Commitment

I’ve had a lot of time to think the last week or so about our money situation.  To say that stress makes things worse for me is an understatement. 2011 started out as a very bad year for us.  We had a lot of marital problems, which lead to family problems, which also lead to our friends being super judgemental about our entire situation. Add to that the insane hours I was working and all the stress that went with it…it was a recipe for disaster. I stopped tracking what we were spending.  I stopped using coupons at the grocery store.  I stopped paying attention to our money and that is never a good thing.

I can sit here and kick myself for this past year or I can ask myself, “What can I do moving forward?” I chose to the latter.  I can’t sit and mope about spilled milk, I can only wipe it up and take precautions to prevent another spill. I started going through and reading all of my favorite pf bloggers and a post that Anna wrote on what she’s learned in the past 2 years on her blog at www.andthenshesaved.com really motivated me.  I CAN GET OUT OF DEBT.  I just have to focus and commit and most importantly be consistent.  

Yesterday, I sat and re read the Total Money Makeover by Dave Ramsey.  It is a fantastic book and it really motivated me (again) to begin this journey of paying off our debts and saving money.  I am going to be following his plan for the most part on this journey with a few deviations.  In his plan, he wants you to stop contributing to your 401(k) until the debt is paid off.  I just can’t do that because I would be giving up 8% matched contributions from my employer and Mr. would be giving up 6% of free money.  I had planned on increasing our contributions next year but will hold it steady at the moment.  For those of you who are unfamiliar with is Baby Steps, it’s as follows (from his website www.daveramsey.com)

Baby Step 1

$1,000 to start an Emergency Fund

An emergency fund is for those unexpected events in life that you can’t plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, and the list goes on and on. It’s not a matter of if these events will happen; it’s simply a matter of when they will happen. Learn more

Baby Step 2

Baby Step 2

Pay off all debt using the Debt Snowball

List your debts, excluding the house, in order. The smallest balance should be your number one priority. Don’t worry about interest rates unless two debts have similar payoffs. If that’s the case, then list the higher interest rate debt first. Learn more

Baby Step 3

Baby Step 3

3 to 6 months of expenses in savings

Once you complete the first two baby steps, you will have built serious momentum. But don’t start throwing all your “extra” money into investments quite yet. It’s time to build your full emergency fund. Learn more

Baby Step 4

Baby Step 4

Invest 15% of household income into Roth IRAs and pre-tax retirement

When you reach this step, you’ll have no payments—except the house—and a fully funded emergency fund. Now it’s time to get serious about building wealth. Learn more

Baby Step 5

Baby Step 5

College funding for children

By this point, you should have already started Baby Step 4—investing 15% of your income—before saving for college. Whether you are saving for you or your child to go to college, you need to start nowLearn more

Baby Step 6

Baby Step 6

Pay off home early

Now it’s time to begin chunking all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. Learn more

Baby Step 7

Baby Step 7

Build wealth and give!

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. It’s really the only way to live! Learn more

Technically, we are on Baby Step #2 because we have the $1,000 but I don’t feel comfortable with anything less than $5,000 in the bank, so that’s where we are going to concentrate on first.  I think we should be able to reach this goal by the end of February. Once we reach our goal of having $5,000 in a mini emergency fund, I’m going to pay down our debts starting from the smallest balance.

When things get super cluttered at home & work, I tend to want to put my head in the sand  and that causes so many problems for me.  I have got to get and stay organized, so out comes the lists to keep me on track:

  1. I’m going to be spending most of the next 2 days organizing our office.
  2. And making a list of everyone we owe money to.
  3. Then, update the sidebar totals.
  4. Then, I’m going to go through the last 3 months of bank statements via quicken and categorize where our money went.  This will help me plug up where I need to eliminate spending. I already know that eating out and groceries are going to be up there.  As well as buying gifts since September through January it seems like everyone in our families have birthdays.
After reading how Anna started her journey, I think I need to make a list of what I can spend money on and if things aren’t on this list, oh well, too bad.  No buying.
Mandatory Spending:
  1. Mortgage
  2. Car Payment
  3. Car Insurance
  4. Daycare
  5. Groceries
  6. Utilities
  7. Gym Membership
  8. Gas for cars
  9. Hair cut & color.  I have kray kray hair and I have tried to go cheaper but end up looking even more kray.  My hair lady is expensive but worth it.
  10. Various school activities for kiddies
  11. Birthdays for the kids only. Sorry friends and other family members, we just can’t afford it anymore!
I. CAN. DO. THIS. Baby Steps.  That’s all.  Just Baby Steps.

Changes

Since I last blogged in September, a bunch of stuff has happened.  I had intentions of blogging about money everyday but by the time I get home I’m beat.  First, the major changes:  I went back to school, my work load tripled and we bought a new car.  I just finished the quarter up with 4.0 and I will be signing up for classes in January shortly. My day starts at about 4:30 – I pack lunch, make lattes for the mister and I, and drive to work by 6:00am.  I work from 6:00 to about 3:30.  Then I run straight to school and study until 5:45.  My classes start at 6PM and end at 8:10.  This is my schedule Monday thru Thursday; Fridays I don’t have class but work until 3:30.  I usually try to get my homework done by Friday night so I can relax through the weekends.  With the increase to my work load, I’ve also been working at least one day every weekend.

Needless to say, I’ve been super stressed out. With that stress comes my penchant for not keeping trackof my finances.  Adding onto my stress our 12 year old car gave out.  It was going to cost so much money to redo the transmission, and the frame of the car, that DH and I traded it in for a new car.  The car is a 2008 Lexus 400h SUV.  Our car payments are pretty hefty because we got a hybrid that uses electric and gas to run.  I know, I know.  I could have gotten a different car but this is the car that DH and I both wanted, it’s safe,  has great gas mileage, big enough for us to drive our 3 kids around + our sports equipment during the winter, spring and summer months.

I don’t like that we added to our debt but I’m okay with the car payment because I plan on paying off that car as soon as possible.  I will be using my OT hours towards making extra payments towards the car as well as using our bonuses and tax refunds (if we get any).

 

I’m Back

I know I’ve been missing in action. I have had so much going on these past few months and couldn’t remember to blog. Hopefully things have calmed down a bit. Will do a blog tonight on all the crazy things going on in my life.