HOW I Am Getting Out of Debt

You now know WHY I am getting out of debt, but the tricky part is figuring out HOW to get out of debt. Thankfully, other people have figured out some good plans to follow and you can adapt those to your life. When we had our epiphany about how bad our debt situation really was, I went online and did some research. This led to me checking out Dave Ramsey’s Total Money Makeover and reading it cover to cover in about 48 hours. I don’t think Dave Ramsey the person is for everyone – he inserts religion into everything and he and I certainly do not have the same political beliefs – but his plan is a good one.

The Baby Steps

The Total Money Makeover outlines seven baby steps to financial wealth (with my paraphrasing):

  1. Save $1000 for a mini emergency fund.
  2. Get out of debt using the Debt Snowball.
  3. Save 3-6 months of your expenses for a true emergency fund.
  4. Invest 15% of your income for retirement.
  5. Invest in college for your children.
  6. Pay off your mortgage.
  7. Invest and build wealth.

We are currently on Step 2, obviously. And will be for awhile. We have so much student loan debt that I may have to tweak this a bit so that we aren’t waiting 5 years before we get to steps 3-5.

What We’ve Done

  • We started budgeting.

We started this in August and used August as a “practice month” before we really started the plan. We sat down and figured out our budget for August. We listed our income and we listed our expenses. And we found that our expenses were more than our income. We were living beyond our means and had no idea we were even doing it.

  • We eliminated expenses.

I thought this one would hurt, but it actually felt great. We gave up our YMCA membership. We gave up our house-cleaner (okay, this one hurt). We cut cable tv. We gave up our Audible subscription. We stopped eating out. We stopped buying things we didn’t need. We haven’t turned our air-conditioning on in two weeks.

  • We “found” more money.

Ben volunteered to give up his planning period and teach an extra class. We switched to a higher deductible health insurance plan. We stopped contributing so much to our retirement. We stopped contributing so much to Evan’s college fund. These will come later. Four years from now, I’m maxing out my retirement contributions and I’m funding Evan’s college as quickly as possible. Right now, we are spread too thin to do it all and we needed to free up this money.

  • We started using cash.

We use cash for our everyday expenses.Actual paper money cash. We take it out every pay day. When it’s gone it’s gone. Some weeks, like this one, our pantry is looking pretty sad by the end of those two weeks. But we are not starving. And we are learning how to live within the budget.

  • We refined our budgeting.

Ben and I get paid bi-weekly on the same day. We learned that a monthly budget was difficult for us and that a bi-weekly budget worked better. It takes a little more effort since different things get paid in different weeks, but it works for us. Each pay period’s budget is unique. We work off of a template, but we add in the random things we need to for each pay period (for example, this next period it is a haircut for Ben and Evan’s school pictures).

  • We saved $1000!

It took us 6 weeks, but we have our emergency fund. And while were saving this, we had to spend $300 on car repairs AND WE DIDN’T HAVE TO PUT IT ON A CREDIT CARD. Our credit cards WERE our emergency fund. Now we have a real one. $1000 isn’t going to cover you if you lose your job or have a serious medical problem, but it will get you out of a lot of life’s unexpected twists and turns, like car repairs. Since we saved it, we haven’t had to touch it. Since we plan our two-week budgets with so much detail, not much surprises us.

  • We started our Debt Snowball.

Now, this one did hurt. We listed all of our debts out and put them into three categories. Category A is our credit cards, car payment, and two student loans that I really want to get rid of. Category B is Ben’s student loans. Category C are my student loans. Dave Ramsey says you list them all out and put them in order from smallest to biggest. We did it this way because of some quirks in our own personal financial situation and because it makes it more manageable. Dave Ramsey also says not to worry about interest rate, but if two cards had pretty similar balances and one had a higher interest rate, we swapped them to get rid of the higher interest rate first.  We also made sure most of our credit card debt was on no-interest credit cards.

We pay minimum payments to everything except the smallest debt that we are currently focusing on. All of the extra money in our budget is applied to that debt. The great thing about the snowball is that you with each debt you eliminate, your snowball becomes bigger because you eliminated a minimum payment.

So far we have paid off two credit cards, almost $1200, in a month. We hope to eliminate one more this year and then two more early in 2015. Then the last few will take awhile because those are the bigger balances. But the reason you pay off the smaller ones first is because it gives you some quick victories. And let me tell you, these victories are both amazing and necessary. We give ourselves a little celebration with each goal we meet (usually pizza or an inexpensive meal out). And we cross it off our spreadsheet, which is also therapeutic. The debt becomes much more manageable when it is broken up this way.

What We Haven’t Done

  • We didn’t cut up our credit cards.

It’s supposed to be therapeutic. And it is supposed to prevent you from ever using them again. But we just put them in a cabinet instead. I don’t think credit cards are evil. Evan and I have flown all over the country for free this year because of a couple of credit cards. We don’t use them now – we cash flow everything – but I think we have enough self-control to keep using them once we are out of debt. But, we need to pay them off every month!

  • We didn’t give up everything.

We still pay for subscriptions to Netflix, Google Music, and Amazon Prime. We still went to Michigan in October. We are still going to Disney next week. We still get the occasional pizza. This is a long road for us and we will give up if we deprive ourselves of everything. But we cash flow everything we do now, which is the big change.

  • We haven’t compromised our health.

We still eat well. We buy organic dairy, even though butter is $8. We still get our organic coop box every two weeks. We aren’t eating more processed food even though processed food is cheaper. I could go on for hours about how awful it is that it costs more to eat healthy, but that’s a discussion for another day. This was something I wasn’t willing to compromise.

Our Timeline

We should eliminate all of the debt in Category A by mid-2016. This is a long time and hopefully it will speed up (it seems like things do speed up once you get going). We should be done with Ben’s student loans by February 2018. And we should be done with my student loans by October 2018. Of course, this assumes we don’t have any added expenses (like another kid in daycare) which is a big assumption.

So we are looking at a 4-year plan right now. Which is a very long road, but that’s only because of the massive student loan debt we have. I think most people can be debt-free a lot faster than us. And any extra money that comes our way –  bonuses, tax returns, raises, etc. – goes straight into the snowball.

How Are We Feeling?

This takes a lot of focus and a lot of dedication. We have to have the self-discipline to say no to things. We have to go against our spontaneous-buyer tendencies. We have to have discussions about money ALL THE TIME.

But, being in control feels GREAT. We feel empowered. We feel like our goals are achievable. We love telling our money where to go instead of wondering where it went. As of the time of this writing, we have paid off $4,246.99 in just a few months.

We always assumed we would be debt free someday, but someday kept getting further and further off. Thinking about our future now, we can see a day when we have the money to do what we want. Four years is not an eternity. It’s high school, it’s college, it’s a presidential term – these fly by. I wish we could speed up the process, but I understand that we dug ourselves into this mess and we have to pull ourselves up slowly.

For inspiration, I listen to the Dave Ramsey Show podcast almost every day. Which sounds ridiculous but I really like hearing how other people are going through the same thing and I especially love the “debt free screams,” where people who have gotten out of debt come on and I get to hear the joy and the freedom in their voices. I don’t love everything about Dave Ramsey, but I think he is doing an amazing thing for people by offering advice and giving everyone a plan.

My Advice

I’m not sure I am actually qualified to give advice, having been at this for only a few months. But, I’ll give it anyway.

  • Check out The Total Money Makeover from the library. Seriously. It’s a game-changer.
  • Talk to your spouse and make sure you are in this together. This won’t work if you are married and you try to take this on yourself.
  • Really evaluate your spending and see where you can make cuts.
  • Stop using your credit cards.
  • Use cash so you can really feel your money leaving you.

I am happy to talk to anyone who is interested in getting debt free and needs some guidance. I would love to inspire a few of you to follow me on this path. Won’t it be fun if we all do it together?

Why I am Getting Out of Debt

I have debt.

I’ve noticed that people don’t like to talk about this. They don’t want to think about their own debt. They don’t want this to be a topic of discussion. But, if you follow me on twitter, you’ve noticed that I have started talking about how I am getting out of debt. Because I think it is important and I think people often don’t realize how much their debt is holding them back. This is a big focus of my life right now and I blog about things going on in my life. I also like the support system. Some of you send me a simple “yay!” when I say I paid off a credit card. Some of you tell me you’ve started the same plan. Some of you tell me you think it’s great that I am talking about this. So I am going to keep talking about.

Today I wanted to share WHY we are getting out of debt and why we have made drastic changes in order to do so.

So, what debt do we have?

We have a mortgage. We live in a reasonably-sized house in a reasonable real estate market and we waited until 2012 to buy so we bought at the bottom of the real estate market. So we’re not doing too bad there.

We have one car loan that should have been paid off by now, but we refinanced the car when we needed a new roof a month after moving into our house because that’s what people with no cash do.

We have some credit card debt. We had it all paid off in 2011, so, naturally, I blame Evan, who is definitely the cause of a good portion of our credit card debt. But, honestly, plane tickets have always been our credit card weakness and that’s been an issue since we moved to Florida.

And then we have student loans. A lot of student loans. Six figures worth of student loans. My husband and I both have graduate degrees and we both got them in the most expensive way possible – at very expensive schools and using student loans. This is probably the only piece of the puzzle that makes us different than the rest of America.

That sounds pretty normal, right?

That’s not much of a confession. Most of us have debt, right? And people often talk about good debt versus bad debt. Student loans and mortgages are “good” while credit cards and car loans are “bad.” Under this philosophy, 90% of our debt is considered “good.” But, when your student loan debt is almost equal to your mortgage debt (and your monthly student loan payments are actually higher than your mortgage payment), I can tell you there is nothing that feels GOOD about that. When you throw in an average amount of credit card debt and a car payment, it quickly becomes a very unpleasant place to be.

So what happened?

We were treading water for a long time, sometimes getting a few strokes ahead, but eventually we felt ourselves starting to be pulled under. We never got in trouble. We’ve never missed a payment. We never even made a late payment. We are blessed with steady incomes in jobs we like. We have excellent credit scores. Everyone wants to loan us money. We were completely normal.

But the debt was starting to drive us insane. It was this constant THING hanging over us. We tried to ignore it, but we couldn’t.

And then we did some math and realized that we literally couldn’t afford to have another baby.  If we were to have a second child, which has always been the plan, we couldn’t afford to send that kid to daycare – we just didn’t have enough free money each month in our budget. Now, we understand where babies come from and that they don’t just show up demanding daycare without some warning, but it really made me stop and think about what we were doing with all of our money. We live paycheck to paycheck and we shouldn’t HAVE to.

So we made some drastic lifestyle changes…

This post has gotten a bit long, so I will save the HOW we are getting out of debt post for another day. Meanwhile, I’d love to hear from some of you in the comments.

My Favorite Episodes of My Favorite Show

In honor of Netflix streaming all 7 seasons of Gilmore Girls (someone tell my boss I’m not coming in tomorrow?), and because this blog only every started because of a Gilmore Girls inspired bookish forum where I found my first real home on the internet, and because this show has been on constant circulation at my house for a decade, I have decided to share with you ten of my favorite episodes of my absolutely favorite show.

2.13 A Tisket, A Tasket

Jess over Dean. Any day. Also, cute Stars Hollow traditions. They never get old.

2.19 Teach Me Tonight

Like I said, Jess over Dean. Always.

3.6 Take the Deviled Eggs

Mostly for the squealing sounds Lorelai and Rory make as the peel away from the scene of the crime.

3.7 They Shoot Gilmores, Don’t They?

Dance marathon + Jess and Rory tension + Dean finally getting a clue. And still I was heartbroken for Rory.

3.22 Those Are Strings, Pinocchio

Rory’s graduation speech is the best television graduation speech of all time. Hands down. Although Buffy’s graduation was pretty epic…

4.2 The Lorelais First Day at Yale

I like this one because it sets up Rory’s new life but demonstrates that their mother-daughter bond is unbreakable.

5.3 Written in the Stars

Clearly I love Rory’s story lines more but I was waiting for this day for years. Luke brings Lorelai to his Luke’s. Aww.

5.7 You Jump, I Jump Jack

This is where I fell for Logan. I’ll admit it. I’m always surprised when this one doesn’t make everyone else’s favorite episode list. Also, I think this might be my blog’s first GIF.

5.8 The Party’s Over

No. Wait. THIS is where I fell for Logan.

7.22 Bon Voyage

I was DEVASTATED when Gilmore Girls ended. Absolutely crushed. Words can’t describe my love for this show. But I still love the finale (partially because Rory and I both went off to work for Obama). And I love that this ending just means I get to start all over again from the beginning.

***

You will note there is nothing from the mostly-awful 6th season where the Gilmores were estranged. There also isn’t anything from the first season. But that’s just because I don’t care much for Dean.

Oy with the poodles already…what are you waiting for. Go watch all of these RIGHT NOW er tomorrow.

The Sunday Salon: Bloggiesta Edition [9.21.14]

I was just hanging out on Twitter on Thursday when I noticed a familiar little thing called Bloggiesta was being discussed. Back when I used to participate in the events of the book blogging world, I used to participate in Bloggiesta – a weekend dedicated to helping bloggers organize and accomplish tasks (and I think I remember margaritas). Well, this little blog needed a lot of love at the moment, so I hopped on as an unofficial participant. It was a great way to get some blogging energy back after such a long slump. Here is a summary of how I Bloggiesta-d.

Tasks Accomplished:

Things I Discovered/Mysteries to Ponder:

  • My reading didn’t taper off when I became a mother. Instead, it dropped off pretty suddenly in the fall of 2013, when E was  year and a half. What happened? Why did life get busy then?
  • I only have three books that begin with numbers: 13 Little Blue Envelopes by Maureen Johnson13, rue Therese by Elena Mauli Shapiro31 Hours by Masha Hamilton. All 1s and 3s. Weird, right?
  • I have not read any books that begin with a K, Q, or X. K? Really?
  • I didn’t start listening to audiobooks until 2010. Since then, I have finished 117 of them! So many books I otherwise wouldn’t have had time for.

Plans:

  • Actually write some book reviews. Life is going to be busy the next few weeks, but I shall try.
  • Figure out how to add a signature to my posts.
  • Finally create my Books by Author directory. This has been on my to do list for years.

Ole.

The Sunday Salon.com

The Monday Salon: August in Review [9.1.14]

It’s hard to believe it is already September, otherwise known as the disappointing month where I mistakenly think the weather should cool down. Maybe this year I won’t have to wait until November to turn off the a/c? But, this is the August wrap-up, and I expect nothing less than miserable heat in August.

Books & Blogging

I didn’t read much this month. This was more a concious decision than it has been in the past. I was away for two of the weekends and while I was home, Ben and I were spending time together after his summer away.

I finished Girls in White Dresses and Story Hour in print and the latest Maisie Dobbs in audio.

I am in the middle of a few good books and I’ve just been slowly reading them. I took a little break from audiobooks and have been listening to some podcasts. I guess August was my reading vacation month.

As for blogging, I had one good week and some sporadic posts in the other four. You win some, you lose some. I do intend to continue the feature I introduced about the books Evan is reading though – look for those most Fridays.

Health

Well, I fell off the wagon hard. After my foot injury in April, I stopped running. I got the all clear in July and I have been running twice since then (see the weather paragraph above). I haven’t been to a dance class in months. I haven’t been to a real yoga class (as opposed to family yoga which isn’t much actual exercise) in months. I haven’t weighed myself in months. I haven’t counted calories in months.

I am still pretty happy with my weight. But my back has been giving me problems lately and I am sure it is due to this lack of exercise. So I am jumping back on the wagon.

Amanda from The Zen Leaf (which is back up!) created a 100 days of exercise challenge – just ten minutes of exercise for 100 straight days. I’ve already managed to miss some days, but more days than not, I am making an effort to do something.

I am hoping to get a real yoga class in Wednesday and ballet the following Monday.

Photography

I haven’t used my camera much this month, but I did share a bunch of photos on the blog here and I’ve been following some new critique groups on Facebook. I’m always learning.

My most-popular post this month was the one where I shared some of my cell phone photography tips and tricks. I’m thinking about doing another post like this since you all seemed to like it.

Evan

Evan started 2-year-old preschool. And he started sitting in a real chair at a restaurant and kind of listening when we ask him to use his walking feet. And he says “thank you, mommy” and “good morning, mommy” and “I love you, mommy” and it is wonderful. He throws things at me. And he runs off in public. And he throws tantrums when he’s tired and upset. But he’s two and 80% of the time it is awesome.

 

The Sunday Salon.com

No, I Won’t Be Reading that E-Novella

This post follows up on a little mini-rant on twitter the other day about how every series now comes with little novellas between books.

I pretty much hate these extra stories. I’ve read a few (Wicked Lovely’s Stopping Times and Old Habits; Delirium’s Anabel, Hana, and Raven; Newsflesh’s Countdown; Fallen’s Fallen in Love) and I’ve decided I am not reading anymore. Here’s why.

They rarely move the story forward, but instead add a level of detail to a character or an event that wasn’t included in an actual official book in that series. Or they tell the same story from someone else’s perspective. They are not necessary to the story.

As such, they seem like a money-making scam. It seems like publishers see how much money a series is bringing in and decide, let’s see how much money we can get out of these suckers. Now, I know that publishing is a for-profit industry and no one is in it just for the joy of books. I am happy to pay for a book. But do I really want to shell out another $2 for a few dozen pages every other week?  It’s sort of like how I feel about the new trend of breaking the last installment in a book series into two movies. You, movie studio, are only doing that to make money. Admit it.

They make me anxious. To be fair, all of the books that exist in the world that I want to read already make me anxious. But if I add all of these little novellas to my TBR pile, it’s certainly not helping things. There is simply not enough time in the world for me to keep up with every series I am reading AND read those 40 extra pages that no one thought important enough to actually put in the book. But skipping them also makes me anxious. I loathe reading things out of order. And skipping something that might have the tiniest chance of being important to the story makes me nervous. So it’s a lose-lose here on the reading anxiety front.

I can see why some people might like them (you do get even more of your favorite series, right?), but these people must have different priorities from me because every series seems like it is doing this and I just can’t possibly keep up.

  • The Lunar Chronicles has 3 novellas.
  • Shade (Jeri-Smith Ready) has 2.
  • Newsflesh has 4.
  • Divergent has 5.
  • Across the Universe has 1.
  • Shades of London has 1.
  • Daughter of Smoke and Bone has 1.

I would list these as some of my favorite series. But I will not (and, really, cannot) read 17 novellas plus all the ones that have yet to be published. I just won’t. (Okay, I’m a little tempted to read that last one because I love Zuzana so much).

So, I’m putting my foot down.  I can’t make the publishing industry stop this trend, but I can stop taking part in it. Unless JK Rowling wants to write one for Harry Potter, or unless someone makes a really compelling argument for an exception, I won’t be reading anymore of these things that are not really part of the series. Publishers, if a story is really important, please make it a real book.

Instead

What I’ve been doing instead of reviewing books (which I intend to start doing again soon).

  • Hanging out with my family
  • Watching Doctor Who
  • Watching The West Wing
  • Watching Everything Else that’s on my DVR
  • Reading Attachments
  • Listening to Bill Bryson and Lani Taylor books
  • Working
  • Injuring my foot
  • Learning about biking and swimming
  • Watching a lot of Mickey Mouse Clubhouse
  • Planning a birthday party that is Mickey Mouse Clubouse themed
  • Enjoying the beautiful weather
  • Traveling to Savannah, DC, and – this weekend – Tallahassee.
  • Sleeping
  • Editing photos
  • Reading about editing photos
  • Discussing vaccines
  • Discussing equality
  • Going to movies
  • Hanging out with friends

Sometimes I miss the old days. Sometimes a break from the book blogging gig isn’t so bad.

Another Beach Day [Wordless Wednesday]

Sorry for being MIA this week. We were out of town this weekend and I thought I would have some Washington, DC pictures for you today, but I haven’t gotten around to editing any yet (that’s the problem with shooting RAW – every photo needs at least some editing). So here are some more photos from Ben’s parents’ visit last weekend when we went to the beach on a very non-beachy day.

 

 

 

 

The Dangerous Animals Club [Audiobook Review]

Title: The Dangerous Animals Club
Author: Stephen Tobolowsky
Narrator: Stephen Tobolowsky
Genre: Memoir
Pages: 352
Audio: 11.6 hours
Year: 2012
Publisher: Simon & Schuster Audio
Source: Personal Collection
Book Rating: 4/5
Audio Rating: 5/5

Summary:

Actor Stephen Tobolowsky shares stories from his childhood, his marriage, and his career.

My Thoughts:

We started listening to this one on a family road trip. Whenever E was asleep, Ben and I would put it on. E didn’t actually sleep as much as I expected him to, so we each had to finish it on our own. But we were both enjoying it so much that there was doubt that we would.

Stephen Tobolowsky, as he explains it, is that guy you recognize but you’re from where (the store down the street? the laundromat?). You recognize him from television and films. But he’s a solid character actor – not one to stand out or be memorable. But he is in practically everything, from Groundhog Day to Glee. And he has amassed some wonderful stories which he tells masterfully.

The book started with stories from his childhood and those mostly featuring animals (the title story is about a tarantula- and scorpion-catching club he was in as a boy in Texas). The stories then move on to his schooling, his relationships, and his career. He has had an interesting life so far and his tales are well-crafted. If you just want to listen to some good storytelling, this one is for you.

Audiobook Thoughts:

Tobolowsky reads this one himself, as he should. You’ll recognize his voice, even if you don’t recognize his name. He’s a born storyteller.