:::: MENU ::::

Expenses = Income???

by

One of my academic mentors, upon receiving tenure (and an associated raise) made the comment, “Expenses rise to meet income.”

This has certainly been something I’ve seen in my own life. Every time you make a little more, your expenses experience an equal boost, right? All the sudden you “need” new stuff. A new position might mean you need a new wardrobe. Or longer hours at work might mean you need to hire yard people since you no longer have time, or you start taking your car for paid car washes instead of doing it yourself, etc etc etc. If you get a really big bump in salary then maybe you decide to move to a newer house in a nicer area of town, or you treat yourself to a new car. All of this stuff comes with recurring payments attached. Am I right?

So with our recent bump in income I’ve been trying really hard to still see ourselves the same way….not to think about our larger income and to continue living the same way, funneling the extra money toward debt.

But I have succumbed and taken on a new monthly expense.

I joined a gym.

Hear me out….

I haven’t had a (paid) gym membership in YEARS. As a graduate student I had free access to the gym on campus, and since running is my primary exercise passion, I have always been able to do that outside for free (only costs associated are shoes and appropriate exercise clothes…maybe a song here and there from itunes). But things have been very challenging lately.

First, I no longer have access to a gym for free (remember I graduated in August 2013). Second, the girls will only sit in a jogging stroller for about 30 minutes, max. And finally (the final straw), it has reached near-death-heat here in Tucson. I’m talking over 100* every day with heat advisory warnings just about every third or fourth day. It is literally not even safe to be outside.

At first I tried to counteract this by jogging extremely early in the morning. I tried waking up at 5am to go run (so the girls are still sleeping and my husband is home, plus its only about 75* instead of 105*). It hasn’t worked well. I have a tough time waking up that early on my own, and my daughters are light sleepers (plus our house isn’t huge), so they have woken up when my alarm goes off. Then it’s a total disaster because my husband is trying to get ready for work (he usually leaves between 6 and 6:30am), so I have to go for a really short run so I can get home in time to allow my husband time to get ready. At that point, it doesn’t even feel “worth it.” I have tried other forms of exercise (like DVDs or free videos on youtube), but I get bored. Videos are not for me.

In the past, my health and fitness had always been a big priority for me. I would consider myself an “athlete,” as I have competed in a handful of races (triathlons, half-marathons, and other various running races), and enjoy physical activities and competitions. When I found out I was pregnant with twins (20 weeks into pregnancy) I was deemed “high risk” and had to stop many physical activities. Once the girls were born, my fitness was the LAST thing on my mind. I had twin infants to care for, virtually by myself (husband helped a TON, but he worked during the day and we have no family nearby for support), in addition to working (at the time I was teaching in-person college courses) and finishing my dissertation.

Here we are, almost 2 years later (the girls will be 2 at the end of this month! Eeek!) and I finally have a chance to refocus a bit on my health. Things do NOT look pretty. My weight is still WAY higher than my pre-pregnancy weight and I just don’t feel good. It’s so weird because I still “see” myself as an athlete…..but I am totally unhealthy right now (that’s not just me exaggerating…that’s according to BMI). I need to make exercise more of a priority in my life. I tried other free options and they really didn’t work. So I turned to a gym.

On the bright side, the gym is fantastic. It’s only about a mile from our house and has everything we could ever want: a pool, exercise classes, tons of equipment, volleyball, racquetball, basketball, etc etc etc. There were cheaper options nearby, but no one else offered childcare. Childcare is an absolute necessity if I’m going to be able to actually use the gym. So this was the only real option in our area.

I also feel that its pretty reasonably priced. I had to pay $100 as an initiation fee, and they make you pay first and last month up front, but there’s no contract so we can quit at anytime. They also worked a deal where they gave me a family plan (so Chris can go, too) for the same price as the “individual” plan. The cost is $50/month. To get childcare I had to pay an extra $10 per child, but it’s for unlimited use of childcare. I think this is a pretty good deal. When the girls were 6 months they went to daycare at the Jewish Community Center (we aren’t Jewish, but it is a FABULOUS facility and EXCELLENT childcare providers! Very $$$$$, but very high quality!). The JCC requires that you join the facility when you use their childcare, so I’m comparing these prices to that experience. The community center fees (which includes gym access) cost $80/month for the family, and gym childcare was an additional $6/hour.

In all, our current gym will cost $70/month ($50 base + $20 for unlimited childcare). I think that’s reasonable considering everything that’s included. Keep in mind that our first month is substantially more expensive since we pay first and last month in addition to the initiation fee. So my first payment was actually $240 ($100 initiation, plus $140 for the first and last months’ payments). I am allowed to drop the childcare, too (if, for example, I decide to work out on days they’re in daycare. Right now I want to avoid that because those are my only days to really focus on work, but it’s a possibility for the future).

To be totally honest with myself and you, I fully believe I would NOT have considered joining the gym if it weren’t for our extra income. Chris was pushing hard around January to join a gym and I totally put my foot down. I did not want to spend the money and did not think we could afford it. But I’ve really started focusing more on my health and my (lack of) fitness has become alarming. I think this is a worthwhile investment in my long-term health.

So there you have it. I’m sure people have opinions both ways (for and against spending money on gyms), but everyone is different, every situation is unique, and I think that this is the best option right now for my family. It still hurts a little to spend this extra money, but I do think its money well spent.

 

Do you spend money on a gym membership? What are free/cheap ways that you stay in shape?

Ashley’s June Debt Update

by

Happy Monday! How about a little mid-month debt update, shall we?

I’ve listed things in order of our planned repayment schedule (according to my new plan of action):

PlaceCurrent BalanceAPRMinimum DueJune Payment Made
Capital One CC$017.9%--
Wells Fargo CC$013.65%--
BoA CC$07.24%351005
License Fees$55432.7%5585
Sallie Mae - Federal Student Loans$44748.25%6262
Sallie Mae - Dept of Ed$55788.5%00
PenFed Car Loan$227422.49%411411
ACS Student Loans$213887.24%2525
Sallie Mae - Dept of Ed$652367%00
Medical Bills$81030%150150
Totals$1330647381738

I’ve been snowballing payments as I go and the snowball has reached a pretty good size!

$450 (from Capital One CC)

$350 (from WF CC)

$100 (from Mattress Firm account)

$60 (from refinancing the car, which now has a lower payment)

$35 (from Wells Fargo)

= Total “Snowball” payment of $995 (we’ll round up to $1,000/month)

The first debt I want to focus on is the license fees. We have been paying $55/month toward it, so our payments starting in July will be $1055. In addition to that, we’re still expecting to have “leftover” money at the end of June so hopefully we’ll be able to make additional snowflake payments in addition to putting some away for savings (an as-of-yet undetermined amount).

Per this conversation, we’re going to start stashing a little money aside, using leftover funds from the end of the month (as opposed to writing a line-item into the budget). At this point, I’m just going to store it in my Capital One 360 savings account. I want some time to do a little research into various options, but my intent is to open a Roth IRA at some point and begin planning for retirement. I want to gain a little better traction on our current debts right now, but I don’t want to put the Roth off too long either. So at some point retirement will, indeed, become a line item in our budget. Currently, we’ll just keep stashing a little here and there into our CapOne360 savings.

Also – and this is random – but on Sallie Mae’s website I decided to click on the “payment history” tab to see more info about my 8.25% APR student loan. I have always only looked at the overall number (total debt due), but when I clicked on payment history it tells you, broken down, how much of your monthly payments are going toward principle (principal?)  versus interest. Can I say how disgusted I was to see that out of every $62 payment, approximately $32 went to principle….the other $30 toward interest?!? WTF? How is this even possible? I know they stack the interest up-front so I’m sure it all makes sense numbers-wise, but that feels like a 50% APR!? Disgusting. I cannot wait to target those two high interest student loan debts. Can you believe – when I’ve worked my way through them (and am down the list to the car in terms of the order of repayment), my monthly snowball payment for the car will be over $1500!?! The power of the snowball is real, my friends! Very, very real! Never did I ever think I’d be making regular monthly car payments of $1500!!! At that rate (along with an extra snowflake payment here and there), it really is reasonable to have it paid in full within a year from the time we start focusing on it for debt repayment (remember, that’s the goal….I plan to start focusing on the car debt in February 2015 and the goal is to have it paid in full by February 2016). Of course, my other loans come out of deferment in February so we’ll see what happens. If we can’t make all the minimum payments the funds for the minimum obligations will have to come from our snowball. : (

I don’t want to see that happen. I want these debts gone with a  quickness! I know we still have an unfathomable amount of debt, overall, but it really feels like we’ve been making great progress. It’s very encouraging!