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I greatly appreciate all your constructive feedback on my priority list that is being incorporated into my life plan.  After evaluating much of your feedback and really weighing what is important to me, here is the current priority list and broken down bits.  (Timeline to be added with next revision.)  Please review and let me know your thoughts.

Car

  1. Take ownership of Honda Accord – add insurance, tax bill.  This happens this week as my dad is bringing the title to what we call the “twins car.”  This debt ($1900 was eliminated via the sell of the house per my dad and my agreement.)
  2. Sell car – eliminating high car payment, higher insurance payment and tax bill. This has been listed for sale for months no with some interest but no luck yet.  I will explore other options of getting it sold…ie Car Max etc after Christmas.
  3. Enroll in AAA.  This will bring me some security in comfort in driving an older car.  Thanks for the suggestion!
  4. Begin paying self “car payment” to savings for next car – est $300 month – add this to monthly budget so I 1) have money for car repairs and/or 2) can buy a newer used car with at least mostly cash when time (eta for this would be Fall, 2015)

Finances

  1. Continue paying minimum payments on all debts.
  2. Pay off checking account debt this month (December) whatever it takes! Total $746
  3. Focus on Credit Card – Retail with any extra debt payments.
  4. Build $1000 EF
  5. Pay off Credit Card – Consumer with any extra debt payments
  6. Add monies to EF until I have $6000
  7. LAST DEBT: Pay off Student Loan with any extra debt payments
  8. Begin living on last month’s income using EF monies to start.
  9. Retirement plan

Housing

  1. Continue to work on design for dream house – free
  2. Continue to monitor land sales – free
  3. Get solid phased plan broken down by costs and timeline
    1. Land phase (owner financing or foreclosure possibility)
    2. Phase I house – livable shell with construction loan  (architect costs and find construction loan so I only have to pay interest during build out)
    3. Move out of apartment (moving and furnishing costs)
    4. Phase II house – build out interior doing as much DIY or bartered as possible (this is an as I have it phase, incurring no more housing debt)
    5. Phase III house – ???
  4. Land phase – at any time with right deal
  5. Begin House – Phase I after Finances #6 is complete
  6. Get re-certified as foster family (this will have to be done if we are not able to take in children by May, 2016)

Personal

  1. Learn something new every month.  This doesn’t always have to cost money or alot of money, ideas include but are not limited too:
    1. Learn to knit – class available at Joann’s for about $30
    2. Find car maintenance class for self and twins (try Parks & Rec and local community college)
    3. Find house maintenance class (local community college?
  2. Vacation…save for it, dream about it, plan it

Business

I did not add this into the priority list because frankly, it is the gate through which everything else must be done…so after much consideration I have decided NOT to return to corporate. I did not make this decision lightly.  The thought of a steady and most likely higher paycheck was tempting, sorely tempting, not to mention the possibility of signing bonus, moving expenses since I’m will to relocate…well, very tempting.  But let’s face it…the cost would be too high.  I would give up the flexibility I have to be wherever my kids need me, when they need me.  Not just activities, but sick days, therapy visits and just mental health days.  I would give up these moments with my kids where they really grasp something and it lights up their faces and then proceed to sprint forward in understanding in application of concepts and ideas.  I would give up those little moments of me time that I get almost daily because after returning from a full day at the office I would need to supervise homework, get dinner on the table and really be there to get one on one time with each child, something I am really able to do at leisure throughout the days now.  And all these don’t take into account the very high possibility that I would have to travel, have lots of job related stress and the over-hanging cloud of working mom guilt.  So that’s a long way of saying…I have decided not to return to corporate.

However, this does not mean I must accept the status quo.  When I lost my oldest, and almost biggest client last fall, I took a big financial hit.  It was literally like going from a two parent income to a one parent income, and I didn’t get the relief or help that would have been in there was actually a second parent staying home because I was still doing it all.  So I have decided to go with option #4 from my original priority list.  It is time to change the game.  I’ve enjoy my “off” time per se since losing my 40 hour per week phone client and it’s time to re-strategize and then market the new and improve business model.  So here is my current game plan for my business (still under construction:)

  1. Set up a meeting with local SCORE chapter.  It’s time to get some expert advice.
  2. Redesign marketing channels: web site, social media, LinkedIn
  3. Create marketing plan
  4. Revitalize job hunting profiles: Guru, Indeed, Fiverr, etc.  Got more suggestions?  Where do you search for consultants?
  5. Research passive income streams
  6. Get the kids involved
    1. Twins have expressed an interest in doing projects via Fiverr, encourage and guide them
    2. Daughter has expressed interest via actions and words in dog training and care, encourage and guide her
    3. Little Gymnast needs to focus on school but add income and budgeting to his curriculum through real life experiences

Okay, so that’s where I’m at.  Probably not the best format for this type of plan, but the goal for the next round of evaluation will be to put it in a timeline format with dependencies in place.  I am wide open for your constructive opinions and criticism.  Obviously there are places that I will need to plan and break things down a bit more, but I’m feeling good about this first draft right now.


27 Comments

  • Reply debtor |

    Go Hope!

    This is a step in the right direction. Writing it out helps.

    Have you ever mentioned what you do? (Not sure if it’s something you decided to keep private). I ask because I wasn’t sure if you were saying you were looking for consultants.

    I think your list looks good. on the financial front, what is checking account debt? I would build a baby EF of $500 (if not the full 1k) before attacking any credit cards tbh. You need it.

    Hope, I also suggest you start posting your debt on a monthly basis. I think we had suggested having sidebars to the blog owners..but even if it’s not changing much, posting will keep it very much in the forefront of your mind and it might change. As a reader, I have no idea how much you owe at the moment so some things might not be applicable.

    Hope, please consider this. You have a construction loan listed. I don’t think you should be thinking of taking more debt. Someone earlier pointed out that your twins are almost out of the house, you really might not need that much space at that point. I think maybe have that on your dream list and then revisit in a couple of years when everything is steadier.

    Anyway, good job on taking this step. I think you are definitely on the right track.

    • Reply Hope |

      Debtor…
      The construction loan wouldn’t come into play UNTIL all debt is paid except for the student loans. (You can see my last debt update here: https://www.bloggingawaydebt.com/2014/09/debt-update-september-2014-hope/)
      The larger is house is so that 1) I can take in more children when I am financially stable and 2) so my older kids have a room to come home to for as long (reasonably long that is) as they need it. You here horror stories about foster kids aging out of the system with nowhere to go, no support system…that will not be my kids whether or adopted or not.
      With the next revision I will timeline everything along with the dependencies that are a bit harder to follow in this format.

  • Reply TPol |

    I sincerely wish you the best with your plans. Having a plan is important and it puts every financial decision into perspective.

    My goals would have been much much different than yours but personal finance is personal and everybody has different priorities. I do not agree with your housing goals, especially with number 4 and 5. I would wait until I chopped off the debt. This is not a criticism in any way. I am very very risk averse and a born pessimist who believes in Mr. Murphy.

    Mine would be more like:
    1. Find way to increase income.
    2. Bump up the EF to cover at least 3 months worth of living expenses.
    3. Get rid of debt starting with the highest interest debt first.
    4. Keep living expenses to a minimum with small luxuries just to avoid feeling deprived.
    5. Get started with retirement.

    • Reply Hope |

      TPol,
      I know this format is hard to follow, but really the housing wouldn’t come into play until all debt is gone except for the student loans. I know it’s important for me to make wise decisions and I am prepared to wait on that to get my financial house in order.
      It is important for us to all recognize our own financial goals…my number one inspiring goal is to be able to take in kids. I know I need to get in a good place first, but that goal will inspire me to keep plugging away.

  • Reply Another Angie |

    Hope – have you done a recent round-up of all your debt? I forget how much exactly you owe on the various accounts. I would be interested to know, just to get a better sense of how you’re prioritizing everything.

  • Reply Angie |

    Its great that you’ve taken the time to think a little more granular with each of your goals. Its the only way to have tangible steps!

    I’m a little confused on the housing front. Maybe you’ve already got an idea of any cash back from your dad that you have not disclosed. But how much are you expecting you would need for a downpayment/upfront costs on a land purchase? You have previously said you plan to move out of the apartment by the end of the one year lease. Yet you list it in the middle of starting a house build from scratch?! Have you come to grips that you will renew your lease or start another? I’ve heard a ton of horror stories from people building houses and they are never on time or on budget. I hate to have you get your hopes up without being realistic. If push came to shove, what would be your priority: 1. Building out the interior of the house or 2. Paying off remaining debt? Because really if you are working on both those goals simultaneously you will be choosing one over the other.

    Also, it may just be my way of thinking but living on last months income would be your emergency fund. So I would say target 1000 e-fund first. Pay off any debt >8% (arbitrary, I would have to look at your debt load again). Save up to live off last months income. Then start tackling all other debt.

    • Reply Angie |

      Sorry I just checked back to your latest debt numbers. I think your plan is definitely a bit more realistic now with the sale of the car (depending on your plan for replacement). Others will probably rail on me, but have you considered a used car loan for whatever replacement you need? This would free up more money to pay down your credit card debt and most rates are <4-5% from local credit unions.

      I really think you could probably get your bad debt knocked out by the time you leave the apartment if you buckle down. Because the rate of your student loan is so low there really isn't any reason to pay that down quickly other than security. It makes the decision pretty obvious between building out a house debt free or paying the student loan.

      • Reply Hope |

        Hey Angie…now I see your second comment. Sounds like we are on the same page…
        My thought is with the student loan and a much lower housing payment if I can stay in my budget I would still be ahead of the game.

    • Reply Hope |

      Good points, Angie!
      I am facing reality that we may be here more than a year…maybe. I’m also very clear that I need to be in a better place financially before I commit to caring for anyone else. Thus the plan…
      By the time we began the build the only remaining debt would be my student loans.
      Hopefully it will all be more clear…to me and to you once I sit down and really evaluate a timeline and plan…since I’m feeling pretty good about the priority.

      • Reply Walnut |

        Don’t forget to consider the time it takes to build a house. It’s definitely not a project that happens over night or even in six months. Also, you’ll need to add a step somewhere where you save up for the money to purchase some land. I’m a strong supporter of always knowing what your potential costs are, so you’ll have a lot of fun in the planning stages of building your dream house. One thing you might find is that building in phases may not be your best option. The most expensive parts of the house would have to be built first (kitchen, bathrooms, electrical/furnace, etc.) that you may find it’s not much more to just design and build the house that works for you all in one go. Living in a construction zone leaves a lot to be desired.

  • Reply Jen From Boston |

    Was Financial Goal #9 supposed to be blank?

    Even if you’re not in a position to buy land it’s a good idea to keep an eye on the prices so when you are ready to buy you know if you’re getting a fair deal or not.

    My other thought, and I may have missed something or not understand construction, but would you be able to get certified as a foster family before a new home’s interior has been built out? I believe here in MA each foster child needs his or her own bedroom (I believe this is in case they’re coming from a sexual abuse situation 🙁 ), so I wonder how the local social services agencies where you are would evaluate a home construction in progress. And I agree that you should plan on, or at least have a backup plan if the home construction takes longer than planned. Stuff happens, and some towns have pickier building inspectors than others.

    • Reply Hope |

      Jen,
      You are right. We couldn’t be certified until the rooms were finished. So if the housing situation isn’t ready by May, 2016 I will lose my current certification (I’m on hold now due to no beds.) I don’t think it’s likely that I will be able to pay off all my debt, purchase land and build a house by then…so I am preparing in my mind that it may be a while til I can take in kids. But it is in the plan..and really it is the end goal.
      It’s my inspiration and will definitely motivate me to work long and hard to reach it more quickly!

  • Reply debtor |

    okay got it now.

    I still think that your number 1 goal overall should be to build your EF for reasons I’ve stated before. You didn’t answer in the previous post if you had life/disability insurance.

    Living on one income with 1 provider you definitely have a greater need for that security than the average person especially with all those dependents. What if something happened that prevented you from working or kids got sick or really anything major.

    It’s always better to raid your EF when that happens than putting it on credit (or at least raid your EF first before putting the balance on credit).

    Do you have any savings? Like if miraculously all your clients dried up in one month, would you be able to pay rent the next month (ie are you living paycheck to paycheck?).

    If the answer is “no”, I would say start your 1k EF ASAP (or at least 1 months rent, whichever is greater).

    Once I got 1 months rent saved up, I felt better knowing that if I lost my job, I might have to eat ramen for a month but at least I had a roof over my head for another month and gave me time to find another jobr

  • Reply Bankonome |

    That is excellent that you are logging your plan, prioritizing, revising along the way, and asking for suggestions and advice from others. My husband and I firmly believe that most of our good financial decisions came from the wisdom of others or learning from their mistakes.
    Excellent list of priorities as well. I like that you are really disciplining yourself to the point off selling your newer car to drive an older one. Thanks for posting information about AAA as well. As for your housing priority and plan, we bought our home under a construction loan to remodel it when we were first married. It can be a risky and expensive loan if you do not have a fixed interest rate or you don’t finish within the time constraints. Our loan had a fluctuating rate. Luckily it did not increase significantly and we finished on time. My husband also works construction and another point to consider is you typically cannot refinance a construction loan to a conventional loan until the interior is finished and the light fixtures are hung (those were the terms of our loan). That means you will pay the interest and the penalty payment on top of that if you do not finish in time. So be sure you understand the contract terms. You can read more about the pros and cons of a construction loan through the following link: http://www.bankrate.com/finance/real-estate/construction-loan-has-more-cons-than-pros.aspx Building or remodeling a home is a wonderful thing, just be cautious of financing debt traps and you’ll avoid that by doing your research.

  • Reply Bankonome |

    Consider doing research before you choose a construction company as well. Some things to look for are honesty, reliability and a good reputation. But don’t rely on them or anyone else to meet the terms of your loan. That is ultimately the consumer’s responsibility in the eyes of a bank and no one will care as much as you do about the terms of your loan.

  • Reply SAK |

    A couple of thoughts.
    1) Check out Lowe’s/Home Depot – they often have free DIY classes on home improvements/repairs that you can take – by yourself or with the kids.
    2) AAA – great investment!
    3) I think you need to focus your thinking on housing. Moving is disruptive and expensive and so the question is – how long does the current housing work – one year? three? until you have a house built? Just my opinion because you know your family best (and you might want to discuss this with them too – not sure of your family dynamic) – do you commit to where you are for a while knowing that it will help you get to the goal of the house more quickly – or do you look at what the house timeline is and decide to move to something larger before the house gets built/done. DH and I downsized to a smaller/less expensive place for over 5 years so we could save more money and travel – it wasn’t easy (in many ways) but the pay off was worth it for a while. Something to consider.
    4) I think you decision on the job issue is great – but coupled with that – you need to beef up the EF significantly. Daunting I know – but you can do it.
    5) Building a timeline and laying what “A” has to happen before “B” will help you focus and us provide better comments!

    Great work and I am excited to hear about what you do on the business front!

  • Reply hannah |

    Just wanted to say about the knitting – any lady you know who is good at those sewing crafts could show you how. I learned at about 11 yrs old and it is very easy. Granted I can’t make all those sweaters and clothes that people make, and perhaps that is what you are going for…
    But starting out, just learning how to manage the needle and cotton, you don’t even need a class. A book, youtube, or helpful lady are all you need.
    The biggest expense here will be yarn – it’s gone up a lot for decent quality. I bet you could find it cheap at thrift stores, craigslist or garage sales though.

    • Reply ginsue |

      i agree in regards to knitting. i taught myself to knit by watching youtube tutorials and using library books. the most difficult things i have made are socks and mittens but they turned out to be fairly easy. i have no problem using double point needles or circular needles thanks to youtube.

    • Reply hp |

      Just wanted to chime in–I tried to learn from a book (pre-internet) and it was a failure. A few years ago, I tried you tube videos and online tutorials and it worked! I am not a visual person, but I can knit most anything I want just by going online when I run into a new thing. I’ve done socks, scarves, blankets, sweaters, and lace. Honestly, the best thing I can recommend is buying larger needles to start with and cheap basic yarn (that is still pretty) so you don’t worry about messing it up. I don’t like to knit with acrylic now (I have expensive taste) but it is a great starter yarn.

  • Reply MB |

    Great job on proritizing your finances.

    I do have one question as I am also dealing with a similar sitution. You mentioned that you want to begin a car fund saving of approximately $300 per month. But you are currently only making minimum payments to your debts. Would it be better to put that savings to the debt to pay them off faster, thus lowerig interest payments rather than having those dollars sitting in the bank? Yes, I realize you may then need to finance a new car, but you should be in a better financial position at that time as your higher interest rate debts should be paid down/off.

    • Reply Bankonome |

      This is a good question. I thought I might add a little insight/direction that might help you in your decision. It is good to pay off debt faster, thus lowering the interest payments as you mentioned. However, it is also good to be cautious as you are paying down debt by thinking like a bank. Let’s say you spend most of your savings paying off debt and you pay off quite a bit and then one month, you lose your job or something happens where you can no longer make a payment that month or several months. The finance company will be more than happy to take your asset at that point, especially if you have paid down quite a bit because it is of more value to them. Therefore, we recommend building that savings to a point of security that you can make those critical loan/debt payments when uncertainty happens. For example, let’s say you have a $30,000 4 year loan and you make the minimum payments and then save any extra money. Let’s say in 2 years, you pay off $15,000, but you have also saved $15,000. Well, then might be a good time to pay off a big portion of your debt (not all if that is all of your immediate savings) because you now have the total amount left on the loan sitting in the bank to compensate if you can’t make a payment. In contrast, let’s say you put all of your savings as you get it towards the same loan and you pay off $17,000 in two years, but then you lose your job or have a medical emergency or something that causes you to not be able to make a payment. You now have no savings. Even though you have paid off quite a bit, the finance company will take the asset in a short period if you cannot pay, depending on the terms of your loan. Therefore, be sure to have a good balance of paying down debt while growing your immediate savings to about 3 months worth of essential bill payments. Hope this gives a little direction from the Bankonome where “We’re banking on you to build our economy.” We will be blogging more about this very topic in the future.

  • Reply Katie |

    On the classes, check out your local Adult Ed offerings. Ours are thru the city, but others I’ve seen are through high schools. They are usually really cheap. I’ve taken several of the home improvement-type classes and enjoyed them. Each one has paid for itself because I’ve avoided calling plumbers, electricians, etc.

  • Reply About AAA |

    Hope, just a heads up on AAA. I’ve found it’s MUCH cheaper to buy similar coverage through my car insurance provider. I’ve had it through both Progressive and USAA, and although USAA’s customer service is just amazing and I highly suggest it if you are in anyway eligible, I also had good experiences with Progressive. I currently pay $1.67 a month for the the coverage through USAA.

  • Reply Jackie |

    Hope,

    I did notice with AAA vs insurance policy (at least my insurance) that with insurance roadside assistance you get reimbursed for towing etc, AAA they just tow you and no paying up front first. Not sure if all insurance policies are like that.

    Also I ended up getting my insurance through AAA once I joined. I ended up saving $600 a year and that was just with liability at the time. Now that I have full coverage I save even more. Just something that may be worth checking into.

    • Reply About AAA |

      I’ve never had to pay upfront for anything when using either Progressive or USAA’s roadside assistance (…other than the monthly fee, of course), and I’ve had to be towed with both. People who love AAA seem to really, really love it but the cost-benefit analysis didn’t make sense for my circumstances.

      • Reply Jackie |

        Maybe it depends on what state your in. I use to have Progressive and always had to pay up front for towing etc. Each circumstance is different as each state is too.

        I know with AAA I save a lot when I buy auto parts too.

So, what do you think ?