Baby Steppin’: November 2016


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We recently finished going through a Financial Peace University Class. It was exactly the kick in the pants we needed to get moving in a more fiscally sound direction. Dave Ramsey has a list of Baby Steps to move through, so here’s our progress to this point:

Baby Step #1 

We have our “baby” emergency fund, which is currently: $1,009.24

Baby Step #2

Starting Debt Amount: $53,285.44
(original projected payoff – December 2019)

As Of:
September 2016: $52,035.26 (-$1,250.18)
October 2016:  $50,243.99 (-$1,791.27)
November 2016:  $47,627.15 (-$2,616.84)
(updated projected payoff – July 2019)

Notes: Again, any “extra” money we had, we added it to our snowball. This moved our projected payoff up by another month!

Speed Bumps Encountered

  • Dining out/Thanksgiving – We totally messed up. We let our food spending get away from us a bit by eating out more than usual. This meant we didn’t have enough in the general food budget to cover Thanksgiving dinner. So, we ended up going over budget. (-$158.33)
  • Switching Cell Service – We are starting the process of switching to another cell provider to save money. However, it’s gonna cost us to make the switch. So far we’ve purchased 5 SIM kits and a phone for the son (he’s paying for part of it). There will be more costs involved with this over the coming months (breaking contract) but we should recoup those after about 4 months on the new plan even with adding a fifth phone. (-$135.11)
  • Fitness – because we cancelled the gym, I started looking into at home fitness plans. I got all excited about the T-Tapp program and ordered some DVDs. This was a purchase I failed to talk over with the husband and was not in the budget. He gently brought that up during one of our talks (he’s so great) and I realized I had broken our agreement to discuss purchases like this in advance. I’m used to doing whatever I want because I’m the one who tracks the money, but no more! We’re in this together and that’s how I want it. Hopefully that won’t happen again. (-$137.96)
  • Weight-loss – well, going without Weight Watchers wasn’t working. Sure, I was saving a little money on the subscription, but I definitely think all the eating out was because I wasn’t tracking what I was eating. So, I rejoined, but only the online version (about half the monthly cost). If I want to go to a meeting I’ll pay for that out of my personal “blow money”. I had to pay the 3 month promo fee to get a discount on the first three months. So that’s something I hadn’t planned for. (-$40.90)

Once again, I am surprised that we didn’t have to rely on credit cards to cover anything this month. And obviously our baby emergency fund is still in tact. So far we’re paying cash for Christmas. I’m realizing I probably didn’t budget properly and will be short, but I am determined to keep Christmas credit-free this year.

Well, that was November… on to the next billing cycle!



Financial Peace University: Week 9


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This was the final week of the class. It was kind of weird knowing it was over but we’ve got so far to go. We’ll probably take the class again next year.

Still, the final lesson was great. Dave talked about giving, which is a topic that isn’t always well received. We already knew what a “tithe” was, and already knew our giving was on the low side. We’re not up to 10% yet, but our plan is to gradually increase till we reach that level.

We’re in full blown debt snowball mode, but we made an immediate increase of 1%. Yes, I know, that seems pathetic, but it’s something. We also wrote up a plan for any merit raises and bonuses in the new year.

If we get a merit raise (the company has frozen them before), we plan to add the entire amount to the giving category instead of using it to pay down debt faster. If we get a bonus, we’ll give away 10% of it.

I’m looking forward to having more opportunity to give once we get through all these baby steps. For now, we’ll just keep plugging along. I’m planning to keep posting a monthly update on our baby step progress.

Financial Peace University: Week 8


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Week eight was about mortgages. We gained a lot of good information, but there wasn’t much for us to do since we are still in the second baby step.

We did use the calculators provided to see how soon we could pay off our current mortgage once we get to that baby step. However, since we don’t plan to stay in this house much past the time it takes to save a downpayment, we’re not sure those numbers are relevant to us.

One thing we have decided, we’ll be doing a conventional 15 year mortgage with at least 20% down in the future.

We already have a fixed rate mortgage. We have talked about selling our home and buying something smaller. Currently our house payment is right at about 25% of our take home pay, but that’s with a 25 year mortgage (when we refinanced, we didn’t want to lose time we’d already been paying).

We’re still working the zero budget and discovering we aren’t anywhere near as broke as we thought we were.

Well, that’s all I can about this lesson.

On to week 9!

Financial Peace University: Week 7


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Ah yes, retirement. Before going through this week’s class, there were some things I didn’t know. Now, I cannot wait to get to baby step 4. I’ve dreaded this lesson because I was afraid we would do some calculating and realize we were going to be broke when we retire.

I’ve had dreams, and while I still don’t know if they are feasible, I feel a little better knowing that following the path we’re on will probably mean our expenses will be covered in retirement.

I think the most interesting thing was learning about the Roth 401K and IRA. If there is one thing that really bothers me, it’s seeing how much the government steals from our income each year. It is a ridiculous amount of money. And don’t even get me started on social “security”. So, when I hear “tax free”, my ears perk up.

We’re not in a position to do Dave’s recommended 15% just yet, but we were able to diversify our existing retirement accounts with his standard plan. We have about 54K in those accounts at the moment. Kind of ironic that it’s almost the same amount of debt we have.

We’ve made the mistake of borrowing on our retirement before and don’t plan to make that mistake again. We feel so foolish, there would be a lot more in there if we hadn’t touched it all those years ago.

We were asked to talk about what we want retirement to look like. We both agreed we don’t want to “have” to work to make ends meet. That doesn’t mean we will just sit around watching tv all day. We’d also like to do some traveling. Nothing extravagant, but we enjoy seeing new places.

I would like to have a significant piece of land. No, not to farm it or raise animals, but for peace and quiet. It seems like a big wish at this point. I’m not sure we will reach our goals without a miracle since we’re starting so far behind, but it gives us something to shoot for.

As for college savings, um, not going to happen. Our youngest starts high school next year and we’ll barely be through the first three baby steps when she graduates. I will say, even if we had saved up money for their college, I think I would have told them we didn’t have a dime and then surprise them after the fact. So far, our older two are being very thrifty when it comes to choosing education and they are working/saving in the hopes of avoiding student loans.

Only two more weeks to go till we finish this class…

Week 8

Baby Steppin’: September/October 2016


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As I’ve mentioned, we’re going through a Financial Peace University Class. Dave Ramsey has a list of Baby Steps to move through, so here’s our progress to this point:

Baby Step #1 

We have our “baby” emergency fund, which is currently: $1,009.14

Baby Step #2

Starting Debt Amount*: $53,285.44
(original projected payoff – December 2019)

As Of:
September 2016: $52,035.26 (-$1,250.18)
October 2016:  $50,243.99 (-$1791.27)
(updated projected payoff – August 2019)

Notes: We’ve been able to throw a bit of extra cash at the debt, and managed to transfer our two highest rate credit cards to lower interest rate cards. This moved our debt payoff up by 4 whole months!

Speed Bumps Encountered

  • Pre-planned Trip – the husband was already scheduled to go on a hiking trip before we started FPU. He was the designated driver, so we had to come up with the money for that. I found $90 in change in our house which helped. (-$150)
  • Airfare – totally forgot to budget flying the college boy home for Christmas break (his first semester away), but managed to buy his tickets without using credit. (-$421.20)
  • Vehicles – the battery spontaneously died in the 13+ year old van and had to be replaced (-$85.89)
  • Appliances – the pressure cooker died last night with our uncooked dinner in it. I think it was about 2 years old and we spent very little on it because I’d never used one before and wasn’t sure how much I’d use it. We use this thing almost every day though. It keeps us out of the take-out lines and saves tons of money in our food budget. I replaced it today and splurged on its replacement because I wanted a quality unit that would take our use frequency. (-$243.51, that’s with a discount, ouch)

These are all things that probably would have ended up on a credit card in the past, and this is largely due to a runaway food budget. Makes me sick just thinking about it. I’m still shocked we’ve been able to cover these things – and no, we didn’t touch the emergency fund.

November 2016

*We thought this number was higher than it actually was because we were overestimating what we still owe the orthodontist. Once we took out the insurance portion, it lowered our part.

Financial Peace University: Week 6


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This week was all about insurance. It wasn’t my favorite lesson to date, but it was information we definitely needed… at least some of it anyway.

I really liked that Dave defined the purpose of insurance as “transferring risk”. We already had most of the insurance policies he recommends, so that made us feel a bit of relief. It’s that time of year when we have to re-enroll in our corporate healthcare/life insurance stuff, so this lesson helped us know what to change and what to keep in those areas.

We have had a high deductible health insurance plan for a bit now, as well as an HSA (Health Savings Account). It was a bit scary at first to break away from our PPO, but we saw the beauty in such a plan when it was first presented to us and haven’t looked back.

It really does make us think twice before running to the doctor. When we do need a doctor, we compare prices first. It’s opened our eyes to how overpriced things are. We also feel more inclined to take better care of ourselves in the hopes that we can prevent shelling out money on preventable medical expenses.

I love the HSA aspect because we’ve been able to put money in there tax-free to pay for everything from orthodontics to prescription eyeglasses.

At the moment, I’m not a huge fan of car insurance companies. We have two teenage drivers and one had a wreck earlier this year, so we’re currently getting gouged in premiums. This is after going more than 20 years without an accident. They said we had “accident forgiveness” because we’d been accident free for more than 10 years, but I really don’t know what that saved us.

We already knew to avoid Whole Life Insurance and have had Term policies for years now. In fact, being in good health actually helped us lower our premiums a couple of years ago. This is the part of the lesson that really started to bug me.

Like most people, I don’t really like to think about losing a loved one, but it’s made even more emotional by the fact that we have buried a child. He was our first and once we had more kids, we immediately added the “child rider” policy to our own life insurance policies (for burial costs). Praise the Lord, we haven’t had to use it since.

Still, we don’t have wills. Yikes. After talking about the will process a bit, we realized why we’ve never done one. It upsets me. I started bawling. Grief is horrible and the very thought of going through something like that again is gut wrenching. It should make me feel better, but honestly, it doesn’t. It rather feels like, “Now your affairs are in order so it’s ok for something bad to happen.”

I know in my heart this is ridiculous and we are moving forward with drawing up wills anyway, but I really don’t like the process.

Most of the numbers Dave uses are 20 and 30 year olds, which, to this 40 something couple, is a bit depressing. We can’t undo the past 20 years, and we feel really behind at the moment.

On to week 7>>

Financial Peace University: Week 5


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Five weeks into this class and it’s hard to believe we’re half-way through. I think we need ongoing support till we get out of this mound of debt, but I’ll just be thankful for the next four weeks.

Buyer Beware

I could say this about all of the lessons so far, but this stuff should be taught to kids. We have the homeschool version of this class and are making sure our high schoolers go through it twice before they graduate. At least they won’t be able to claim ignorance.

I wish I had known this stuff as a teenager. So many mistakes.

This week’s lesson was on understanding the marketing techniques of the companies vying for our money, defining/handling a significant purchase, and negotiating strategies.

My favorite thing Dave said was something like, “You can buy fun, but you cannot buy happiness”.

Right now, we aren’t in a position to make major purchases unless they are dire needs (like if the transmission falls out of the van), so much of what we went over is something we’ll have to reference again later.

We did notice that we had been played in 1999 when we put money down to build a new home. The salesman told us all about “buyer’s remorse” and that it was “normal”. I remember we woke up the next morning sick to our stomachs and regretting our decision, but then I remembered what the man had said and figured we’d probably be feeling that way even if we weren’t already in debt up to our eyeballs.

You see, we had planned to stay in our apartment another year and get out of debt before buying a house, but we grew impatient and foolishly thought we could still get rid of the debt with a mortgage. Of course, we were naive and had no idea how much owning a house actually costs.

If the salesman hadn’t said our feelings were normal, I know we would have been back in his office the next day getting our money back. That’s how horrible we felt about the purchase.

While that’s a little frustrating to look back on, we were smiling a bit as Dave went over negotiating. After a car accident earlier in the year, we had to replace our undriveable car. We did buy used, and in hindsight probably should have purchased something MORE used, but we were encouraged to see that we had actually used most of Dave’s tips without even realizing it.

In the future, we hope to do the same thing, but with CASH!

Progress Check

This past week we were able to pay off another debt, so we are down to 8 now. WOOHOO!

On to Week 6>>

Grocery Shopping with the 12 year old


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We go grocery shopping every two weeks. Well, the other day, the 12 year old wanted to go with me. She is really into baking and has access to my “out of Milk” app so she can add things to the list.

We stopped by the ATM first to withdraw our grocery dollars and then we sat in the parking lot while she helped me update the total on the envelope. I cannot say enough about how much this one simple thing is transforming our spending on food. We were always over budget on food till I switched the envelopes a few weeks ago.

We went to four different stores that day so we could get items at the best price. After each store, we sat in the parking lot and re-tallied before going to the next store. She checked off items on the app and updated the prices as needed.

About two and a half hours in, we were really hungry, although my daughter didn’t breathe a word about being hungry until I asked if she was. When I handed her a 5 dollar bill from my wallet and not the food envelope, her eyes got wide and she said, “But mom, that’s your own money.” I told her that daddy and I get an “allowance” to use however we want and that I wanted to buy her a cookie. I told her this was a benefit to budgeting and knowing where your money is going.

She selected a chocolate chip cookie for each of us and we enjoyed them while we tallied the total from that store. At the last location, we were down to the end of the envelope and I had to make some tough decisions about how best to use the last of it. When it was all said and done, we had a dollar bill left over. A week later and that dollar is still in the envelope.

This was the first time one of our kids has gone grocery shopping since we started paying attention to how we spend on food. After going, I’ve noticed that she is far more choosy about how she uses the baking ingredients we picked up. Then, a week later, a friend (who has no idea we’re doing this financial thing) gifted me a bag of vegan chocolate chips out of the blue. My daughter was shocked and delighted that the Lord would provide something like that for her. I know it was because she’s being a good steward of her supplies. So cool!

Financial Peace University: week 4


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This week’s lesson was rather huge. Maybe it seemed so big to me because this is where we are in the baby step process and we really want to learn the lesson… dumping debt!

For starters, the husband and I kind of stared at each other when asked the question: “How would it feel to be 100% debt-free – now and forever?”

Um… we have no idea. We have never been without some kind of debt in our adult lives. Even when we clawed our way out of a mound of debt several years ago, we still had a mortgage.

Watching Dave’s talk on debunking debt myths was rather sobering and I know we’ll be referencing that in the weeks to come. While we are totally on board with living without debt (once we get out), I cannot begin to imagine what that would look or feel like. We’re even a little afraid to “dream” about it because we feel overwhelmed by how far behind we are in planning for retirement.

For now though, we are committing to working our debt snowball and practicing being content with what we have. That’s really all we can do at this point. I had already tried to estimate how long it would take us to pay off our debt, but this week I searched for a debt snowball calculator that would give me a more accurate result. Turns out I was dead on with my guestimate of December 2019.

Obviously, that date is if we just applied the minimums from the date we started this and kept applying that same amount each month. We are hoping to do it faster than 39 months.

Stop Borrowing Money and Start Saving!

We’ve stopped using our credit cards and the husband even cut up one of the two he kept in his wallet. The other one… well, we’re just not emotionally ready to slice it up. We’re getting there though. With each passing day, I feel less loyal to that old creditor (first one we got as a married couple 20+ years ago). When we applied for that card, we wanted it “just for emergencies”. What a joke. I really wish we’d known then what we know now.

Of course, we would have had to act on that knowledge and like most young couples, we thought we had plenty of time. We hit snooze on our financial alarms and now we’re waking up and feeling late for the party.

Anyway, in the process of stopping the use of the cards, I didn’t realize we had over $240 in subscriptions and such being auto billed to our credit cards every month. Yikes!

We justified signing up for payments with our credit cards because we’ve had our bank account emptied twice in the past few years and were fearful of that happening again. Of course, fear can make you do some really stupid things. At first, we were paying the balance each month, but then we got lazy, had some unfortunate events which went on the cards, and before we knew it… BAM… our debt was like that giant boulder chasing Indiana Jones… Huge and threatening to squash our financial future.

So, in the past week, we’ve either cancelled the subscriptions or moved them to our debit account. It will take a month or so for all of that to readjust, but I’m thinking we’ve lowered our outgoing expenses by at least another $100 a month just by reevaluating what we were automatically being billed. At a minimum, it’s coming directly out of our checking account now rather than being hidden away on a credit card somewhere.

We also cancelled a gym membership we decided wasn’t being used enough to justify the cost (about another $100 per month), especially when we have trails and workout DVDs we can use for free while we dump debt.

Dave also says to Sell Something so we’ve started discussing what we could sell. We actually started purging things from our life in the past year and donated a bunch of stuff during that time that would have ended up on our “sell something” list. I’m not saying we’re minimalists, but we definitely have less stuff than we did.

Overtime isn’t an option for salaried employees, but we are tossing around the thought of one of us getting a part-time job. I have no idea when we would fit it into our schedules and stay sane, but it is something we’re praying about.

In the meantime, we’re working on plugging the holes in our financial ship, streamlining our budget, and tossing any extra money at our debt snowball. We got a raise just by converting our food money to cash only purchases.

And finally, Dave tells us Prayer Really Works. I certainly agree with that. One of the things I wrote down for my “one-minute takeaway” was: “Do I believe God or man regarding debt?” It was after prayer that we decided to move all of those auto-bills off our credit cards. Do we trust God or don’t we? That was a tough pill to swallow, but I actually feel relieved that we stepped out in faith on that one.

Once we get all of our October statements in, I’ll post a progress check on our Baby Step #2. I know we’ve made a small dent in the number, just not sure how much.

My prayer this week is asking God to restore the lost years.

On to Week 5>>

Financial Peace University: Week 3


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Wow, this class seems to be flying by. This week, the lesson was on Cash Flow Planning, which I must admit, sounds much more awesome than “Budgeting”. I learned about Dave’s “zero-budget” plan a while back, built my own spreadsheets in Excel, and kept up with it for a while. Then, I would get tired of doing it and take a break.

I have actually tried to keep up with it most of this year despite falling further and further into debt. It’s probably a good thing I was at least reconciling and attempting to budget or we would be in even worse shape I’m sure.

One of the things that stuck with us through this lesson is the importance of accepting this will be a lifelong task from here on out. We will have to do a budget at least every month and then stick to it. We have to choose to live differently and that includes being committed to this task.

I’ve spent a lot of time over the past weeks pouring over my old spreadsheets and making changes to our budget. There were things that we’d left off because they are automatically being billed to the credit cards (out of sight, out of mind). The husband is very leery about moving those to our debit account because we’ve been the victim of fraud a couple of times already and had our account wiped clean both times. Checks started bouncing before we knew what had happened. Bad, bad memories, so I don’t blame him.

I didn’t even want to look at the statements to find out what I had to now incorporate into our budget to keep our debt from continuing to climb. I was so afraid that updating our budget would show just how much money we didn’t have leftover.

On the contrary, I’ve discovered we do have a little extra each payday that was vanishing from our coffers. As the warden from Shawshank would say, “like a fart in the wind”. We’re encouraged by this and I’m determined to have no more disappearing acts on my watch!

Although Dave talked more about using the money envelopes this week, we actually started using them for our food budget over two weeks ago. The husband as been resistant to use cash or carry cash in the past, but he’s more open to it now.

This area of our finances was a pretty major leak and the simplicity of switching to cash has plugged that hole. At the end of the first two weeks, we actually had $33 left instead of going over budget by $330+. Score!

We’re still looking at other categories we might be able to convert to cash, but I’d like to take a week or two more focusing on the food budget to make sure that becomes a habit. When we actually have some extra money for clothes, that would probably be a good area to use cash as well.

As a bonus, because we’ve been telling our money where to go these past three weeks, in addition to having Baby Step 1 done, we were actually able to pay off one of our smallest debts. That brings us down to 9 remaining. Woohoo!

Ok, so it was really small (compared to our “big four”), but it’s progress at least. I won’t have our debt numbers until about mid-October, but I plan to post the progress in more detail then.

On to Week 4!