After feeling proud and hopeful yesterday about our current debt payoff plan I made the mistake of checking the mail. Two envelopes from the California State Tax Board. And my heart sinks.
The state tax debt I have previously discussed is for Virginia, so this is an additional debt to add to our list. We knew California would need to be dealt with eventually, but hoped it would be on our own time. You cannot hide from the government and the debt is owed. My husband will need to contact them and work out a payment plan. Hopefully the monthly payment amount won't be too high so we can still reach some other goals.
Add $4,333.67 to our total. I thought we would be 100% done with our debt in less than three years, probably not anymore. Trying my hardest not to let this make me feel defeated. The timing was almost laughable. I was literally on the phone with my husband discussing our plans for the loan and how excited we will be to be debt free soon when I put my hands on the mail.
Real funny universe! I don't appreciate your timing at all.
~E
Friday, June 29, 2012
Thursday, June 28, 2012
2 Weeks Later
As promised, here is a two week update to “if you don’t have any money …”
Two weeks is a short period of time, sure, but I’m still proud of myself and my husband for staying very focused on our financial goals so far. We should hear from our bank today to find out if we were approved for a loan. The loan will be used to pay off our tax debts and some of my student loans. We see this as an opportunity to pay off our most stressful debts quicker and will work hard to pay back the bank as early as possible. The loan will be in my name because I have better credit. I have never applied for a loan before and it’s a little intimidating, although I do feel pretty confident that we will be approved.
As a part of the loan application process my credit score was checked and is currently sitting pretty at 731. According to the letter I received this is better than 58% of US consumers! The loan application also forced us to get all of our numbers together in terms of our debts. As of June 26, 2012 we have $14,207.46 in debt. Very scary to see it as one large sum. Here’s the breakdown:
$7,003.95 is IRS debt
$5,901.82 is Student Loans
$950.00 is State tax debt
& $351.69 is Credit Card debt
The number seems high, but when you started doing calculations, it won’t actually take us too long to pay off. We have been averaging about $507 in debt payments monthly - $181 to student loans, $150 to state taxes, $137 to the IRS, and $40 to the credit card. By buckling down (as discussed in "...square one" and “The Plan”) we can make higher payments than that. $507 per month gets us out of debt in more than two years, but less than three. I am very hopeful that we can be strict with our spending and really knock this debt out quickly. I dream of buying a car with cash, saving for a house, having a big fat emergency fund, and traveling to Europe!
Our savings account did creep up slightly since I originally posted. It’s now $285.43. Still small and not much of a security blanket. Progress may continue to be slow here as our budget is tightened.
The major reason for our very tight budget for July is trying to afford plane tickets for the children to come visit us in August, and then the costs of having them with us as well (food, entertainment, time off work). We have to be very tough on ourselves (little to no spending outside of necessities) because plane tickets are not cheap in the summertime (or ever). After we afford this visit, I hope we learn to be more spending conscious throughout the entire year, as these visits will always be happening and preparing in advance would greatly reduce our stress.
I have been faithfully tracking my spending, which is always helpful. I plan on keeping that up long term. It will come in very handy when we sit down to create a budget again. Speaking a budget, I have gone back to a limit on grocery spending. The amount is generous, we just need to learn to eat what we buy and to not buy new food just out of boredom. When I have a spending limit I use my cell phone’s calculator to add things up as I put them in my shopping cart and almost always end up under budget. I’m still not quite to the point of meal planning and cooking nice meals yet, but I’d like to get there eventually.
I have held myself accountable and I’m proud. I shared my goals and fears with my husband and my online debt support group. But the work is not done … I must keep working hard at this, the payoff will be worth the sacrifice.
~E
Monday, June 25, 2012
The Plan
Here is our plan to get into a better place financially.
My husband recently re-crunched our numbers (bills vs. income) and discovered we should end up with approximately $900 at the end of each month. What does this mean? It means we have been acting like complete idiots lately and we have wasted an unknown amount of money.
The plan is to pay our bills, and stay within budget for areas like groceries. By the end of each month we should have the surplus money to play with. This amount will be divided up between savings and various other funds (allowance, entertainment, a clothes fund, etc.). Because of our recent bad behavior, we will not have the full amount at the end of July, however if we keep focused and working hard we should have it by the end of August. Essentially we are a bit behind at the moment and July will be a very tight month. No more eating out, limited grocery spending, no entertainment (during summer movie blockbuster season? torture!), no extra purchases at all outside of rent, bills and food.
I worry about endurance. With any plan in the past we have done well for short spurts of time. Keeping our energy up for the long term is our challenge. Hopefully if we start to see our savings grow and debt dwindle we will feel inspired to keep going. If we can make this plan work and actually stick to a budget for once, the payoff (pun intended!) will be great!
I started yesterday by setting a spending limit when I went to the grocery store. I make our grocery list with items numbered by priority and calculate the total as I shop using the calculator on my cell phone. Shopping takes a little longer this way, but it is very worthwhile. I was $40 under budget and we have tons of food!
Another great reason to buckle down and follow this plan - we are turning in a loan application to our bank tomorrow. The purpose of the loan is to pay off our tax debt. We will then re-pay the local bank. We need to stick to our plan so that we can pay off this loan on time or early and be debt free!
~E
My husband recently re-crunched our numbers (bills vs. income) and discovered we should end up with approximately $900 at the end of each month. What does this mean? It means we have been acting like complete idiots lately and we have wasted an unknown amount of money.
The plan is to pay our bills, and stay within budget for areas like groceries. By the end of each month we should have the surplus money to play with. This amount will be divided up between savings and various other funds (allowance, entertainment, a clothes fund, etc.). Because of our recent bad behavior, we will not have the full amount at the end of July, however if we keep focused and working hard we should have it by the end of August. Essentially we are a bit behind at the moment and July will be a very tight month. No more eating out, limited grocery spending, no entertainment (during summer movie blockbuster season? torture!), no extra purchases at all outside of rent, bills and food.
I worry about endurance. With any plan in the past we have done well for short spurts of time. Keeping our energy up for the long term is our challenge. Hopefully if we start to see our savings grow and debt dwindle we will feel inspired to keep going. If we can make this plan work and actually stick to a budget for once, the payoff (pun intended!) will be great!
I started yesterday by setting a spending limit when I went to the grocery store. I make our grocery list with items numbered by priority and calculate the total as I shop using the calculator on my cell phone. Shopping takes a little longer this way, but it is very worthwhile. I was $40 under budget and we have tons of food!
Another great reason to buckle down and follow this plan - we are turning in a loan application to our bank tomorrow. The purpose of the loan is to pay off our tax debt. We will then re-pay the local bank. We need to stick to our plan so that we can pay off this loan on time or early and be debt free!
~E
Saturday, June 23, 2012
Back to square one
It's time to buckle down.
My husband checked our bank account online this morning and was surprised to see we didn't have a lot of extra money beyond his just received paycheck. This does not come as a surprise to me as I have been checking the account daily and tracking our spending for a little over a week now.
I have learned in the short time we have been married and financially merged, that nothing works if we are not on the same page. I can't get far with debt payoff and limited spending if my husband is in a splurging state of mind. Facing our checking account balance may have been an unfortunate way to start his day, but for me it is a relief. I am happy that we are both now aware of our situation. We can discuss how we got here together and make a plan to move forward.
We have been living a lifestyle that we can't afford. We can't say "it's only $15, it's not a big deal" every time we're not in the mood to cook dinner and opt to grab a sandwich somewhere instead. Those $5, $10, $15, and $20 purchases have all majorly added up over the last several months. My husband has felt like we haven't been spending much money (with the exception of eating out too often), but with a little thinking I can rattle off a pretty significant list of places our money has gone. Books, dvd's, going to the movies, eating out, a bridal shower gift, a graduation gift, greeting cards, haircuts, clothes, a day at the shooting range, joining a gym, accessories for our new cell phones, and lot's of unneccessary treats at the grocery store. My husband described it well - he's had a wall up between himself and reality. I do not have that same wall, but I am guilty of letting the behavior continue on too long.
We will sit down together this evening to discuss this further and come up with a plan. One of the major problems we are facing is that we have a large purchase to make before summer is over (plane tickets so the kids can visit) but have spent any money that could have been used for that purpose.
I have a few ideas in mind that should help us.
*We need to go back to grocery shopping only once a week, using some kind of meal plan to make the most of the food we buy, and sticking to a set budget limit for groceries.
*I need to continue tracking our spending and checking our bank balances regularly - and sharing this information with my husband. We should be discussing money and our goals weekly.
*Leaving money sitting in our checking account just doesn't work, if it's there it will get spent on something. If we have big things to save for, we need to either transfer money into a safer savings account, or set cash aside in an envelope.
*We desperately need to get back to a budget, but my husband might not be ready for that just yet.
*This is a little more difficult, but we need to find a way to break the cycle of stress/emotional eating and to stop using food as a reward or treat. This is bad for our wallets and our waistlines.
So here we are again, back at square one it seems. Not enough money in the bank, not able to lead the lifestyle we want. It's time to face up to all of our faults and do better.
~E
My husband checked our bank account online this morning and was surprised to see we didn't have a lot of extra money beyond his just received paycheck. This does not come as a surprise to me as I have been checking the account daily and tracking our spending for a little over a week now.
I have learned in the short time we have been married and financially merged, that nothing works if we are not on the same page. I can't get far with debt payoff and limited spending if my husband is in a splurging state of mind. Facing our checking account balance may have been an unfortunate way to start his day, but for me it is a relief. I am happy that we are both now aware of our situation. We can discuss how we got here together and make a plan to move forward.
We have been living a lifestyle that we can't afford. We can't say "it's only $15, it's not a big deal" every time we're not in the mood to cook dinner and opt to grab a sandwich somewhere instead. Those $5, $10, $15, and $20 purchases have all majorly added up over the last several months. My husband has felt like we haven't been spending much money (with the exception of eating out too often), but with a little thinking I can rattle off a pretty significant list of places our money has gone. Books, dvd's, going to the movies, eating out, a bridal shower gift, a graduation gift, greeting cards, haircuts, clothes, a day at the shooting range, joining a gym, accessories for our new cell phones, and lot's of unneccessary treats at the grocery store. My husband described it well - he's had a wall up between himself and reality. I do not have that same wall, but I am guilty of letting the behavior continue on too long.
We will sit down together this evening to discuss this further and come up with a plan. One of the major problems we are facing is that we have a large purchase to make before summer is over (plane tickets so the kids can visit) but have spent any money that could have been used for that purpose.
I have a few ideas in mind that should help us.
*We need to go back to grocery shopping only once a week, using some kind of meal plan to make the most of the food we buy, and sticking to a set budget limit for groceries.
*I need to continue tracking our spending and checking our bank balances regularly - and sharing this information with my husband. We should be discussing money and our goals weekly.
*Leaving money sitting in our checking account just doesn't work, if it's there it will get spent on something. If we have big things to save for, we need to either transfer money into a safer savings account, or set cash aside in an envelope.
*We desperately need to get back to a budget, but my husband might not be ready for that just yet.
*This is a little more difficult, but we need to find a way to break the cycle of stress/emotional eating and to stop using food as a reward or treat. This is bad for our wallets and our waistlines.
So here we are again, back at square one it seems. Not enough money in the bank, not able to lead the lifestyle we want. It's time to face up to all of our faults and do better.
~E
Friday, June 22, 2012
Envy & Inadequacy
Last night, I hosted a book club meeting at my apartment. Only two lovely ladies were able to attend out of the eight total members in our group, but it was still a very nice evening. Being a part of the book club is relatively new to me (I was invited to join by a co-worker at my former job) and I’ve missed a few meetings myself due to being overwhelmed by my new job.
Leading up to hosting I felt negatively several times about our apartment. First, I felt bad for living in an apartment at all, since many of the book club women live in houses. Then I feel bad about our old, broken couch, the dirty carpet, our lack of a real bed, my embarrassing old furniture some of which I have had since I was a teenager, the bare white walls with no framed artwork or photographs. I feel inadequate, and nervous about being judged. It’s a terrible feeling because I don’t usually view our home through that set of eyes. On a normal day, I love our home. It’s comfortable, it’s us, it’s peaceful. It’s a safe place for my husband and I both to come home to every day – it’s our sanctuary. We don’t have people over very often (mostly because we live in an apartment, and have limited space and seating) so opening our home up like this was in a way an invasion of privacy and made me feel vulnerable.
When my guests arrived they were very complimentary of the apartment and I felt more at ease. But as the conversations strayed from the book and towards personal life I began feeling poorly again. Both women travel regularly to Italy. Both have vacations planned this summer – two weeks at beautiful beaches in North Carolina and a trip across the country to California. Both women live in real houses and spend their weekends decorating and working on home improvements. When I mentioned wishing we lived in a house one of my guests, whom I had just met for the first time, said in an almost singsong voice “now is the time to buy!” I can hear the sentence ringing in my ears. Now may very well be a great time to buy a house, but not for someone without any money.
I envy their trips, their travels, their shopping sprees at Home Depot, their backyards, their family beach houses, their spare bedrooms that are used as workout rooms and crafting spaces. That lifestyle feels so unattainable sometimes. I often wonder where I went wrong. Was it a series of poor decisions on my part the led me to not have these things I covet? Is it because I didn’t choose the right school or major, and took too long to finish my education? Career choices? Lack of drive? Spending and savings decisions? I'm not sure either of these women are dealing with debt or child support. Is it too late to achieve things like owning a home, being able to afford a summer vacation every year, occasionally traveling the world?
All in all, I enjoyed playing hostess for a few hours and it was very nice being social and having some girl time. On a positive note - our cat, who is extremely friendly, vocal, and lovey, was the star of the night and both of my guests fell in love with him.
The comparison game is a terrible one to play. Sometimes I just feel so behind ...
~E
Tuesday, June 19, 2012
Mark the calendar.
I cried at work yesterday. In front of my boss. Because of my boss.
Embarrassing.
I'm struggling with how to handle the situation. I believe there is very poor communication and that my supervisor can be hostile at times. Often we get along very well, she is complimentary of my work and I learn from her. But there are times (unpredictably so) when I get berated, treated like a child, talked to in hostile and condescending ways. I dread going to work and I've been in this position for less than four months.
I could confront my boss. I could go up a level and talk to my boss's boss. I could talk to HR. I don't have a lot of confidence in any of these options. A lateral move would be great, but there aren't any openings at the moment.
I woke up this morning with a sore jaw (likely from grinding my teeth all night due to stress), so I will take that as a sign I should do something.
~E
Embarrassing.
I'm struggling with how to handle the situation. I believe there is very poor communication and that my supervisor can be hostile at times. Often we get along very well, she is complimentary of my work and I learn from her. But there are times (unpredictably so) when I get berated, treated like a child, talked to in hostile and condescending ways. I dread going to work and I've been in this position for less than four months.
I could confront my boss. I could go up a level and talk to my boss's boss. I could talk to HR. I don't have a lot of confidence in any of these options. A lateral move would be great, but there aren't any openings at the moment.
I woke up this morning with a sore jaw (likely from grinding my teeth all night due to stress), so I will take that as a sign I should do something.
~E
Friday, June 15, 2012
If you don't have any money ...
... don't watch My First Place, Househunters, or really ANY SHOW on HGTV. It's completely disheartening. Especially the episode that features an annoying 24 year old who can't decide how to best spend his $300,000 budget. Ugh. It's probably more enjoyable if you're not 30 years old with less than $300 in savings. :(
Time for some new financial goals, and some accountability.
1. Pay off debt. We have several types of debt.
a. Student Loans - All mine, and I've been paying them off faithfully and aggressively. Just recently made it under the $6000 mark! Still will take almost three full years to pay off at the current rate of progress, which feels like forever.
b. Credit Card - The only card my husband and I currently have. Intentionally obtained in his name, to help build his credit score. Sitting at just under $400 (with only a $500 credit limit), but paying the minimum of $15 most months. Interest rate is 17.9%! We were also charged a $15 late payment fee last month.
c. State Tax Debt - I do not have the exact number, but we recently managed to get under $1000! Yay! This feels manageable. We are on a payment plan of $150 per month. Should be paid off in approximately 6 months, or less if we are aggressive!
d. Federal Tax Debt - This is the worst and the scariest. I do not have the most recent number (all tax debt is under my husband's name). We should be under 5 or 6 thousand dollars. However, the IRS does not issue paper statements to us, and does not allow online payments. We receive stress-inducing certified mail from them fairly often. They change the amount owed often as well and it's difficult to keep track of where we stand. A nightmare, essentially (see goal #2).
2. Explore bank loan as a debt payoff option.
We want to talk to a real live person at our local bank to discuss loan options. The idea is to take out a loan so that we can pay off our debt (especially tax debt) in one fell swoop. Remove the stress of multiple payments and our fear of the IRS, and only have to deal with paying back our local bank. Interest rates would hopefully be lower as well, but we will have to check with the bank to know for sure.
I want to assign the "talk to the bank" task to my husband.
3. Build savings. At this very second in time we have ... (drumroll please) ... $253.43. That's it. Unacceptable in my opinion. I have no sense of security, and no feeling of preparation for life's inevitable emergencies. Things like buying a home, having a child, taking a (belated) honeymoon, or buying a new car all feel impossible. I want contributing to our savings to happen regularly, and to increase over time.
4. Tracking spending. I did this religiously and obsessively in the past! But then we used my new job as an excuse to stop tracking, stop thinking, and abandon our budget (is that harsh?). We now know exactly what my paychecks are each month, so that can't be an excuse any longer. Not surprisingly, tracking keeps me on track. I'd like to track for 90 days straight to get a good picture of where we are and where our money is going (hint - Chipotle, Ledo's Pizza, Subway).
5. Reconsider a budget. My husband and I do not think about or handle money the same way, but we do our best to communicate and compromise. I'd like to revisit having a budget. I think buckling down for a few months can help us reach some goals sooner, and a budget is a great way to do this.
6. Be honest about my fears. I promise myself I will share with my husband my fears about starting a family with little to no emergency money in the bank.
Now for the accountability piece! I will share these goals. With my husband, and with my debt support board. And I will write about them again - not a year from now this time, but soon! I will mark my calendar and update again in two weeks.
Wish me luck!
~E
Time for some new financial goals, and some accountability.
1. Pay off debt. We have several types of debt.
a. Student Loans - All mine, and I've been paying them off faithfully and aggressively. Just recently made it under the $6000 mark! Still will take almost three full years to pay off at the current rate of progress, which feels like forever.
b. Credit Card - The only card my husband and I currently have. Intentionally obtained in his name, to help build his credit score. Sitting at just under $400 (with only a $500 credit limit), but paying the minimum of $15 most months. Interest rate is 17.9%! We were also charged a $15 late payment fee last month.
c. State Tax Debt - I do not have the exact number, but we recently managed to get under $1000! Yay! This feels manageable. We are on a payment plan of $150 per month. Should be paid off in approximately 6 months, or less if we are aggressive!
d. Federal Tax Debt - This is the worst and the scariest. I do not have the most recent number (all tax debt is under my husband's name). We should be under 5 or 6 thousand dollars. However, the IRS does not issue paper statements to us, and does not allow online payments. We receive stress-inducing certified mail from them fairly often. They change the amount owed often as well and it's difficult to keep track of where we stand. A nightmare, essentially (see goal #2).
2. Explore bank loan as a debt payoff option.
We want to talk to a real live person at our local bank to discuss loan options. The idea is to take out a loan so that we can pay off our debt (especially tax debt) in one fell swoop. Remove the stress of multiple payments and our fear of the IRS, and only have to deal with paying back our local bank. Interest rates would hopefully be lower as well, but we will have to check with the bank to know for sure.
I want to assign the "talk to the bank" task to my husband.
3. Build savings. At this very second in time we have ... (drumroll please) ... $253.43. That's it. Unacceptable in my opinion. I have no sense of security, and no feeling of preparation for life's inevitable emergencies. Things like buying a home, having a child, taking a (belated) honeymoon, or buying a new car all feel impossible. I want contributing to our savings to happen regularly, and to increase over time.
4. Tracking spending. I did this religiously and obsessively in the past! But then we used my new job as an excuse to stop tracking, stop thinking, and abandon our budget (is that harsh?). We now know exactly what my paychecks are each month, so that can't be an excuse any longer. Not surprisingly, tracking keeps me on track. I'd like to track for 90 days straight to get a good picture of where we are and where our money is going (hint - Chipotle, Ledo's Pizza, Subway).
5. Reconsider a budget. My husband and I do not think about or handle money the same way, but we do our best to communicate and compromise. I'd like to revisit having a budget. I think buckling down for a few months can help us reach some goals sooner, and a budget is a great way to do this.
6. Be honest about my fears. I promise myself I will share with my husband my fears about starting a family with little to no emergency money in the bank.
Now for the accountability piece! I will share these goals. With my husband, and with my debt support board. And I will write about them again - not a year from now this time, but soon! I will mark my calendar and update again in two weeks.
Wish me luck!
~E
Subscribe to:
Posts (Atom)