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Teacher Gifts, Holiday Tipping

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There are TONS of guides out there for holiday tipping those important service people in your life.  I am so grateful that I don’t typically have this struggle because I don’t use any service people are on a regular basis…no babysitter, no hair dressers, no maintenance people, etc.  Oh wait, I’m living in an apartment now and the maintenance crew, two in particular have been AMAZING!  So what do do?

In addition, my kiddos attend a homeschool co op run by super talented and committed moms and professionals.  The urge to shower them with gifts to show my appreciate is strong.  My desire to spend money is about zilch!  I had planned to make soap for every one but two things…one I haven’t started it and it needs at least a week to cure and two I gave them all soap last year.  So I’m in a bind, what to do?

So this post is all about you…what do gift or do you gift those important service people in your life and/or you children’s caretakers or teachers?

I have decided on one…for the first time since Little Gymnast joined the team, I feel the urge to show my gratitude with gifts.  I asked the owner of the gym what to get for his primary coach as I really don’t know him to well.  He’s an older, pretty gruff man and for a lot of reasons I haven’t had any personal conversations with him over the last three years.  But the owner made it really easy…buy him a case of Mountain Dew.  So that’s one gift I will be giving someone who is an important part of our lives if not a personal connection.


Advice Wanted!

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I’ve been doing a lot of thinking about our debt payoff journey and feel as though I’ve come to a bit of a crossroads. Sometimes having an objective opinion (YOURS!) is just what it takes for me to gain a little perspective or see something from another angle, so here’s the deal….

I’ve been (borderline-obsessively) checking and re-checking my budget/debt spreadsheet, trying to determine the best course of action. It appears that we will be able to pay off the Wells Fargo card much sooner than previously expected (probably by June!!!), and the plan has ALWAYS been to snowball that payment toward our last credit card – Bank of America.

But a careful examination of ALL (of our many, many) debts leaves me feeling a bit unsettled about the decision. I think the money may be better allocated toward a different debt.

To get a big picture, I’m going to break from the mold a little and lay out my debts now (mid-month) instead of waiting until the beginning of June. So here’s the big debt picture (listed by APR – highest to lowest). Note the “Deferment Ends” column. I have listed minimum payments for my student loans once deferment ends.

PlaceCurrent BalanceAPRMinimum DueMin Due (When Deferment Ends)Deferment End Date
Wells Fargo CC$334513.65%8787N/A
Sallie Mae - Dept of Ed$55788.5%0692/10/15
Sallie Mae - Federal Student Loans$45648.25%6262Current (no deferment)
Carmax$229947.75%470470N/A
BoA CC$21407.24%3535N/A
ACS Student Loans$213887.24%2524010/28/14
Sallie Mae - Dept of Ed$652367%07372/10/15
License Fees$56232.7%5555N/A
Medical Bills$82530%100100*Still does not include Mayo Clinic bill
Totals$139121

 

My thoughts are totally fragmented, so I’ll lay them out bullet-style.

  • I recently discovered that one of my Sallie Mae Department of Education loans is at an 8.5% APR….ALL of the others are at 7% so I had mistakenly thought this one was 7% too, and had previously lumped them all together. I’ve now separated this debt because it will be my highest interest-rate debt after WF is paid.
  • When deferment ends my plan has been to consolidate my student loans and try to get a lower interest rate. So its possible the 8.5% could be getting a reduction in February.
  • After my Wells Fargo card is paid in full, my plan is to go try to refinance my car loan for a lower APR (currently 7.24%). So its possible I can get this interest rate lowered.
  • People may disagree with this one (particularly as my #1 goal has ALWAYS been to eradicate CC debt), but now I’m feeling less urgency about getting rid of my BoA debt. I feel the money might be better spent going toward a higher interest student loan??? Additionally – any credit gurus out there? I’ve read that if you have $0 CC debt it can actually ding your credit score a little (not as significantly as having too much debt-to-credit, but there’s still an impact). Being as I’m trying to refinance student loans and cars, I’m thinking that leaving a little debt on my lowest APR card right now might not be terrible? (Note: I’m NOT suggesting I stay in debt forever….just saying I may be better served to allocate funds toward higher APR debt currently while I’m playing the credit score game).
  • My ACS student loan deferment ends in October, at which time the payment will increase to $240/month.
  • I’m mathematically-minded so my preference in debt-repayment is highest APR first (regardless of balance).
  • That said, if I were to rank-order my debts in order of the PERSONAL satisfaction I’d receive from paying them off (that whole psychological aspect component), I’d rank: Wells Fargo, Bank of America, Carmax, License, Student loans, medical debt).
  • My current inclination (a rough combination of mathematical and personal satisfaction factors) is to rank order debt repayment as such: Wells Fargo, Sallie Mae (first the 8.5% APR, then the 8.25% APR loan), Bank of America, license, Carmax, remaining student loans (ACS & Sallie Mae 7% APR), and medical debt still dead last.
  • At the same time, I’m trying to think of some strategy to leverage the extra money we have right now. While student loans are still in deferment I have a good amount of extra money to throw toward debts. Once deferment ends my funds will be greatly divided. I’d like to strategize to eradicate some of the lower-amount debts so that – once deferment ends – my funds aren’t being split into 15 different directions!
  • Ever heard of using a 0% APR credit card to pay student loans??? Remember that 0% offer I got that everyone said I should take? I never did (and won’t need it since I’m kicking WF’s butt right now!), but maybe I could use it for the 8.25-8.5% APR student loan debt??? Yay? Nay?
  • Keep in mind we’ve only budgeted $1500/month for debt repayment, though we’ve been putting extra toward debt each month if we have money available after paying our bills.
  • Another couple considerations to throw into the mix just for fun…at some point (before all of our debt is gone), we’re going to have to cash-flow some major expenses: serious dental work for my husband (discussed earlier today), and a new work truck for my husband (if we’re lucky, maybe it will last until next winter….we already had several problems this past winter). Plus all the “baby” related items as our girls grow older – buying the supplies to convert cribs into beds, newer carseats when they outgrow the old ones, etc.

I’ve liked not splitting priorities, so I can focus on eradicating one debt at a time, but I won’t have that luxury much longer, as the minimum amounts due on many of the currently-deferred student loans are going to be increasing within the next 1-8 months and forcing me to split up our finds.

Your thoughts, recommendations, incite?

And….GO!!!

 


Question of the Week- What Are You Willing to Sacrifice?

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

 What are you willing to give up, or not willing to give up, to get out of debt?  For example-not willing to give up the gym because health is critical: willing to give up current home to live in a small space and save money.  posted by Juhli

Stephannie

I feel like we have already made a lot of changes and none of them have caused a decline in our quality of life.  For the last year my girls did not participate in dance or cheerleading (which they’ve both done since they were three) and while they miss it and will go back at some point, it was kind of a nice respite from how crazy our weekday evenings used to be.  They currently only participate in sports that are offered locally for free and that keeps them happy and us busy enough to stay out of trouble!  I also think my going back to work full time has been a huge sacrifice because I can’t be nearly as involved with my girls’ school activities as I used to be. This has been a big adjustment for me but even more so for them.  I think it’s safe to say that we are pretty much willing to do anything short term to get out of debt as quickly as possible.  The long term goal will be to stay out of debt.

Jim

Basically I am willing to sacrifice any superficial thing to get out of debt.  We have already gotten rid of cable and our cell phones.  Starting last month we cut back on eating out, with the intentions of only eating out once a month.    As for not willing to give up… Well I think you all know that answer. I have very strong feelings about my self employment. I know in the deepest parts of my body, that I can make this entrepreneurship work. I know that eventually with what I am doing, I will be better off. And I also know that if I did take on a job, that I would let this dream die in me. Which eventually will do devastating things to me.

Hope

I will not give up opening our home to children in need. That was easy. Pretty much everything else is up for negotiation.  And every day I’m looking for new ways to make money, save money and cut costs.  I’m certainly not perfect and it is a daily battle for me, and I do mean daily, but I am committed – all in.

Ashley

I’m trying to be open to sacrifices both big and small. In terms of “big,” Chris and I have decided to forego our annual Christmas trip back to Texas so we can save money (it will be our first Christmas in the 7 years we’ve lived out-of-state that we won’t be returning for the holiday). We had also originally been planning another trip this Spring. Chris has family in Seattle and I’ve never been to the area. Chris hates flying (read = scared terrified), so we were planning to drive, spend some time, then take our time driving down the California coast line to get back to Arizona – take a couple weeks for the full trip. Obviously that’s out the window. In terms of “small” sacrifices, I’ve been making all kinds of things homemade or DIY instead of buying, we’re trying to cut down how often we eat out, and I’m trying to generally “make do” with what we have instead of buying new things (first thing that comes to mind is a swim suit for summer, though this applies to more than just clothes). In terms of “not willing to do,” one thing I do not want to change is our residence. We pay $1055/month for rent in a reasonable (small 1 story) home in a safe area. In the past we have lived MUCH more cheaply (rent for only $595). But to do so, we were living in the extreme “hood” (in a really rough area). That was all fine and good when it was just me and husband but now that we have children I really value living in a nicer, more family-oriented neighborhood. I’m sure there’s some compromises – places “in between” where we currently live and where we used to live….but at this point I’m not really interested in looking elsewhere. We moved here last August so we haven’t even been here a year, we love it here, and I do not want to uproot us again at this point. I’m not saying this will NEVER be a possibility, but currently it is not an idea I want to entertain.

Question of the Week – Tackling Debt

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

 Are you planning to tackle debt in an “all-out” kind of style or more of a “slow and steady wins the race” pace? – Jocelyn

Stephannie

Our plan is to sacrifice as much as we can stand to pay it off as quickly as possible. Life gets in the way sometimes but we just want that burden gone. 

Jim

To be honest, I am a little in the middle.  I am throwing the majority of our income, setting up our emergency fund and on debt.  But at the same time, there is a lifestyle that I have grown to love.  Being home when my children wake up, when they go to bed, and everything in between I simply love and for the most part am probably not going to change.  But as my income grows from all my ventures from home, more money will be thrown toward debt.

Hope

I did not even have to think about this one…I’m all in! I am so anxious to be out of debt and free up some of my income that every dime is thought and re-thought before it’s spent.  I have spreadsheets upon spreadsheets exploring different scenarios.  Granted, I have to balance my “all in” with four kids and their lives too, but I am pedal to the metal…all in!

Ashley

Is it cheating to say both? To be fair, we’ve been paying down our debt for over a year now, but it’s definitely been at more of a “slow and steady” pace. Starting in January of this year we really got gazelle intense. I am SOOOO committed to eradicating our credit card debt. I am trying to tackle it with absolute dedication (examining all opportunities to cut costs, increase income, etc.). Our goal date for being credit card debt-free is March 2015 (one year after starting blogging here at BAD), but if I have it my way we’ll be finished by the end of 2014. But our credit card debt makes a relatively small proportion of our overall debt (which also includes a car loan, license fees, medical debt, and student loans). I see us staying focused and intense on paying off the car and license fees (and will continue blogging during this time). But If I am 100% honest, I feel much less urgency about the medical debt (which is interest-free) and student loans (which is NOT interest-free). Everyone I know with student loans basically finances it over the course of a mortgage:  15-30 years!!! I don’t want to be in debt that long, but the numbers are so huge and daunting, I would be lying if I said I am certain we can remain gazelle intense until its gone!!! I guess I haven’t fully decided regarding our pace of debt-repayment for these debts (medical & student loans). I’m hoping that as we continue along the journey, each additional “win” will help build momentum and make the process feel easier and more comfortable as it simply becomes our way of life. But if anyone would like to share a success story or tips for staying motivated, please leave comments! I find success-stories particularly compelling and would love any and all tips on staying motivated for the long-haul!

Question of the Week – Long Term Goals

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

Beyond paying debt, what are your long-term goals? posted by TPol

Stephannie

First, I want to say Happy Easter!!  I am so thankful that I can spend this day with my family, celebrating Jesus and the sacrifice He made for me. I hope ya’ll are with your loved ones, as well!  Ok, so our primary long term goal is to be prepared for retirement as early as possible.  I don’t necessarily mean full on, staying home retirement. My husband has a great job that takes care of our needs but it’s not what he loves to do.  Cars are his passion and we hope that with a few years of hard work, and getting our debt down, that he can leave his job and do what he loves. This is also the reason we have an investment property and may add more as we go.

Jim

Beyond paying off debt, there are many goals I have for the long-term.  I like to break them into three sections, financial, business, and personal.  Funny thing is though, a lot of them still have something to do with financial.  Financially I would like to start planning for my retirement and put money away for my children’s future education.  I thought I was going to be able to pass down my GI Bill to my children, but for some reason I think I only have 10 years to start this.  I have to ask someone at the VA.  Business goals – I want a real living breathing lifestyle business.  At one time I thought this would be getting into the food truck/vendor arena.  I had a dream to sell homemade italian ice at festivals and fairs, especially music fairs.  And I would still love to do this at sometime, especially once my children are old enough to help me run this business.  But my current long-term goal, is to make use of all this internet marketing education I have been learning since 2007, to make even more money than I do now.

Personally I would love to be able to remarry my wife, I feel as I ripped her off and getting a quick marriage. She was very unhappy with her dress, and we were both unhappy with how our pictures came out.

Hope

My ULTIMATE long term goal and by that I mean 10 years…would be to have my home paid for and be in a position that I could either 1) work far less and/or 2) be in a position to help my children as my parents have helped me over the young adult years.  I have that time frame in mind as that is the year my youngest will graduate from high school and hopefully, head to college.
Other than that, I would like to be able to travel, not huge trips so much, as just be able to get in the car and go when the travel bug hits.

Ashley

I’m not sure if this is supposed to be “financial” goals or otherwise, so I’ll give a bit of both. Financially, I’d love to be stable enough to be able to “retire” early. I enjoy working so I imagine I’d probably continue working for fun rather than necessity, but probably only a part-time job that allows me some freedom and flexibility. Instead of having to work to survive, I’d love to be able to develop some hobbies I’ve always wanted to cultivate. I would love to garden, for example. Hard to do when we don’t own a home and have been moving about every year or so. I’ve been making more food products home-made for health and financial reasons (cheaper and no “gross” unnatural ingredients), but I would love to get into this more and in additional avenues (beyond food). A friend of my mom’s makes beautiful soaps, for example – I’d love to learn to do that! Having more time to do my scrapbooking/crafting would be fabulous. And being able to spoil my friends and families with little trips or thoughtful gifts! Basically, I’d just like to be able to do what I want without feeling like a slave to a job out of necessity. 

Question of the Week – Defining Success

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

Beyond the numbers – how will you define success throughout this process? posted by Jenna

Stephannie

This is a question that I would have answered very differently just a couple of weeks ago.  My moms recent diagnosis has really made me look at things in a different way. One thing that has not changed is that I have never been a numbers person. I avoid them at all costs which, let me tell you, that strategy has done wonders for our debt situation. Sarcasm aside, the numbers were never really what I considered when I thought about success in becoming debt free. I used to think that I’d feel successful when we would only rely on ourselves for the things we want and need. When we would use good judgment and if we did not have money for things we want then instead of running out and getting a loan we would reassess and either save up or realize it was something that we didn’t really need. I always thought once our thinking was changed and it had become second nature, I’d feel successful.  Now, I just want to be able to take care of my family. If my mom needs me to take her to the doctor in Houston I don’t want to have to worry that I can’t afford to take a day off of work because I need to pay a furniture loan, or pay on a credit card that has some charges that I don’t even remember what they’re for. Having to make that choice just seems so stupid. So, now I will feel like we are successful when debt no longer rules our lives. We go to work everyday and spend more time with coworkers than we do with our family. I want that money that I make those sacrifices for, to really count. 

Jim

As in life, things are mostly done in baby steps.  Having these small achievements will keep me motivated for the long haul.  There is three things that if came true, I would define it as success.  The first being is the numbers, let’s be honest seeing your Debt Number really does motivate you every day.  The second, is to get in a different mindset, one that is set up for success.  And the third is to change my children’s thoughts about money.  My daughter really has a hard time grasping the idea of money, she thinks that we can buy anything, whenever we want.  She is always begging for everything, just to not play with them.  I really would like to change her thinking.

Hope

Great question! I think there are two ways I will truly measure success other than the debt numbers…First, seeing a change in my children’s attitudes towards money.  Seeing them make wiser decisions with their own money, learning to budget our grocery money and being willing and even excited to earn money.  This would be a huge plus to me out of this whole process!

Second, the stress reduction and loosening of then noose around my neck as I am able to pay bills easily without strategizing so much each and every time I get some money would be awesome. This will come not only from the lowering of the debt numbers, but continuing to consciously choose more frugal choices in a lot of areas, enough so that those choices become habits rather than things I have to think about each and every time.

Ashley

This is a hard one because I am intrinsically motivated by the numbers (seeing the debt amount go down, the amount in savings go up, etc. etc.), so I think I automatically associate the numbers with “success.” But, obviously, theres so much more to debt-reduction than just the numbers! For me, I think another way to measure success is in becoming content with what we have. Its so easy to be tempted with things we see in stores or on TV and the “I want” mentality is rampant at least in the U.S. (and elsewhere too, I imagine??) I’ve been trying to learn to want what I have and be content with that. I am very fortunate. I have a great family and a blessed life. I’m still working toward it (it’s so easy to be tempted by “stuff”), but I think that finding peace with what we have and not always desiring to have the next “hot” gadget or gizmo is a good goal to have. I would love to instill the same values in our children, as well. That, in my opinion, would be a huge “success” on this debt-repayment journey.

Question of the Week – Bad Decisions

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This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.

Question of the Week

What were the worst decisions that led up to your current situation of being in debt? In hindsight what could you have done differently? How will the knowledge of those decisions effect your future decisions? posted by Kili

Stephannie

I don’t know that I can pinpoint any one decision that put us into our current debt situation.  I regret our furniture loan for reasons that I’ll get into in an upcoming post but everything else kind of, I don’t know, snuck up on us.  I know that probably doesn’t really make sense but, that’s how it seems.  I think our problem was that we could afford the debt we were taking on so, it wasn’t something we worried about. Up until just a couple of years ago we felt like having debt was perfectly acceptable and something with which we were comfortable. One thing we did that I feel certainly didn’t help, was that we thought using credit was a way to make our money really work for us.  We would have the money to buy certain things but we would buy on credit because getting under a certain point in our savings made me anxious.  I know some people can use their credit and pay if off immediately.  We never seem to do that and eventually it wasn’t possible to pay off all at once. Then, the medical problems hit and that took away from savings and added to our debt.  Now, as far as what we could have done differently, we could have used cash and if we didn’t have enough cash then it wasn’t something we really needed. That’s how we are living now and how we will continue to live in the future.

Jim

There are two that come to mind right away.  One the furniture loan, I should have been more alert and realize that the payments didn’t equal the loan amount to have it paid off in 18 months.  That cost me probably an additional $3k-$4k.  The second was putting all that money and time into a house that neither the wife or I wanted.  It cost us all of savings, put us more in debt, and let the ex live in a better house.  The only solace I get out of it, is that our daughter will be living in a better, safer house.As for what I have could have done differently, I am not really sure about the house.  But the furniture loan, we could have paid cash for this.  We had the money, I was just to focused on building our credit.  These decisions effect all my decisions lately, for I thought I was doing everything right when it came to using “credit the right way” but when I hurt myself… I quickly found out how much credit really affects you, when you can’t pay it off right away.

Hope

I don’t even know where to start with answering this one.  Would the worst decision be the tv and gaming system while in grad school for my newlywed husband or the Disney trip right when I had paid off my credit card just a couple of years ago? Maybe it would be getting rid of an older car due to the divorce rather than sticking with it and having it paid off by now. Or the one I question the most often these days, living in a tourist town where the cost of living is so high in general.  I can’t narrow down my worst decision easily, but there have definitely been milestone events like those above that have heavily contributed. 

Now, how would knowing and evaluating those affect my future decisions? Well, as I get older and hopefully wiser there are two things I know.  I HATE living with debt, having the chance at getting behind when there are bumps in the road with work is sickening.  And with my kids, I will not pay for ‘stuff’ but I am willing to compromise on experiences.  We have just wasted so much on stuff and I see it thrown away, broken or become so quickly out-dated, that it’s a complete waste to me.  With those two things well in hand, I will focus every bit of my energy now on getting out of debt and once there focus on staying there.  And I will not be swayed by the “gimees” that got me as a young parent, but rather weigh the money spent on kids from the long term experience perspective.

Ashley

Hands down the #1 decision that lead to my debt was the choice to go to graduate school. At the time, it felt like the only logical decision. I want to be a professor, therefore I must obtain a graduate degree. Even though I was 22 at the start of my graduate schooling (and, therefore, technically an adult), I don’t think my mind was capable of FULLY comprehending the amount of debt that I was about to take on. And I certainly wasn’t weighing the risks of graduating and being potentially unable to find a job. If anyone else has experience with student loans then you know that when you finally graduate you are required to take “Exit Loan Counseling.” Based on the amount of my loans, my exit counseling said I needed to seek employment making $95,000 per year. It was a punch to the gut and I felt sick to my stomach. Even if I land the coveted assistant professor position, salaries in my field start at closer to $60,000. Only tenured professors have salaries flirting with the $100,000 mark. I won’t dwell on how this could potentially have been the WORST mistake of my entire life. I am still, afterall, working diligently to try to get hired in my profession of choice. Instead, I’ll focus on how I could have done it differently. In Florida, I could have ONLY taken out loans for tuition. I could have worked extra jobs and eaten rice and beans and tried to avoid any additional debt. In Arizona (where my tuition was covered by the department), I really shouldn’t have taken out any additional loans at all. I did of course, but I could have gotten by without them. Finances would have been tighter and life may not have been as “glamorous” or fun, but then I wouldn’t be stuck facing the almost insurmountable amount of debt I have. For what it’s worth, I’ve been VERY vocal with my group of friends and family about the realities of a graduate education. I am not alone. Not by a long shot. There is a huge, growing number of highly educated people who are unable to find work after taking out disgusting amounts of student loan debt. I’ve even heard it likened to the next “housing bubble” – people are being given more credit than they can handle, many will undoubtedly default on their loans, and then…..????? I think these experiences will impact my future debt-decisions because I now firmly believe there is really no such thing as “good” debt. I don’t care if its real estate, student loans, etc etc etc. There are no guarantees with anything and every form of debt carries some VERY REAL risk.

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