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Fighting for FI

I read a lot of personal finance blogs. Like…. a LOT. I have about 40 of them bookmarked in my faves list and i cycle through them. Daily. I love reading everyone’s philosophy on personal finance. But more importantly, I keep looking for the “secret”. The magic thing I need to do to achieve financial wellness. Freedom.

But here’s the rub.

If I read ONE MORE ARTICLE about maxing out your 401K (keep in mind that is $18,500/yr) to be a millionaire by the time your 65 and how I should have simply started saving $1,000/yr when I got my first allowance at 8 yrs old, I am going to seriously VOMIT all over my keyboard.

Folks.

No shit.

Who are these people that can seriously set aside $18,500 EVERY YEAR??? That’s almost DOUBLE what I pay for my mortgage every year. If I could save $18,500 every year for retirement, I certainly am not reading your blog about clipping coupons and downloading apps to save 15 cents wherever I can.

Also, hey, just spend less than you make and save the rest!

OMG> No kidding!

But what about the rest of us? The ones who don’t have a gap? That’s what I call it. The money left over at the end of the month when you tally up everything you made and everything you’ve spent.

I don’t have a gap. I track my money. Every penny. I have an entire workbook devoted to my finances. And someday I’ll share it with you.

For now, I’m just figuring out how to survive. Here are a few things I have going for me:

  • $10,000 emergency fund in a 1.85% money market account. I don’t touch this. Ever. I can’t.
  • I have one credit card with a $1,935 balance at 0%. If I continue to pay $100/month it will be paid off by end of promo period. I keep telling myself that’s $100 that will become part of the gap. Right now it pisses me off that I have a balance/payment at all. I abhor debt.
  • I use a credit card for EVERYTHING. All of my utilities are set up to auto-pay on that card. I buy all my groceries, gas and everything else on that card. I get 1.5% rewards cash and it’s an easy way to track spending.
  • I do not use cash. Ever.
  • I always pay off my credit card in full. Sometimes I make payments every week to keep the balance small. I can’t afford to pay interest.
  • I recently invested $1,000 in lending club. It’s an experiment. But every month I will take the money I receive (principal + interest) and put that money towards extra principal payment on my car.
  • I have a few thousand dollars in an online investment brokerage. This adds about $14/month in dividends. It’s not huge, but it’s a start. Right now this broker is transferring everything to another online broker. Dividends are not being reinvested. Instead, I’m pulling them out and putting them towards the principal on my car.
  • I need to pay off my car loan ASAP. This will help create a gap. Only $11,700 left to go.

Although I am a single mom, I won’t allow that to be my story. There’s no room for pity. Just action. I want to be successful regardless of my relationship status.

Because I don’t have someone else to bring in a second income, it scares the crap out of me. I don’t have room for error. There is no safety net. I need to create several passive (or active) income streams so that I have breathing room. And someday, financial independence. To have enough passive income that I don’t have to worry about the economy or my job. To give me choices.

 

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Still going…..

I wish i could tell you that we are debt free and pursuing our next goals. But…… we’re not. If we had been able to stick with the debt management program, our last payment would be in a few weeks. Unfortunately, we had to drop out of the program last winter because we just couldn’t come up with the moo-lah anymore. We have been making the payments still, but much smaller.

The good news is this: we are current on all of our regular bills. The exception is a handful of medical bills. They have all been sent to collections companies eons ago, so the damage is done. The plan is to build up a comfortable emergency net in savings and then tackle them one at a time.

I’ve recently decided to alter my strategy. I had been aggressively paying down our credit card debt using the snowball method. In 2 weeks, another card will be paid off and we will only have 3 cards left. (We started with 14!) The minimum payments total $320 for all 3 cards. Instead of snowballing the next card in line, I’ve decided to take the “extra” cash and put it in my ING Direct savings account. I know, I know. I’m not giving up. I’ve decided that it would be better to build up our emergency coffers for the remainder of the year.

Being a type A personality, i fret over the unknown. Even though we have some savings, a larger cushion would help me sleep better at night. We only have 1 month’s worth of expenses in savings. If we need to dip into savings between lawn and snow seasons, it’s all gone. Not cool. And since it will be quite a while until the next card will get paid off, i’ve decided to take a break for a while. We’ve paid of 5 cards this summer. That freed up over $250 in monthly payments to snowball with. The remaining balances on the 3 cards are large enough that adding $250 to the payment won’t reduce the minimum payment significantly. I’d rather have $750 in savings than a $25 lower minimum payment. I’m sure the personal finance gurus are foaming at the mouth, but right now it feels like the right decision.

ugh………

Getting out of debt sucks.

It definitely does not happen overnight. So easy to lose momentum…

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Are we there yet?

This update is long overdue, but here goes…

Jan 2011 – July 2011

  • CC1:   14,350        13,250   
  • CC2:   6,325             5,800
  • CC3:   1,025                 950
  • CC4:   4,910             4,650
  • CC5:   390                          0
  • CC6:   485                          0
  • CC7:   515                          0
  • CC8:   520                       90
  • CC9:   5,225              5,225
  • CC10:   4,150           3,650
  • Total CC’s:   37,895          33,615
  • Family: 10,000                  7,000

So, drumroll please……….. we’ve paid off $7,280 since the beginning of the year! Get out of the way, HUGE snowball rolling downhill! LOVE seeing those ZERO balances!

Thanks to landing some nice contracts and a snowier than usual winter, we have been able to knock down a large chunk of debt. We are also CURRENT on all of our monthly bills, including the mortgage. A small emergency fund is in place for both personal bills and business bills. Ahhhhhhhhhhhhhhhhhh…… What a wonderful feeling.

The physical aspects of unloading such a burden are positive as well. I’ve been able to shed 15 lbs since March. My periods (I know, TMI) are pretty regular now. I LAUGH again. I have friends again. I have a good time whenever we go out with friends/family.

Work has improved for me as well. I’m back up to 40 hrs/week plus a $1.25/hr raise. That really helps get caught up. I’ve been throwing extra money each month at the vehicle payments trying to pay them off sooner.

Did I mention we took a VACATION in march? It was hubby’s idea. Surprise of all surprises. Of course, i wanted to pay off as much debt as possible, and maybe stash some aside for the inevitable unexpected expenses. Hubby convinced me that we NEEDED a vacation. It had been more than 5 yrs since we spent any money on ourselves, and we needed to enjoy the fruits of our labor and not be miserly. It took several days to sink in, but he was right. As long as we didn’t accrue any additional debt, and were still able to keep on pace with paying down our debts we needed to spend our money in a positive way and see money as a good thing, and not as evil incarnate. Besides, our 10th anniversary was coming up and he thought we should do something more special than spend a weekend a few hours from home in a so-so hotel in some lame town, arguing about what to do.

So we went on a cruise. Neither one of us had ever been on one before. He found a great deal through his parent’s travel agent. We spent 5 days in the caribbean. It was awesome. We had a BLAST. In fact, we had so much fun, that we decided to work extra hard and save money and do it again next spring. Who would have ever thought? That $1500 splurge allowed us to really RELAX and re-align our senses. It was good for our marriage. Honestly, i didn’t know what to expect. I worried that it could go the other way. It was a good deal, but still a lot of money in what -i felt- was still a fragile personal economy and we hadn’t spent that much time alone together since we’d been married. It paid off ten-fold. He’s still telling everyone what a great time he had and recommending them to go.

So, are we there yet? Have we made enough progress to call it a victory? I mean, everybody has bills, right? Just 6 months ago, my only financial goal was to be able to pay the bills on time every month. We’ve accomplished that. And it feels great. But, it only seems natural to set the bar a little higher.

Discretionary income. It’s one thing to be able to pay your bills, it’s another to MAKE CHOICES on how you spend the money left over when the bills are paid. That concept terrifies me. What if something happens and I need that money later? Was a trip to the movies this weekend really worth it if the electric is in danger of getting shut off again in 6 months? What if an appliance suddenly dies and my small e-fund is wiped out? And then another appliance dies, or the car needs to be repaired? I never thought about these things before because i just couldn’t. I was strictly in survival mode. Food, shelter, clothing. Now that those needs have been met, there’s a whole new set of things to worry about.

So, are we there yet? Or when are we really “there”?

 

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Verrrrrry Productive Weekend

Last week I did some investigating on ideas to organize mail and clutter. Also ran across some articles debating “cleaning” vs. “organinzing”. This really got me thinking. All these years I thought i was organized. Turns out that was only half true. I didn’t truly have a system in place to deal with incoming mail, receipts, unpaid bills, etc. It all went into a pile on the counter and once or twice a week went with the laundry upstairs where it joined another existing pile. Then once in a while it would get sorted through and paid/entered/filed.

So, ladies and gentleman, let me tell you about my new system! I was pumped after i received my new basket in the mail on Friday afternoon. I immediately put in my folders labeled: Bills due by the 15th; Bills due by the 30th; Bills due (for those bills i’m not sure when they can get paid); Reciepts; To File; To Enter/To Do. It looked great! But only took up a small portion of the basket.

I decided it would look best and be the most functional on the catch-all counter. *Admit it, you have one in your house too!* Our catch all counter is about 4 feet long and this is where we (previously) piled mail & papers, charged the phone, stored the cookbooks, charger for my MFR radio, charger for the cordless landline phone, kleenex box, etc. Quite the smorgasbord of stuff.

Then, on the main counter under the phone with the answering machine is where i kept the message pad. On the wall under the phone was a wood mailslot box type thing. In that i kept deposit slips, stamps, pens, letter opener, customer phone list. 

Then i had a brain fart. I can put all that stuff in my new basket! So now everything is in ONE place. When it’s time to pay bills or create invoices or work on anything financially, i can just grab the basket and head to the computer. Now I can pay bills every other week without worrying about being late. I send invoices to our customers every other week in the winter, so that information can just accumulate until I’m ready to work. It’s perfect!!! 🙂

So far, it seems to be working perfectly. I bring in the mail, toss the garbage, and sort into the proper folder. No more piles. And i know where to find it when i’m ready to deal with it. My counters are less cluttered alogether and I took down the ridiculous mailslot thingy. Cookbooks that didn’t fit on the shelves went into the cupboard. A nice plant is hiding cords to chargers. I also installed the under-the-counter radio/TV i got for Christmas. Except for a fresh paint job, my kitchen is nearly perfect!

Sunday I spent the day in the ER on my clinical rotation. It was….. not what i expected. I was really looking forward to it. It wasn’t horrible, but it’s definatly not in my career path anymore. The nurses and doctor were very unfriendly. The triage staff were grumpy. I was made to feel like i was in everybody’s way and unwelcome.

I guess I was expecting a tour of how the system works from admitting the patient, to triage, to the actual care of the patient based on their chief complaint and assessment findings. Since I’m an EMT student, I anticipated them explaining how the hospital works and what I can do in the field to make their job easier or better for the patient.

Nothing. Nada. Zip.

I got there about 7:30 am and there was only one patient, so it’s not as though they were busy. All the nurses huddled together and complained about how overworked they were. The doctor – I have no idea where she was half the day. The triage crew were the best. Grumpy, but asking me to help them and explaining what I could do to help. Any time I tried to ask questions, I was either ignored or was given an answer – with attitude. There was one lady there who sat at a desk the whole time. Her scrubs were a different color, so i asked her what her job was. She said “everything” (with flair), and turned to the nurses to bitch about discuss the schedule for the day. I still have no idea what her title is or what her job is.

An ER tech arrived at about 3:00 and he was very nice. He explained to me what his job is, what is required to get the job, and the salary range (which is not very much). The nurses treated him like crap too. But, he was very upbeat and genuinely enjoyed his job. My rotation was over at promptly 4:00 when the next student arrived. Apparently 2 students at once is especially frowned upon.

ugh. Next clinical i will try at another hospital. Maybe it was just a bad experience.

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Spinning My Wheels

So hubby and I were going over some business stuff last night to see what the winter is going to look like. Looks like things will finally be going our way! Of course, all of this depends on the weather. But if we only consider the addition and losses of accounts, our winter sales should double from last year. YAY!!!!

Hubby went off to work in the barn and i pulled up the budget for 2011. With the expenses we have reduced already and guesstimating at a mortgage modification, we should finally land in the black at the end of most months. Of course we will have to continue to watch our spending and be diligent about setting aside money for the leaner months. I’ve decided NOT to let hubby in on that strategy. Money burns holes in his pockets and if he knows we have it he finds “needs” to spend it on.

Though the future looks promising, it’s the getting there that gives me anxiety. Hubby put a lot of time and effort into landing new contracts. But that won’t pay off for months. I am taking a class to get my EMT license. But that won’t pay off for months. Don’t get me wrong, I’m not looking for immediate gratification. I know that hard work sometimes takes a while to pay off. I’m just saying the waiting is tough.

I’ve been dropping nuggets to the hubby lately about the need to start saving for retirement. I know, i know. We should have started this 10 years ago. Can’t change the past, but i can control what we do from here on. My employer does not offer any kind of retirement, so we are all on our own. I’m hesitant to pay a financial advisor at this point because we don’t have much to invest. And, as of today, I have nothing to invest so it doesn’t matter anyway. 

It’s so encouraging to be able to finally think about what to do with our money. For the past 4-5 years there was nothing to think about. Everything that came in went out immediately in the form of a payment. The only thing we had to think about was which bill was more important to pay first.

As though emerging from a deep, dark winter, i can finally see the sun rising. Can’t see the sun yet, but the skies are lighter and the sun is just over the horizon….

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In Between

So the good news is this should, potentially, be a good winter for making money.

The bad news is: It hasn’t snowed yet.

And we’re out of money.

My cell phone has been “restricted” until I pay the bill. Luckily, this week I get my paycheck early due to the holiday and can pay the bill. Unfortunately, I was hoping to using my entire check for groceries and Christmas shopping on Black Friday.

Not gonna have much money for shopping this year.

To add to the stress, I’ve recently been promoted to the Assistant EMS Coordinator position at the Fire Dept. Cool, right? The EMS Coordinator called me this morning and needs to move up her maternity leave – to now. So, until she comes back after having the baby, I’m in charge. yikes.

And i’m still on-call 24-40 hours a week. I’m at home though, so that doesn’t stress me out.

And i’m half-way through my EMT class. 2 nights a week/4 hours a night. Homework due and quiz every class.

And work has picked up a ton of work, so i’m working super full time.

My cup runneth over and is empty all at once. Life is good~!

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Getting a Grip

What a productive weekend!

The bank that handles our mortgage sent us a letter a week or so ago stating that we may qualify for a loan modification. They were hosting an event as a chance to meet with an advisor face to face and discuss possible options based on your situation.

I was on shift (it’s volunteer, can be at home but can’t leave the township) most of the weekend starting Friday after work. What an awesome opportunity to sit down at the computer and really put some numbers together.

I started Friday night. I woke up early Saturday morning and continued working on it. Gathering pay stubs and tax returns was the easy part. They provided a worksheet to list income/expenses. Easy enough right? Well, since hubby is self employed, the numbers get a little fuzzy. I’ve always had a “budget” worksheet based on historical estimates – that I look at ALL the time. But it was several years old and I decided to go through it line by line. I spent hours going through bank statements, utility bills, receipts, automatic payments.

By mid afternoon, I was ready to look. The results were amazing.

Just as I already knew, we were spending exactly what we brought in each month. On just the basics. I was blown away by the numbers. That I thought I already had a good grip on. There is zero room for error. Or haircuts, or new tires, or Christmas presents… but I digress.

This wealth of information helped me accuratly fill out the bank’s worksheet. But I didn’t stop there. I researched some of the options they offered. The Making Home Affordable program seems to be the best option. After some reading, i discovered that one of the criteria is if your current loan, taxes, and insurance are more than 31% of your income. Hmmmm… Crunch some numbers on the ol’ calculator. Whoa. We are at 39%. Looks like we might have a real chance to be approved!

I gathered up all my paperwork, grabbed my letter, and headed out the door for the 1.5 hour trip. Not gonna lie, I was nervous and prayed the whole way there.

The representative I met with was very nice and we discussed additional paperwork I would have to provide. That kind of annoyed me. Why didn’t they ask for it in their letter? Oy. Anyway, we got all done and I took a leap of faith. I spilled my guts. I figured it could only go one of 2 ways. Either she would politely nod while trying to pretend to listen to yet another pitiful sob story trying not to stab her eyes out with her pen, or she would offer some good advice.

Miracle of all miracles. She listened. And then she shared her story. God was on my team that day. We chatted for probably a half hour swapping stories of unemployment and the dreadful economy. At the end, she offered kind words of encouragement and i left. Feeling a little lighter, feeling hopeful.

When I got home, i filled hubby in of all the details. Then I got back to work. Digging out yet more paperwork, more paystubs, more tax returns.

Then I pulled up my spreadsheet and got to work on a projection for next year. If we stay on course, several credit cards will be paid off by next October. The dump truck will be paid off in November. We were able to reduce the cell phone/internet bill by $60/month, and the cable was downgraded recently saving us $30/month. The commercial vehicle insurance rates are actually lower starting last month.  The forecast looks really promising. It’s just getting from here to there that makes me nervous.