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Positive Twist

2 days before Christmas my boss sent me a message asking me to call her. I work from home most days and although I had no reason to suspect I would be laid off a momentary panic crossed my mind.

As it turned out – even though our company is facing tough times – I was being rewarded for my hard work and dedication over the last year with a pay increase. Not just an increase, but $10,000 more for 2014! My first thought was excitement that I would have the ability to spend more, finally add to my wardrobe, spoil my son… then I realized that I should pretend I never got the raise at all. I don’t “need” it, we can survive without…

So on 1/15 my first check of the year came in and I finally had a dollar value to assign to my pocketbook – $336 more per pay period, $672 a month. Nearly $700 that I was not counting on having that I can now….. snowball!

Next to-do was to plug that figure into my snowball spreadsheet and the result was AMAZING. It made our “debt free date” move forward by 6 months! We are now looking at having zero debt except our mortgage on June 30, 2015!

AHHHHH! July 1, 2015¬†I’m buying that lens I want for my camera ūüôā

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$25 – Why I hate Dave Ramsey

Last night I received a $25 money order for selling 7 cloth diapers on Facebook. I normally do all the transactions via Paypal but the woman was insistent and I figured the worst she could do was not send it, in which case I would relist the diapers.

Irrelevant.

The point is that I have the $25 money order sitting here staring at me. If it was in Paypal I could just sit on the money until the desire to buy something through a co-op came up (or an awesome deal on a new carrier or wrap… or super cute AIO Diaper… or…)

I’m getting side tracked again.

So… Damn you Dave Ramsey. This is why I hate you. I woke up to that damn $25 money order sitting on the counter just screaming to me, “spend me! spend me!” while the DR in my head was saying “Get Gazelle Intense”. 4 hours later I gave in… I spent the $25 money order and now I’m pissed about it.

Screw¬†you Dave Ramsey for making me want to scream “I’m debt free” so fucking bad (yes, I’m this angry!) that I spent that $25 on our truck loan. No toys for me… just another $25 thrown at a debt we never should have had if we would have known you a couple years ago.

so Dave, you win this time… even if it was just $25.

2014 – Minimalism

Spend a little time on Pinterest and you’ll find that especially in the organization and home category there’s a trend called minimalism. Now I don’t know if it’s really a trend or if these people have been around forever but it’s not something I’ve ever been exposed to. Perhaps that’s just because my family is all hoarders or maybe I live a sheltered life within the confines of stuff.

So anyways as I started the Dave Ramsey plan I started to come to realize that a lot of our money is spent on stuff. And I don’t just mean food,¬† because in our house we spend a lot of money on food. Doesn’t matter if it’s takeout, carry out, dining out, or dining in¬† we spend a lot for two people –¬† and I am terrified that that number is going to continue to grow as our little boy does.¬†¬†Anyway… I’ve tried to find ways to become gazelle¬† intense¬† and I kept stumbling across the concept of selling¬† stuff.¬† If you don’t use it get rid of it,¬† if you don’t love it get rid of it,¬† if you can’t prove a damn good reason to keep it‚Ķ¬† Get rid of it.¬† People will buy anything, the proof is¬† in my basement. There is shit everywhere.¬† Now I’m not saying that I’m actually going to get rid of a bunch of stuff¬† or that I’ll make a lot of money doing so but I figure it is worth a try.

So I started googling minimalism¬† or minimalist lifestyle. Since this is a relatively foreign concept to me I figured I better do my research before I jump in and call myself a minimalist.¬† After a few Google searches, a couple webpages,¬† and a good look through my closet (the parts of it I can see any way)¬† I have decided I will never be a minimalist…¬† But…¬†I agree,¬†I have too much stuff.

So then I stumbled upon this concept of getting rid of¬† an equivalent number of items within your house¬† as the year. Now I don’t know if I described that correctly¬† but the basics are: this is 2014¬† so, over the course of the next year I need to get rid of 2,014¬† items with in my house.¬† I’m sure I could cheat and start counting things like the cans that go in the trash¬† or fingernail clippings (gross!)¬† But I’ve decided if I’m going to do this¬†I’m going to do it right…¬† So,¬† we are 13 days¬†in and I have¬†successfully gotten rid of¬† 78 items.

Among them, a slew of cloth diapers that¬† little man has outgrown,¬† a collection of shipping boxes I had been saving for¬† the thousands of things I’m going to sell on eBay (yeah, right!),¬† as well as some miscellaneous Christmas crap.

I think I could quadruple the goal, make it 10,000 items¬† and my house would still be a mess,¬† cluttered,¬† and I would still misplace my keys…¬† But just like the Dave Ramsey plan I need baby steps!

So to my readers, do you live the minimalist lifestyle?  If so did you overcome hoarding?  Any tips for a newbie?

If you are stuck in hoarders hell like me –¬† care to join me on this¬† endeavor?

Birthdays and such

My birthday is nine days away. When my dear husband asked me what I wanted for my birthday I said that I didn’t need anything. This went on for the better part of two weeks, before he finally reminded me that he wasn’t asking me what I needed but what I wanted. I started to think of things that I wanted, everything I could come up with was either ridiculously expensive, takes up too much space, or it isn’t something that can be bought.

What I really want is peace of mind.¬† You can’t buy that.

Of course I would love a new lens for my digital camera –¬† it’s only $1300…¬† I would like a new iPad¬† for no reason other than to have the latest and greatest one.¬† I want a new phone¬† because the android that I have sucks.¬† There’s a list of items that may be considered needs¬† that I could ask for.¬† I need¬† new pants,¬† a few well fitting shirts,¬† a couple of shells to wear under my suit,¬† another pair of shoes for work.¬† However, I can survive with what I have.

So after thinking about it for a few days I decided that what I really wanted was an experience. I wanted a family¬† centered event¬† for us to attend or go see¬† or do together.¬† now that is obviously quite hard when you consider that we have a seven-month-old.¬† however we live in an excellent area for¬† free¬† or not so free¬† experiences.¬† it just so happens that I came across a woman online¬† who was offering up two free tickets to the Baltimore Aquarium.¬† We live about two hours south of Baltimore and I have always wanted to go to the aquarium there.¬† I contacted her and within 24 hours the tickets were on their way.¬† now I know the fact that I was so frugal probably annoyed my husband however,¬† the tickets were free, it is something I wanted to do,¬†and I know I will be happy.¬† will I be a bit happier knowing that we didn’t spend additional money? Absolutely.¬† But this was more a divine intervention situation¬† than anything – and I have to admit I’ve also requested crabcakes so it’s not like my birthday is really going to be “free”.

The nice thing is I’ve left the rest of the planning up to my husband. He loves to do these kinds of things and try to surprise me. I’m very lucky in that respect. He always wants the best for me and he wants to see me happy. Right now I am overjoyed at the fact that I will get to do something I wanted to do, with my husband and son for my birthday‚Ķ The fact that we are saving money is merely a bonus.

 

2 Month Check-in

Well, it has been two months since I last wrote. We took the month of December off, despite my better judgment I agreed to it. Even though we weren’t doing the Dave Ramsey plan I feel we still manage our money pretty well. We did stick to a budget for Christmas and I don’t think anyone felt shortchanged in the gift department.

So where are we at?

In October we had six short-term goals. The last of which was to pay off our La-Z-Boy credit card by June 2014. That is the only outstanding debt that we have for our short-term goals. However the plan has changed; the La-Z-Boy credit card is now the last thing to be paid off in our debt snowball. We are currently working on paying off the loan on our Expedition. When we started this plan we were on track to be debt-free except the mortgage in January 2017. By reallocating funds from our savings account and getting gazelle intense that date has moved to January 2016.

In October we paid off three credit cards,  and another credit card in November.  In December we paid off the Lending Club loan and made additional payments on the Expedition.  We are starting the new year with a new plan,  we are motivated,  and we have every intention of being debt free by December 31, 2015!

Our debt snowball payment is up to $637.  That means each month we are paying 2 1/2 car payments.  At this rate  we can pay off the Expedition by the end of the year  with just a couple extra  small payments.  Had we chosen to stand that like a normal American family  we would still be paying off the car  through February 2017.  Screw being normal!

The latest snowball is currently set up I have ranked our debts¬† by interest rate – next¬†up would be the baby loan.¬†¬† We have a few months left to decide if we would rather¬† pay off my student loans¬† and La-Z-Boy¬† before the baby loan.¬† the baby loan is actually a gift¬† if you can call it that¬† from¬† my in-laws.¬†When we¬†decided to pursue IVF treatment they graciously offered¬† to loan us some money – I will never¬† take such a gift again.¬† I didn’t know at the time that they were going to use our loan as a tax loophole – they make enough money¬† that they took out a HELOC on their house¬† for the tax benefits¬† however we are on the hook for it¬† and now they cannot refinance¬† so the subject of our loan comes up often.¬† It is uncomfortable to say the least.

anyway, that’s the update…¬† We are on month¬†4 of¬†the Dave Ramsey plan and we have paid off $13,000 worth of debt.¬† We are living like no one else so later we can live like no one else!

Baby Steps

I have taken this truncated version of the baby steps from the Diaperswappers forum:

Pre-Step 1: Get current on your debts and do a budget
Before you begin the
baby steps, you must be current on your bills and, if you aren’t doing one
already, begin doing a monthly budget.

Baby Step 1: Save $1000 cash in
the bank
Start your emergency fund. If your income is less than $20,000, make
that $500.

Baby Step 2: Get out of debt
With Gazelle intensity and
using the debt snowball, pay off all your debts.

Baby Step 3: Finish the
emergency fund
With the money you were paying towards debt, now with no debts, you can save 3-6 months of expenses into a fully funded emergency fund.

Baby Step 4: Save for retirement
Saving 15% of your income
didn’t seem possible before, but with no payments, you’ll be ready for
retirement and not have to take a job as a Wal-Mart greeter.

Baby Step 5:
Save for College
Instead of taking out student loans, your kids will be
eternally grateful you thought ahead and had a plan for their higher
education.

Baby Step 6: Pay off the house

Baby Step 7: Build
Wealth and Give It
Away

———————————————
Expanded Baby
Steps:
0.1 Commit to NEVER borrow $$$ EVER for ANYTHING other than possibly a
house
0.2 Talk with spouse and get him/her on the same page as you concerning
finances
0.3 Do a written budget
0.4 Temporarily stop all retirement
contributions
0.5 Get current on the basics (You MUST have Food, Utilities,
Shelter, Basic Transportation)
0.6 Amputate “toys” (bikes, boats, ATV’s etc)
if they will keep you from completing the snowball within 12 months
0.7 Cut
lifestyle (Cut CATV, Cellphone, Regular phone “extras”, Internet, Eating out,
etc) and/or take a second job if $1000 EF will take more than 30-90 days.
(depending on income)
0.8 Get current on ALL bills.
1.0 Save $1000 in Baby
Emergency Fund (EF)
1.1 Chop up CC’s. (You have an EF now, no NEED to keep
those CC’s!!!)
1.2 Get Health Insurance NOW (chances of getting sick w/major
medical bills are larger than that of death), especially if you have
children.
1.3 Get Life Insurance NOW if you have debt/your family couldn’t
make it financially if you died. Especially important if you have children!
Social Insecurity only provides a small amount of coverage if you have
dependents.
1.4 Amputate cars that you can’t pay off within 24 months (you
have an EF to fix “bondo buggy” if something should happen)
1.5 Consider
raising insurance deductibles to $500 or $1000 and dropping full coverage on
paid for “bondo buggy” (you have an EF ya know)
1.6 Draw up a will.
1.7
Get Long-Term Disability Insurance.
2.0 Do debt snowball, paying all your
debts from lowest BALANCE to highest.
2.1 You can take your first vacation
since finding Dave if you can pay cash for it. (no using the EF!!!)
3.0 Save
3-6 months EXPENSES in EF (FFEF)
3.1 Start replacement car fund.
3.2 Save
up 20% for home purchase OR pay down existing mortgage to the point that you can
drop PMI.
3.3 Start furniture or other non-essential stuff replacement
fund.
3.4 Move up in car if you still feel the need to (must pay cash for
it!, you can only buy NEW if you have a net worth over a million dollars)
4.0
Start contributing 15% of your paycheck to retirement.
5.0 Save for kids
college fund.
6.0 Pay off the house early.
7.0 Live like no one else since
you have lived like no one else! Give, Build Wealth and Have Fun!

 

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Support & Recommendations

I have found support in the following places (and hopefully will figure out how to tag or save this post at the top!)

Diaperswappers

Facebook

 

Recommended Blogs

Mr. Money Moustache

Not so Surprise funds

Finally received checks from my FSA account to repay medical bills. Nearly $1100.

 

Now I have to decide. Use this money for Christmas, our two trips this month, and pocket the rest OR pretend I never got it and sink it in debt.

 

Thinking I should divide it up, but I’m not sure how yet. Stay tuned for my surplus status.

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Avalanche

While it seems things have grown out of control we are attempting to make changes before it all comes crashing down on us. I can only speak for my upbringing but financial prowess was not something I was exposed to. Extravagant Christmases and repossessed cars ‚Äď yes, that was my life. I never remember needing anything, I sure wanted ‚Äústuff‚ÄĚ but my basic needs were always met. I will not however blame my current situation on my parents. I did this. I spent this money (or my husband did ‚Äď I can [and do, sometimes] blame him).

Another one of the tools Dave Ramsey talks about is the concept of the Debt Snowball. I have to do something before the avalanche of debt buries us alive. So, taking those numbers we put together earlier I found a debt snowball calculator and plugged them in. If we accrue no new debt and we put no additional money towards payments we will be debt free by… December 2022.

Shit. 9 years. Nine years! Wow. Seems like a LONG time… except for the fact that our mortgage company plans on keeping us as customers for another 25 years.

snowball

So, this is where the nerd in me starts playing with numbers.

What if I take $1000 of savings this month and plop it in as a one-time payment? Hmmmph. Still 9 years.

What if I do $1000 a month for the next 3 months? Shaves 2 months off, October 2022.

What about $5000 over the next 5 months? Just one more month gone.

Maybe I should overlook the mortgage and look at my next ‚Äúleast‚ÄĚ important debt which is my student loan.

Nothing extra: October 2016

$1000 extra: September 2016

$1000 x 3 extra: July 2016

$1000 x 5 extra: May 2016

New goal. Everything (except the mortgage) by May 2016!

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The numbers

*If you are just starting out, starting over, or thinking of starting to get out of debt I recommend listing out all of your debts ‚Äď it is scary and daunting and discouraging but you cannot change your situation unless you know your situation*

 Here it is. A breakdown of our debt.

Citibank CC                                        $272.00                      12.75%                       $50.00

Capital One CC                                  $3,247.00                  12.29%                       $75.00

Navy Federal CC                               $2,406.00                  11.9%                         $100.00

Best Buy CC                                       $194.00                      19.99%                       $25.00

La-Z-Boy CC                                       $1,600.00                  0%*                             $75.00

Lending Club                                      $4,696.00                  7.99%                         $261.00

Car Loan                                             $16,150.00                3.99%                         $425.00

Baby Loan**                                     $15,325.00                3.99%                         $365.00

Student Loan                                     $5,860.00                  2.35%                         $101.00

Mortgage                                           $179,000.00              5%                               $1,055.00

*0% promotional interest rate for 24 months ‚Äď ends 9/30/2015

**HELOC taken out by the in-laws to help us fund IVF

 

The good numbers include:

Savings Acct 1                                   $13,000

Savings Acct 2                                  $1000

CD’s                                                    $500

Lending Club Notes                         $500

529                                                     $50

401k                                                   $41,000*

*I currently have 5% of each paycheck put into my 401k account because my employer matches 50% of the first 5%

We also have some additional funds across a couple other savings and checking accounts and a few years ago I bought some savings bonds but lost my login to TreasuryDirect so I have ‚Äúforgotten‚ÄĚ about them.

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