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Family Time

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A family member has a home in the Rocky Mountains.  We were actually married in this mountain town.  With our “glamour” travel all over the great State of Texas via Southwest Airlines…we were able to purchase 5 airline tickets (the 3 youngest kids are going with us) from SA to Denver via Rapid Rewards.  I reserved the minivan rental 6 months ago (that is, by the way, the best frugal travel tip that I never read anything about…there’s no risk in reserving a rental car b/c you don’t give a credit card number and you don’t even have to remember to call and cancel.  If you don’t show up to get the car…no harm, no foul).  So I managed to reserve a minivan for $380 for 7 days…but wait…we have free days with National so that will be reduced by 4 days; worth so the final charge for the van will be closer to $160.  I have managed to squirrel that away from my spending money and although I know many of you will say every cent should go to debt…I’m not willing to go to that extreme when it comes to family trips.

This house has been available to me for many years–we are blessed.  The family member who shall remain anonymous believes in paying it forward and is extremely generous…and he might also see this as the least he can do since he lives out of state (not Colorado–this is where he plans on retiring) and isn’t able to help with our aging parents.  LOL…that gives it away!  My kids and I have been going there for years now (yes that also explains some of the debt b/c I didn’t worry much about those airline tickets not being free back then!) Steve and my stepson have been to the house as well.  We have always cooked all of our meals–even before the strict budget–so I don’t anticipate too much difficulty in sticking to our food budget…even on real food.  We have already had the discussion that there’s no need for any shopping (besides grocery) and are doing our homework on free events in the area.  A National Park pass is $20 for 7 days and really…when you are from Texas where going outside is near impossible bc of the heat and the landscape isn’t much to look at when you do…just being in a National Park in Colorado presents plenty of things to do!

There will  be no “pre-trip” shopping madness like in years past.  We all have everything we need for this trip.

So we are taking this budget living, real food eating show on the road!  We leave July 1 and return July 8.  I plan on providing daily spending reports to all of you so you can rest assured we have not gone crazy.  I am prepared for criticism for this decision but also know that we are serious about debt reduction and going on this trip is not going to change that.  In fact, I see it as a challenge to keep up the good work in a different setting.

 

 


My weekly budget

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The budget talks with my husband have been resolved via a compromise.  As of June 1, we are adding a separate grocery budget of $125 per week (remember we had been taking our grocery money out of the $200 spending) and then each keeping our respective $200.  This effectively increases weekly spending money by about $50-$60.  I still wanted to push for more cut backs but the warning signs of jumping off the debt payoff ship were evident so this is a good compromise. I anticipate with time we will add more budget line items like kids, clothing, gas, fitness, etc….but this is where we are now.

The discussion about budgets did, however, prompt me to write out how I plan to spend my $200.  I got a free app “budget envelopes” and have created virtual envelopes to track how my $200 is spent.  For this week I am still buying 1/2 of the groceries with this money.  Thankfully it is a small grocery need week with lots of meals already available at home and with the kids at lots of events where meals are provided!  My $200 is broken down like this: 

$25 to clothing

$30 to kids

$50 to the van (gas and hopefully building up an account for oil changes and the like)

$10 to dry cleaning (so that I can get about $30 done per month and rollover the rest)

$25 to yoga (saving toward buying a package so I save more per class)

$60 leftover for groceries and “spend.”  My plan is to reduce that spend money each week as I get better at this.  

As of today, I have spent $0 of the clothing money, $15 for the kids ($5 to a scout event, $10 for two birthday gifts for parties), $40 on gas, $46.00 of the cash (of which $37.50 has been groceries), $0 of the dry cleaning and $0 of the yoga money.That’s $101 and have $99 remaining.  Of that $99, there is only $14.00 remaning in the “spend” column.  I really should not need more than $14 for things but my goodness does seeing only $14 there make you stop and think!  I REALLY want to have at least $90 remaining on Friday!  That would be so cool to go into the next week with that rollover fund starting! 

Another benefit I noted–yesterday I had to come up to the office for about 3 hours.  I brought 7-year-old DD with me and as we left the house she was suddenly hungry.  I DID remember to bring snacks but noted that this is a withdrawal process for DD and so…I agreed to stop for a snack and then as I drove to the office, she was in charge of inputting the deduction for that snack!  When she saw the spending money go from $18 to $14 she didn’t think much….until we were returning home and again she wanted to stop!  I reminded her of our budget line and she quickly said “we have snacks right here…we should just go home.”  She didn’t like it but WOW what a moment!!!  I must employ this method with the older ones ASAP just so they get the “hands on” part of it.  Although I recognize they won’t be nearly as cooperative or excited as she was about the whole thing!

So this is my newest addition to the process.  Steve isn’t biting on this one but he says he does have part of his $200 set aside.  I think giving each of us total control over the $200 is reasonable although I still don’t think it necessary.   Time will tell.

 


Budget Talks

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Disclaimer:  My husband IS aware of this post and, as you will see, participated in its drafting.  Fasten your seatbelts–this one is a doozie!

I am trying to figure out the best way to convey a lot of information without overwhelming everyone with a lot of information.  Let’s start with the upcoming changes that sort of got this discussion started.  Steve has been paying private school tuition since 1996 when his eldest (OS= Older Son) started Montessori.  That son will graduate from a catholic high school in a few days.  The younger son  (YS) is graduating from 8th grade and will be continuing on to the same private high school.  We pay $800 per month for OS’s tuition and $500 per month for the YS.  As of June 1, Steve is reaching the end of this marathon.

Simultaneously we have really been trying to nail down a more precise budget and see what we can do to pay off the credit card debt earlier than December 2014.  (I do have good news to share on that front…but that must wait for another post). He spent a lot of time and energy today updating the spreadsheet and I am thankful.  Let me preface this with the fact that all of the credit card debt is mine and Steve is only on the car loans.  His 1996 BMW with 275,000 miles fell out from under him and due to his own income changes (went to salary after an entire career in sales–with very nice commission checks) he took out a car loan for the first time since 1999.   Steve will admit that he may not have gone into debt but he also did not save money when those huge checks came in.  Oh I must share (trying to be objective) that he got one last hefty commission check in September of 2010 ($24K or so) and spent a lot of it moving us out of one house into another and all the associated expenses.  He also spent $2500 of that on the now dead BMW.

So where is the disagreement?  As I have previously posted we currently each get $200 every Friday.  Out of this $200 we split groceries (running about $50 per person, $100 total for the week),  we pay for our gas (currently at $40 for him, $60 for me) and then any and all other expenses.  Haircuts, kid school expenses, gifts, dog food, incidentals, mad money, and unknown other crap! The good news is we are hearing you (okay I am hearing you loud and clear…Steve…slow to hear but I think we have progress) and know that this $200 has GOT to be broken down.  I really believe I can do groceries at $125 per week (I am turning into a maniac on planning and couponing) and then gas is $100 per week.  Deducting this from our current $400 per week amount we have $175 total, $87.50 per week for “no explanation needed” spending….do what you will…mad money!

I think that is plenty if everything else is taken care of ESPECIALLY because this is supposed to be uncomfortable!  Steve, on the other hand, wants an additional $100 per week in spending money so that he can create a “savings” to get things that he has put off b/c so much income was going to tuition.  I disagree.  My argument is that we have been on this plan for much too little time to be making that kind of increase.  Again…back to my drunk analogy…just when it starts getting uncomfy and there’s access to booze…should you partake?  NO.

Steve’s argument is that he also walked into this relationship as well with a $90,000 debt  of sorts–because of his boys’ private school tuition.  He has come to a major milestone of paying off a big chunk of his obligation so he thinks it is reasonable to be rewarded with $100 additional spending money per week.  He began the race when OS was 2 years old and he has been running it for 16 years.  He’s down to his last 15% of the debt and his payments have dropped 50%.  He is going from $1300 per month to $800 a month effective August 2012 and he wants $400 of that $500 savings in his pocket to spend on what he has done without (clothing, shoes, gym membership, bicycle…etc).   Side note:  These are Steve’s words and he has approved this message.

I suggested taking a full month’s tuition ($1300) on June 1–which I don’t think is a good idea really but I figured it could be the reward for crossing the finish line for him–and doing what he will.  He refuses. I suggested taking the $500 “raise” and putting it toward his mortgage on the pre-marriage house.  He refuses. He wants more control over more spending money and my fear is no behavior modification is taking place.  If our respective spending habits don’t change we are in for a world of hurt!

He wants me to share that he will have two extra paychecks this year totaling $4000 that will all be going toward debt reduction and that he is not sabotaging my efforts.

What do you think?


Don’t procrastinate!

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I have never had an issue with talking about death and dying and what we all need to do to help our loved ones when the time comes for our passing.  Maybe it has something to do with my parents having me in their 40’s at a time when people just weren’t having babies in their 40’s.  My mother often talked about her mortality–sometimes in a heavy way but more often with a healthy dose of humor.  While I can’t say this led to Mom being ready to do the “must do’s” related to mortality, it did give me a real sense of the importance of planning…not dwelling, mind you…but not completely denying the reality either.

With the issues regarding my Aunt in a nursing home and then my own aging parents, I just don’t put this stuff off.  What’s the state of your estate?  Take time this week to talk to your loved ones and make a plan of some sort.  It may not be feasible to buy your pre-paid funeral plan or figure out all details right now, but do something to move in that direction! Losing a parent at any time is a traumatic event, please don’t leave your kids with more trauma because you have not communicated anything about your desires for your funeral and done nothing to deal with the property you have at the time of your passing.  It will cost your loved one dearly on the financial front if they have to start from scratch.

In Texas, we can do a hand written will.  It isn’t ideal, but it is an option.  Look into your state’s laws and see what you can do yourself.  If you need help, there are a lot of very reasonably priced options for basic will drafting.  Be sure to have the various power of attorney documents as well and don’t forget the advanced directive.  I’m not giving legal advice here…this stuff is important and easily accessible on the internet.

Why the sudden rant?  I just spent 2 hours messing with stuff related to my Aunt not being able to handle her legal affairs.  It is a nightmare as it is…I can’t imagine if I didn’t have the proper legal documents to get me through much of the red tape.


The saving money bug is biting others in this house…

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I overheard the kids talking tonight and 7 year old girl explained to her big brothers that the library is the “way to go” because you just borrow the books and DVD’s and you don’t have to give them money.  🙂   This on top of the 13 year old revisiting the 25 cent boxes of Rice Krispies and marveleing aloud.  The 12 year old was on the phone with his Dad yesterday sharing what a deal these antennas are because “tv is FREE Dad.”    There have been some unrelated challenges with the 17-year-old so we definitely don’t have any positive or negative commentary from him.  Oh to be as smart as all of the 17-year-olds out there!  Another day where I find a whole new respect for my parents surviving FIVE teenagers!

I know that some readers will assume our kids are overindulged…but I beg to differ.  They saved money from chores (more on that in a post to come), birthdays, holidays, little “jobs” and have bought ALL of the gadgets they have.  One bought an iTouch after over a year of saving. Honestly I didn’t think he’d be so determined but I’m proud he was!  We supply the bottom of the barrel cell phones b/c my husband has a stash of old phones at his disposal and I’m the only one in this house with an iPhone!  And that was only after it was reduced to an employee discount price.   The middle schoolers just got their phones this school year and friends don’t believe them when they learn their Dad works for a cell company…b/c they definitely don’t have the cutting edge phones.  Three of the four kids seem to be naturally thrifty and the one that isn’t…is learning from the others.  We provide basics and even the PS3 that is now serving as our television supply was split–we paid 50%, they paid the other 50%.   So, all this is to say that I’m not surprised by the lack of drama or pushback from them…but I am surprised at each of them articulating it in the manner they do.  As a new blended family we’ve needed a common goal.  It hit me today that saving money and paying off debt is the perfect common goal!   In some bizarre way (truly bizarre thinking here) I wish I COULD point to a bunch of crap for the kids to explain this debt!  But that’s CRAZY talk!  I am sure the days ahead will see unhappiness and disappointment as the novelty of this battle wears off and we all realize it is a long war ahead.

Anyway, this  is just a random share to celebrate the entire family’s progress.  I like the idea someone put in a comment about recruiting them for my ebay sales.  I know they would love that!


Budget Talks.

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The talk went well.  There was good news and bad news.  The good news is we are going to put the “found” money in savings…so our emergency fund should increase by $400 by the end of April.  That keeps us on track for the goals I set forth back in early March. We decided on $1600 as our emergency fund goal.  It’s a long story how we got to that number but we are both happy with that goal. 

And now the bad news…as to our debt payoff approach, it’s a “snowball hybrid” of sorts. We have decided that we will pay off the second line of credit of $145 this week.  That’s just to motivate us to scratch one more off the list.  Then we are going to work to knock out the debt with higher payments–not the highest, but not the small $25 minimum payment accounts either.  More specifically, we are going to snowball the minimums from the two we’ve paid off (the $60 something first one and the first line of credit= $45 freed up) to the Dad debt.  That will pay him off in June.  That will then free up $145 in minimums to go to that heinous 24.9% store credit card with the approximate $2000 balance.  That card has a $105 minimum payment.  By increasing the payment to $250 in June we estimate that one will be paid off in 10 months.  Let me take a moment to express just how much that sucks!  I was sure those calculations were wrong but that is the beast called “denial” creeping in again. Hello.  It’s a 25% interest rate!  What would I expect?!  Totally stinks. 

Next, we discussed tackling the Discover card that sits right around $7,000 @ 18% and with a $140 minimum payment.  Using the snowball we’d be paying $390 per month toward that and using a very basic calculation that would result in a 1 year, 10 month payoff timeframe.  That’s looking pretty far down the road but that is good to keep all of this very, very real.

On the upside now–digging deep to find an upside–these numbers do not reflect any additional income we can put toward this mess.  We aren’t considering an income increase,we aren’t consider any additional money we free up by cutting monthly expenditures and we haven’t taken into consideration the $400 extra per month that we will be putting into the emergency fund for now.  I have to keep those numbers at bay in the calculations but I can allow myself to keep them in mind so I don’t go running out into traffic!  🙂  Good thing I’m a pretty upbeat person or I could see me spiraling into a very dark place! 

Until next time…

 


A New Month!

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April will kick off the first month that we will feel the positive impact of the elimination/reduction of a few monthly debts and expenses.  With these adjustments we will see an extra $400 this month–NOT including my raise that hits on Friday, April 6.  My husband is doing an excellent job of stopping me from counting those chickens before they are hatched..but MAN does my brain go there each and every time we discuss $.   I wish you could see how excited we are about putting that toward debt!  After I finish up this post we have set aside time this evening to review the various approaches to paying things down–including those you have posted in your comments–so we can finalize the approach.  We’ve been talking about it since I started blogging, but it is time to make a decision since we have the money to pay!  Here’s to financial communication!   We are looking at shaving off another $100-$200 in monthly expenses so in addition to the little stuff we are doing what we can on that side of the ledger too.

Speaking of the little stuff…I tiptoed into the world of couponing today.  I was very deliberate in my approach and managed to save a total of $32.  I only went to Walgreens and CVS and purchased regularly used allergy medicine (that alone usually sets me back $20), my usual coffee, toothpaste, toothbrushes, Easter treats for the kids, jello pudding mix and 4 boxes of regular Rice Krispies.  I used my usual spending amount and didn’t dip into what sits in the account which is the only way I will do this.  All of these are items that we would have bought anyway–but at FULL price.  So I say… yippee!