Tuesday, October 27, 2009

Credit Card Rate Hikes

We have a credit card that has a balance on it, but we are not using it, just paying it down. The interest rate has been 14.99%, not bad, though our lowest has a 5.9% rate. Last week, we received a notice that the credit card company was going to raise the rate to 29.99%! We could opt out if we wanted to, which meant agreeing to being unable to use the card again, and keeping the same interest rate as we pay down the balance. The other choice was to keep the card and pay the usurious new rate, which I couldn't stomach. We chose to opt out, which means we lost the $30,000 limit, most of which is unused, which may dampen our credit score, especially since it was a major card. I think that the reforms are hurting consumers as much as they are helping.

The good news is my change jar is getting quite full.

Thursday, October 8, 2009

Don't Buy It if You Don't Use It!

What I mean by that is that while trying to get the hang of being a "strategic shopper" combining coupons with sales to get stuff at a very low price, I discovered that I was purchasing a lot of grocery items because they were a good deal, even if I never purchased that item before. I have concluded that it is much better for me to buy the things we actually eat, than to scoop up every bargain. And I am able to shop at a military commissary, which, time and again, still beats Wal-Mart, Krogers, and Harris Teeter. So now I am trying to be a REALLY strategic shopper, letting certain "amazing deals" go and focusing on our basic grocery list, which actually does not include a lot of processed foods, as many of these "deals" seem to be full of them.

Tuesday, October 6, 2009

Learning the Hard Way: Buying Fish

I really like to make sure my kids eat healthy, and that means getting Omega 3s into them as much as possible. About once a week, I buy fish, usually salmon, and they promptly devour it. This past week, however, the salmon was expensive, but the red snapper was cheaper. The red snapper came as a whole fish, head and fins and all. I ordered two pounds of it, like I do with the salmon. What I didn't factor in was how much of these big fish was actually edible. My husband didn't know how to fillet them, so we had a neighbor come over who is a fish-fanatic, and he did the filleting. What was left when he was done was four VERY small fillets, to feed six of us! That cost me $18.00!!! I felt pretty stupid, though my husband was gracious. Lesson: buy fish that is already prepared so you get the most for your money!

Friday, September 25, 2009

Forget Clothes That Say "Dry-Clean"

I just picked up some items from the dry cleaners that had been sitting there since the spring. The total bill was $75.00. Ouch. Three of the items were jackets that couldn't be washing by hand, I think two other items might have done okay on the "handwash" cycle. The less money we spend on dry-cleaning the better, so I am going to be more careful to check the tags before I buy anything to see if I want to pay many times over the cost of the item in drycleaning. Usually I wouldn't, but you can't avoid drycleaning fancy dresses or sport coats.

Monday, September 21, 2009

Don't Bring the $1 off Coupons to H.T.

I just found out today, after matching up my coupons and selecting my items, that during the Triple Coupons Week at Harris Teeter, they will double any coupon with a face value up to .99, but not on a dollar off coupon. So I only got $1 off instead of the three I though I was on several times. Bummer. Lesson learned. Read the fine print.

Why You Should Color Code Your Checkbooks

I made a stupid mistake last week and I am kicking myself for not having each of our checking/savings/money market checkbooks in distinct covers. Two of them were in burgundy covers, and I handed my husband the wrong one last week to pay a car repair bill. You guessed it, the check bounced because the checkbook he used was the one with not much in it. Aaaargh! So now we have fees to pay on top. I immediately threw away one of the burgundy covers and I am ordering different covers for our other five checkbooks that came with navy blue. This is the kind of thing that should never happen. Maybe we have too many accounts in too many different places! Hmmm......

Sunday, September 20, 2009

Great Tool For Cutting Grocery Costs

On Coupon Mom, I found a booklet you can download (8 pages) that spells out exactly how to be a strategic shopper. All of her "tricks" are outlined there, and combined with her research providing every state's grocery store deals of the week, and the coupons to print out, you can save A LOT of money. I am glad to have something I can study this week to make my efforts pay off. I feel more change in the jar coming!

Saturday, September 19, 2009

Taking Advantage of a Great Equifax Service

We have used Equifax for years to track our credit score and. They advertised a new service for $15.00 a month that lays out a debt repayment schedule for you and keeps track of whether or not you are on target each month. According to Equifax, we should be debt-free (except for a mortgage) in two years if we stay on plan. They use the "debt-stacking" method and map out which credit cards you should focus on first. I tried to keep a debt-stacking plan on our computer using Excel, but I like the fact that I don't have to look up the balances each month because they track that for you. Much easier. I am excited about following this plan.

New Grocery Tactics

This week was the first time I tried the method of trying to get groceries for free or for only a few cents using grocery store triple coupon specials combined with coupons. I have subscribed to a great blog called www.thecouponconsultant.com where the match-ups are often done for you. I went to Harris Teeter and got $59 worth of groceries for $18! At Krogers, I was able to get $195 worth of groceries for $113. Not bad. My goal is to cut our $1000 a month grocery bill in half. I have become obsessed! It does require some preparation but it is worth it!

Saturday, September 12, 2009

Big Start of School Delay

What I mean is, I have been so busy getting my four kids back into the swing of school, that I have had little time to blog about finances. My biggest struggle these two weeks has been paying for all of the back to school clothes and supplies while shopping for my oldest's sixteenth birthday and encountering a huge car repair bill. That makes two huge car repair bills in four weeks. Yikes! This is the sort of thing that can completely throw your budget if you don't have the money previously saved. We did have money saved for the first car repair because we knew that $900 bill was coming. But the second $900 for the second car was not planned, so now we have forked out money out of savings that was set aside for earnest money on a new house for a fall move. Now we have to refigure it all out. We may have to delay the move til spring when we get our tax money back, which is a big bummer. And the fall visit to a college in Florida for my oldest will definitely have to wait til spring. She won't be happy, but oh well. Life happens. I am waiting for the big fall sales to put my kid's clothes resale business on Ebay. Can't sell resell fall clothes until I can buy them at a big discount later this month. Waiting seems to be the theme here! But waiting is better than more debt!!

Friday, August 28, 2009

I Really Hate the Unexpected

We all know it comes: the unexpected expense. But boy do I hate it when I think I have the budget all planned out and then one of my kids needs something (a certain book, massage therapy for back spasms, specific kind of shoe for working at a camp) that completely messes it all up. So if I start out at the beginning of a pay period thinking "Ha, this time the budget will work!" I feel so defeated when ,before the two weeks are up, we have had $100 extra in these unforeseen "necessaries." I try to buy as cheaply as possible in these circumstances, but when your daughter is in pain and needs her back worked on now for $75.00 a pop, what do you do? Say tough it out? This is why we need a bigger budget for "miscellaneous," which means less for other things.

Wednesday, August 26, 2009

Finding Cheap Activities for the Kids

Everyone knows how expensive it can be to take your kids to the movies, or to a water park, or out to eat. I feel the need to remind myself in writing of all of the free or cheap things we can do when they are bored. We live near the beach, so that is always a great option. And there is the pool. We have a zoo membership, so we can go anytime for $45 a year. There is so much in our area to keep us busy, and yet so often we resort to the pricier forms of entertainment. I am pledging to keep this item in our budget low. We have cable and netflix, so a night home with popcorn is a great choice.

How Sleep Deprivation Leads to Over Spending

I hadn't slept well for two nights in a row, and last night I felt so completely exhausted, and my thirteen year old was melting down over boredom, so I took her and another one of my kids out to dinner out of desperation to get out of the house and out of cooking. So we spent more than was budgeted, but it was a better alternative than an evening spent yelling at my kids. Last night I got great sleep and feel like I am back in control again. Lesson learned: try as hard as you can to get good sleep! Lack of sleep leads to over spending and weight gain too!!

Tuesday, August 25, 2009

Having to Say Goodbye to Our Maid

Yes, I am giving up the maid service. It was wonderful to have a housekeeper for the past five months because the weekly housecleaning helped me to have to keep things picked up and organized, which I do struggle with quite a bit. But we can't afford to pay her and pay for the private school to which we send our special-needs kid. So starting the first week of September, my kids will be put back to work in a serious way. I feel really bad about having to tell our maid that we can't have her come anymore, because she just lost another client for financial reasons, and so now she needs three more. She supports a family and family in Columbia so this will be a blow. I am already putting the word out about my fabulous housekeeper in hopes that some of my friends will be able to hire her soon.


Dollars in the Jar

A different jar that is. After one of sisters related a story about a friend who every time she had a five dollar bill, would throw it into a jar, I decided that every time I have a few extra one dollar bills around, I would throw one or two into another jar. Those will add up even more quickly. I am not ready to throw fives in there yet, since money is tight right now, but at least this is a start. Pretty painless way to save.

School supply shopping is here, and I am saying no to new backpacks, lunch boxes, etc. unless they actually really need one. I had some supplies from last year that were unused, so we were certainly use those first. The most expensive items were the printer cartridges for our printers. During the school year we go through a lot of them. I need to find out if the refill offers at Walgreens are worth it.

Friday, August 21, 2009

A Year Without Shopping?

In the September issue of Good Housekeeping, there is an article by a woman who, back in 2003, decided to have her family embark on a year without shopping for anything except edibles and depletables, meaning food and anything that could be consumed like shampoo, etc. After reading about her experience, I must say that she is braver than I am. She wouldn't even buy new tennis shoes for one of her girls when she outgrew them. Instead, she dug around in the attic for a pair of her own old shoes and handed them to her. I don't think I would resist buying new shoes for my oldest if she outgrew them, but the ideas were interesting. If they ran out of bandaids, they made due with gauze and medical tape. They "repurposed" their belongings as much as possible. The key factor to their success (an extra $500 left over at the end of each month) was that their kids were on board and agreed to go along with their spending diet. This meant no eating out, no allowances, no new clothes for a whole entire year.
I don't know that I could get the same cooperation out of my kids, but I want to take a lot of her ideas and put them to use. My oldest, having some pretty wealthy friends, with big allowances, closets full of designer clothes, and pricey vacations, might have the hardest time with a huge cut-back. She compares her life with theirs, which is quite unfair to us anyway, not to mention unrealistic.

Looking at our monthly budget, which for years I have planned out sixth months in advance on Excel spreadsheets down to the dollar, I must note that the money allotted to entertainment, dining out, clothing, and my own personal spending money has always been on the small side. Our biggest expenses each month are the mortgage, food, private school, and of course utilities and revolving debt. We have always lived with not much leftover after paying the bills. I have used the envelope system on and off for years, and now I am trying to stick to it. It's not easy. There are always things that pop up that are unanticipated. We've increased the miscellaneous category to try to include more funds for those surprises. My husband and I have probably been on a date twice this year. That's not a category that I've made a priority, even though we should.

But, there are always things we don't have to buy. I think the biggest areas we can pare down are dining out while out on errands, buying clothes my kids don't need, and cutting back on our monthly cell phone bill by finding cheaper plans. My kids buy all of their own toys with their allowance money, unless it is their birthday or Christmas, so that is not an issue. My oldest buys 90% of her own clothes too, and passes them down to her sisters. We could cut back on Christmas, which we have already by not buying much at all for extended family. The gifts I buy for our kids and husband are almost 90% things that they actually need, not "fun" stuff.

Let's face it, we all have tough choices to make. We want to move so we can be in a better school district and avoid private school, which will help a lot, and also with no home equity payment we will be better able to pay down debt and sock away money into an emergency fund.

I think if I could have done anything differently years ago, I would have pushed for an emergency fund before signing up for Roth IRAS and whole life insurance, as we were pressured to do in 2001. We got some bad financial advice from someone we thought was a financial planner but was actually an insurance sales guy, and I am still ticked about it. We weren't savvy then about the difference between an independent financial advisor, and someone working on commission. The number one goal of any financial plan should be to build an emergency fund and pay off (or never get into) debt. Then you start saving for retirement, and then for college. The financial "planner" would not have made a commission on us if we had said we wanted sixth months of expenses saved before we started saving for retirement. Don't buy whole life insurance either, or just a very small amount. But that is for another post.








Struggling with My New Business

Having embarked on a resale business of high quality children's clothing on Ebay, I am hoping that this will be a good source of extra income and not another drain on our finances. I am discovering that you have to be very careful in how much you spend on your "bargains" in order to make a decent profit. The nice stuff can still be pricey with a discount and coupons, and I certainly don't want to end up with start-up costs that are too costly. I did however, receive enough store "bucks" that I could really cut my costs with future sales combined with the "bucks" and the sale coupons. I won't quite unless I try this strategy to increase my profit margin. If this works, I could have a nice way of adding to our income without working outside the home. I'll let you know! Meanwhile, more change in the jar.

Wednesday, August 19, 2009

Great Reads!

I have a few favorite books on personal finances that I will recommend to you. My top four are: Dave Ramsey's Financial Peace, Larry Burkett's Debt-Free Living, Sandra Hunt's The Financially Confident Woman, and Financial Survival in Uncertain Times by Deborah Pegues. I have been reading about wise financial doings for a long-time, but not making a serious commitment to following the principals. Now, I must, or we face dire straits. I try to read every day at least one chapter of any of these books or other articles online or in the paper to remind myself what it is we are trying to accomplish, which helps when I am at the mall or Target and an item is screaming "You need me!" I can walk away much more easily if I have in the forefront of my brain how I got into this mess and where I want to be in a month, year, ten years. I wrote out Dave Ramsey's "Seven Steps to Financial Peace" on an index card and posted it on a kitchen cabinet. Anything to keep our goals in mind.

Tuesday, August 18, 2009

It Isn't the End of the Month-Yet

This is always the part of the month where you look at the checkbook, having subtracted out all of the bills to be paid and withdrawals for food, gas, etc., and you realize that you will have about $4.95 left when all is said and done. Now I did start a cushion in our checking account, ghost money if you will, which I plan on adding to each month little by little until it is about $100, so I don't worry about bouncing checks, etc. We used to tie our checking account to our visa for overdraft protection, but guess what!! I saw that as a line of credit, so to speak, so I was very un-careful about going over-budget. Bad idea. Our visa balance ballooned every month boften by a thousand dollars! Yeah, very bad choice on my part, and one I don't want to go back to, ever.

But let's go back to nothing in the checkbook on day 18 of the month. Really, there is a couple thousand in checking, but basically we will be down to the dregs in a week. I would like to live differently. No more wondering if the debit will go through this time. Let's take charge and be in charge of our money! The change jar is calling! Do I hear a clink?

Thursday, August 13, 2009

Doing the Coupon Thing in Earnest

I am trying to learn the ropes on how these women find amazing deals and come out of the grocery store paying very little for a large amount of groceries. I am reading some blogs and websites about this and hoping that I can make a big dent in our $1000+ a month grocery bill. If I could cut this item in the budget it would really help me to put more change in the jar for a lot of other things!

Tuesday, August 11, 2009

I've got a Bipolar Relationship with Money

With the large amount of debt I have racked up, you might think there isn't a frugal bone in my body, but that is far from true. My kids whine all the time about all of the stuff I won't buy for them. And I hate paying for any grocery item without a coupon. If I find a coupon I could have used after I have left the store I get really mad. I am pretty anal about this. My kids find it embarrassing.

I just wish I would have been frugal in all areas of my life. I won't spend top-dollar on anything, but I have spent A LOT of money on discounted items using credit cards. Pretty stupid, huh? I want to tell my kids to NEVER, EVER use credit cards, that they are evil and will lead to their ultimate demise. A little extreme, I know, but I grew up watching my mom use credit cards for a lot of purchases except groceries, so I didn't see anything wrong with using them. What I didn't understand is that those bills were quickly paid off, probably the next month. I wasn't taught directly about money, actually. We didn't talk about anything really big and important for some reason. I never heard my parents talk about money, or savings, or debt, ever. It was one of the marks of that generation born in the Great Depression. However, saving and not getting into unmanageable debt was also a mark of that "greatest" generation. Many of them are enjoying nice retirements because they were smart about money and debt-averse.

Unlike our parents, my husband and I talk about everything, much to the dismay of our teenagers and rising middle schooler. Money is something we talk about a lot, but debt hasn't been a topic yet. My oldest just found this blog and read it (not what I was counting on) and freaked out about how we were going to send her to college. I reassured her that we have the GI bill. I really didn't want her to know the state of our finances. I feel embarrassed. Our kids should be able to look to us for leadership, and we haven't been the best example. I definitely want to turn our finances around so that my kids can follow our choices and be unburdened when we are elderly.

Monday, August 10, 2009

Not a great day

This was a day when I had to order homeschooling curriculum for my two youngest daughters. The grand total was $1340!! That is cheap in comparison to what we would be paying for private school for both of them, which would have been about $1200 a month. Still, it was painful. I know that it is a good value but don't we all wish it was free!

Saturday, August 8, 2009

Looking for a Second Income

I have been a stay-at-home mom to four girls for sixteen years. I have been so grateful that I have been able to do this, even when my husband's income was about one-fourth of what it is now. Truthfully, we were actually better off financially in our early years of marriage and raising kids. We had very little debt, we paid cash for all of our home repairs and improvements, we had a growing retirement fund, and we were saving a little bit every month for college. There was not a lot left over after the bills were paid, but we were okay. I treasure the time I have had being a full-time mom, but now with college looming in two years, and our savings depleted, and a mountain of debt to pay down, I am feeling the need to explore ways that I can add to our income.

I have a degree in International Studies from a competitive university, but I can't really use right now without going back and getting a masters in the foreign language I studied and then being willing to possibly travel to Europe for a job. Not happening. We have a special needs child who needs me and will need me in the future to be here caring for her. So a full-time job where I don't get home until 6:00 every evening would not be a good fit.

I have looked into getting a teaching certificate. What I would love to teach is high school English or history, but after talking to a public high school teacher recently, he said he puts in 70 to 80 hour days during the school year. Ouch. Not for me. So maybe I could teach elementary school, but that doesn't appeal to me as much. I love intellectual banter and as much as I love the grade school years, I think I would feel stifled.

Increasingly, I am exploring creative ways to make extra money from my home. I am looking into free-lance writing, and I have started two different books but haven't had enough focus to finish them. So I started investigating selling things on Ebay, but I want to be smart about it. I don't want to have to spend a lot of time and effort chasing down items that wouldn't fetch a lot of money. I have noticed that high-quality brand-new children's clothing at a discount seems to be a hot item, especially if packaged as outfits and in bulk. So I have started the process of finding things on sale at a deep discount and I will also look in consignment and thrift stores for items with the tags still dangling.

We will see how well I do at this. I do love to shop! But I would focus on a choosing clothing in sizes too small for any of my girls or nieces so I wouldn't be tempted to keep the stuff I am buying. I would love to make money at home instead of having to commit to something that might interfere with my commitment to my kids. I believe that being home when they are home after school and during the summer is a good thing. Kids get into trouble the most when they are left by themselves too much, and I wouldn't want to open the door to that.

Someday, when my kids don't need me as much (i.e. all in college or out) I would love to return to a full-time job, but who knows what the future will hold. I do know that I still have a lot to offer--I am not done yet!!

I stole some quarters from my jar today. Oh well, there is always tomorrow!




My Blog Looks Different

Yes, I changed my template and colors because I decided it looked too much like my other blog. Hope you like it!

Friday, August 7, 2009

One of the Stupidest Decisions I've Ever Made

I have to share this because I think this situation kind of opened my eyes to just how bad I can be with money.

It started with going to an auction for a charity. You know, the kind where you show up for a nice dinner and put bids on various items, ranging from the inexpensive to the very expensive. We were glad to go, but we hadn't planned on really spending a lot of money there, like maybe one hundred dollars or much less.

Well, there was one item that caught my eye immediately. It was from a photographer who is very well know here, who specializes in family portraiture. He was offering one family portrait and a free family photo session with the option to purchase more, with a starting bid of $450. His work is stunning. Several of my friends had used him in the past and I had always admired (coveted) their beautiful photos on their walls of beautiful families on the beach, or at the botanical gardens, or wherever. He captured personalities with an exceptional eye.

That temptation just ate at me. I couldn't stop thinking about all of the reasons we needed HIM to do our portrait NOW. After all, we hadn't had one done in years, the kids looked significantly different, and it was just $450, what a deal!

So the bidding began and I was the only bidder on that item. I won, and paid the $450 (which we really didn't have to blow on this) and went home happy.

Then I called to schedule to photo session. He said that he needed to come over to my house first and show me examples of his work and to explain how he does things. He brought a brochure with his pricing, but I didn't read it carefully. I thought a package would probably cost around $2500, which I was increasingly justifying as a reasonable expense for lifelong memories. Well, I misread the print, that a package didn't start at $2500 but that an individual portrait started at $2995, and went up from there. Stupid mistake. Always read the fine print right?

So I schedule our session at the beach, and we get them done in about two hours, at sunset, and I knew they would be beautiful.

About a week later, he brings the proofs to a meeting at our house that he insisted my husband my husband attend. Later I knew why. He showed us the amazingly gorgeous photos with which we were instantly smitten. We had never seen more beautiful portraits of our family, each individual child, the kids together, etc. He even airbrushed out the braces on our oldest!

Then we began to talk packages. That was when I realized I had made a big mistake. The minimum package started at $5000!!!! My husband nearly went white. Awkward. He and I went into another room to talk about it. We were stuck. We had gone through the trouble of getting the photos done, and had seen the pictures, and now we couldn't let them go.

So what did we do? We agreed to sign on and pay monthly, interest-free installments for two years. Aaargh! I could feel my stomach turn in knots. We had to put a down payment on the photos, and so we wrote a check for a thousand dollars (which we really needed) and ate it.

So that was a year ago, and we are still paying for photos that aren't on our walls. What if the guy goes out of business and we lose everything? If we sell our house this fall, we will pay the balance and just be done with it. Lesson learned: listen to that small voice inside screaming "YOU CAN'T AFFORD THIS!!!" and forget keeping up with the Joneses and their smiling photos. We could have gotten high quality portraiture for far less, I have now realized by seeing other photographer's prices. Oh, and will will have to get them framed too. Sigh. Live and learn from your mistakes. And drop some more quarters on the pile.

Thursday, August 6, 2009

My Teenager Thinks Cars Grow on Trees

We have a daughter who is soon to get her permit. She is already lobbying for her own car, a Mustang no less. Oh nevermind, now it is a truck. Understand that we are the kind of people who drive our cars until they are dead, at least too expensive to fix. Both of our cars have well over 100,000 miles on them. The minivan is looking a little tired, and my husband's car needs some work, but we are content. Our oldest teenager, however, has a different opinion about our means of transportation. She says she wouldn't be caught dead driving the minivan!

Our oldest has an interesting view of what parents should do for their children. She believes that when you turn sixteen your parents buy you a car. We never told her this or would ever subscribe to that kind of indulgence. If we buy her a car, it will be out of necessity, not want. But many of her friends who are from wealthier homes do get cars for their sixteenth birthday. I still think that just handing a kid a car on their birthday amounts to giving them a very unrealistic understanding of how big tickets items come into our lives, even if you are wealthy enough to fork out the dough. I just think that our children need to understand the value of waiting and saving, or at least having a job that will pay the gas and insurance.

I never dreamed that my parents would buy me a car in high school. Sadly, too many kids are being spoiled this way, and I hate the jealousy it produces in my progeny. Thanks a lot! Oh well, our daughter will understand someday that her parents weren't mean or stingy, just frugal, well at least trying to be frugal. Frugality is something that has eluded me in the past, but that's for another post.

Wednesday, August 5, 2009

Ouch! The Checkbook is Bleeding

I updated our checkbook with Quicken yesterday, after having been out of town for a few days, and I got a little shock. I forgot to add a big automatic payment and a big check, so my balance was off by about $600.00! Darn. This has been a typical mistake I have made. I love using Quicken, and I have scheduled lists of items to debit each month, but every now and then I forget to enter something like the big check my husband wrote, or I accidentally delete an item. So my whole checkbook is thrown out of whack and we are in the red, so to speak. I hate it when this happens.

So now do I pull money from savings to cover the deficit, or do I use the plastic? Neither is a great option, but the latter attitude is what I am trying to change. Presently, I am waiting on word from our church if they are able to help with some of the costs of our emergency trips out to see our sick loved one in another state which has been a big drain on our savings and checking. Our church's deacon's fund is designed to help with these sort of emergency situations and I have been loathe to ever ask for help because I've always been a very proud person. Even when my husband was out of work, I refused to accept help from our church. My pastor challenged me on this, but I couldn't bring myself to take him up on his offer. I thought of the deacon's fund as if it were for "poor" people.

But looking back, I decided that my attitude was stupid, because we really could have used help then. So I learned from that, and when one of our kids was hospitalized in a another city for a month, we asked for help with the gas we were spending traveling between our house and the hospital which was an hour and a half away. They were more than happy to defray this cost, which was way out of our normal budget.

Anyway, I have learned to not be so proud. Pride keeps us from honesty. One of the best results of my new admittance that I have not handled money well is that I convinced my husband that we needed objective financial advice. Our previous financial planner was actually an insurance salesman. So we have great life insurance, but we didn't get the kind of advice we really needed, like "Where is your emergency fund?" or, "Stop using those credit cards NOW!" So I sought out independent financial advisors, and we met with two of them to interview them. We liked both CFPs a lot. The first one said he was more of a specialized planner, dealing with end of life issues. The second one was more willing to work with us on short-term planning. But we had to decide if we were selling or moving or whatever before she could really give us good advice. So we will probably go back in September or October.

In the meantime, I am saying no to the pesky plastic thing, and dropping dimes into my jar. Happy saving! I feel freedom coming....


Tuesday, August 4, 2009

Travel is Expensive

We have been having to travel once a month out to Texas to see a loved one who is presently in a residential treatment center for a mental illness. Talk about costly! We never travel by plane this much or stay in hotels, or rent cars like this, but this has been a true emergency situation. The kind of thing you are supposed to save for!!! One more reason to keep dropping change in the jar (or dollars in the bank.)

Monday, August 3, 2009

Just How in Debt am I?

You may be wondering. I am an intelligent woman, with a college degree from a prestigious university. People like me should know better. I did, certainly. But it was all of the small things that added up to big debt. Presently, after our $273,000 mortgage, we have a $57,000 home equity loan, an $7000 car loan, and consumer debt, i.e. credit cards, in the tens of thousands. I hear you saying, "Wow! At least I'm not that bad off!" Congratulations. I hope that your debts are considerably smaller, or nonexistent.

Now, my husband makes a good salary, in the low six figures shall we say, and we aren't living in a terribly expensive area. I've have been a stay at home mom to our four kids for sixteen years. We have a special needs child, who needs a lot of my time and attention, which is why I do not work outside the home (yet). We have managed to keep our credit score in an acceptable range (above 700) but we used to have a credit score up in the 800s before we racked up so much debt. We have been able to manage the payments on all of this debt but now we are uncomfortably SQUEEZED. We can pay for the necessities (we have never missed a payment on anything), but not much else is left for savings or date nights, or vacations, or anything in the "incidentals" category.

Our financial situation went from okay-could-be-better to really-stretched when my husband was out of work two years ago for almost five months. We didn't have five or six months of income saved up (which would have been 50,000 in short term savings), only about one month's. When we ran out of cash, we used our home equity and our credit cards. Big mistake. We should have asked for help, and I probably should have gotten some part-time job, but we didn't think it would take that long to find a job. In the end, we added about $40,000 more to our debt. We have dipped into our college savings for our oldest (the only that we had) until it is almost gone, and she goes to college in two years! Our 401Ks and our Roth IRAs were cut in half due to the plunge in the stock market. We have only about $4500 in short term savings.

So we are in a hard place of looking at selling our home to move to a different school division where we won't have to pay for private school anymore. Yes, for about nine years we have been paying for private school for all or some of our kids because our district is not a great one. This extra $10,000 a year meant that we were not saving for emergencies, and using our credit cards to make up the monthly difference. Why were we doing the private school thing if we couldn't really afford it? Well, we live in a neighborhood where probably 90% of the families send their kids to private schools because of the substandard educational environment in our district. It is sad, but a result of a very high rate of teen pregnancies in our city. The local schools are filled with kids who are basically parented by kids themselves, resulting in a lot of discipline issues and dumbed down standards of education. So that is why we need to move.

I figured out it will take us about five to seven years to pay all of this off. I will tell you how we intend to do it next time. Keep dropping that change in the jar!

This is All About Me (It's a Good Thing)

I started this blog because I am in debt and I want to be, not in debt. If you are reading this you may have no problem with that little plastic temptress called a credit card, or you may be reading this and thinking, I so need a friend! I will be brutally honest and I hope you will be too, because we won't get anywhere without honesty! I will be blogging about my progress and I look forward to hearing about your progress too! We can do this together! I call this the change jar because I have one that has been the start of my reformation. I have made a pledge to start with small change because I have NEVER been a saver. I robbed the change jar regularly, but no more. It's a small step in the right direction.