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Ashley’s New Plan of Action

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In case you’re a new reader – welcome! Thanks for stopping by!

To catch you up….

I first started blogging here in March (Intro post here).

At that time, my #1 goal = eradicate credit card debt IMMEDIATELY!

And, not to toot my own horn, but I’ve done a pretty good job (and thanks to YOU for all the invaluable advice along the way! I’ve learned so much already!)

So as a follow-up to this conversation and trying to decide the next course of action for my debt-reduction plan, I wanted to give you a quick follow-up, along with my new goals:

Order of Debt Repayment (now that WF is paid in full, woot woot!):

  1. Bank of America credit card (goal date = paid by July 2014)
  2. Sallie Mae 8.5% student loan (goal date = paid by September 2014)
  3. Sallie Mae 8.25% student loan (goal date = paid by November 2014)
  4. License fees (goal date = paid by January 2015)
  5. Carmax (goal date = paid by January 2016)
  6. Remaining student loans (no goal date yet because I want to reassess in January 2015)
  7. Medical bills (no goal date yet, see above)

I was originally going to pay the higher interest student debts first, but I can’t do it. I’ve GOT to pay off the credit card debt for my own personal satisfaction and sense of accomplishment.

Next, I will try to get rid of the two high-interest student loans. Getting rid of debts #1-3 will free up $218 in minimum monthly payments (which will be invaluable when my deferment ends on the student loans in February). I’m still a little undecided regarding #4 and #5. I feel like I’d get more personal satisfaction from paying more toward the Carmax loan, but the license has a balance of about $5,500 versus $23,000 for the car, so its a huge difference. We could feasibly pay off the license fees before my student loan deferment ends (in February), but in contrast, there’s NO CHANCE I’ll have the car paid off before deferment ends. Again – I’m trying to free up those minimum monthly payments so they can be applied to the student loans and other remaining debt.

Notice my new “goal dates” for paying off these debts. I have to say as a disclaimer that these are really optimistic dates. Keeping those dates will have us paying about $3,500 toward debt each month (as opposed to the $1500/month we have budgeted). This means we HAVE to keep pulling these big income months like we have the past couple months. This may be possible….I mentioned how “I’m getting a raise” (by teaching additional classes….which started this week so its already “in effect”). Additionally, my husband has hired a new crew of workers so his income will also receive a bump from the work this new crew is able to complete. But at the risk of sounding like a hypocrite (given this morning’s post)…I don’t want to count our chickens before the eggs hatch. I think it will take a few months of my new income + my husband’s new income for us to really know what what we’ll be bringing home each month (in terms of pay). I hope it stays steady with what its been the past couple months, but there’s no guarantee. Only time will tell.

So, yup. Just an update on my new plan of action and goal dates for debt-eradication. I really appreciate all the suggestions and feedback! For example, I had NO IDEA that student loans can’t be consolidated for a lower APR. No point in consolidating then! So those will all be staying separate. I do still plan on trying to refinance the car loan, but I want to wait until my recent huge Wells Fargo payment gets updated with the credit reporting agencies (as I believe it should help give my credit score a little bump).

Hope you all have a great Memorial Day weekend!

 

 


Rewards and Celebrations

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I have some good news to share today! I am about to receive the largest paycheck of my life!!!

I have been working on a writing-related project for a loooooong time (10 months) and finally finished last week. (No, it was not a book). I wasn’t smart setting up my contract and I had agreed to not get paid at all until project completion (in my defense, I thought it would take a fraction of the total time invested). Anyway, 10 months later I’m about to receive a paycheck for several thousand dollars (more than 5, less than 10…but that’s “gross,” so I’ll need to pay taxes), which is by far and away the largest single paycheck I have ever received.

Good news: This means we are going to knock it out of the park this month in terms of our income. Last month was the most we’d ever made (in life), and this month is going to be even better! I tell you this because we’ve just “met” and I really want you to understand how NOT TYPICAL these huge pay months are for us.

But, that aside, I want to celebrate. It feels like a HUGE weight off my shoulders to have this project complete; in the past we would have done something fun – gotten a ‘sitter and gone to dinner.

But we pay babysitters $13/hour (is this normal?? I used to make $5/hr when I babysat but that was 20 years ago), plus a dinner-for-two can be in the range of $50, so we’re talking roughly $80-$100+ if we were to throw a movie into the mix, too.

What do you do to reward yourself when you’ve hit a big milestone? Ours has ALWAYS been going out to eat, but we need something new (read = cheaper!) I want to celebrate a little!


Ashley’s April Debt Update

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I’ve seen lots of comments (on all the bloggers) asking for more openness and transparency. Hopefully this post provides you with that (but, as a result, its a long one so maybe get a quick snack ready!):

April Debt Amounts and Payments

 Place APR March End Balance April End Balance Monthly Payment
Capital One CC 17.9% $0 $0 $0
Wells Fargo CC 13.65% $7429 $5705 $800
Bank of America CC 7.24% $2198 $2175 $35
Carmax Car Loan 7.75% $23736 $23385 $470
License Fees 2.7% $5720 $5672 $55
Mattress Firm 0% until Sept 1st $1281 $181 $100
Medical Bills 0% $8328 $8228 $75
Total $48692 $45346 $1535

 (See the starting balances from when I first started blogging here) A couple notes: Remember that I’m also paying low monthly payments toward my student loans (not in table, but can be seen here. Amounts to $87/month), so our monthly debt payment actually amounts to $1622 (not $1535). Additionally, we made 2 big snowflake payments at the beginning of the month (with extra money from last month since we had a higher income than normal – discussed here). We paid $2,000 in snowflake payments ($1,000 each toward Mattress Firm and Wells Fargo), for a total of just over $3500 toward debt in the month of April!!! (that’s the $1622 “regular” payments + $2,000 in snowflake payments).

April turned out to be another good month financially. Our take-home pay after taxes was $8290. I just want to say that these really good months are NOT “normal” for us. Our annual average is right at about $5,000/month so this was one of our best months….ever! We’re going to talk about what to do with the surplus and will update with our May Debt Update (since the snowflake payments won’t occur until during the month of May). Right now, I’m thinking 2/3 or 3/4 will probably go straight toward debt (paying off Mattress Firm and the rest to Wells Fargo), and the other 1/3 (or 1/4) will go toward making a debt-sinking fund. This is something Adam and Emily did and a commenter suggested it, too. The reason is that summer is Chris’ “busy” time at work and I worry about what happens when winter rolls around and we start having more “lean” months again. The idea is that we keep some money in a savings account but once it reaches a certain dollar amount, I make a big snowflake payment. In hypotheticals, I could save a portion of our income until we get to $5,000 then take half ($2500) and put toward debt, then save back up again and repeat. That way we always have some extra cash on hand in case Chris’ business has a slow month, but if things continue going well we can siphon some off and put toward debt, instead. I will update (in the May Debt Update) with exactly how this surplus was handled. I hope this isn’t confusing. Basically, anything “left over” after paying our basic bills has been used as 1-time “snowflake” payments toward debt, but it doesn’t get applied until the following month (since our income is variable, we wait until the month is completely over to assess how much “left over” we have, so our snowflake payments are always a month behind the pay, if that makes sense). Now, onto the budget:

How We Fared in April

We ended up coming in at- or under-budget in all categories except one.

Category Budgeted Actual Spending
Rent 1055 1055
Electricity 100 62
Water Bill 75 53
Gas bill 75 25
Sprint (2 phones) 150 150*
Cable/Internet 85 85
Car Insurance 90 90
Health Insurance 350 350
Waste Management (trash) 35 35
Debt Payments 1500 1622**
Groceries 400 398
Baby Purchases 600 566
Gasoline 100 57
Miscellaneous 250 355
Savings for Irregular Bills 190 190
Total 5055 5093

*Remember, I got a deal on our phones, but I won’t see the savings until our next bill.

**This was our “normal” debt payments (minimums for everything except Wells Fargo bill), but does not include large 1-time snowflake payments (because those were paid using leftover funds from March)

Quick re-cap:  In April we made $8290 – $5093 = a surplus for the month of $3197

As you can see, we barely slid in under budget with groceries, and I want to try to reduce this category so I’ll have to pay close attention to figure out why we’re barely making budget ($400/month). I’ve switched to making so much homemade (bread, bagels, tortillas) and DIY (cleaning spray, baby wipes) that I feel like we should be spending less on groceries, but for some reason we’re not. I’m going to examine this closely during May and figure out WHY. Soooo, the one category where we went over-budget: “miscellaneous.” I budgeted $250/month (down from $350 last month) for this category and broke it down into 4 sub-categories:

Category Budgeted Actual Spending
Entertainment $20 $19
Eating Out $75 $110
Personal Maintenance $30 $7
Other $125 $219
Total $250 $355

Clearly we went way over budget (by more than $100!), with the culprits being “eating out” and “other.” I think some of this was growing pains. I just slashed the budget in this category by almost a third, and you can see that our spending was definitely in-line with our “old” budget(<<link to old budget).

I’ll admit it – I hate the envelope system. I don’t know why (bulky? annoying? inconvenient?). But I have to admit, I think it may help with this situation. If I look in my envelope for “eating out” and there’s only $5, I can’t say “screw it, order a pizza” when I’m exhausted and don’t want to cook (confession: that happened once last month). Instead, I’ll suck it up and make dinner. If for whatever reason I really can’t handle it then we’ll eat PB&Js and live another day. It’s a mindset-change from what I’m used to but it needs to be done.

So….May = Month of the Money Envelopes I’ll let you know how it goes.

Envelopes:

  • Groceries = $380 (trying to cut it by $20, down from $400)
  • Entertainment = $20
  • Eating Out = $75
  • Personal Maintenance = $20 (trying to cut it by $10, down from $30)
  • Other = $125

Have you tried the envelope system? If so, did it work for you? What other system(s) do you have in-place to curb over-spending? Given our current debts and APRs, (and also knowing our variable income and wish to do a debt-sinking fund) how would you appropriate the surplus $3200 from April?


I got a new job!

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From the beginning I’ve thought that increasing my income was my best bet to speeding up my debt free journey.  And with summer approaching and the kids being older, I thought it was the perfect time to explore that theory as a reality.  And now it’s here!  I start my new job…TODAY! Woohoo!

I’ll be working 12-15 hours a week, doing whatever needs to be done, and it’s outside my home.  This is so huge.  I haven’t worked outside of the house in almost 11 years.  I’m excited about the ‘adult’ time, yes, I’m aware most people don’t go to work to have adult time.  I’m excited to try something new where the possibilities of what I’ll get to learn are endless. And I’m excited to see what new responsibilities this may bring out in my kiddos.

My youngest has struggled the most with the idea, but when I reminded him that 1) I would be away less hours then he spends in the gym for him competitive gymnastics and 2) if I go in the mornings, I would be back before the kids get up (yes, we are all night owls.)  It will take a few weeks to really see what kind of income this will bring in, especially since I’m going to max out the tax they can take out, but then I’ll have to come up with a plan for using it wisely!  I’m thinking a 40/40/10/10 split – 40% towards debt, 40% towards savings, 10% fun money and 10% giving.

I’m just so excited about the possibilities!


I got a raise!!!

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Can I get a “woohooo!!!!”

But before we get too excited, let’s have a little #truth.

I don’ know if you can really consider it a “raise” because what happened is I took on additional work. So, yeah, my income is going to raise (and not by just chump change…a pretty decent upward improvement), but it is in exchange for additional work.

It was a bit unexpected, but I’m very grateful for it. Even though I’m not an “employee” (I work on a contract-basis), I still somehow feel like a very valuable “team member” at this particular university, we’ll call it University A (remember – I work for multiple universities, but I don’t feel comfortable divulging where). I feel well compensated for my work and have established a great working relationship with the faculty, administrative staff, and other contract-employees as well (all done through distance & technology – pretty amazing!)

So I’ve given it a great deal of thought and, although this may disappoint some, I think this new development has rendered this conversation moot. I hope you will not be angry with me! I had been thinking about reducing daycare to save money for a LONG time….it was not something I was just spouting off randomly and have taken back just as suddenly. Instead, I’ve made the calculated decision to leave our situation as-is for now (care 3 days a week instead of reducing to 2). The additional work I have picked up more than makes up for the $200 in savings per month, many times over. And with additional work, I really believe I’ll need the extra day of childcare per week. Also, as an aside, last week the girls were only in daycare 2 days instead of 3 (the provider had a pre-planned trip that left us out-of-care for a day). OF COURSE, this is when the WORST ALLERGIES OF MY LIFE hit! I felt like I was dying from the sinus pressure, migraine, non-stop sneezing, etc. I looked like I had pink eye because my eyes were so puffy, swollen, red, and watery (I took a picture, but I’ll spare you the gory image). Let’s just say….very little work got done. And now I’m way behind (and I don’t get paid until my work is done, so that’s a problem!) And it just made me recognize how valuable our current childcare situation is. $50 WELL SPENT, if you ask me!

That was a long side-note – let’s get back to the employment situation…

Of course with contract situations there is no guarantee of ongoing work. But, so far, I have been made to feel very safe and secure in our current situation at University A. I will say that this situation is with online teaching, so I get a new contract every semester. I don’t see the current situation changing anytime soon.

With my other “employer” (said in quotations because, again, I’m not technically an employee since its a contract-based job…we’ll call this University B), there is not as much job security. This job is mostly research-based, so whenever the current project is completed I could be out of a job. At this point I’ve been working with University B for 6 months and have worked through completion of 4 separate projects (being asked back after the completion of each previous project). But this “raise” makes me feel much more comfortable because previously I earned my pay approximately 50% from each (research job and teaching job, respectively). This additional work (and associated pay) tips the scale to where I am now earning my full “old” salary solely at the teaching job. Any money from the research job is just gravy. So, as long as the research job continues, I’m coming out ahead. If the research job were to cease today, I’d still be making the same salary I’ve been accustomed to.

Doing contract-based work certainly requires some flexibility. You never know what the future holds and there’s no guarantees about anything.

But, with that said, a little birdie told me I could potentially be expecting another “raise” come the Fall semester at University A. *fingers crossed*  We’ll see!!!


Striking Out on Your Own

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Several years ago, I wrote an article on my personal blog about Striking Out on Your Own. I was forced to start my own business because of my priority in staying home with my children.  I have absolutely no regrets about that decision. BUT…

My natural tendency is not be the #1 when it comes to business, I am much more comfortable as a #2.  I tried explaining this to my twins as they start feeling out what they may want to do with their lives.  It came out a little bit like this…typically, the head of a company is the visionary, has great ideas, is great with networking and people and can influence people.  That’s not how I see myself.  I see myself at the support staff…you give me the idea and I can make it happen.  I am smart, determined and know how to find good resources. I am really not good at social situations and my visionary abilities stop at planning a great vacation.

So with that being said, as I am Exploring Making more Money, I have been looking for ways to streamline what I do so that I can do more.  My business is just me, no subcontractors, no staff, just me.  I do all the work: the marketing, the management, the sales, the customer service, the administration and the actual technical work.  I have been focusing on tracking my work and free time to see if there is anywhere that would be the most economical items to contract out to free me up some.

I know I then have to weigh the benefits and cost of subcontracting versus doing it myself, but this is where my mind is heading right now.  So my question is for you entrepreneurs out there, what tasks have you found to be most effective and efficient to contract out versus doing it yourself?


Making More Money

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For 8 years now, I’ve been self employed. When I lost my corporate job after I refused to travel any more after my second child was born, I knew I had to find something that would allow me to stay home. After six months of stay at home mom unemployment, I knew I needed a job. During late night browsing sessions, I discovered virtual assistants, and knew that was the route for me. EPOH was born.

I’ve definitely had my ups and downs, taking pay cuts with economy crash, having clients fail to pay, gaining and losing clients along the way. But I’ve been able to support us, that is until last fall, I took a pretty big hit when my very first client had to let me go as their business just couldn’t support my cost anymore, and I couldn’t afford to work for a significantly lower rate.

I thought I could make it, I thought it would be fine. But then I fell behind. Then in November, after putting in a small time of marketing things started to look up again. And since then it’s been a bit of a stressful roller coaster ride of finding work. I’ve got a steady client list still, but I’m playing catch up, and trying to get ahead all at the same time. I MUST make more money, that’s all there is to it!

i love work

So this past week, with that goal in mind, I have been haunting my typical marketing methods:
1. Guru
2. Craigslist
3. Church Community Board
4. Local papers classifieds

But more importantly, I am starting to consider alternative revenue streams, which until now I’ve been very resistant to:
1. Etsy
2. Finding a local part time brick and mortar job (now that the kids are old enough and responsible enough to be left alone for short amounts of time)
3. Going back into the corporate world (really don’t want to, but more than I don’t want to, I want to be out of debt!)
4. Starting a business with my kids that has been burning a hole in my head since this time last year
5. Building my personal blog with writing and affiliate links
6. Product sales – I thought momentarily about selling some product like so many do and like Claire started doing, but I am so much of an introvert and do not do well with ‘house parties’ that have concluded that this is definitely not the route for me.

I can’t remember who said recently that in this debt pay off race you normally have more time than money which is definitely the case with me. So in my time, I am working hard to find the best way to increase my income while maintaining a healthy family life balance. I know I’ve got the skills, I just need to find the right way to go about it. Suggestions?