February is Rocking!

I just wanted to write a quick post about how awesome February is shaping up to be for the debt snowball.

We sent in our taxes last week and expect our refund to arrive next week.  Our refund was about $3300, which will go directly to loans.

In addition to that, we refinanced our home from a 30 year fixed @ 5.0% to a 15 year fixed at 3.25%.  Currently our house payment, included private mortgage insurance (PMI), taxes, and home-owner's insurance totals roughly $765.  It's going to go up to $925 (and we're eliminating PMI), but our loan term has been cut in half.  I don't have the exact numbers in front of me, but the amount we're saving in interest is ginormous.  However, the other benefit of refinancing our home loan is that we get to skip a full 2 months of house payments, so all the saved money goes to loans.

But wait, there's more.  Not only are we getting a great interest rate on our house, but because our loan-to-value (how much you owe compared to how much your house is worth on the market) is low we're actually getting money back from the refinance this month to further put towards loans.

So, all in all we'll have about $6000-$6500 to put towards loans this month.  We've decided to pay off my ECSI loan which rests at about $5200 and then put the rest towards the lowest Gate loan remaining.  The main reasons for skipping to this loan is 1) It has the third highest monthly payment ($80) and the second highest interest (5%) of all our remaining loans.  2) It doesn't sync with Mint.com, so it's a logistical pain.  And 3) I'm sick and tired of having to use their website that was set up in what feels like the 90s.

And also, since there's no house payment due next month either we'll have enough money to knock out the smallest remaining Gate loan AND pay the balance due for the cruise.    

I'm very excited about how this is shaping up.  Sometimes I'm too excited.  I look at the calendar and want it to move faster, I want to be done with our loans.  But I know we're headed in the right direction, and I know that we're ahead of our projections, so I will try and slow down and enjoy the experience of destroying our debt.

January Progress

So, it turns out January has been busy!  Or I keep forgetting to blog.  One or the other, you decide...

The important news of the month:  We paid off yet another DEBT!  Woohoo!  Which means, if you're playing along at home, we've paid off 3 loans in the last 3 months.  We just bowled a turkey!

I wish I could adequately describe how good it feels to be chewing through our debt.  In fact, with just a few more days to go in January we are sticking to our budget and will be on pace to pay off another loan in February.  We have like $30 bucks left for the rest of the month, but we have no needs, except possibly gas, until February, so we should be good to go.

February is going to be a tough month.  Fact: 34052 of our friends have birthdays that month, so the opportunity to spend money will be high, but our friends understand our goals and are very supportive in our quest.  So if we have to be lame and stay home or go out and have water instead of beers, I know they'll be fully supportive.  Besides, when we're done, after all the sacrifices we make, we'll have a giant party to celebrate.

In addition to paying off a loan this month, we also spoke with my friend Dave Lind about refinancing to a 15 year mortgage.  After some consideration, we decided to go for it.  Rates were, when we locked in our rate, just above the all time lows.  In fact, shortly after we locked in our rate, at 3.25%, rates went up.  We had an appraisal on Tuesday, and our loan will be going through soon.  In the end, we'll end up paying about $120 more a month, but we'll pay off our house 15 years earlier.  Sounds good to me.

Next month's loan is approximately $2800, which is going to push us to the edge of our finances.  We also have to pay for the cruise deposit, which is going to make February crazy tight.  Wish us luck!

New Years "Game Plans"

Every year around this time people declare they need to change.  This past year they've done to much of X and resolve to do more of Y.  For most people these are goals to work towards, or habits they wish to change, or even new rules for the way they wish to run their lives.

In the end though, these resolutions end up as empty words.  I know many have for me.  And the reason that these resolutions end up falling by the wayside is that for me they are simply something we do at this time of year.  There's no urgency, there's no real desire, there's no gameplan.  You've heard it said that the road to hell is paved with good intentions, and well that's what's going on here.  For years I've said I'm going to workout more or I'm going to spend more time doing this or that while spending less time doing that or this.

So this year I'm not making resolutions.  I'm sick and tired of saying one thing and then doing another. More importantly I'm sick and tired of failing at my "resolutions."  An idea without a plan of action is just an idea, but an idea with a plan of action becomes a goal which becomes inspiration.


1) Pay off Debt!
This is pretty obvious.  I mentioned in my last post that we're on pace to pay off 6 loans this year, which is wonderful, but those 6 require tight spending and sticking to The Plan.  To that I'm going to stick to the following gameplan:

• No fast food.  This will shore up a major area where we overspend on our budget: Recreation - which covers eating out and activities like movies.  I'm hopeful we can cut this budget down by 25% this year by simply not spending money on fast food.
• No purchases outside the budget:  Over the course of the last 6 months we've spent money that we didn't need to on various items for the house, for ourselves, for whatever.  The fact is that we could have been much better with our budget and purchases.  This year we'll include large purchases in the budget from the outset so we've planned for every dollar.  As a quick example we need to replace our refridgerator (or get it repaired).  We can add this to a budget and know exactly where the money is coming from.
• Weekly Budget Checkups:  We've also noticed that we're not as diligent at recording our expenses as we could be.  This means that we often find we've spent more money than we have accounted for or that we have more money than our budget says we should.  I believe if we talk about it and do a weekly count we'll be able stick to our budget better.  We also need to be more diligent about entering transactions into our budget app, EEBA.

2) No Uneccesary House Improvements
This doesn't really need detailed steps.  The fact is that both of us tend to spend money on things for the house, most of which is usually not needed.  So unless we need to replace a window, or like I said above, the fridge, we don't spend the money.  Easier said than done, but if we're committed we can make it happen.  This is the one I'm the worst at.  The other day I bought a new wireless router and modem (without consulting or informing Kristi) and it led to a fight because I tried to hide the purhase, and when confronted I lied about.  This is a big problem for me and something I need to work on.

2) Purchase Discussions
The aforementioned fight notwithstanding, this is something that I need to work on. Kristi is the natural saver and I'm the natural spender, which can cause some friction if we're not clear with each other. The fact is that I need to be more open about how I want to spend our budgeted money. The gameplan for this is simple: talk about our money before it gets spent and make sure we're each on board.

That's about it for the money gameplans. I'm thinking about my personal resolutions/gameplans still, and when I've settled on them I'll post them here.

On the Road Again!

I'm on my way to California for the Christmas and Kristi and I have been listening to a lot of people call in to the Dave Ramsey show with huge problems.  Problems with their husband/wife/significant other/family.  Problems with their management of money.  Debt problems, health problems, car problems.  It really makes me appreciate all that I have, and all the plans I have to continue the success we've achieved in 2011.

First of all, let's begin with my lovely wife Kristi.  We've been together for 7 and a half years, but we've only been married since May 2011 and I couldn't be happier.  Statistically the number 1 reason for divorce is money issues.  As the saying goes, "It's not 'till death do you part,' but rather "till debt due you part."  I am so incredibly fortunate that Kristi and I are on the same trail together.  She has been working on me for awhile, but I had to come around on my own.  And I'm so happy that I did.  Kristi and I have struggled with finances in the past, but we're both on board, we've circled the wagons, and we're on our way.  I don't think I could do it without her, and I'm so glad I'll never have to.

Secondly, I want to reflect a bit on how much 2011 has changed my life.  I think this will always be a year I look back on and marvel at just how fortunate I've been.  The year started off with landing a job at Optimize Technologies and I love my job.  Every day I go to work for a locally-owned company that cares about me and that wants me to succeed.  I enjoy everyone I work with, the atmosphere fits my personality perfectly, and the only direction I've gone in the almost year I've been there is up.  I've heard some whispers on the next step at Optimize, and I'm catiously optimistic about my review next month.  Stay tuned for an update on that front.

The year continued with my wedding and subsequent honeymoon.  I'll always remember my wedding as one of the happiest moments in my life.  I was surrounded by my closest friends and family as I made the committment to Kristi and I will be eternally grateful for all the help and memories everyone there shared in.  And then there was the honeymoon!  Words can't explain how great that was, and I'll always remember it. 

As the year continued I made new friends and deepened other friendships on and off the softball field.  I couldn't ask for a better group of guys to spend a few nights a week with.  I'm looking forward to the 2012 season that starts in a few weeks (cold!!).

In September Kristi resumed school and thus far has had a much better year than last year.  She's comfortable in her role and the kids are much better behaved for her because she has the confidence that comes from someone who knows their position and how to get the most out of the kids she has.  It's really been helpful for our relationship as she's not bringing home bad experiences every day.  To me she is happier than sh's been in a long time with being a teacher.

In October we had the priviledge to stand witness at our best friends' wedding.  The lead up, the ceremony, and the reception were great and I really enjoyed meeting Tamara's friends and family, many for the first time.  I am so happy for them and I know now that the clock is ticking before our lives are full of baby joy.

And finally I want to look back on the debts we paid off this year, and the debts we're on track to paying off next year.  This year we paid off a small student loan that my mother had to co-sign for when I was in college.  This was very important to me because I didn't want my mom to have to assume any risk on behalf.  She was gracious to do so when I was in college, but I no longer wanted to have her in that position nor do I ever intend to put ANYONE in that position again.  After that we took care of some other small loans/credit card debts.  We (or rather, I) wasn't as committed as I am now, otherwise we would have done much more.  We had a balance on a Home Depot card for our carpets (at 0% interest for 12 months) and I had a balance on a ShaneCo card for the wedding gift I gave Kristi (also at 0% interest).  Even though they were 0% interest, the priciniple of being beholden to a credit card company frustrated us to no end.  Part of the plan is to cash roll everything, so we knocked out those debts quickly.  We also took care of the truck and the first of 4 Gate Loans through American Education Services, the recent one happening last week!

For 2012 we're on track to pay off the following loans:
January 2012:  Gate 2 ($2500ish)
March 2012: Gate 3 ($2800ish)
May 2012: Gate 4 ($5000ish)
July 2012: ECSI ($5300ish)
September 2012: K Loan 1 ($4800ish)
December 2012: K Loan 2 ($5500ish)

Wow...  Just looking at that makes me smile.  We're on track to knock out 6 (SIX!!) loans this year based on our currect incomes and payment plan.  That's awesome and I can't wait for 2012 so we can meet this challenge head on.

Merry Christmas everyone and may the New Year bring you new joys and adventures!

Christmas is Coming!

Wow, it's been awhile since I last posted.... Things kind of got away from me but I since I paid off another loan this week I thought I'd better get back to posting on a regular basis.

We paid off the truck last month which as I've said was a great feeling.  At the moment we're working on the next loan down the list which is the first gate loan.  We have just paid that loan off so in January we'll be working on the second gate loan.

Quick list review:

• The Truck: DONE!
• Gate 1: DONE!
• Gate 2: $2628
• Gate 3: $2798
• Gate 4: $4909
• ECSI: $5290
• K Loan: $10710
• FSA Loan:: $23000

Christmas Mishaps

So... Christmas time is always interesting.  And by interesting I mean I spend too much money.  Let's start in the beginning, shall we?

I wanted a tablet.  In order to buy the tablet I told Kristi I would sell some board games in order to pay for it.  I would also look for the best deal I could find, which naturally came on Black Friday.  I did a bunch of research and decided to purchase the ASUS Transformer with a Keyboard Dock (so it becomes a little netbook).  On Black Friday the tablet was $250 and the dock was $100, totally $350.  

I sold a slew of games and ended making $360 give or take a dollar so I had the whole thing paid for.  Great!  I was buying something I wanted without going into debt, definitely on the right track.

However, I ended up overspending for the month because I bought a second, smaller tablet for Kristi.  I also bought a bunch of accessories/cases for both tablets, memory cards, and cables.  Furthermore, I went in with Adam, Kristi's brother and my new brother-in-law for a second present for Kristi, her new Kitchenaid Stand Mixer.  So, what was originally supposed to be a zero sum purchase ended up being a -$600 or so venture.... ooops...

While this obviously wasn't ideal, it turned out to be not that bad in the end.  We had the benefit of John's rent ($300) and Adam paying me half of the mixer ($100) so it actually wasn't the end of the world.  The problem is that what I'm doing now is justifying my bad spending in December.  I will use this month as a lesson in overspending and falling short of my goals.  We could have put more towards the Loan List, but the money got spent on things.  Lesson learned.

Paid off the Truck!

A few weeks ago we paid off the truck!  I know I said I'd post after it happened, but my life has been busy the last few weeks and I haven't had time to sit down and post about it.

I'm very happy to be making progress towards our goal of being debt free.  Paying off the truck was a wonderful experience.  We drove down to Salem on Friday afternoon, October 30th.  The traffic was surprisingly light and we made good time.  We drove straight to Oregon Community Credit Union and plopped down the final $941 dollars left on the loan in cash.  The teller smiled and congratulated us on paying the loan off and wished us luck with the debt snowball.  There were cookies and candy in the lobby, too, so we helped ourselves to some while we waited in line.

The title to the truck arrived in the mail about a week later.  This is the first time I've ever had the title to a vehicle I bought myself.  It was a very gratifying experience.  I'm not sure I can adequately describe it, but I felt power and ownership over my life.  You might think that buying my house or some of the other things I own would have given me the same feeling, but this is really the first major purchase since I've had my new job and since we've been married, so it felt different.  I realize that we "bought" the truck last year before our marriage, but since we didn't actually own it (the bank did), paying off the loan felt like purchasing it and now I own it.  It's in my name.  It feels great.

November's Budget

I promised I'd go into detail on our budget at the beginning of each month and so here I am.  Most of the Total Money Makeover is about discipline, self-control, and sticking to your well laid plans.  This involves sticking to a budget each month so that all the extra money is focused on your debts.

I'd like to state that we are in remarkably great shape compared to the average person on Ramsey's plan, at least in my opinion.  Kristi and I have began the habit of listening to his radio show podcast on the way to work and it seems to us that most people are in a much worse situation than us.  For example, we have $0 credit card debt, whereas many people seem to have ten, twenty, or fifty or more thousand dollars in credit card debt alone.  A lot of people also seem to have giant car/truck payments, a home equity credit line, or even a second mortgage on their home.  I feel lucky, honestly, that up to this point we've been relatively responsible with our money.

That's not to say I was responsible all the time.  In college, and while I lived on my own, I wasn't always the best handler of my money.  I spent money on all kinds of things, and usually there was always too much month and not enough money.  Because I was irresponsible, I racked up some credit card debt, to the tune of about $2500 or so.  Again, not a crazy amount, but still more than I ever plan on having again.

The budget, I've found, has really helped me stay focused, and instead of spending money frivolously and on impulse, it's made me examine my purchases more closely.  The first thing that pops into my mind is board and video games.  There are several games I know I would have bought in the past that I have refrained from buying because it's not in the budget and because I have a goal to work toward.  I plan on saving a portion of my budgeted money each month to buy things for me, and I'll write a post about some of those things in the coming weeks.

Now, to the budget:

Pets - $35.00

• We dropped this budget down to $35 mainly because we no longer have to buy a bag of dog food each month.  A bag of food for Kitty lasts a very long time, so we will adjust the budget during the months we have to buy a bag for her.  The same is true for liter, as we usually buy it when it's on sale at Costco and we stock up.  
• We plan on buying Sam a new bed and some new toys this month with the money.
• Any money at the end of the month gets put into a larger pet fund that would be used for bigger purchases or vet visits.

Clothing - $50.00

• This is a budget item that is a little different from the rest.  Sometimes this is used, and sometimes it's not.  For example, in October we overspent the budget buying costumes for Halloween, mainly because we didn't think about costumes at the beginning of the month.  We use this for any and all clothing purchases.
• What differentiates this from the other categories is that it's a rollover budget.  Any money unspent is added to the category for next month.  So if we don't spend any money in November, we'll have $100 to spend in December, and so on.

Recreation - $125.00

• This drops from $180 in October since we don't have Halloween and we aren't hosting Wine and Dine.  Recreation covers pretty much everything we do for fun.  Whether that's buying a Groupon, going to a movie, or going wine tasting, this has us covered.  We overspent in October, so this month we'll make a more concerted effort to stay on budget.  We'll be helped by having family in town for one weekend and won't be going out and spending money.
  

Personal - $150.00

• This budget covers our household expenses like toothpaste, dish soap, and the like.  It also covers personal wants like boardgames and supplies (for me) and tea cups and books (for Kristi).  We use this budget up regularly at Costco buying our supplies in bulk.  
• Each month we get a "Personal 25" so that we can buy things we want individually.  This helps us in 2 ways: It lets us buy a little something here and there for each of us so we can prevent splurge spending.  It also let's us save up for things we want down the road.  I want to get a tablet, so in a few months of saving I'll be able to get one.  I can easily get one tomorrow, but I'd have to not pay down debt as much to do it, so with the slow trickle of savings I can get something I want without sacrificing our ultimate goal of being debt free.

Food - $400.00

• This, along with our Transportation budget are the two largest budgets.  We usually spend about $250-$300 on our food each month since we plan our meals (most of the time) and can buy food in bulk and on sale in order to stay on budget.  This budget also covers any food I buy for lunches at work since we have a full kitchen it's super easy to buy a bunch of lunch foods and store it at work to make during my lunch breaks.
• This month we have increased the budget to cover Thanksgiving purchases. Mainly delicious jellied cranberry sauce, not that whole-berry blasphemy.  And a turkey, I guess. A big one. For the leftovers.

Transportation - $300.00

• This is our other main budget area.  We have been able to cut this down significantly since Kristi started school again since we can carpool to work again which greatly reduces our transportation costs.  Softball is over as well which has cut out 1-2 long trips a week out of my driving and saved a lot on the gas budget.  
• We also incorporate maintenance and parking into this budget, so sometimes this budget will be four, five, six hundred dollars when we know there is a maintenance need like oil change, new tires, etc.

November Budget Total: $1060

At the end of the month I'll post an accurate breakdown of our expenses and how we stayed on budget.  I'm hoping that being out in the open with the budget will help us stay on track, as I really don't want to be writing how we went over budget each month because that won't help us progress towards our debt freedom.