can be debt free in less than two years.  That would be amazing.  Most or all of this debt is going to be gone before the girls start kindergarten.  That means that I'll be in savings mode throughout most of their school years.  I can't believe that as a single mother raising twins I'm going to be able to pay for both of them to go to college by myself!  Paid-for college is going to be a reality!

i might have to review my goal...

They way things have been going, I might have to take a hard look at my $15,000 goal mid-year.  I think I can do better.  And quite honestly, I would rather have a goal that I have to stretch for than a goal that I know I can easily meet.  I'm pretty sure that $15k is a goal that I can easily meet.  Look at what I've done since I started!  Now the question is whether I should bump it to $20,000 or $25,000.  Hmmmm... How far can I take this in the span of one year...

Just a quick note: the girls and I are walking in the March for Babies again this year.  R and K were born seven weeks premature and spent their first weeks in the hospital being cared for by doctors and nurses with some of the biggest hearts I've ever had the pleasure of meeting.  The mission of March of Dimes is to prevent prematurity and infant mortality and to promote healthy pregnancy and healthy kids!  We're hoping a few of our readers will donate $5 or $10 to our walk (it's not per mile) to help the cause.  Thank you so much!

Three paychecks in April!  We're going to knock out another debt, so keep coming back!

the baby steps

I've mentioned that I'm following the incredibly simple debt-reduction plan taught by Dave Ramsey.  To give you an idea of what exactly that plan is, here is a list of the seven "baby steps" he teaches as a means to get out of debt and build wealth.


Baby Step 1
$1,000 to start an Emergency Fund
Dave frequently refers to this Emergency Fund to as "Murphy Repellent," meaning that Murphy's Law ("Anything that can go wrong will go wrong.") seems to apply far less to those who are prepared to deal with the unexpected.  It is crucial to keep perspective on what is truly an emergency when considering using this money.  Is it really an emergency?  Could I save money to cover this expense rather than pulling money from my Emergency Fund?


Baby Step 2

Pay off all debt using the Debt Snowball

The Debt Snowball pays off all debts except a first mortgage.  Dave suggests paying off the lowest balances first.  Pay the minimum on everything except the lowest balance and put everything you can toward that creditor until it is paid off.  Then take the amount you were putting toward that balance and attack the next lowerst balance.  As each balance is paid off, the snowball grows and more money is available to pay toward the lowest balance each month.  Learning to live on a budget and within your means (living on less than you make) is the only way to get out of debt and stay out.

Baby Step 3

3 to 6 months of expenses in savings

After the debt is taken care of, it's time to beef up the Emergency Fund.  More savings means you're better prepared for bigger emergencies should the arise.

The next several steps overlap or occur simultaneously. With the first three steps, you are digging out of a hole and ensuring that you are prepared to handle emergencies without incurring debt. The remaining steps are about building wealth.


Baby Step 4

Invest 15% of household income into Roth IRAs and pre-tax retirement

This is just the start of retirement preparation unless you're already on the verge of retirement.  Once the rest of the Baby Steps are complete, more may be invested.  My company matches 401(k) contributions, doubling the first 1% and matching the next 3%.  That means that if I put in 4% they will put in 5%.  That's free money!

Baby Step 5

College funding for children

R and K will be starting college at the same time, so this step is a little intimidating.  R declared the other day that she wants to be a doctor.  Later the same day, we were driving past the private college that I attended briefly and she told me that was where she wanted to go to school.  Granted, she is not even four years old yet, but I want to support her big dreams.  After all, I want to be in a nice nursing home someday!

Baby Step 6

Pay off home early

Home mortgages are the only type of debt that Dave Ramsey understands as a necessity for most people.  He would prefer that everyone pay cash but that's not an option for most people.  He provides some guidelines for those looking to buy a home:

1. Utilize only 15-year, fixed-rate mortgages.
2. Your monthly payment should be no more than 25% of your take-home pay.

Using these guidelines helps you to keep the cost of your home within your means and if your payments are reducing your mortgage balance at a faster rate, equity in your home is built more quickly.

Baby Step 7
Build wealth and give!

With the first six steps out of the way, you can invest more in your retirement if you'd like.  You can give more to the philanthropic organizations that are important to you.  You can even add more cash to the fun envelopes!  A fortune cookie I got recently said it best: 

"If you continually give you will continually have."

So those are the Baby Steps!  That's not so hard, is it? :)

This blog is now open to the public.  Feel free to pass it along to anyone you think may enjoy or benefit from it.  The links over there ---> might help me pay my debt down faster if I find myself with some followers who click on them now and again.

I'm adding labels to my posts so specific topics can easily be found.  I've also added a net worth tracker.  It's not much to look at right now, but it'll be fun to watch it change.  I'm a nerd for math, graphs, and spreadsheets so all of this is kind of fun for me.  I like paying bills.  How weird is that?

Please leave your answer in the comments below. :)

baby step 1: COMPLETE!

I got a big fat paycheck (lots of overtime) and my federal tax return today.  My baby emergency fund ($1,000 in the bank) is now fully funded!  Yay!  I also paid off half of a low-balance credit card.  When my state return comes in, it will buy tires and glasses and the rest will go to debt payments.  What a great start!  I'm going to do my best to keep the momentum going.  Woooooohoo!