Converting to Cash

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Going back to my recent post on The Cost of Convenience – Snack Time, I am finding the temptation to overspend or spend in situations where I don’t need to has become more of an issue as my debt load and monthly obligations continue to drop.  I have more available income and carrying plastic around…well, I have found myself making some bad decisions.  So effective immediately, I am converting to an all cash system.  I’ve cut up two of my cards and put the others away.

I will still pay my monthly bills online using either my debit cards or bank bill pay.  But for any “spending money” I will be withdrawing the money at the beginning of the month and sticking to it.  This money will be my grocery money and the money I would pay the kids for work (since they no longer get an allowance.)  And I’m debating the car money.  Obviously I have to get gas at least twice a month, and paying with a plastic is most convenient.  Not to mention maintenance, etc. that is not always predictable.  I’m considering opening a car only account (checking, that is, not credit) and using that card only for card related expenses.  Thoughts?  But since on most months there are monies left over for that budget item, I really want it in an interest bearing account.  So I’m still figuring that one out.

But essentially I am taking away all possibility of over-spending on a whim or giving into the temptation of convenience or acquiescing to the kids’ “mom, can I have this?”  And when the money is gone for the month…it’s gone.  The kids are used to this on a smaller scale as I’ve been trying it out on a weekly basis…and I’ll just tell them, we are out of  spending money for the week, we have to make due with what we have.  And they are getting that.

Teaser: New monthly budget coming soon as we have cut back on some other expenses to keep us on target for our 6 month credit payoff goal!


Knee Deep in It – Tax Season

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I’d been so proud of myself for getting posts done ahead of time and here I am already falling off that wagon!  But I do have a good excuse…

So I haven’t filed 2013 or 2014 taxes yet.  Long story short, it all leads back to discussions early on last year with my dad regarding the house, so I am not going to get into that anymore.  But I was comfortable not filing as I had pre-paid my taxes correctly AND because the twins adoption was finalized and they were a special needs adoption, I had a large tax credit coming that can be carried over for up to 5 years.

With that in mind, I have ALWAYS filed my own taxes.  But with the possibility of needing to finance a home in the coming years and the new tax credit which I don’t have any experience with, I decided I might need to hire someone this year to do it for me and make sure I covered those bases properly.  (Since I am self-employed, banks look at my last two-three years tax returns for financing rather than current year pay.)  So I started calling around trying to find someone who was familiar with the Adoption Tax Credit (<=link to IRS site regarding credit if you are interested.)

Almost no one had any experience with the tax credit, and the cheapest I could find was $350 per year…for a total of $700 just to fill out some forms (which I have already compiled all the numbers for) and get the correct form done for the tax credit.  I spent a couple of weeks rolling that number around in my head.  And then started digging into the tax credit.

And yep, I’m back to doing my taxes myself.  I’ve already done all the compiling everything thanks to my organization kick I’ve been on this year.  I figured at $25 per hour, I could essentially give myself 28 hours of research time to figure out the new tax stuff and not have to pay anyone else the $700.  So that’s where I am this week…knee deep in tax code.  And the scary thing is, that I am actually enjoying it.

I did break down and buy TurboTax’s 2013 version to kind of guide me, but from what I can tell, even they don’t handle the tax credit properly.  So I’m doing this by hand…downloading the proper forms from the IRS.gov website and filling them in.  It’s been tedious, but I’ve learned ALOT.  Hopefully, I will wrap this up this week.  And then…I get to help the twins file their taxes.  What a cake walk next to this!


Out Sick

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Sorry folks, I got a pretty nasty cold this weekend and I’ve been out of commission for the past couple days. I won’t have a weekly debt update per usual today, but I will have one up on Thursday once I’m feeling better.


Talking to Friends About Money

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Today I wanted to talk about something a little taboo (I guess we’ll just keep with the theme, since today’s mid-day post was a bit taboo, also).

Do you ever talk with your friends about money? Not just casual mentions of money, but deeper conversations about budgeting, debt payments, financial goals, etc?

Confession: when I first started blogging here I hadn’t ever talked about money (on a deeper level) with any of my friends, ever! It made for a challenging transition from my old spending habits to my newer (more frugal) ones.

Eventually I slowly started talking a little bit about how I’ve been working to pay down our debts. One of my friends, in particular, has been really kind about my debt reduction mission. She still doesn’t know specifics (exact figures of debt versus monthly payments, etc. etc.), but she knows that I’ve become much more money-conscious (side note: she’s actually made innocent comments occasionally about how “tight” money is right now in our household. LOL! If she only knew the truth = that we spend $2,000/month on DEBT!!!).

This friend and I used to get together nearly once a week for lunch or a happy hour and, instead, we now get together to do a little 3-mile walk/jog on a popular jogging trail here in Tucson. I love it because I’m able to get some exercise and some girl talk all at once, and to do so for 100% free!

But still….no one knows the extent of our debt situation, nor the sacrifices we’ve made to really try to chip away at our debt.

I have a different friend that I was chatting with the other day. She and her husband were preparing their taxes and realized that last year they’d had a dramatic income boost – 33% over the previous year. The scary part is that she said she has absolutely NO IDEA where the money has gone. They still have the same living arrangements (same modest apartment, same old car, no new baby, same basic “stuff”), so it’s not like their expenses have gone up. Just…the money has disappeared.

To be totally fair, she recognized that her spending has gotten a little “willy-nilly” lately (e.g., extra Starbucks runs, more dining out), and my friend is one of the most generous people ever so she spent a TON at Christmas (I don’t want to give her financial specifics, but when she told me the amount she’d spent on family I was SHOCKED!) I’m sure she’s equally as generous throughout the year with other occasions (birthdays, showers, etc.)

So after hearing all this, where does the conversation go from there? I know my friend has some debt (student loans at a minimum, though I don’t know specifics about other consumer-related debts), and I want her to win with money! I wanted to tell her all about what I’ve been doing, to encourage her to examine her spending, make a budget, try to cut back, etc. etc. etc. Only…I didn’t feel comfortable to do so completely unsolicited.

I did mention that I’d been working really hard this last year to pay off debts by really trying to stick to a budget (hoping this would open the door for more questions), but the conversation just kind of ended there. She picked up with a different topic.

So what would you do? Do you talk to friends about money? Would you ever do so unsolicited, or simply wait to be asked? It feels like a weird topic (kind of like trying to push your religion on a friend), but I’ve just felt so thrilled with my progress this past year and I really WANT my friend to do well financially, too! Especially with their big income boost, they deserve some financial wins, you know? But it’s definitely still so taboo.

How do you feel about the topic?
Would you talk to your friend(s) about money? Would you try to encourage them to get on a budget, or just let them see how you live your life (with the hopes that one day they ask about your success)?


Breast Versus Bottle: A PSA

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Hi friends! I’m taking a little time today to blog on something totally unrelated to debt as a little public service announcement (PSA).  Even though unrelated to debt, I really want to spread this message and encourage any/all of you to do the same. This is something that isn’t talked about nearly enough, but is quite near and dear to my heart. Mention it to a new Mom or Mom-to-be. Or just talk about it amongst friends. If this message reaches and helps even a single new Mom, then this post will have served its purpose. Thank you for your patience with this interruption to regular blogging. I’ll be back later with a more relevant post.

One of my lifelong best friends called me the other day.

I could tell instantly that something was wrong. She was clearly holding back tears, just trying to keep it together.

My friend Alice* (*not her real name) is a first-time Mom. She brought her sweet baby home from the hospital a few days ago, and is having a very difficult time with the transition. Although it’s totally normal to have your hormones all over the place in the early days and to feel some level of angst, Alice’s feelings were a bit amplified compared to most. As we spoke, I could tell that she was near-panic. My heart ached for her as she told me about her anxiety and feelings of helplessness.

What was Alice’s biggest problem?

Breastfeeding.

Alice’s baby was refusing to latch. She’d seen multiple lactation consultants in the hospital, but was experiencing continued problems. The doctor noticed it and even had her stay an extra day in the hospital, hoping the extra time would help.

Exhausted and feeling defeated, Alice turned to formula while at the hospital. Now at home, she was still trying to breastfeed, but was working herself into a terrible mental state due to her difficult and unsuccessful experiences.

She called me to seek some solace from our friendship and to ask about my experiences (I’m a huge breast-feeding supporter. I breastfed my girls for 6 months and attended a weekly breastfeeding support group religiously). I gave her some suggestions and talked about my experiences. Every person is different. Every baby is different. When I first had my babies I’d planned to breastfeed for a full year. I fought tooth and nail to make it to 6 months. I won’t go into all the details, but it felt like a daily battle and I struggled the.entire.time. It never came easy or naturally for me and my girls.

Here’s the thing. We all know that “breast is best.” We’ve all read the studies, heard it from nurses, pediatricians, etc. We have had it beaten into us that breastmilk is the best thing we can give our babies. I am not arguing with that.

What I would like to say though, the message I really want to spread, is that it’s not all about what’s best for the baby. There’s another very important person in the equation:  the mother.

Yes, we all know about the studies showing how important breastmilk can be for supporting a baby’s health (see here or here for an overview). But do you know how incredibly important maternal mental health is for her growing baby? A recent meta-analysis discussed the many varied ways that maternal depression can negatively effect a child long after infancy (see here).

I want to be clear that I’m not a breastfeeding-basher. If a woman can breastfeed then that is fantastic! I’m totally pro-breastfeeding! I’m just saying that there are many cases where trying to breastfeed may actually cause more harm to the child than formula-feeding would. One of these cases, specifically, is if the woman is battling severe anxiety and/or depression as a direct result of breastfeeding complications. We all have these ideas of what it will be like when we have a baby, and rarely do we think that one of our biggest troubles will be feeding the baby! Experiencing difficulty with breastfeeding is actually quite common. But if these complications translate into perpetuating a state of anxiety and depression in the mother then, “Houston, we have a problem!”

I liken this to being on an airplane. If the cabin loses pressure and the oxygen masks come down, we are instructed to put on our own oxygen mask FIRST! We do this BEFORE helping anyone else (including children and/or elderly) because if we don’t help ourselves then we aren’t in a position to be able to help anyone else!

If a woman is struggling with depression, then she’s unable to mother as effectively as she would otherwise. This can negatively influence the growing child’s affective and behavioral development in a number of ways (higher rates of depression and psychopathology, behavior problems, and altered biological stress reactivity profiles). In short, if a new mother is depressed, it’s bad for her child. I would argue that the effects of maternal depression are much worse (and longer lasting) than the effects of being formula-fed as opposed to breastfed.

Many people don’t look at it that way. They look at a new baby and if the mother is feeding the child formula, then she’s often judged. Why would you not want the best for your baby? But maybe offering formula IS the best choice for the baby.

I’m not a trained counselor nor am I a trained medical professional, but I gave my dear friend my own personal advice (this, coming from someone who is pro-breastfeeding, but also pro-mommy’s mental health). I told her not to give up yet. Try to pump so baby can still get breastmilk that way. Try to nurse (like, really try….could take a good 30-45 minutes) at least once a day. See another lactation consultant. Try a nipple shield. Etc. Etc. Etc.

But I ended the conversation with this:  If, after you’ve exhausted all other options, you are still finding yourself in a state of panic and depression, unsuccessful with breastfeeding….then you give your baby a bottle of formula. And you do NOT feel bad about it for one second. You are doing the best thing you can for your baby. You are taking care of YOU!

I know this is a controversial topic and you may not agree with me and that’s just fine. But I  urge you all to open your minds a bit about this topic and consider not just what’s best for baby, but what’s best for Mommy?

In my opinion, this concept (what’s best for Mommy) is not discussed nearly enough. Think about it. Keep it in the back of your mind when you offer a new Mom suggestions or advice. Remember that each person is different; our babies are different; our experiences are different; and let’s be sensitive toward each other in our choices about breast versus bottle because it’s not always the clear-cut choice that everyone makes it out to be. We’re all just trying to make it through life doing the best we can. Let’s offer each other a little bit of grace.

Thank you! I hope you’re having a fabulous day and will check back later for a more debt-related post. In the meantime, tell me one of your favorite things about your best friend. My dear friend Alice is so incredibly generous. She always thinks of others before herself (really to a fault), and over the years has taught me to be a more caring and giving individual. I am a better person for having her in my life.


Budgeting Decisions

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Well, folks, the jury was out for awhile but the verdict is finally in. The month of February was a bit rough for our income. Like….ouch.

Hubs and I have a variable income, but in the (almost) year I’ve been blogging our income has ranged from about $5,500/month on the low end, up to over $10,000 on the high end. In general it has averaged around $6,500-$7,00ish/month.

So February officially marks the worst income month we’ve had to date since we began blogging (not in life, in general, but since we’ve started this debt reduction mission). Combined, we didn’t even crack the $5,000-threshold. In fact we were closer to only $4,500.

Yuuuuup.

This also marks the first month in a long time that I’ve actually brought home more than hubs (which makes no difference with our budget since funds are combined, but makes me sad given I only work part-time and he puts in long, physically grueling hours daily. Just feels unfair somehow that he didn’t make more).

Why?

If you’re a long-time reader then it’s for several of the same reasons I’ve discussed before when we’ve had lower-than-average income months. The main thing this time around is that his payroll was super high (he hired a new crew – yay!!!), so he’s been paying out a lot of funds for work that’s been completed, but he hasn’t been able to actually close out the jobs yet (and get PAID on his & his crew’s work) for a few high-dollar jobs due to various reasons (it’s boring, really, but if you’re curious this happens occassionally in flooring….things like they’re missing some transitions that have to be ordered, or there wasn’t enough material and it’s coming from across the country – oh wait – the order can’t come in due to inclement weather in the NorthEast, etc. etc. etc.).

We’re working on some of his business financials to try to change things up so stuff like this won’t happen in the future. In the past, the way hubs’ has run his business is that he’s kept a couple-thousand dollar buffer in his business account, but then anything over his costs for the week, he gives to me as income. But as his business is growing, we’re seeing that a couple thousand dollars is not really enough of a buffer. I’d like to see his buffer grow a little higher (so he can easily cover the expense of materials and labor when needed, even when waiting on his paychecks), and get to a point where hubs is drawing a regular income every month. Any money his business earns above his income would either sit in his business account (adding to the buffer), or he can pay himself a quarterly bonus or something similar. The point is, I’d like to move toward a more regular, steady income that doesn’t fluctuate based on miscellaneous business finances.

The good news is that hopefully March will be a really good income month, what with all his regularly-scheduled jobs PLUS the jobs from February that he’ll finally be getting paid on. Fingers crossed.

In the meantime, you might recall that we live on last month’s income. This means that although February was the low-income month….we really weren’t affected until this month (March). Remember me talking here about how I was scrimping and saving every last dollar to try to make one final $100 (extra) payment toward my student loans at the end of last month? Well, I did manage to save the money! I ended up with about $125 leftover. On Saturday (February 28th), I logged into my student loan account. I was going to make the extra payment but just kept going back and forth between my student loan account and the month’s budget. Seeing how, realistically, I’m going to be unable to make some of my goals that I’d hoped for this month (like finally paying off the license fees), I decided to just let the money sit in my account. I’m going to add it to the income we have in March because, otherwise, there’s just not enough to go around.

I’ve had to make some tough budgeting decisions this month. I’ve had to cut nearly all of our savings and reduce our planned debt payments. Things are going to be tight; particularly since I’ll be traveling toward the end of the month (going for my “not an interview” campus visit), which will cause hubs to have to stay home from work for a couple days (to watch the girls), and I’m sure there will be some eating-out involved.

I was debating whether to withdraw some money from our 3-6 month savings account to use for the month (at least to boost our debt payments), but have decided against it for the time being. This isn’t an emergency and I think that having a little bit lower income this month can serve as a bit of a character-building experience. We’ve taken our income for granted for awhile now. We’ve been lucky to have plenty to go around for all of our basic living expenses + good-sized debt payments. Having a month where we really need to scrimp and save and cut-back on excess will remind us of how far we’ve come and WHY we’re so committed to getting out of debt.

So, just a heads up that this month isn’t going to have as high of debt-payments as I would like (and I’m unlikely to be able to pay off those pesky license fees in full). But hopefully we’ll be able to cut back in all of my budget categories to try to minimize the blow to our debt payments, and with any luck we’ll learn a thing or two about getting back to the basics this month.


Saving Money High (or Low)

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Raising kids is costly!

One of our largest expenses, which actually costs more than our rent, is our children’s preschool (and they only go part-time! Yikes! See full budget here). Beyond that there is the expense of feeding, diapering (ours are THIS.CLOSE to being potty trained, but still wear diapers overnight), and clothing them!

Thus far, we’ve been very lucky with the clothing part and have spent only a tiny amount of money on clothes for them. Early on we were gifted tons of clothes (at baby showers and such); we also received a lot of hand-me-downs from friends (particularly from other twin moms, as there seems to be a bond between us); lastly, our families have been very generous to gift us clothing for various occasions (particularly for their birthday and Christmas). All in all, we’ve been very fortunate.

But one area where their clothing has been decidedly lacking lately has been in pajamas. And therefore I’ve come up with a solution to stretch their old clothes longer….cut out the feet!!!

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My husband thinks I’m crazy. I call it thrifty! ; )

Seriously, though. Our girls are very small (in terms of weight) for their age. But they’re still a normal height. That means that the pajamas still fit perfectly fine (not too snug), but were becoming too small length-wise.

In the past I’ve tried to resale or donate our old clothing (particularly since we were generously given so many hand-me-downs I like to find twin moms who I can give our used clothes to as a pay-it-forward type thing). But since we’re running low on jammies I figured I’d rather just keep these going as long as possible, even if it means cutting out the feet and making it impossible to ever resale or donate. It stretches their use that much longer (these are size 18 months, and our girls are 2.5 years), and keeps us from having to spend money on PJs for that much longer, too.

So I think its a saving money high point. I’d call it a win (even if my hubs thinks I’ve lost my mind). ; )

What do you think?

What do you do to try to stretch your kids’ wardrobe and/or your clothing budget?


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