Week 34 of 52 - Proceed to Checkout

What do savings accounts and scales have in common?  I can't fool either of them.

I’ve decided saving money is like maintaining a weight loss.  When you are losing weight, people see the pounds shedding, ask how you are doing it, and congratulate you on your progress.  When you are “shedding” debt, you see the numbers falling, payments ending, and you get to celebrate the victory when you are done.

Then comes the maintenance part of weight loss – figuring out how you can still enjoy food without regaining the lost pounds.  Similar to saving money – figuring out how much fun you can have while saving cash so you don’t regain the debts.

I’m motivated not to go in debt again, but I’ve felt daunted by our task of Baby Step 3 (saving a 3-6 month emergency fund).  We also need to save for two used vehicles over the next couple of years.  I imagine the scene: all that work and I’ll be able to say yep, this here is my new Toyota, she’s 10 years old and only has 100,000 miles on her.

Hopefully, my humor is evident.  The success will be in having money saved, not the car itself.

All that said, I do envy people who get a natural charge out of watching their bank account grow.  As for me, I have to work against my 3-click preferred endorphin release: “Add to Cart,” “Proceed to Checkout,” and “Place Order.”   Probably much like I will always have to manage my sweet tooth.

I remind myself that 15 years ago, I began a weight loss journey which gradually led to a healthier lifestyle. (A lifestyle which includes small daily doses of dark chocolate, mind you.)  With time, persistence, and prayer, I will learn to embrace these new money habits too.  Who knows, maybe someday I will be more giddy about my bank statement in the mail than an Amazon box on my porch.  Um, I'd better keep praying.

For this week's photos, Samuel and I stayed at home Wednesday night and played outside as the sun was setting.  He had been cranky with his molars coming in, but a little time outside took his mind off his troubles.

Week 33 of 52 - Growing and Changing

Ever look at your kids and swear they are growing before your eyes?  I've definitely had one of those weeks.  I'm away from them 48 hours and see changes in their looks, George's conversation, all the little details.  I think it's why I took so many "everyday" photos this week.

We had a tree branch fall and George took his toy hedge trimmers out to "cut it up".

And I admit, Samuel's hair probably isn't "scalped" as I described, but it IS really short and he looks so much older now.

Today, we went to Big Lots for George to cash in his spending money.  We've not been as consistent in using the coins for a good behavior award, but when we do, it works.  He's now earning money vacuuming the crumbs under Samuel's chair - practically a full-time job.

In the store, I marveled at the differences in the two boys.  When George was Samuel's age, he wouldn't leave my side.  As soon as Samuel's feet hit the ground, he was off to explore the rest of the store... as I chased behind.

We talked about how he only had enough money for either the three little sets of tools or the big tool set.  He is deciding which set to buy.

He may be a bit like his mother, analyzing all the data before making a decision...

He had discarded a similar tool set over a year ago.   Then he saw a photo of himself from last year playing with the tools and he began talking incessantly about "the tools of mine in the picture."  George:  Beg for tools.  Parent:  Give in and schlep up to the 100+ degree attic to look for the tools.  George:  Cry when parent can't find tools.  Other parent:  Think of another possible box in the attic.  Repeat the next day.  George decided to stop the madness and buy more tools.

Week 32 of 52 - Catching Up

Two weeks have passed and finally I'm blogging again.

Cause of absence?  Camera issues.  Here's how it all began:  I shot happily with the same camera for a couple of years, then chose to upgrade this year.  I saved my hobby money, made some Craigslist sales, and proceeded to buy a newer model.

Then trouble began.  I am extremely picky about focus and I began noticing my new camera* was front-focusing with two of my lenses.  After several tests, tears, and emails to my photography buddy, she agreed, and even the manufacturer agreed.   I sent it in for repair.

A few weeks passed, another camera is in my hands, and the previously-new camera was repaired and sold - with full disclosure to its new owner of course.  I'm enjoying my hobby again and able to "focus" on everything besides focus!

Between shipping cameras and selling gear for less than I paid, I lost a sizable chunk of my saved hobby money.  And I missed two weeks of my 52-week project.

I'm still sorting out my lessons learned, but eager to jump back in to what I love.  So a little scuffed and humbled, I charge forward.


This Week in Photos

I chose this photo because Colton reminds me of photos I've seen of my dad as a boy.  I never saw a resemblance until this photo.  So I loved it, despite being a tad overexposed... black/white to the rescue.

Giggly George.  They were playing with water guns and he was contemplating drinking the water out of his gun.  Why?  Because Samuel did.  I love that all the boys are captured in some way. 

Eagerly trying to figure out this whole water gun deal, Samuel paused to look my way.  Shortly before he gave up and drank the water out of the gun instead.

I could write an entire blog on this lady.  Former professor, friend, and extended mother.  She always speaks her mind to me - and my life is better for it.  She has been Christ's hands, feet, and mouth when I needed His love, encouragement, and help.  She has a new puppy Bud and wanted some photos to send her extended family.  She is holding her older dog Sunshine in this photo.

*I'm purposefully not mentioning any camera brands/models.  This can happen to any brand and typically is a function of the lenses rather than the camera.  In my case, the manufacturer concluded the camera needed adjustment. 

Week 30 -The Nitty Gritty of the Budget

After my last post, some folks asked questions about how we did our budget.  When we finally landed on a tight budget that worked for both of us, we found three keys:

Working together. 
Dave Ramsey says in most couples, one is the nerd and one is the free spirit.  Then there’s us.  I’m a split personality.  I’m the nerd, I like love to do budgets.  But, I also used my nerdness to squeeze the budget for my free spirit spending pleasures.

In the past, Walt was the carefree but frugal nerd.  He preferred the “let it ride” approach to budgeting –put everything on auto bill-pay, check-in once a month if needed, and watch a little TV instead.   

That said, we needed more time to find our budget groove and truly TALK about the budget.  I still watch every transaction and move things around depending on how the month is going, but we now check in 1-2 times each month and discuss those decisions.  

For us, this also meant combining our checking accounts, but every couple is different.  We also use Mvelopes.com which puts everything in one place – the checking account, savings accounts, the student loan and credit card debt registers (no more!), and our bill pay.  Think of it as a virtual envelope system*.

Being specific. 
We learned through trial and error that detail, detail, detail is the secret to a good budget. 

Most budgets break down because of something unforeseen.  As Dave Ramsey says, most things we declared as unforeseen were actually quite predictable – take Christmas for example, comes every year, same time every year.  Birthdays, new tires, school clothes are other examples.

We have sinking funds for many of these things.  Rather than busting the bank one month for a large expenditure, we divide the cost out over 12 months.

Sinking budget categories we use:

·         Car license plate renewal

·         Auto repair/maintenance

·         Home maintenance/landscaping

·         Birthdays/holiday and special occasion gifts

·         Monthly memberships/professional licenses

·         Eyeglasses

Including fun. 

I’ve been known to suck the life out of a budget.  Slashing everything and then living miserably until we couldn’t stand it any longer.  Perhaps the binge/purge of  budgeting, ha! 

To find a budget we could live within happily, we included:  

·         Personal “blow” money each month. For us, this meant $50/month each while we were paying off debt.   This amount is a personal decision completely dependent on income, other family goals, and debt.  On the Dave Ramsey forums, I’ve seen this amount range from $20 - $200 per person each month.

·         A small eating out fund for the family.  Meals out at work came out of the blow fund.

·         Small vacations some years.  We did choose to forgo a vacation last year, and delay this year’s vacation until we finished Baby Step 2.  (Hoping the federal government’s debt situation doesn’t impact our ability to keep that plan!)

·         Some splurges in our future budget once we hit particular goals to keep us motivated.

All that to Say.

So I hope this explains things and helps you think about your own budget.  Also, don’t be discouraged if the first few budgets fall short or even fail.  That’s actually quite normal.  We learned during Financial Peace University that it usually takes about 90 days for most couples to figure out how to do a budget that works.  For us, we took about four years, but who’s counting?

*Envelope System:  Dave Ramsey recommends every dollar is assigned to a spending category.  For some of those categories (such as gas, clothing and groceries), he recommends you use cash and store the cash in envelopes. When the envelope is empty, you’ve spent all you should for that month.  Since we use debit cards for these items, we use virtual spending envelopes in Mvelopes.  Studies do show people buy less when paying cash, so cash envelopes may prove useful if you routinely overspend in certain areas.

Week 29 - The Photos

I've traveled with work to Boston this week and captured a shot I liked with my point and shoot.

Missed my boys and edited a couple snaps from last week while flying home.   Runny nose from a tantrum about something I can't recall now. 

My little sand-eater...

Week 28 of 52 - The Photos

Shared our debt-free story earlier in the week.  The week in photos for my 52-week project...

George suggested this pose.  He said, "I know what would look cute..."  Had so much fun with him.

When Samuel doesn't like the texture of the surface on his knees (particularly grass), he crawls like this.  He started walking this week too.  Needless to say, catching him for a photo can be a challenge!

George pretending to drive the lawnmower.  This is the only photo in which his lips weren't puckered making an engine sound.  The sun makes his hair look like it's on fire.

Week 28 of 52 - The Story behind The Story

For our boys…may neither of you ever know the bondage of debt.

I gave George the evil eye as he banged on his cereal bowl with his spoon.  We were waiting on hold for Dave Ramsey.  Popping his little bottom would result in shrieks and one million listeners questioning child abuse.  And he seemed to know this, as he smiled back at my glares and tapped his spoon.

Dave came on the line, George miraculously quieted as Walt told our "debt-free" story in thirty seconds or so, a story six years in the making.

God brought us together.

We married while I was still in graduate school.  The first few months, we were consumed with dissertation requirements and learning how to live with each other.  I graduated, my paltry assistantship salary ended, and our financial reality smacked us in the face.  As God would have it, our church offered Financial Peace University that same month.

Walt wanted to go.  I didn’t.  I needed a job and felt a job would solve all our financial woes.  Besides, we needed to worry about paying our utilities, not paying down our debt.

Again as God would have it, Walt’s grandmother sent a late Christmas present – a check in exactly the amount of the Financial Peace Class.   Walt signed us up.

We attended Financial Peace.

During the 13 weeks, we started embracing the principles and faced our non-mortgage debt $65,000 – mainly student loans, but also a car, and some credit card debt.  Meanwhile God provided me three part-time jobs and we stayed ahead of our bills.  Then finally (10 months into our marriage), I landed a full-time position.  We started cranking on our debt snowball*, paying off about $15,000.

Personal finance gets personal.

What a beautiful story if we had continued that pace and paid off all our non-mortgage debt.  Instead, a truck died and I insisted we finance a SUV.  I knew Walt didn't want want to finance a car, so I picked the one little rig I knew he liked.

Eighteen months later, I again insisted on a larger SUV when our family grew.  Between these vehicles, our debt mounted another $35,000.

We made about two payments on that big SUV and I felt sick inside.  According to our culture's standards, we could easily afford this car.   But I knew my desire for a nice vehicle was keeping my family enslaved to debt.  Besides, if I have to finance it, who does that car really belong to anyway? 

          I got a job but it ain't nearly enough. A twenty thousand dollar pickup truck
         Belongs to me and the bank and some funny talkin' man from Iran…  Steve Earle

Deciding my status symbol was really just showing our “status” as in debt, I committed to sell the SUV.  We prayed for God to provide.  Meanwhile, we had a huge hailstorm and after replacing our roof with the the home owners insurance settlement, we still had money to buy a used car.  If you had told us God could bless with a hailstorm, we would not have believed you.    

After that time, we kept chipping at the debt.  We cash-flowed** several medical expenses and another maternity leave.  We were making progress, but we didn’t let go of the credit card.

But we pay it off every month... well most of the time.

Most months, we carried about a $1000 balance.  We told ourselves we could pay it off in a month if we wanted, and sometimes we did.  Other times, the balance would creep to $2000, we would pay it off a couple times a year, then we would allow it to creep back up.  We continued that pattern, adding another $5k of debt over the years - a conservative estimate.

We continued this seesaw of “debt reduction/debt accumulation” until a real emergency happened.  During my maternity leave with Samuel, our washing machine overflowed and we came home to a flooded house. The floors and the washing machine needed replacing.  And of course the dryer “must” match the washing machine; well, you know where this is going.

A credit card is not a good emergency plan.

We drained our maternity savings and walked away from that maternity leave and emergency with over $7000 on our credit card.

As we stared at the $7000 balance, I rationalized.  I’ll get a 401k loan then it’s “paid off.”  My dad’s words rang in my ears – “you can’t borrow your way out of debt” and I knew this was a ridiculous idea.

After I rationalized, I got angry.  We prayed. We knew the credit card had to go and more importantly, I felt I had to change my materialistic views.  I knew my dear husband would have walked on concrete sub-floor and gone to the laundry mat before getting us in this mess. I had pushed for these outcomes.

 I will say that in both instances – the big SUV and the floor renovation – I was a post-partum, sleep-deprived, and hormonal hot mess, so hopefully, I am less prone to repeat these errors now that our child bearing years are behind us (she grins sheepishly). 

God continued a work in our lives.

For I am confident of this very thing, that He who began a good work in you will perfect it until the day of Christ Jesus.  Phil 1:6

We began working with Russ Carroll, Dave Ramsey’s lead counselor.  We got on a gazelle budget like never before. We made changes we could live with for a few months - we cut the cable, cut the grocery budget, started couponing, ate out even less than before, and (gasp!) drastically cut our personal "fun" money!  (Why the heck do you think selling stuff on Craigslist has become my part-time job?  A girl has to fund her extras somehow!)

As a result, we paid off the last of that credit card and the remainder of non-mortgage debt in just the last six months.

I give credit to –

God.  He led our path, helped me change my views, and blessed our efforts.

Bring the whole tithe into the storehouse, so that there may be food in My house, and test Me now in this,” says the Lord of hosts, “if I will not open for you the windows of heaven and pour out for you a blessing until it overflows.  Then I will rebuke the devourer for you, so that it will not destroy the fruits of the ground; nor will your vine in the field cast its grapes,” says the Lord of hosts.  Malachi 4:10-11

We know this is Old Testament teaching as a promise to Israel, but we believe He has fulfilled this promise in our lives.  Throughout these six years, despite our own shortcomings, we saw things happen in our financial lives that we know were the hand of God honoring our tithes and offerings. 

My husband. The man finds contentment more easily than I do.  He walked with me through what could have taken three consecutive years, but took three years of off/on “we like Dave Ramsey but don’t always do what he says” six years.  If you wonder why did he “let” me make these decisions, he spoke out each time, but as Dave says, “those who are convinced against their will are of the same opinion still.”  I had to learn through my mistakes.

Dave Ramsey. Through Financial Peace University, showing us the basic money principles that helped us budget wisely and hopefully change our family tree.

Thomas J. Stanley.  Our culture teaches us certain behaviors are associated with having wealth and most of us in the middle class emulate what we believe those behaviors are.  Reading Stanley's books (The Millionaire Next Door and Stop Acting Rich) made me realize I believed many things about wealthy people and their behaviors that are completely inaccurate.  Knowledge of his research findings with millionaires curbed my car obsession more than anything else - and for those of you who know my car obsession, this is a big stinking deal.

What’s next?

Pounding through Baby Step 3:  A fully-funded emergency fund of 3-6 months of expenses in the bank.   Emergencies happen and until we get this done, I don’t feel we can turn down the volume.  We’ve loosened the budget reins in a few areas, planned some celebrations, but this goal will define the next year or so of our life.  

All this to say, if I can be enabled to do this… anyone can.  I want financial freedom for everyone I know!

Dave Definitions

*A debt snowball is the term for baby step 2, where you list your debts smallest to largest and pay minimums on all, throwing any extra money at the smallest debt.  When the smallest debt is paid, you throw all of that money on to the next highest debt, until all are paid.

** Cash-flowing is the term for paying cash for things or services typically our culture tells us to finance.  In these instances, it can make sense to slow or stop the debt snowball to avoid accumulating additional debt.