Au Revoir Debt

A 29 year old wife & mother trying to pay off the last bit of debt.

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Expensive month

I know we’re half way through August, but I wanted to give an update on July now that I have a few minutes to catch my breath.

July was VERY busy & VERY expensive. We had a lot of family visit from out of town which really increased our expenses.

We also both needed new glasses. My husband needed all new frames, so his were about $300. I’m a contact wearing kind of girl and only use my glasses at night, so I just got updated lenses and used my old frames. They are about 4 years old, but still in really good condition. My glasses came to $130, saving us over $150! At first I was kind of bummed about not getting new frames, but now that we’ve saved all of that money, I feel really good about it!

This is where we stand debt - wise:

Student loan: Previous balance: $1790 New balance: $1593 Paid off $197 in July

Medical: Previous balance: $5,623 New balance: $5,423 Paid off: $200 in July

Mortgage: Previous balance: $215,032 New balance: $213,782 Paid off: $1250 

So in total we paid off $1647 in debt in July! Not our best month, but we had a few obstacles this month, so I’m very pleased!

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Clothes allowance

Soooo after I had my baby, I had a really difficult time losing the 'baby weight'. I'm still carrying around 30 extra pounds that I'm actively trying to get rid of. It's starting to verrrrrry slowly melt away. I'm ok with this for the most part. The only issue is that I do not have a lot of clothes that fit right now. I have a whole closet full of beautiful dresses and blouses, but I'm not sure if I'll ever get back to a size 4/6. After I accepted that my body had probably changed for ever, I went and bought about $150 worth of clothes at old navy. That was a BIG mistake. I don't want to offend anyone who likes their clothes, but they do not work for me. I'm very tall and have a long-ish torso. After only one wash, all of the dresses, t-shirts and tank tops I had bought had shrunk or lost their shape. The clothes were very cheap, and so was the quality. I debated about what to do. I have very few clothes that fit and won't be losing this extra weight over night. I don't want to buy cheap clothes for fear that they'll fall apart again. After a lot of thought, I've decided to set aside $50 per month to start building up my wardrobe again. I think this is necessary even if I start to fit into my old clothes because a lot of my shirts and blouses aren't practical for a stay at home mom. Wearing a silk blouse that is dry-clean only spells disaster to me. So I need to get more kid friendly 'play' clothes. Before this debt journey, I used to shop at Jcrew and just charge everything. I know my shopping habits contributed greatly to my debt. So this time around, I'll only shop with cash that has been budgeted. Tonight I went to Jcrew and immediately hit up their sale rack. They were having a promotion of 50% off the sale price. So I was able to get two graphic t-shirts for just under $50. They were each originally $40 each! I know for some, spending $50 for 2 t-shirts is a lot. But, I've always found their clothes to be superior quality and I purposely got darker colors so toddler stains won't show up as easily. I'll have to wait until next month to get anything else, but I figure that if I can get 1-2 new items a month, I'll eventually have a solid selection of clothes again. I'm also debating about selling some of my too-small clothes. I've got a few really nice dresses and shirts and think I could easy get a few bucks for everything. Does Anyone have any tips/tricks on buying good quality clothes for cheap?

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CVS sent me my savings summary and I'm pretty impressed with how much I've saved. I've found CVS to be one of the best places to play the coupon game and can usually get good deals on diapers/wipes. I honestly haven't been couponing that much lately, but CVS makes it pretty easy. So I try to hit up my local store once in a while. It's nice to see my efforts are adding up!

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Our New House - Part 2

Seeing as moving and buying a new house is a huge expense, I thought I should breakdown some of the numbers so people know what we're working with. I mentioned that we now have a mortgage of about $215,000. The house actually cost a bit more than that. First, we were able to negotiate the price wayyyy down. The former owners were a retired couple who sold the house themselves. It had been on the market for almost a year and I think they just wanted to get rid of it. They had dropped the price a few times and then we negotiated it down even more. Second, the market was realllly hot when we were moving. To get an idea, we listed our townhouse on a Thursday, had our first showing/open house on a Sunday and got 3 offers that night. We bought our townhouse as a foreclosure when the market was at it's worst, so we made a huge profit. I'm talking tens of thousands of dollars. That townhouse ended up being a very smart investment! Thirdly, right before we bought the house my husband was finally able to collect on the profit of the business he co-owns. We have been living on a very small salary (less than the national average), so he was able to take a lot of profit. We decided the best thing was to put (most) of it towards the down payment because then we could get a better interest rate on the loan. So with all of that, we only had to take out a small mortgage. The house is a fixer-upper, but not to the point where everything has to be done right away. It's mostly just ugly bathroom tiling, yucky carpeting on the stairs, outdated light fixtures, etc. All things we can live with for a while. And I'm not worried about pumping too much money into the house over the years because there are houses down the street that are $900,000-$1.2 million. No joke, our house is the eyesore on the street, hence why we got it so much cheaper. This is getting long, so I just wanted to quickly say that moving didn't cost that much because we actually moved to the next town over and had over 2 weeks before we had to get out of our townhouse. This allowed us to move a lot of stuff ourselves. We did hire movers for the really big stuff (my husband has a bad back). But we went with a fledgling company that was super cheap. So we were able to pay for all of this in cash and just budget it into our regular monthly expense.

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Our new house - part 1

First, thank you to everyone for all of the nice comments/ messages about my last post. When I started blogging here almost 1.5 years ago the personal finance/debt community was soooo small. It's nice to see so many more blogs popping up! I'd like to explain why we decided to move so that it makes sense why we decided to take on a bigger mortgage before being 100% debt free. Reasons: 1. We out grew our old house. We moved around the time my daughter started pulling herself up on furniture and trying to walk. Once she became mobile, it was clear to us that we needed more space with a bigger back yard. Also, we only had 2 bedrooms which meant we could never have guests over. There were many times I really needed my mom or my mother in law to stay the night and help with the baby and they couldn't. My mom doesn't drive, so day trips aren't easy for her. We really needed a place that could accommodate her comfortably for a few days. 2. Two incidents happened while I was out for a walk with my baby. First, I witnessed a teenage boy overdose on the sidewalk. It was very scary and I felt helpless. I stayed with him and his friends until help arrived. Heroin seems to be a HUGE issue in my area and particularly in my old town. This is not the environment I want my daughter to grow up in. The other incident occurred a few weeks later when I witnessed a severe domestic violence situation. I literally ran past the couple and hid my daughter and myself behind a bush so I could call 911 and report it. For months I was worried that the couple (who lived down the street) would find out it was me who reported them. This happened around Halloween and a few days later all of my pumpkins were smashed. I have no clue if it was them, but it made me scared to go for walks by myself and just made me very uncomfortable. My old town has a lot of bars and restaurants and was great for a newlywed couple, but not so much for young kids. So after these two incidents occurred, I began looking for a new house. 3. Everyone has a dream town and a dream neighborhood and a dream house. So when our new house came on the market and fit 2/3 of those, I knew we had to jump on it. This house is in my DREAM town and in such a nice neighborhood. The house itself needs a lot of work, but we don't mind that. We've been here almost 3 months and I still have to pinch myself when I drive through the town center or when one of my neighbors brings over a house warming gift ( everyone is so nice, we've gotten chocolates, flowers, food, etc)! So I know taking on more debt is not smart. Debt is terrible! But, this was an amazing opportunity that only set us back a little bit. I don't think we'll be moving again for a veryyyyy long time, so I don't even mind all of the costs associated with moving. This is getting kind of long, so I'll do a part 2 to explain all of the financial stuff later. I hope everyone is enjoying their weekend! Xo

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It's been a while...

... Life has been crazy, so blogging has been put on the back burner. But I thought it was time to give a little update: 1. We are not debt free. We still owe $1777 on a student loan and about $3000 in medical bills (some of these are new, I'll explain that at a later date). Not terrible and most importantly, we still have zero CC debt! Woo!! 2. We bought a bigger house. I know what some will think, but it was necessary and a long story. I'll try to do a separate post about all of this soon. But we now have a mortgage for $215,000 that I want to start focusing on paying off. 3. The house is a bit of a fixer upper so on top of paying off debt, I'd like to start tracking our savings so that we can start to do house repairs. I know Dave Ramsey would be shaking his head at me right now, but a lot has happened/changed since I last posted and I feel really comfortable & happy with everything. Beside tracking debt, I also want to start tracking my weight loss. I gained 60lbs when I was pregnant and only lost some of that since giving birth. I have about 35lbs to lose to get back to my pre-baby weight. I'm hoping to lose 55 lbs in total.

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Why is the home stretch the most difficult part?

We are so so so close to being 100% debt free (except for the house), but it feels like we'll never actually make it to the end. I can see the light at the end of the tunnel, but we're currently moving slower than a turtle. I feel like this is not uncommon. Why is it so difficult to lose the last 10 lbs, pay off that last little student loan, run that final mile? We are doing really well with our spending, it's just that little emergencies keep coming up so we've only been able to pay the minimum. The good news is that we have NO NEW DEBT! All of these little obstacles have been paid for in cash. I feel very proud and happy about that!

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I'm back!

Vacation was lovely. It was perfect weather all week and I was able to relax and take some time for myself and my husband. My 10 month old did surprisingly well all week and adjusted to a new environment very well! I'm already missing palm trees and the sun because it's currently snowing outside and sooooo cold! We did pretty well with money while on vacation. My husband got his yearly bonus right before we left so we loosened our belts a bit and spent a little more than planned. We had budgeted about $300 for the week and spent about $350. That's it! Not bad for a week long vacation. I'm excited to do a debt update soon because we have paid off a lot of bills and are so close to be debt free! Hopefully next week I can provide some updated numbers!

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Vacation

So we're going on vacation next week. And I know what you're thinking, but this vacation is basically FREE! We're heading to Florida to visit my in-laws and will be staying with them (for free), using their car (free except for gas), our airline tickets were purchased using rewards and credit card points (so free) and my in-laws have already said they want to wine and dine us (meaning free food). So basically all we need is some spending money for the odd thing or two. It's supposed to be really nice weather while we're there, so we're going to take advantage of the beach and park (both free). Since we won't have to buy groceries next week, we're just going to use what we would have spent on that as our spending money. We really need a vacation! We haven't gone anywhere in a long time and I'm looking forward to being able to sneak in some husband/wife time while my in-laws watch our baby! Here's to hoping we are blessed with beautiful weather all week!

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Budgeting

Any debt blogger or financial guru will tell you budgeting is #1 when it comes to getting out of debt. When we began following a written budget last year, it made a huge difference in our spending.

After our windfall of money this past summer, I sort of eased up on the budgeting and started doing what I called a ‘soft’ budget. Meaning, I made sure all of the bills were budgeted and paid first, but didn’t get too crazy about all the little extras. That worked fine for a few months, but now that we’re facing some debt again, I’ve been ‘hard’ budgeting. Meaning EVERY SINGLE PENNY IS ACCOUNTED FOR. This has once again made a huge difference. We’ve been making good progress again and have really cut back on the excessive spending.

If anyone is struggling with paying off your debt, I really suggest making sure you are budgeting down to the last penny. It really makes a huge difference!

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So I received this lovely email last night. I didn't shop at Target during the weeks they were getting hacked. I'm assuming my info got compromised because I've ordered things online and they stored my login and information. I'm sure I'll be ok, but it's still such a pain. And this is why we're going back to the cash envelope system and only paying with cash from now on. We used the cash envelope system when we first started this debt free journey and it helped us stay on budget and reduce excessive spending. I'm hoping we are just as successful now and can save more money

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Medical bills are not my friend.

My husband and I rarely get sick and went almost three years without getting the flu or a even a cold. That changed this Christmas when we had a triple whammy of the flu/cold/stomach bug. All of that required some trips to the hospital and a lot of doctor visits. We just got the first wave of bills and it’s not pretty. It’s nothing we can’t pay off quickly, but still stinks.

And now my girl is having some medical issues. She seems to be allergic to everything and has had some severe reaction which obviously always happen after hours and thus require ER visits. Hopefully we can get all that sorted out soon because not only is it terrifying to see her lips swell up, but it’s also adding to our medical debt!

So here’s to hoping we can get our good health back. And I promise to never take it for granted again!

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Beach house

Have I blogged about this before? I can’t remember and am too tired to look back and see. Sorry if this is a repeat.

In summary, my husband is 1/8th owner of a house that sits right on the beach in a very nice town. His grandparents had bought it 30 years ago and when they both passed away a few years ago, ownership was inherited by everyone in the family (minus spouses).

We love the beach house and usually try to spend a few weekends there a summer, but we honestly have always sort of taken it for granted. I think that will change this year because we now have to pay $1200 a year to maintain the house.

It’s sort of complicated and I’m not even sure I understand it, but basically the town raised the taxes and land fees by 50% and it’s only going to keep increasing every year. Up until this point, the house has been paid for by a healthy trust fund. But that money will no longer sustain it for the long run. So every owner is now going to pay $1200 a year to cover costs.

This isn’t an expense we can afford right now, but we love the house and it would be pretty messy and not worth it to sell our portion. So our finances just got even tighter.

I can promise you that we will be at that house every weekend this summer! If we’re paying that much money, then we are going to enjoy it as much as possible!

I also know I shouldn't complain too much about this. How freakin' lucky are we to have this?!

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Goodbye 2013!

Overall, it was a good year and I'm a little sad to see it come to a close. But my husband and I have set a lot of goals for 2014 and I'm excited to see what this new year has in store for us. Here are our 2014 financial goals: 1. Pay off all debt! With my car accident, some major medical bills, house repairs, and a small student loan, we have found our debt growing again. If we stick to a tight budget, we should be debt free within 6 months! 2. Build our emergency fund. We used to have $1,000 in there, now we're down to $90. Our plan is to try and get it back to a comfortable level as quickly as possible and then once our debt is gone try and save $25,000 (about 6 months worth of expenses). 3a. Begin contributing again to our 401k/IRA retirement fund. 3b. Speaking of 401ks/IRAs, we have about 6 total from various jobs we've worked. I want to roll them all into 1 or 2 accounts. Some of them are so minuscule and not worth having in an account by themselves. 4. Blog more. Not technically financial, but I find blogging really helps keep us on track and stay accountable! 5. Buy a bigger house and pay off the mortgage. This probably won't happen in a year, but I like to set big goals. Our current townhouse is too small for our growing family so we need to start looking for a place that's a little bigger and has a backyard. I think that's it for now. I hope everyone has a happy new year!

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And my car accident has cost us: $4,665. This was mostly due to the fact that they had to replace both doors on the drivers side. So I’ve been debating about whether I should blog about this, but I want this blog to be a place where I can be honest. But, Dave Ramsey is going to be really mad at me because my mother-in-law loaned us the money. We really didn’t want to put this on our credit cards and accumulate interest and she was very supportive of that and offered us an interest free loan. I know what they say: never borrow money from family. But my relationship with my MIL is very strong and we have borrowed money before with no issues. We’ve already set up an automatic monthly payment so there is no risk of us not paying her. We just really need to hustle now and get this paid off ASAP. Because even though I’m not worried about this affecting our relationship with her, I don’t like having this debt hanging over our heads!

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Not much to report this week. My husband and I are being super careful with money and making every penny count. We haven't done any takeout in 2 weeks and have been sticking to our Christmas budget. I actually think we might come in under budget! We did save some serious money on diapers this week. I'm noticing that as my girl goes up in sizes they become more expensive and you get less in a package. So when I saw that my grocery store had her diapers on sale for only $5 (usually about $9), I knew I had to act fast and scoop up a bunch up. My mom also sent me two $3 off coupons, so we're going to hit up the sale again this weekend and get two more packages for only $2 a piece! That's a huge savings and we're now good for diapers for a very long time! I hope everyone out there in tumblr land is doing well, sticking to your Christmas budgets and enjoying the holiday season :)

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Return the baby clothes, if you can. Goodwill and/or Craigslist is now your only option. You have a mess, and it is your responsibility to your child to clean it up immediately. All the respect in the world for you and your situation, but this revolving mess needs to be over with.

Thank you for your input, but I'm not going to return the clothes because 1. The tags are already off and they have been washed and 2. I will not be putting my baby in clothes from eBay/craigslist. A friend did that and her baby ended up with fleas. Plus, I don't think I could have gotten a better deal on what I did get. I got some t-shirts for less than $3! And now she has enough clothes to last her through to her first birthday.I think this 'mess' you refer to is actually just called life. It sucks that in the same weekend my cat got sick and I got into a car accident, but I can't change that. And financially we should be ok. It just means some adjustments and cutting out some fun things we wanted to do. But we crunched numbers last night and by February everything should be paid off.