Money Matters // An Update

I can't remember where I left off with our debt and repayment + debt-free goals. I made those goals last January and declared we could be debt-free in just 15 months. We were doing OK with our plan of attack for a while, but then summer hit (vacation we shouldn't have gone on, etc.) . . . and then we had thousands of dollars of repairs needed for various things in the fall. And then we planned to be frugal at Christmas, but ended up spending more than we intended.

Yadda, yadda, yadda. Major setback is what I'm saying.

I am sharing this post to hopefully keep myself accountable. Stephen and I sat down yesterday and looked at our whole financial picture. That savings we had in the bank has dwindled to just two months of expenses. We needed that money for a lot of stuff, so I get it. And I'm glad we didn't go into debt paying for the repairs we needed for our home and our car. But still! It stings.

Anyway, enough of you (and my friends) have said to look at Dave Ramsey. We were loosely following those goals last year when we started. Mostly, I am afraid to drop our emergency fund to just $1,000 because history has shown that we regularly need more than that in emergencies. I think a cushion of more like $3K would work for us. But -- for those of you who have done this -- is that all the money you have in your bank account? That makes me nervous.

But then I realized we've done so much of this money thing backwards. We actually had like nine months of living expenses in the bank when I left my full-time job to stay home/work from home. We retained that cushion for a very long time because I was afraid of losing work and needing that cash. All the while, if we needed a car or a major something (furnace, for example), we'd finance. Adding to our debt. In a way, we had a very false sense of security, right?

We are now thinking of going through the Ramsey steps. We already have a very good budget that we just need to follow again. It's realistic. It's tight. But it's very doable. We can pitch some of our money in the bank to pay off a few debts from the get-go, freeing up money in the monthly budget to start the whole snowball thing again. And we can kick a lot of our debts out by the summer this way.

Milestone: Stephen and I each now have less than $5K left in student loans. This is HUGE, as we both started with more than $30K.

But our total debt right now is sitting at just about $25K. That's an improvement from last year's $34K, but we did add to our debt by incurring credit card debt on vacation and buying a washer + dryer set via a Home Depot card. It's 0% for that last debt, but it's still just sitting there. We should have purchased them with the money we had in the bank.

OK. I hope to update you more as we go through the steps. I know many of you have gone on your own debt-free adventures. Are we on the right track? Is it just a matter of moving forward? I don't know how we fell so far off from our goals. Any suggestions on that? And is anyone else starting this journey . . . or starting it again, like us?

The idea of being debt-free is so liberating. I know it will happen eventually, but we definitely have some savings goals in mind and would love to lighten up a bit. You know, take a big trip or do something FUN with our money again. I can't wait to get there!

I'm off to my Excel budget spreadsheet! You can read more of my debt-related posts here.

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6 Debt Lessons from Readers // Debt Free

I wanted to take today to thank all of you for your advice on our money situation. So many readers have either commented on the blog or Instagram, or sent me private messages about what they did to start their own debt-free journey. It’s helpful for a few reasons. First, it makes us feel much less alone. I don’t know why, but we sometimes assume we’re the only people dealing with money issues. We see people jetting off on expensive vacations, buying much fancier houses, sending their kids to snazzy private schools, living vacation fantasy lives, etc. and we assume we’re the only people in the red.

But you know what they say about when you ass--u--me things.

In the end, it’s good to focus only on us because that’s what will get US out of debt. I think focusing on other people can only be harmful in some ways because -- despite how we’re pretty good at avoiding this trap -- there’s this whole peer pressure component to life, right? Keeping up with the Joneses, even if you aren’t in that game. It sort of filters into the subconscious. Of course my kid should have X, Y, and Z. Of course we deserve X, Y, and Z. But a lot of this stuff means living above means, etc.

As a silly example, Stephen and I are both feeling like we should not have immediately gone out and replaced our central air system last year. I know why we did -- we had just brought Eloise home, my hormones were saying YES WE NEED IT NOW, and we had grown accustomed to having it, like many other people have in our area. But if we’re being honest, we could have popped a few window units in the bedrooms and probably been fine. After all, that’s how I grew up. That would have cost a few hundred versus a few thousand . . . and we may have been able to borrow some from family or friends for a year or two while we surveyed the options.

I digress.

The second reason it helps to hear from you guys is because some of you have DONE it. You’ve gotten out of debt, gone through the trials, and come out the other side to tell the tale. Hearing success stories and the hard work it took to get there is inspiring. Anyway, I wanted to condense some of the best tips/advice we received into a nice 6-point list.

// 1: Do get creative 

One reader pointed out that her house went up in value significantly since she bought it. She considered selling and using the profits to pay off debt. This is interesting because it’s something we’ve considered doing as well. We love our home, but we often feel like we could be happy in a smaller, less expensive house. That said, our own property value has stayed relatively stagnant, so I don’t think we’d gain much this way. Regardless, I thought this example was interesting. If you’re really in debt, you can do creative things . . . and even turn your thinking upside down about life. This is one reason, for example, the tiny house movement is so popular.

Other readers warn that investments like houses may be good ones to hold onto, especially if getting rid of your home significantly affects your quality of life. It’s a hard balance to strike. And this is just one way of getting creative. We’ve experimented with becoming a one-car family in the past. It’s something I wish we could stick to, but our area isn’t exactly pedestrian friendly and Stephen is gone a lot of the time for coaching.

// 2: Do give up extras

This is one area where I feel like we cycle between good points and bad. When you’re paying off debt, just cut the fat already. Stop going out to eat. Stop buying random stuff to fill your house or that emotional void (emotional shopper here!). Do pitch everything you can toward debt -- even if that means using Christmas money, etc. for a while. This isn’t to say you can’t EVER enjoy the finer things in life. But I know myself, and I often give into the whole “I deserve this” because of some insignificant accomplishment or pure laziness. Make meals at home, seek out free entertainment, keep your eyes on the debt-free prize.

// 3: Do remember that “small sacrifices add up”

I suppose this extends on the last tip, but it’s a different way of looking at just denying yourself things. A reader shared on my Instagram that “small sacrifices add up” and I liked that train of thought. It’s more positive than STOP ENJOYING EVERYTHING. Even if you can piece together one additional payment through giving up your daily coffee habit, it’s worth it. Gather together those pennies where you have them to save.

// 4: Don’t deplete savings. 

One of the popular debt-free methods encourages people to completely pay all money to the debt monster. But many of you shared that keeping zero or even just $1,000 in the bank for emergencies seemed like too little, especially with a family or house, etc. I agree.

How much should you keep? It’s personal and depends on where you live, your life situation, etc. Some say to keep $3,500. Others like to have a $5,000 safety net. We personally have about three months of our living expenses in our bank account. The reason for some much is because my income is variable. It’s tempting to shift this money around . . . but I feel like we’ve run into bad luck and needed these funds.

// 5: Do consider getting help

One reader mentioned that she and her husband see a financial advisor. I don’t know why this isn’t something we’ve considered in the past. But the advisor helped them figure out a game plan for attacking debt according to interest rate charges. Not only that, this advisor was also able to help the couple allocate funds toward their 401K and pay minimums on debt . . . but through some financial magic earn more interest on the 401K than was being charged on the debt, if I’m explaining that correctly.

// 6: Don’t get discouraged

This might be my favorite piece of advice. Don’t get discouraged if progress is slow. You may not be able to pay off massive amounts quickly. I feel like we’ve all seen the stories of paying off $100K in like six months. For many most people, this just isn’t feasible. Heck, we don’t quite make that much money . . . in a year. So not amount of scrimping or saving would give us that type of wild success.

Another reader explained that debt ebbs and flows throughout different stages of life. Don’t look at all setbacks as failures. I think that’s a good point to end this post on. If you have more to share, I’d love to hear you thoughts in the comments! I would like to add more of the tips into a part II post -- the next one will be some more specific things people shared about their debt-free adventures.

Happy Wednesday!

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Debt Confessional // Our Progress (or Lack Thereof)

Remember when I told you guys how we’re carrying $34K (not including our house) in debt? Yeah. Not much has changed since I last wrote. We did go full steam paying all extra money we had toward this number for a few months. Then we fell off the wagon. We had to buy a new washer and dryer. Our car needed new tires. You know, stuff happens. So, while I don’t have the exact number . . . we haven’t made a ton of progress in this department.

As you remember, without aggressively paying down the debt (paying only minimums), we’d be paying bills for the next 78 months or -- gasp -- 6.5 years. If we allocated all my freelance income plus the minimums, we had the potential to be debt free in just 15 months. Fifteen glorious months that would we would have already been six months into paying.

Nope.

Here’s the problem -- that plan was too aggressive for us. My freelance income isn’t always steady. Emergencies come up. And -- yes -- weakness does set in even if you have the best of plans. I think the new debt plan will have to be a mix of pay more when we can, pay less when we’re dealing with other financial stuff. (Like summers! How did I not plan for summers with no paychecks?! Fail.).

I’m interested in those of you who have followed the snowball debt repayment -- did you really deplete all the money in your bank account to pay off your debt? I see this being a good or potentially bad thing. On one hand, with most of the debt, you’re paying interest rates. Some high, some low -- but that’s added money you don’t HAVE to pay if you get your act together. Depleting savings makes sense in this scenario.

At the same time, then things come up like needing new tires or a hot water heater, etc. (ugh, yes -- my birthday present -- and then some -- this year was a hot water heater). If you have nothing in the bank, what do you do?


Ultimately, we need to figure this whole thing out sooner rather than later. We’re wasting money on interest . . . we’re feeling the weight . . . we want OUT. I get so inspired by the stories I read of people who have come out of debt, but many times I feel like they are about credit card debt. For us, the student loans have really limited our available funds for other things. Then car payments (stupid, STUPID cars, right?!) Credit cards weren’t much of an issue.

I suppose I could look into a blended approach between the debt snowball and debt avalanche. There are really so many approaches.

To recap today, here’s what went wrong:

We made too aggressive a plan that didn’t leave room for any error. As a result, instead of sticking even remotely close to it, we got overwhelmed and almost rebelled at the whole idea. Thinking, “this is ridiculous -- we can’t even BEGIN to follow this plan.”

Area for improvement: 

Get over it and keep moving forward. We may try to do HALF of my original plan. Use half my freelance income and go after our car loan first. From there, we’ll get ONE of our debts totally paid off, feel accomplished, and then be able to pitch that money toward the next debt.

I’ll be back soon with some notes on how we’re hoping to cut our budget further in the fall. These will be specific, seasonal tips . . . and I’m excited to share them with you. I’d love to hear what things you’re doing recently to save money. We joined Sam’s Club a couple weeks ago, so I have a lot of good, bad, and ugly to write about that.

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Bad Spending Month // Recovery Plan

March, you guys. Oh, March. Where to begin? Stephen and I are in the process of switching to a more local bank. We have most of our money (which isn't much!) in Bank of America, but there are no local branches. It's made the cash system costly. The month we did take out cash, we discovered that we were being double-charged. We had taken out our cash in two installments . . . and it ended up (FOOLISHLY) costing us like $30.

So, we joined a local bank which now makes ATM transactions free. In the process of switching, though, we haven't transferred around enough, so we decided to just do our debit card last month. I still shopped for our food at the beginning of the month in a large shop and stuck within budget. After that, though, it was a landslide of spending . . . and I'm really not proud of it. This is our current plan to get debt-free, and I hate already deviating from it.

Without having the physical money, we find ourselves venturing out to the store and buying all sorts of things we "need". We find ourselves without a plan -- and that's dangerous. I haven't looked at the ugly numbers yet, but I plan to do that later today. Part of me is actually just nervous/scared to look at how much we over-spent on our budget. Does anyone else ever feel that way when you're looking at a bad over-budget month?

Here's our plan for recovery:

Chatting about the Why

Stephen and I know very well why our spending got out of control. He started coaching track and is now gone long hours and Saturdays. This means we are trying to do anything and everything to make ourselves feel better. And that usually means eating takeout or getting extra food all the time. Because home-cooked meals are sometimes hard to make when life is crazy AND eating delicious sandwiches with fresh ingredients from Wegmans several nights a week just sounds . . . amazing.

Ugh. The schedule isn't changing until a couple weeks into June. If we keep spending at this pace, our bank account will look frightening by summer. This is one of the main reasons why everything went to crap this month. So, we need to recognize it and move on.

Going Back to Cash

We need to take out cash for this month. Period. I'm going to figure out the total number I want to take out today and then divvy it up into my cash envelope system wallet. Then I'm going to write out our spending plan for the month.. There isn't much more to say about this one. If you're prone to mindless and excessive spending when you use cards . . . cash can help so much.

Simplifying Our Meals

We have $500 a month set aside for our food. We have a pretty well-stocked pantry right now, so I may forgo the big monthly shopping trip and try to just use up what's in the pantry for as long as possible. I'll need to buy some fresh produce and other items that expire more quickly. But otherwise, I am going to try to plan our meals around what's already at home. This may mean eating pasta more frequently this month.

My goal is to spend just $300 of that $500. SAVINGS: $200, maybe more.

Planning a Personal Spending Freeze

I budget $200 a month to an allowance fund for the family. This money is essentially fun money, money for stuff each of us might need or want, and etc. This month of April we are going to try to spend as little of this money as possible. Along with that, we have a $135 monthly weekend fund to do stuff out. Instead of breaking into that, we're going to try to just doing free stuff on our weekends and skip eating out, etc. I'm hoping the nicer weather may help with this. Having a blizzard and all that jazz definitely contributed to us spending more money.

SAVINGS: Potentially $335, but we'll see what ends up happening. It definitely won't be all of this.

Changing Vacation Expectations

OK. Yeah. So, this is where it gets tricky. We are also heading up to Burlington to visit my brother mid-month. What I think may happen is that we use some of these weekend/personal funds to pay for what we are doing up there versus spending any extra on top of the budget. Does that make sense? We've had this trip planned for a while . . . and we originally intended to stay three nights. I think we're going to cut the trip back to just two nights and try to save that way as well.

On the trip, we get free breakfast at the hotel, so that's a savings. I'm going to look up as many free things to do as possible. And we will try to eat modestly out and not spend a ridiculous amount of money on all the meals. Gas is the other expense. I'll try to write more about our travel budget soon.

SAVINGS: $100 -- at least that's what we'll call it for now. It's complex because we didn't totally have budget for travel right now BUT we also want to see my brother and his girlfriend.

Postponing Paying Our Debt

This might not be a popular bullet point, but I think right now we need to preserve the money that's in our bank account. And that means skipping a month of paying an extra $1,000 to our debt. This isn't really a savings, but it will help us in the short-term preserve our emergency fund.

I am actually experimenting with taking on a bit less work this month because things have been crazy with Stephen's new schedule. Basically, we're needing to go back to our original pay-off plan to tweak it a bit. It may make better sense for our to try and allocate $500 a month toward debt versus a full $1,000. I am having trouble sustaining writing so much when Stephen has 11-hour weekdays and was gone from 8:00-5:30 on Saturday.

Final Thoughts

This isn't the most organized or most inspirational budget post I've ever seen. I more just wanted to get it out there. We had a bad month. We recognize that we cannot go back to our old habits. Back-sliding it just not fun at all, especially when it comes to finances. We are admitting we messed up. We are doing a few things to help recoup some of the extra we spent. And all we can do now is more forward and have a good month.

What do you do to recover from a bad spending month? Any suggestions for us? I'm off to see exactly what the damage is!

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Vegetarian Meal Plan // What's In My Fridge + Pantry

It's that time again -- MEAL PLANNING time. Yup. Today is March 1, so that mean we are getting more cash out of the bank to do the envelope system. And along with getting cash, I'm going grocery shopping for the entire month. Doing both of these things helped tremendously with our budget, and I plan to write a lot more about each.

Today, let's take a look into what food we are starting the month with:

DINNER PLANNING

This month's meals are split into the following categories:

• 20 weeknight meals
• 4 Friday pizza nights
• 4 Saturday sandwich nights
• 4 meals using up what we have

From there, I came up with what we'll eat:

• Veggie Bean Burgers FREEZER x 4 nights 
• Chickpea Curry DUMP x 2 nights 
• Pasta w/ tofu meatballs x 2 nights 
• Veggie-Loaded Quesadillas x 3 nights 
• Sloppy Lentil Sandwich DUMP x 2 nights 
• Breakfast for dinner x 3 nights 
• Ethiopian Slow Cooker Peanut Stew DUMP x 2 nights  
• Udon Noodle Tofu Stir-Fry w/ Frozen veggies x 2 nights

DUMP means that I plan to put all ingredients in a freezer bag, label it, and then pull it out + cook it the day we're eating it. I find when I cook ahead and then freeze, I never want to eat the meals. So, I'm thinking if it's made the day of, that might improve.

SHOPPING LIST

And for those of you who are interested, this is how my shopping list is shaping up. This isn't absolutely everything, but it accounts for everything we'll need to make the dinners above (along with a few other staples for the month).

• 3, 5-pound bags carrots
• 1 large head cauliflower
• 6 large sweet potatoes 
• 2 packages celery 
• 2 tubs baby spinach
• Garlic 
• Bag onions
• Pizza sauce x 2 
• Pasta sauce x 2  
• Olives x 3
• 4 cans black beans
• 12 cans chickpeas
• 4 28-ounce diced tomatoes
• 2 cans coconut milk 
• 1 can tomato sauce
• 2 large peanut butters
• 2 jelly (grape, strawberry) 
• Tortillas x 2 
• Hot sauce  
• Udon noodles x 2 
• Asian freezer veggies x 2 
• Tofu x 1 three pack 
• Large bag walnuts
• Quality bread flour
• Sugar
• Chocolate chips
• Package bread crumbs 
• Large container Goldfish
• Bag lentils      
• Curry powder
• Garam masala  
• Mustard powder
• 4 assorted non-dairy milks
• 6 tubs Greek yogurt 
• 4 packages sliced cheese
• 4 blocks cheese  
• Large pack cheese sticks
• 4 loaves seed bread
• 1 tub of oats
• 6 dozen eggs    

I am shopping at Aldi and Wegmans this month, and I'll be sure to share how I fare with the budget getting all this stuff. I'll also be back soon talking about the other meals we'll be eating this month (breakfasts, lunches, etc.), as well as some handy tips to make school lunches really fast + cheap.

PS: Don't forget to subscribe to my YouTube channel!

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Making Sense of Our Debt // Plan + Numbers

Have you ever had one of those crazy Ah-HA! moments? Like, you've been doing it all wrong this whole time? Yeah. This post is about one of those.

Warning: I'm going to get a little TMI. A little taboo . . . and I'm going to share a few details about our financial situation. Honestly, it's embarrassing. But at the same time, I've learned so much from other bloggers and vloggers who have done the same (one of my favorites is Pennies Into Pearls). 

And -- really -- this is only the beginning of what I am hoping will be a major success story.

Also: I'm not subscribing to any particular school of thought with budget matters. I know there are some big names in this area with detailed plans to boot. The whole snowball debt thing is even taken directly from Dave Ramsey -- but I don't agree with all of his practices. 

So, much all of my adult life, I've been saddled with debt. Like, a lot. Stephen and I both have been. Student loans for private liberal arts education are killer, you guys. I think I brought something like $33K to the table when we got married. That was after my parents generously paid half my way. I worked a lot (two jobs) during college as well. I also got a nice grant. Still, I was $33K in debt by age 21.

Stephen also brought his graduate school loans which amounted to about the same. We've dutifully paid the minimum of these loans since we graduated school. We've picked up a few cars along the way. And then there are things like when you furnace or air conditioning dies or you want new carpet in your basement, etc. Thankfully, we never really got into credit cards.

The thing is, I've always just paid minimums. Seemed manageable enough. Try not to think about interest. Break it down monthly, and those gigantic numbers didn't seem so frightening. Keep the interest rate a vague number so you don't think about how much you're throwing away in the long run. It was a system that worked. It works for many people. Not all debt has to be bad. But when it starts to mount, it's not something that makes it easy to sleep at night.

Anyway, I had more compelling financial things to take my attention. Like saving 3 to 6 months of our monthly budget to have in our bank account. My focus has been entirely on building this number for so long. We did have 6 months at one point right when I had left my full-time job. In those last five years, life has happened. We've had to dip in for various reasons. We have about 3 months of our budget in savings currently. I am not thrilled it's only 3 . . . but also not saddened by that number. It's solid.

Then, I had this moment. I found out that my interest rate on my student loans went up very minimally when the feds increased the prime rate. It prompted me to take a look into my account beyond just paying my bill. I started to think we could do better. Maybe we SHOULD try to pay off some of this debt faster. I mean, we can't have TOO much more, right? So, in the new year -- I set this as a goal. At least to LOOK at how much we still owe and think about tackling it a bit faster.

At age 33, our family is carrying about $34K in debt.

Breathe.

Almost half of this amount is in student loans. There is an amount we had to take out to pay for our air conditioner that broke on one of the hottest days of summer last year when Eloise was a few days old. There's a bit left over on a 0% financing deal for when we moved and got new carpeting in the basement (worth every penny we are paying, IMO). And the rest is the worst of all -- debt on two used cars (UGH! We have the worst luck with cars, too). One of the loans (I'm looking at you, van) is higher than either of our student loans if you break them out.

Yikes.

So, $34K. That sounds super overwhelming, especially considering all the interest we're thrown away in the last decade just paying minimums. I maybe even feel some judgement from those of you who are smarter with your money. It could be worse, but the more I read into it . . . we probably could have paid off all of this YEARS ago if we had been smart. If we had buckled down and spent less. If we had just paid attention at all.

And that's what I think we're going to do in 2017.


There's no how-to in today's post. This is just my declaration that we are committed to using the snowball technique to pay down this debt as quickly as possible. Thing is, I do not want to deplete what we have in the bank to do it, which I think deviates from Dave Ramsey. It might not make the best financial sense, but I do want to retain a large cushion because my income is somewhat volatile.

That being said, we are going to try our hardest to live on Stephen's salary alone and use all my freelance money to pitch toward the debt. As much as possible.

If we start in February -- in just a week and a half -- with our smallest car loan and progress by using my freelance income + minimums, etc., we could potentially be debt-free (OK, not counting our mortgage) in just 15 months! Fifteen months! That's just over a year. Holy moly. Now, I know Ramsey says to pay off the smallest debt first, but we aren't going to do that. Our smallest debt is also our smallest monthly payment with 0%. We'll let that one wait.

Instead, we're hoping to do them in this order. This list takes into account paying minimums on all loans each month BUT adding my freelance money to the first loan, and then adding the minimum money we put toward the FIRST loan PLUS my freelancing income PLUS the money for the second loan toward the second loan, and so on.

Does that make sense?

• Car (3 months)
• Van (7 months)
• Stephen loan (2.5 months)
• Ashley loan (1 month)
• Air conditioner (1 months)
• Carpet (will basically be paid off)

= 15 months total

Without this plan, we wouldn't be totally out of debt for like 78 months. How many years is that? Oh, it's 6.5 years. I'll have an almost 12-year-old Ada by then. Now, that isn't the norm. On average, the length we have left on our loans if we just pay the minimums is 36 months. Our student loans don't have terrible interest, but it's just darned silly to be paying long loans on used cars. We did what we had to do, but it's something I don't ever want to do again moving forward.

The best part of all of this is that when we're done, we'll be freeing up $1,100 a month that we currently have built into our budget to pay off all this debt. That is SO much money to us. And it's that kind of stuff that makes the whole having-a-third-child conversation less scary.

Obviously there's more to this conversation. How will we modify our budget to live on just Stephen's income? What will we be giving up? What happens if we feel we can't be this aggressive? There are many more things I'd like to cover another day. But I feel good getting this out there. Motivated. I sort of don't care if people judge us. We have a plan. The debt is what it is. There's no changing it at this point.

In the wise words of Hamilton's Aaron Burr: "I am the one thing in life I can control."

(BTW: My brother-in-law and sister-in-law saw Hamilton on Broadway last night. I'm green with envy. Hamilton tickets, though. That's definitely one thing I will NOT be purchasing in the next 15 months!)

Image credits here and here

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