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Insane or Crazy Like a Fox?

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Have you ever heard that the definition of insanity is doing the same thing over and over and expecting a different result?

Welllll, does it count as being insane if you are doing the same thing over again and expecting a different result, but you’ve learned something new throughout the process that hopefully changes the outcome you’re anticipating?

Does this even make sense at all?

I think so. I’ll just think of myself as crazy like a fox.

So here’s the deal (and, please, refrain from the exasperated sighs until I finish)…..

I’m changing up my debt-repayment game plan.

Again?

Yes. Again.

I’ve been calling my car loan repayment my race to 20K (because the loan balance was approximately $20,000 when I began). This was back when I was making $3,500 monthly debt payments (last summer) and thought I could reasonably expect to pay off the car within 6 or 7 months. I soooo had my eye on the prize for a March 2015 payoff.

But, alas, things have changed.

Our income went down. Our debt payments went down. We’re only a few weeks from March and nowhere near paying off the car.

That’s not to mean we haven’t made good progress. When I started the race to 20K back in July the full balance was actually $22,742. As of last month I had just dipped below $16,000 owed (averaging over $1,000/month toward the payment).

BUT….

I need some quick wins. And with a balance that high, there’s not going to be anything “quick” about paying off the car.

That, plus comments many of you have left, have made me reconsider our game plan a bit. So here’s the new debt plan of action:

We’re re-adopting a modified snowball approach (aka: attacking lowest debt first) so we can re-gain some traction and feel a good boost when a debt is conquered. Here’s what’s up on the chopping block:

  1. License Fees. I made a massive payment on the license fees this month, bringing the total owed to $1344. The goal date to have it eradicated is April 2015.
  2. Medical Debt #1. Note that I’ve always grouped our medical debts together for ease, but we are actually making 2 separate monthly payments (one for $25/month and one for $50/month). The $50/month payment will be done in 3 more payments, by May 2015. Although this isn’t a huge deal from a goal perspective (this will be gone simply from making our regular $50/month payments, no extra), it will be nice to free up that extra $50/month to apply toward other debts. Plus I still consider it a win to have the debt behind us!

Aaaaaand, that’s as far as I know now. My next smallest loan is for a federal student loan (balance = $4347), which also happens to have one of my largest interest rates (8.25%), but I just can’t let go of my desires to pay off the car. My rationale is that I can increase my student loan payments to keep the balances from growing (since my minimum payments don’t even cover the interest), but by May I could refocus back on the car as my #1 priority. If I do that, I’d have a solid 8 months to work on chipping away at the loan, with a tentative goal of having it paid in full by the end of December 2015. Remember that we bought the car (original balance $30,000) in March of 2013, so I would LOVE LOVE LOVE to have it paid in full in under 3 years from purchase date. It would be so lovely to begin 2016 consumer-debt free, with only student loans (and that one low-payment interest-free medical debt) remaining.

We’ll see. I can’t commit yet to what will be #3 on the chopping block. But I do know that it will feel oh-so-good to get those license fees and the one larger-payment medical bill behind us. Especially with the license fees, having them paid off will feel like the closing of a terrible, long-ago chapter of our lives that has been hanging around for entirely too long (over a decade, but whose counting?).

Only one other teeeeeeeny thing I need to mention that may serve as a competing interest for our debt payment funds. But that will have to wait for another post. (CLIFF HANGER!) Check back on Thursday for the juicy details.  ; )

What debt are you currently focused on? What debt(s) motivate you the most?


Weekly Update #4- Orlando Trip

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Hey everybody!

I’m back from my visit with my sister and my nephew. I couldn’t be more stoked that I went. An amazing trip. I got to Orlando on Wednesday night/ Thursday morning at 12:30AM (just barely, though. I made my connecting flight by the skin of my teeth. 2 minutes later and they would have taken off without me.) Since my sis and her fiance are both Cast Members at Walt Disney World, we spent all of Thursday at Magic Kingdom with the baby. Friday was spent hanging out with my sister and other family that was visiting, while her fiance worked. Saturday was spent at Epcot and Animal Kingdom and I left very early Sunday morning.

Here’s a picture of me and baby on my favorite ride, Living with the Land, in Epcot:

Disney Pic

 

He was so amazing and seemed to love the rides we took him on (if sleeping on them means loving them, lol). The only ride he didn’t like was Haunted Mansion, which he just screamed and screamed and screamed on.

OK, so for the financial aspect of my journey, I had budgeted $200.00 (above the $70 I normally carry in cash) for the trip, but it ended up tallying $280.00, give or take. I took it all in cash and had too much change left over to count, I just threw it all in my change jar. I would have been pretty close if I had accounted for the $25 in baggage fees each way for my checked bag. Oh well, I’ll know better next time. The remaining $230.00 was spent mainly on food. I bought dinner on Wednesday (McDonald’s) when I arrived, snacks throughout Magic Kingdom on Thursday, dinner at Sweet Tomatoes Thursday night, dinner at Downtown Disney on Friday night and snacks throughout the day on Saturday. Given the fact we ate so much in Disney, the damage could have been much worse, but my sis gets a pretty nice Cast Member discount that could be used at each stop.

So, here’s what my budget looks like for February:

Weekly Update #4

I have yet to return the juicer (ugh), but I’ve vowed to do that sometime this week, hopefully as early as tonight. But thankfully, even though I spent a majority of week in Florida, I was still able to pay $497.85 on my student loans, which brings the tallies to:

Loan NameInterest RateOriginal Balance- May '09Current BalanceTotal Paid Off
Sallie Mae 015.25$27,837.24$24,462.48$3,374.76
Sallie Mae 024.75$22,197.02$19,189.15$3,007.87
Sallie Mae 037.75$20,692.10$655.99$20,036.11
Sallie Mae 045.75$10,350.18$7,723.61$2,226.57
Sallie Mae 055.25$6,096.03$5,356.99$739.04
Sallie Mae 06 & 074.75$6,415.09$0.00$6,415.09
Sallie Mae- DOE 015.25$5,000.00$0.00$5,000.00
Sallie Mae- DOE 025.25$3,000.00$0.00$3,000.00
AES6.8$9,000.00$0.00$9,000.00
TOTALS$110,587.66$57,338.22$53,249.44

My current slush fund balance didn’t change from the previous post:

Slush Fund= $2,577.57

For the following week, with V-day (Saturday) and my birthday (Sunday) coming up we have some plans for the weekend, but nothing that will cost a significant amount. I have some money budgeted and a pretty good plan for my V-day gift, but I can’t reveal how much and what I’m buying until next week (my GF reads this too, lol). How is everyone else going to spend their Valentine’s Day? Do you treat it like a holiday to celebrate your spouse, or do you see it as a “Hallmark Holiday”? Let me know in the comments! I know couples that do both. Some see it as a nice day to enjoy time together, and others just see it as another day.


Paying Down Principal

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Can I admit something that may make me sound like a real dummy? (It’s okay, I’m secure enough with my own intelligence in other domains that I’m okay with admitting when I’m totally out of my depth in something.) Plus, it’s something that I’m hoping many of the readers here will be able to educate me on and help me with. Here goes…..

You know how I’ve been making larger-than-minimum payments on my car for several months now (since last August to be precise)? Well, I logged in to check on the status of my balance for my last debt update and realized that it said my next due date isn’t until January of 2016!!!

In other words, instead of applying any additional money toward the principal balance, they were simply pre-paying future payments. I had thought (and was wrong), that they only pre-paid for up to 3 payments, and then extra money went straight to principal. So after discovering this error I called customer service and explained the situation, asking for my extra payments to go toward the principal instead of future payments.

I was assured this would be done, but it would take a few days (so my online account hasn’t been updated yet), and I was told that it wouldn’t actually change my balance at all.

I started thinking about it after we hung up and have thoroughly confused myself.

Aren’t most loans (cars, mortgage, etc.) arranged so you pay mostly interest up front? Toward the end of the loan terms you end up paying more principal, but initially almost the entire payment goes to interest, right? So basically I’d just be pre-paying mostly interest. Sooo, if that money gets reallocated toward the principal, then there’s a lower balance for the interest to be compounded on (or capitalized on? I’m so confused!). Right? Soooo, shouldn’t my balance go down then??? No?? Why not? I don’t understand!

Also, I was thinking about it more and trying to figure out what the actual benefit is of paying more toward principal versus simply pre-paying payments (particularly if there’s no difference in the balance). I’ve always heard that if I make extra payments (for car loan or student loans) that I should request for the extra to go toward the principal. But why? I was so off-put by the fact that I don’t know the answer to this that I started googling…..without much luck. When I googled “why should I put extra money toward principal instead of prepaying a loan?” I received a ton of results related to mortgages and student loans. I’m specifically interested in my car loan, but figured the numbers would be the same so I read some of the articles. From what I could gather, it seems like if you pay the principal first, it basically just shortens your loan term (so if you had a 60 month term, like my car, it may end up getting shortened down to a 48 month term). But wouldn’t this also inherently decrease the amount interest being paid? I mean, you’re paying it off sooner, so you have a lower balance for the interest to be compounded/capitalized on (again – no idea the difference between capitalized vs. compound interest), and then eventually you pay it off and it all just goes away. Right? And it’d be the same thing with pre-paying a loan too, right? You pay it off sooner, meaning less interest gets paid in the end because there are fewer months for which to have interest accumulate. Am I totally off on this?

I almost shudder, knowing that so many of you are probably bonking your heads against the computer screen, shouting at my ignorance.

But, yeah. I really don’t know. And I don’t get it, either.

Please enlighten me! I really want and need to understand this difference, particularly with my huge amount of debt!!

And, relatedly, I’m going to start paying extra on my student loans. My plan is still to focus on other debts first, but I need to at least pay the interest on my student loans so the balances don’t keep growing (remember, my minimum payments are so low that they don’t even cover the interest). In reference to this….when I make an extra payment, my intention is really just for it to cover the interest. So I can just make the payment online and leave it alone, right? Or do I need to call and ask that the extra payment be applied to principal? This whole issue with prinicipal balance, interest payment, and loan pre-payment has really thrown me for a loop! Help me sort it out!!!

Seriously, sorry for my ignorance on this matter! Clearly I do not have a background in finance! But to really take charge of my debt I feel like I need to get my mind wrapped around this better. Do you suggest any good personal finance books? Or any good websites or other resources that have been informative for you?


The Book is Closed on our Old Home

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So I am closing the book on the old house and many wanted to know the final chapter.  There is not much to tell, and this will be the last time I will bring it up here, but I didn’t want to leave you wondering.  So to understand it all, especially if you have joined us in the last couple of months, here’s a recap of the posts regarding my housing debacle.

Three Years, Six Moves – When I wrote this back in April, 2014, I said we were home.  Little did I know how quickly that would change.

The Best Laid Plans

Why I Decided Not to Buy My Home

The Ultimatum

The Curse

The Next Step

The House is in Chaos

I Quit

Oh What a Feeling

The House Sold

Chapter Closed

So now that you are caught, I want to tell you how it ended.  As you know, in December, after several months on the market, I got what I thought would be the best offer on selling my van but the difference between my loan amount and the sales price was more than I had readily available so I had to make up the difference to make the sale happen. Needless to say, time was of the essence.

I had had several brief conversations with my dad without trying to pressure him, asking about the house, and he consistently said he didn’t have time to review it.  This time I called with a purpose.  I let him know the situation and asked if he had time to consider the house monies that he had said several times I would receive as this would be a big help at this point.

His words “well, if I was going to give you money, it wouldn’t be for a car.”  I was shocked speechless.  First, it was never my intent to ask for him to give me money.  I felt and he had indicated during several conversations that I would get some money from the sale of the house since I had paid all related expenses for four years, put the blinds in, paid for all the appliances (which were sold with the house,) added a patio, landscaping, etc. Essentially I treated the home as my own and incurred all relevant expenses including my own renters insurance and his owners insurance, etc.  Ok, you get my point, I was in no way asking for a handout.

He then went on in the same conversation to say that he had been thinking we could open a joint account, where we would both have to sign to get money out and he would match my savings toward a house with the money rather than give it to me.  If I wasn’t still speechless from the “give” suggestion, I was shaking in anger now.  Control.  He still wanted control.

I knew with no doubt that I was not ever going to consider that option and frankly, I let him know what I thought in no uncertain terms.  Now, I don’t want to seem ungrateful for what he did four years ago after our two rental homes fell through, BUT my dad has ALWAYS used money to control.  He would take away my car when he didn’t agree with my decisions, he would threaten to stop paying for school when he didn’t agree, and that’s just me.  I am not in any way trying to bash my dad, I love him, respect him, but this is fact.

You see four years ago, when the second rental house fell through I put all my stuff in a POD as we began to travel as I figured out what to do.  The POD would have allowed me to move anywhere, sending for my stuff when I figured it out.  That was my plan, travel around for a while and then decide.  That was when Dad stepped in and offered to help me buy a house here where he and my mom lived. I know he was doing what he thought was best for me and my two kids at the time but it was also a control move.

So back to the final conversation my dad and I had about the house…I told him in no uncertain terms that I would NEVER, EVER get into a financial relationship with him again. And based on our conversation I would assume that he never intended to give me any money from the house.  I also told him that I thought he took advantage of me.  If he had been honest about the house money from the beginning I would not have put EVERY SINGLE extra penny into the house to get it ready to sell as I really needed that money for my family.  I have now totaled the money I put into the house to get it ready for sale plus utilities for the two months after we moved out, and I spent $4000 on that alone.

So no, my dad has never given me a dime from the house and I don’t expect he will.  And you know what, that’s fine.  I learned a very, very hard lesson.  My children have learned some really hard lessons.  And what ever happens next, we did that.  No man will ever have that kind of control over me again.

I am in no way male bashing.  I know there are some great guys, husbands, fathers out there.  I see them all the time with their children, with my friends.  But after my marriage and my brothers and my dad, I’m done, completely and totally done.


Interest Payments

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It’s that time of year again….TAX time!!!

Maybe some think of it as a “fun” time of year, particularly if you are expecting a refund (in which case…why are you doing that?? You’re essentially loaning the government money interest-free for a period of time! Change your withholdings so you end up with a smaller return. That means you’ll get more money in each paycheck!)

For our little family of entrepreneurs (him) and contract workers (me), this time of year isn’t so fun.

We pay estimated quarterly taxes, but last year we had underestimated our taxes and ended up owing a bit when April rolled around. This year, I fear the same thing may have happened. We haven’t finished taxes yet so I don’t know for sure, but I’m a little nervous of the bill we may find ourselves facing. We’ll see. *fingers crossed*

Relatedly, because I’ve started gathering the relevant documents, I’ve seen how much INTEREST we’ve paid this year and it is sickening!

Between student loans, the car loan, and the credit cards (note:  we no longer have credit card debt at this point, but before they were paid in full we did accumulate some interest from them at the beginning of 2014), we ended up paying a total of $5988.95 in interest.

Can you believe it? That’s sooooo much money to be simply giving someone in exchange for them lending us money. It sickens me as I think of all the things we could do with $6,000!

Perhaps not surprisingly, the majority of the interest came from the student loans (just over $3,000), the rest came from the car loan (a little less than $2500) and credit card debt (remaining).

I know you can deduct interest payments for tax purposes*, so that’s what we’re planning to do. Still, I’d much rather pay taxes on that $6,000 of income and get to keep the money in my pocket rather than paying it out as interest. Booo!!!!

Have you started figuring out tax stuff yet? Do you get a refund? How much did you pay in interest last year?

*I should mention that I know next to NOTHING about tax preparation, as I never do my own. Sooooo, don’t take anything I say about taxes as a 100% fact without double-checking for yourself : )


Ashley’s January Debt Update

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I pre-wrote and scheduled a couple of posts for today because I’ll be doing my campus interview all day (my itinerary is from 9am-7pm)!!! I probably won’t have a chance to respond to any comments until tonight or tomorrow so I just wanted to give you a heads up on that. Please send me some good vibes, positive thoughts/energy, prayers, good juju, whatever works for you! I am trying to come off as confident (but not cocky), enthusiastic and likable (but not desperate), professional, and articulate. Remember – I’ve kinda got all my eggs in one basket on this one, so it feels like a BIG day for me! Wish me luck!!!

The numbers are in and here’s how my debt has been shaping up this month…

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date (original debt, March 2014)
Capital One CC-17.9%-Paid off in March ($413)
Mattress Firm-0%-Paid off in May ($1381)
Wells Fargo CC-13.65%-Paid off in May ($7697)
BoA CC-7.24%-Paid off in June ($2220)
License Fees$22082.5%250January ($5808)
PenFed Car Loan$159782.49%1000January ($24040)
Navient - Federal Student Loans$44448.25%16January ($4687)
Navient - Dept of Ed$722318.25-6.55%260January ($69191)
ACS Student Loans$210407.24%77December ($21035)
Medical Bills$64110%75January ($9000)
Totals$122,312 (Last month = 123,667)Total: $1,678Starting Debt = $145,472

Maybe it’s just because we’ve reached the 10-month mark so some of the newness and excitement has started to rub off a bit, but I’m just not as enthusiastic about my progress as I was early on in the debt-repayment process.

On one hand, we put over $1,600 toward debt this month! That’s great, right?!

On the other hand, my student loan balances went up. Again. (my minimum payments don’t cover the interest, so the balance keeps slooooowly growing).

And my total debt ($122,000+) is still so out-of-control. I cannot WAIT for the day that I break the $100,000 barrier and dip into the $99,999s.

Hubs ended up making an extra debt payment toward his license fees at the end of last month. So if you were to compare the balance this month to the one from last month, that’s why there’s a discrepancy (the table says $250 was applied this month, which is true, but hubs had made a payment of just over $250 at the end of last month, too, so it’s gone down by $500 compared to last month’s beginning balance).

Can I make a little confession that will become pretty apparent anyway real soon (when we talk about how the budget went this month)???

I ended up going a bit over on a couple categories this month. I think some of the holiday-spending spilled over into January and I was just a little too loosey-goosey on my spending. Nothing crazy or extravagant. Mostly just up to my old tricks again….spending too much on groceries and crap that we don’t really need because its oh-so-easy for me to justify grocery purchases as a necessity, even if they aren’t.

Anyway, my plan at the beginning of the month was to pay extra toward my student loans (above the minimums) so I could pay the interest in full and not have a growing balance. *Sigh* Having gone over on my grocery budget (by a lot, I should add), I re-allocated those funds to cover my frivolous food expenses and, alas, the student loan balances continue to grow. Very discouraging.

I will do better next month!

Another confession, since we’re on that train now…

Hubs and I have fallen off the wagon with our monthly finance talks, too.

For long time readers, you’ll know that hubs and I have a unique financial relationship (I talked about it here when I first started blogging). Some of it is changing (e.g., we’re adding each other to all of our accounts this month), but one of the big things is that I’ve always been the one to sit down and actually pay the bills. When I first started blogging we started loosely following a Dave Ramsey-esque type program where hubs and I would have a monthly budget discussion to decide exactly how to allocate that months’ funds.

Over the holidays we’ve sort of slipped back into our old patterns where hubs has simply given me money and I’ve put it where I think it should go. To be clear, I really am doing what I believe to be best with the money (in terms of debt allocations, etc.), but I do think it’s important for hubs to actually be in on these decisions rather than simply letting me handle the funds how I see fit. Things seemed to be moving faster and progress seemed to be better when we were working together. So that’s coming back at the end of this month as we discuss our plans for February.

Hopefully in the coming months we’ll see some stronger progress!

How’ve you been doing with your debt payments? How do you and your significant other handle finances/bills/etc?


2015 Financial Planning & Goals

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Warning: This post is a bit of a doozy! Reminds me of when I first started blogging and would basically write a novel for each post! But everything is related so instead of breaking it up into separate smaller-sized posts you’ve got one monster post to contend with. Maybe make yourself a cup of coffee and settle in with a little snack. This is gonna take awhile!

One of the things I did over my winter blogging break was to analyze my 2014 spending and do some planning for 2015 budgeting and savings needs. I’m trying to shake up my budget categories a bit for 2015. For one, I want to do away with my “miscellaneous” budget all together. I want everything categorized. This will make it infinitely easier in future months/years to look back and easily see exactly where my money has gone (as opposed to this year…where I had to look at each month’s spending individually and start to categorize things on my own).

 

Basically, I wanted to see where this “miscellaneous” money was going and see if I could plan and budget for it. In addition to my normal budget categories (see latest budget here), here are some new categories I’ve come up with:

  • Gift-giving. I’ve greatly reduced the amount I’ve been spending on gifts since starting to blog here at BAD, but it’s not down to zero! This needs its own category.
  • House maintenance. Looking at the past year, this is mostly gardening-related stuff (some tools, plants, mulch), but it also includes things like light bulbs and cleaning supplies. There’s nothing too major cost-wise, but still enough random miscellaneous expenses to justify its own category.
  • Phone/Computer Items and Repairs. I broke my phone twice this year. I now have a serious heavy-duty case on it, but should the unthinkable happen again (fingers crossed), I decided to make this it’s own budgeted category. In addition to phone repairs, this year I had to buy a new charger for my computer and an external hard drive to back up my work, so expenses like that fall into this category as well.
  • Holiday expenses. Non gift-giving holiday related expenses. Things like Halloween costumes, 4th of July sparklers, and holiday decorations. This was also a relatively small category of spending.
  • Clothing purchases. I’ve actually successfully avoided the clothing-shopping bug this holiday season. I’ve mentioned before I’m not a big shopper in general, but I usually have one or two big shopping splurges a year where I’ll spend over $100+. This year I’ve done really well with making do with what I have and only filling in with absolute necessities (like when I had to buy a new pair of pants when my old ones had already been mended twice and were falling apart). Again – a small category in terms of money spent.
  • Work-Related. This was primarily for parking-related expenses when I would drive to campus for meetings. I haven’t been going to campus as regularly in recent months so some of these expenses have fallen away, but this also includes anything specifically work-related (e.g., licensing for special data analytic software, printer paper, ink cartridges, etc.)
  • One-Time Expenses. This was a tiny, tiny category but there were still a couple random things that came up that don’t fall within any other category. I’m calling them one-time expenses.

Please note, I will certainly NOT be spending money in each of these categories every month! For instance, I only spent money on work-related purchases 6 months out of this past year; only spent money on holiday expenses 3 months out of the past year, etc. But these will be categories that may pop up from time to time along with my regular budget categories, depending on what that month demands. Instead of having such a rigid, set number of budget categories, my new 2015 budget will be more fluid depending on that specific month’s needs. I think this will be a much better system overall.

What Else is Changing?

I did a careful analysis of all my monthly savings categories. It’s obvious that we were not budgeting enough toward dental and car maintenance, for instance. By tallying up our actual expenses for the full year, I was able to get a better picture of our real needs in these areas. Let me address each one individually:

 

Current

Saved

New

Plan

Explanation

Annual Expenses $100/mo $100/mo This is a perfect amount. It covers annual life insurance premium, car registrations, and Costco membership. It actually also left us a little bit extra leftover, but I’m not reducing the monthly amount saved because we’ll be adding life insurance for hubs soon, too.
Car Maintenance $100/mo $200/mo My calculations actually amounted to only $166/month needed for vehicle repairs, but I’m rounding up to $200/month because I know we will be needing to replace husband’s work truck at some point (probably this year), so I want to save a little extra. This will amount to $2400 saved for the year. Note that when we come up with an exact time frame to buy a new (new-to-us) work truck, this figure may need to be bumped up for a few months.
Dental/Vision/Health $125/mo $125+ ??? Our actual costs here would amount to needing $3651 for the year (just over $300/month). BUT, we’re going to purchase a dental discount plan in January and will see how much it will save us. Husband is going to go get a full exam and see exactly how much dental work he is quoted. I think we’ve covered the “big” stuff at this point (fingers crossed) and, in the meantime we’ll continue saving $125/month, but will adjust this number depending on his dental appointment with an in-network dentist.
Christmas/Travel $25/mo $25/mo Of course, this doesn’t fully cover our travel and/or Christmas-related expenses, but it was never intended to fully cover those costs. It does what it needs to do, which is to off-set some of the costs incurred. Any extra money needed will come from that month’s budget.
3-6 Months Expenses $25/mo $25/mo Ugh! Still owe you guys a post about the emergency fund. Right now, though, the amount being contributed will remain the same on a monthly basis.
Dog Expenses $10/mo $500/year Previously, I was only saving for potential vet expenses. I’m changing this category to cover food costs for the full year (about $50 every other month), plus the pet registration required by our county, and a couple hundred dollar buffer for potential vet expenses. I’ll likely fully fund this savings in January and just draw from it all year long.
Girls’ Birthday $10/mo $10/mo Staying the same
2014 Roth IRA $100/mo $100/mo Staying the same
TOTAL $495/mo  

$585/mo

 

(+ one-time $500 expense from the dog expenses category)

 

This brings me to…

My 2015 Financial Goals

In 2014 I paid monthly debt payments that equaled $25,091!!! This is actually a conservative number because it only includes the planned debt payments. Remember that before I was living on last month’s income I would often make debt payments bi-monthly: once was the planned debt payment (which this figure represents), and then I’d make a second payment at the end of the month with any extra “surplus” money from the month. (Side note for new readers: I did this because we have a variable income so I made conservative debt payments initially, then when I figured out exactly how much income we had for the month, I’d put any money leftover toward debt. Now that I live on last month’s income I know exactly how much money we have at the beginning of the month and, thus, have eliminated the need for any extra payments because I do a zero-based budget so there is no money leftover at the end of the month).

So my goal for 2015 is to pay at least $30,000 toward debt payments.

Whoa. That’s a big, huge number. $30,000 is a full annual salary for many people! To say we’ll put that much toward debt is certainly a lofty goal. But you have to shoot for the moon, right? ; )

What debts do I plan to eradicate from our lives with that $30,000???

Well, some of the money will be going toward minimum payments for all of our debts and interest, of course. But with extra debt money I plan to eliminate the license fees, car loan, and highest interest unsubsidized student loan. Then our only debts remaining will be medical bills and additional student loans. Don’t get me wrong – we’ll still have a ton of debt (I have almost $100,000 in student loans, alone), but it will feel so good to knock out some of these smaller debts in their entirety! So, so good, indeed.

How Will I Do This?

I’m a firm believer that all goals require careful and strategic planning. If you just pull a goal out of the air its really more of a hope or a dream. Goals, in my opinion, require more careful calculation than that.

So it might surprise you that my answer to this question (How Will I Do It?) is….”Who Knows!?” ; )

This year could potentially be full of many big changes. If I land a job here in Tucson then my salary will double and we won’t have any moving costs. Win! If I land a job elsewhere then my salary will more than double, but we lose husband’s salary and incur moving expenses. If I don’t land a job then I keep making what I’m currently making, try to find additional work, and husband focuses on building his business. Oh yeah, and I’d love to start saving for a house down payment at some point (once we know where we’ll be)! There are so many unknowns!

What I do know is that I want to keep working as hard as I can on reducing our debt. BUT, that being said, I do still plan to let up a little steam (just a teeny, tiny bit) in March 2015. Remember this whole post about finding balance??? It still stands. I don’t think I’ll give up the blogging (I love it and you guys too much), but don’t be surprised if you see a “date night” pop up in the budget every other month or so. That’s a big expense that we’ve done without for the majority of this past year (honestly, for the majority of the last 2.5 years since we had kids!!!). But I also think it’s important to nurture our relationship and while our kids have been infants/toddlers our marriage has taken a bit of a back seat. Don’t get me wrong – there’s no trouble in paradise or anything like that!!! But I think it’s time to make dating my husband and nurturing our relationship more of a priority in our lives. And even if we do so cheaply, it still costs money.

I’ve got one more curve-ball….

I’ve spoken before about retirement savings and how we’d like to start funding a Roth IRA. Although our contributions for 2014 are pretty measly, I’ve been talking more to hubs about it and we’ve come to an agreement about the matter. Once the highest interest student loan and license fees are paid in full, I want to bump up our Roth IRA contributions. Ideally, I’d like to work toward having fully funded Roths for both hubs and myself. We haven’t committed to an exact number yet at this point, so it may be that we double our current savings (go up to $200/month) or triple them (up to $300/month), or we could even aim to have fully funded Roths (about $458/month x 2, for each of us). We’re not there yet so I’m not sure how comfortable I’d be with saving that much while our existing debt is still incurring so much interest. It’s something we’ll think about more moving forward (and feel free to weigh in on the topic). But just let it be known – once these two fees are paid in full (license fees and highest interest unsubsidized student loan), our Roth contributions will be increased…while still trying to hit the $30,000 mark for debt payments this year.

So cross your fingers for us or wish us luck (or call us crazy).

No matter what 2015 holds in store, I feel like it will be a very good year!

What are your financial plans for 2015? Any big budget changes? Any lofty financial goals? What do you think of our goals and plans?