2014 Financial Update

The last time I posted about finances was in November (if you missed it, you can check it out here.) Since we are starting the New Year, I figured now would be a good time to share where we are. Also, we just met one of the goals today, and I’m really excited to tell you!!

Here are our current financial goals:

Goal #1: Pay off student loan by February of 2015.

Goal #2: Pay off credit card and car by June of 2014.

Goal #3: Pay off credit line by January of 2014.  MET!!!!  :)   :)   :)

Goal #4: Have $3,000 in savings by end of 2014.

Goal #5: Pay off couch loan by July of 2014.

Goal #6: Be 100% debt-free by February of 2015.

Let me tell you, it feels SO GOOD to finally have one debt item paid off!

So far we are tracking on all of the other goals, except Goal #4. We have a good bit to go if we are going to meet that one, but I’m hoping that we can play catch-up with our tax refund next month. I can’t wait to get everything in there and see what we’ll get back. (We always over-pay with our deduction percentage, so I know we will get a refund. Some people don’t like to do that, but for us, it’s really nice to get that big tax refund in the mail. It’s kind of like putting money in a savings account where we can’t touch it, because we’ll use that money for car repairs, savings, and vacations.)

I also added some things to our budget for 2014...

The first is a monthly date night. Roman and I are really bad about not budgeting for one, so then we only take one when someone gives us a gift card or when Roman makes extra commission for the month. Now we have an actual budget line for date nights in our budget, and my goal is, no matter what, for us to go out on a date. If you’re married, you definitely need to do this!!

The second thing I added is for Roman and me to get $20 a piece each month for whatever we want. I can’t tell you how many times I’ve wanted to break the budget so I could buy a new book or a new pair of shoes. Now, I won’t have to because I’ll have that little bit of money each month to spend on whatever catches my eye (without feeling guilty about it.) Now that we are finally making some progress, I feel like this is a good thing to do in order to keep us on track and to keep us from getting frustrated.

I also increased our grocery budget amount. One of the things that Dave Ramsey talks about is if you are consistently going over budget in a certain category, then you probably just need to raise the amount. You can only cut so much before you’ve cut too much and you’ve created a number that is just not realistic, and I think I’ve done that in our grocery budget. I’ve consistently gone over budget with our groceries almost every month, even though I’ve done meal planning and have tried to keep extra un-needed purchases out. So I finally did some re-working and increased that grocery amount for the month to give us some more wiggle room. Hopefully that will do the trick!

If all goes well, then by June of this year (only five more months away!) we will have both my car and the credit card paid off. And then the month after that, we’ll have the couch loan paid off, leaving us only with the student loan. A year from today we will only be one payment away from being 100% debt free. I’m getting pretty excited!!!

“Keep your life free from the love of money, and be content with what you have.” ~Hebrews 13:5

November Update

Whew! Long time no see, huh?

Let me be the first to say, I am SO glad that November is finally here, because October was a doozy. Between going on vacation, trying to catch up after vacation, lots of stuff going on at church, and then being really sick this past week, we have been at a much higher level of crazy this past month. Most people’s schedules tend to get crazier the closer we get to Christmas, but we actually don’t have that much planned for this month (yet) so we should have some sense of calm and normalcy during November.

As we approach the final countdown for the year of 2013, I thought it would be appropriate to re-visit our financial goals. Also, I promised you guys an update last month when I was lamenting over the government shutdown. #warningitslong

Thankfully, our dear Congress did decide to pay everyone, so with my last check I got my $537 lost income back-paid, which was definitely a huge relief. Not-so-thankfully, we had to put four new tires on my car this past month. Womp womp. Basically, we took my car in for an oil change right before we left for West Virginia, and promptly found out that my tires were falling apart on the inside. The phone call went something like this:

Roman: Sarah, I have some really bad news.

Sarah: ……….

Roman: We have to put four new tires on your car. Johnny says they won’t make it to West Virginia because they’re falling apart.

Sarah: …………….. Okay FINE.   >:|   O.o   :(

So even though the government shutdown didn’t wind up setting us back financially, four brand new tires did….by like, a whole lot. And then Roman brought home a good chunk less than what we needed him to (for the second month in a row—this is when I hate commission), so that put quite a pinch on us as well.

Lesson learned from all of this?? We have GOT to get an emergency fund built up as quickly as possible. It made me so angry to have to charge basic living expenses plus new tires to our credit line when it was supposed to be paid off already. An emergency fund would take care of things like this…but so far we’ve been so focused on paying off debt that we haven’t been putting anything in savings. Literally, nothing. As in, the balance of our savings right now is $26. Yes, I know. Be ashamed for me. *hides face*

If you remember my September financial post, then you know we started paying off our debt using the Snowball Method by Dave Ramsey. (If you didn’t see the post, or want a refresher, click here.) Below are our updated goals from September using the Snowball Method, followed by the new goals due to the ridiculous amount of expenses in October:

Goal #1: Pay off student loan by January of 2015.

Updated Goal #1: Pay off student loan by February of 2015.

Goal #2: Pay off credit card by March of 2014.

Updated Goal #2: Pay off credit card by June of 2014.

Goal #3: Pay off credit line by October of 2013. 

Updated Goal #3: Pay off credit line by January of 2014.

Goal #4: Have $3,000 in savings by end of 2014.

Updated Goal #4: We aren’t pushing this one back any because we realize how important it is. If anything, we’re going to be pushing to meet this one a whole lot sooner.

Goal #5: Pay off couch loan and car by June of 2014.

Updated Goal #5: Pay off couch loan by July of 2014; pay off car by June of 2014.

Goal #6: Be 100% debt-free by January of 2015.

Goal #6: Be 100% debt-free by February of 2015.

You can totally see how much damage was done just because of one month of insanity. Thankfully, even though some goals got pushed back by three months, we will be able to do some catching up and are only one month behind on our final goal of being debt-free. The important thing is to never give up on paying off your debt just because things get hard. I’m hoping that with Christmas approaching, Roman will start bringing in a lot more (this is when I <3 commission) and then maybe we can get caught up. We should have a tax refund at the beginning of 2014 as well, although that will probably go towards our savings goal.

Now you can totally understand why I am so very glad that November is here. I was so happy to file away October’s budget and start with a clean slate in November. #nerd #accountingmajor

Anyways, we’ll just keep plugging along on our quest to be debt-free and you know we’ll be keeping you updated!  :)

And oh yea, TGIF!!!!!

“Dishonest money dwindles away, but he who gathers money little by little makes it grow.” ~Proverbs 13:11

September Financial Update

Is anyone else blown away about it being September already, or is it just me? 

This will make the fourth time this year that I write about our finances. The first was this post in February, the second was this post in May, and then the last time was this post in June. 

In the last post, I mentioned that I was nervous about the coming furlough. Now that the furlough is over, I figured it would be a good time to revisit our goals and be accountable on where we are with them. So let's dive in, shall we? #warningitslong

At the end of July, Roman and I re-did our entire budget. For this year, we've kind of had the method of "pay extra on everything-especially whatever has the highest interest rate." But I started to feel like we weren't really getting anywhere. We weren't seeing any success because nothing was actually getting paid off, and then when we weren't able to pay extra because of the furlough, it really started to feel unsuccessful. So one day I decided to cost it out: how much interest were we saving and how soon would everything be paid off after the furlough under our current method, vs. the consolidation method vs. the Dave Ramsey "snowball method". And the results were kind of surprising.

I thought for sure that the consolidation method would be the cheapest and the fastest because we would be able to save interest on our high-interest credit card. But in consolidating, we also lost the benefit of our low-interest credit line and student loan so we actually spent more money on interest. Pretty interesting, huh? (pun 100% intended) We also would not have been debt-free until February of 2015 because of the higher interest we would be paying. So this method wound up being the worst. 

The next-best method was our current method: paying a lot of extra on our high-interest items and paying a little extra on our low-interest method. Although we did save some interest against the consolidation method, because of the furlough we were not going to be debt-free until January of 2015. And it was going to be May of 2014 before anything actually got paid off--that's a long time to wait to see any of the fruits of our labor. 

That leaves the Dave Ramsey method: snowballing. If you aren't familiar with this method, you take the smallest debt you have and pay as much as you can on it while making the minimum payments on everything else. Once it's paid off, you take that money you were paying and add it to the next-smallest debt until it's paid off. You continue this method until everything is paid off. I thought we would be spending more money on interest under this method because our smallest item (credit line) also has one of the lowest interest rates, but I was wrong because under this method our two high interest items (credit card/couch loan) were getting paid off MUCH faster. However, we did tie with our current method as far as timeline goes-thank you, furlough. 

So without further ado, here are our old goals.......

Goal #1: Pay off student loan by end of 2014.

Goal #2: Pay off credit card/credit line by July of 2014. 

Goal #3: Go on a second cruise in October. 

Goal #4: Have $3,000 in savings by end of 2014. 

Goal #5: Pay off our couch loan by end of 2014. 

Goal #6: Be 100% debt-free by end of 2014. 


And here are our updated goals under our new plan......

Goal #1: Pay off student loan by January of 2015.

Goal #2: Pay off credit card by March of 2014.

Goal #3: Pay off credit line by October of 2013. 

Goal #4: Have $3,000 in savings by end of 2014.

Goal #5: Pay off couch loan and car by June of 2014.

Goal #6: Be 100% debt-free by January of 2015.

As you can see, everything gets paid off faster except for the student loan. And the only reason we are behind by one month on the student loan is because we haven't been able to throw as much money towards our debt the past six weeks due to the furlough. 

Another thing we did was start saving for Christmas this month. In the past, we've used a combination of my Christmas bonus and credit to pay for Christmas. This year it's not guaranteed that federal employees will receive a bonus, so I don't want to rely on that. We certainly don't want to go deeper into debt while we are trying to pay it off, so we've done a mini-budget on what we want to spend for Christmas and a savings plan to make sure we have the money available. 

It's really exciting to see Goal #3, because we get to see something paid off by next month. Finally, results! Wahoo!! So congratulations Dave, you win. Not only are we saving money on interest under your method, but we are seeing the fruits of our labor a lot faster too, thereby keeping us motivated and dedicated to reach our financial goals. 

Whew! That was a long one. But you guys are all invited to an ice cream party in January 2015 so we can celebrate our debt-conquering, m'kay?? Bring the cool whip and chocolate syrup! 

Pssst: If you want to learn more about Dave Ramsey and his guide to money management, you can check out his web page here. (Not an affiliate, just really love his product!)

"The rich rules over the poor, and the borrower is the slave of the lender." ~Proverbs 22:7

June Financial Update

So far I’ve written twice this year specifically about finance. The first time was this post back in February, and the second was this post just last month. I thought that now would be a good time to re-visit our finance goals, you know, with it being the middle of 2013 and all. Wait, is it seriously June already? Holy moly.

Goal #1: Pay off student loan by end of 2014

Update: We are currently still on track to meet this goal, which is pretty exciting because it is our “largest” amount of debt at $5,500.

Goal #2: Pay off credit card/credit line by July of 2014

Update: We’ve had quite a few hiccups on this one. We’ve paid off both the credit card and the credit line…and then subsequently charged more to them. Between having an emergency surgery on a dog, a non-emergency surgery on the same dog, truck repairs, and our pesky impulsive buying habits, well…..let’s just say that with some hard work we will still meet this goal, but it’s going to take some serious cinching.

One thing that we’ve done to help with this is switch back to using cash as much as possible. For some people, this doesn’t work very well…and in some cases it doesn’t work very well for me either. I can’t just carry cash around in my purse indefinitely because if I do, I will eventually spend it on something it was not intended for. So what we’ve been doing is taking out the cash for our groceries the day we get paid and then we buy what we need for the next week that night. I also give both of us a certain amount of cash for lunch for the week and once it’s gone, it’s gone.

This has not exactly been foolproof, but it has helped. Example: yesterday I forgot that we had to eat out for lunch because we were not going to have enough time to cook. Only except we didn’t have enough cash for that. Thank you, credit card for saving the day. But in my defense, I fully plan to pay that $20 back when Roman gets paid this Friday.

For the most part though, having to hand over actual for-real cash has been painful enough for me to re-think a lot of my impulse purchases, and it has helped in cutting down how much we spend on groceries as well.

Goal #3: Go on a second cruise in October

Update: We actually already went on a cruise back in March. So we can call this goal “met”!

Goal #4: Have $3,000 in savings by end of 2014

Update: We actually changed this goal to the end of 2013. Why? Because we’ve realized through Duke’s surgery and our truck repair incident that we really really REALLY have got to save up a healthy emergency fund. An emergency fund saves you from charging $400 to an already-paid-off credit line for a dog’s surgery.

Goal #5: Pay off our couch loan by end of 2014

Update: We are currently still on track to meet this goal as well. Wahoo!

Goal #6: Be 100% debt free by end of 2014

Update: We may or may not actually get to this goal by the target date. Currently, all of our debt is actually scheduled to be paid off by July of 2014-including my car. But we’ve been talking about trading in or selling my car so we can get something a little bigger, so if we do we probably will not be 100% debt-free by December 2014. But honestly, if we can get everything else paid off and keep a healthy savings account, then we can pay extra on the new car payment and get it paid off super early-which is certainly our plan!

The biggest hiccup that we see coming down the line is my impending furlough starting next month. Unfortunately, I am a federal government employee, so I get to endure the 11 furlough days that are being served to pretty much the entire federal workforce. I’ve done the math, and I will be losing $553 out of my net pay during the months of July, August, and September. I would be lying if I said I wasn’t nervous about all of this, but I know that God is going to take care of us regardless of whether I get paid or not. We are just really praying that Roman will make enough commission over the next few months to cover my loss in pay, that way we won’t fall behind on our goals-and so far he is on track for this month, so that is really encouraging!

How about you? Got any big financial goals you are working towards? Anyone else really hate those “sudden” financial situations that seem to pop up at the least appropriate times? And who else thinks it’s too early to be June already?? Feel free to share in the comments!

Swing....and a Miss

Has anyone ever told you life is hard? Because if not, I’m here to tell you: life can be stinkin’ hard some days.

I’ve written before about our quest to get out of debt. Our original plan was to be 100% debt-free by the end of 2014. Then we got a nice tax return, Roman made some great commission, and we were able to take a cruise and pay some serious debt down. So our goal was able to be moved up to June of 2014.

Cue: Life enters from stage right and takes up the. entire. stage.

Did I mention life is hard? Because if I haven’t yet, let me tell you: life can be stinkin’ hard.

I had to have knee surgery, and I know there is a not-so-nice doctor bill coming in the mail for me any day now. Roman is going to need some oral surgery and possibly braces, and God knows that’s going to cost us. And then, Duke all of a sudden needed surgery this week. He had a sore on his back that we couldn’t get him to leave alone, and it welled up into a giant red thing that we had to get cut off. After the fish hook incident, I thought it would only be around $150. After all, we wouldn’t be paying for emergency surgery this time. Oh no sister, try $400 (!!!!!).

Needless to say, I freaked out. And only one day after the credit line being 100% paid off, I had to do an emergency transfer of $400 into our checking account to pay for my dog-child. Hmph. Check out his battle scars: Only except now you have to imagine that half of those stitches are staples. Because shortly after me writing this post, he ripped out half his stitches and we had to pay another $40 to get the staples put in. Thanks Duke.

My poor baby. He sat in my lap all the way home from the vet’s office, he was so upset. And of course, I feel like a terrible dog-mom. And an awful budgeter on top of that.

So to all you other peeps out there who may or may not be in a quest to pay off some debt: life can come at you hard and fast. And it hits you hard when you least expect it, and often times when things are going super awesome. But don’t give up. Slow and steady wins the debt-free race. I can almost guarantee you that there will be set-backs. Flat tire? Probably. Cracked windshield? Been there. But you can’t just throw up your hands and call it quits just because life throws you a fast one. **This may or may not be a self-counseling session. Forgive me, I just revised our budget for the month for the ten-millionth time.**

Chin up all you debt-paying-people. Just keep trucking as best you can, and we’ll arrive at our destination sooner or later. Although, I can’t tell you when Roman and I will arrive at our destination now that we’ve had our big three setbacks, because I refuse to re-calculate our payoff dates. I’m still in denial. Ignorance, for the win!  ;)

"The wicked borrows and does not pay back, but the righteous is gracious and gives." ~Psalm 37:21