What to do?

I'm in a little bit of a quandary as to what to use this paycheck for. I have paid all the bills I need to pay and have about $700 left. I could put it all in my baby Efund and be pretty much done with the $1000 goal, or I could throw it all at the last medical bill.  Anyone have any thoughts on the subject?

I Made It!

....not only am I back from Massachusetts (again), but it's also PAYDAY and I have a whole lotta paycheck to use towards my various targets.  :) I made it through on cash only and I am a happy girl...I will post later with the details.

Muddling through...

I'm back in Maine and still on cash though seriously depleted. Luckily, I am getting a reimbursement tomorrow that should carry me through payday.

I feel like a baby bird who's been thrown out of the nest and is expected to figure out how to fly. There were a couple times on my trip where I thought about stopping at a store...then realized I didn't have my "back up plan" in place (aka my cards) in case I overspent. There IS NO overspend anymore. It was a wake up call!

I'll post in a couple days to show my progress. The good news is I am less than a week from payday and have lots of ideas on how to spend that money...in  a responsible way  :)  Stay tuned...

I was born a ramblin' (wo)man....

And yes, I like the Allman Brothers.

Things are going well so far, and we're just cruising along. I'm still on cash only.

I do travel a fair amount for my job - I'm in Mass right now- and the only thing concerning me right now is making sure I have enough cash for incidentals and toll money for my trips. I use a corporate card for hotels, meals, gas etc., but there are things I need to pay out of pocket and then submit for reimbursement.

Since I am new to the cash-only plan, I'm being very cautious with my cash to make sure that it lasts through next Wednesday when I get paid.

For those of you who travel for your job, how do you budget for toll money? I don't know how to plan ahead for the cost, since the tolls on each trip vary, so I'm hoarding my cash so I have enough. Is there a better way?

I'm very tempted to spend...on bills.

My husband and I both have a paycheck coming at the end of the month. His is earmarked for the mortgage, 2nd grocery trip (we shop every two weeks) and final daycare bill for the last week of October, all due November 1st.

All the bills we pay with my paychecks are paid through the end of the month. I took a look ahead and I only have two small bills due on November 1...they total $46.

I have enough in checking to pay those two small bills and still have $22 left, on top of the cash in my wallet ($35.)

Part of me says don't do it. I'm new to this cash-only thing, what if something happens, etc etc.

But the other part says....if I pay those now, nothing will be due until after my first November paycheck. Which would mean I could devote my ENTIRE 2nd October check (coming 10/27) to savings and debt.
I am really tempted to do this.
Thoughts?

Sobering Thought

A coworker's young son died unexpectedly last week. They had no money set aside for his funeral, and don't have a lot of money to begin with. We all chipped in to put money in a card for him; I contributed $20.

Two things struck me about this:

1. I can't imagine the grief of losing a child, coupled with the stress of not knowing how to pay for his burial. It's an unthinkable thing. My heart goes out to them.

2. When you're on a cash only diet, pulling a crisp $20 out of your wallet to contribute hurts. I can afford it, but I thought about my contribution much more because it was cash in hand. Funny how that happens.

Bottom line:  Given the chance to do it over, I would still chip in the $20. If it makes the burden their family faces even a tiny bit less, it's worth it to me. But it was also a great life lesson.

Feeling Bad

Since I posted those numbers I have been feeling really crappy.

But, I have to remind myself that it could be a LOT worse. This time last year, we had over $4,000 in medical bills and another small credit card balance and those are PAID OFF. The first target on our debt chart, a medical debt, is to one hospital. That's all we have left after paying off about eight other doctors and hospitals ...one more medical bill.

So we have been doing something right.  We just need to do better.

The Good, The Bad, and the Ugly - Mostly Ugly.

Here's a list of our monthly expenses and let me just say, wow. We spend a LOT of money on monthly bills.

House	1464
Truck pymt	285
Car pymt	284
Stu Loan 1	190
Stu Loan 2	370
School/daycare	470
Car Ins	112
Life Ins	26
Trash	20
Cable/Internet	130
Electric	110
Cells	175
Sirius	15
Groceries	400
Gas	200
Personal*	50
Entertainment*	100
Misc Expenses*	50
TOTAL	4451
*estimated

I wasn't really sure what we pay on those last few categories so I honestly guessed based on receipts from this month.

A couple things:
What I noticed right off the bat is that our expenses are super high. Besides that, though, our take home pay (after health insurance, short and long term disability, 401k contributions, and automatic payments to savings) is typically around $4600-$4700 a month. So where is that $150-$250 extra going?  My expenses, big as they are, don't total that amount. And that's just an average month....if my husband does well commission-wise, we bring home MORE than that. I guess that's why I have been haphazard about debt repayment, which you'll notice isn't included here. I'm throwing $10 here, $20 there at it with no rhyme or reason. No wonder we're all over the place.

What are we spending our money on?

The only good news is this: without trimming anything out of our budget, or adding any additional income to our cash flow, we now make enough to cover all our bills plus have money left over towards debt.  I think with a little tweaking we can free up a  big chunk of cash towards getting rid of this burden.

I'll tackle the bills in the next post. I know a lot can be trimmed, so I will do a line-by-line analysis next.

Cash Flow

Okay, more on the money situtation:

Our current gross income varies from year to year because my husband works on salary plus commission. Last year, he grossed about $57,000 and this year is on pace for about $62,000. Combined with my income, we should end up at around $95,000 this year.

The fact is, we make good money for the area in which we live. And the fact that we're swamped with debt is embarassing.

Here's another confession: we don't have a budget. We know what we spend on fixed expenses, but it's the other categories like gas, groceries, personal care, entertainment, etc. which are our downfall.

I'm going to put together a list of monthly expenses in my next post. I know there's a lot of fat that could be trimmed off our expenditures, but first I need to get everything down on paper.

Regarding assets:

We do have some savings. Here's a current snapshot:

Cash: $35
Checking: $65
E-fund: $141
401K 1: $XX,XXX
401K 2: $XX,XXX


So, there is a bright side. All our bills are current and are paid through Nov 1 except one that we haven't received yet. We have health insurance, life insurance, heat, food, lights and gas in the cars.

So my next steps are to figure out our expenses and also focus on some ways to build our E fund back up, since car repairs pretty much demolished it recently. I do have two auctions going on Ebay right now that end tomorrow, so I will funnel that money over to the savings acct as soon as they end.

Onward...

Dirty Debts...Done Dirt Cheap

Well here goes nothing!

Medical	$878
Credit Card	$3,158
Truck	$7,926
Car	$12,322
Student Loan 1	$24,682
Student Loan 2	$55,364
Total non-house debt:	$104,330

Yikes, that hurts. I will post more about our income and expenses also.

One week.

It has officially been one week since I charged anything. I have been carrying cash and have used my debit card a couple of times, but that's it! I'm celebrating this small victory!

To be perfectly honest, I really thought this would be harder. I have had a couple unexpected expenses this week, so I am lower on cash than I would like, but I'm OK so far.

I've gotten the debt figures together and will post those next.

The Back Story

My husband and I met in college. We were 21 and 25 years old at the time, and both of us had student loans and some other small debts. 

Two years later we were graduated and got our first apartment together. Since we both had decent paying jobs, we weren't content to just get by. We got a nice place and promptly went about furnishing it - on credit, of course.

Two more years later the cracks began to appear. We were over our heads, and worse, employment problems began to plague us. Though we both had bachelor's degrees, one or both of us were at one point underemployed or unemployed.

It's a classic tale: credit card bills piled up and pretty soon we couldn't even pay the rent in a timely manner. Bill collectors started calling. I was solely managing the finances and I was doing a poor job of it. I'd pay off a chunk of debt and then 'something would come up' and we'd be right back where we started.

Then we got married and soon after, realized this was no way to live. We did what we had to do: tightened our belts, paid what we could, moved to a dumpy and cheap apartment, sold stuff, and hunkered down to weather the storm.

Finally, after what seemed like an eternity, things began to turn around. We both got great jobs that we still have today.  We had two used cars that were paid for. The huge student loans were lingering as always, but other than that, no other debt. I had credit cards, but there wasn't much on them. (My husband wisely abstained from credit cards after that first debacle.) Things were looking good. So, what did we do? We had a baby. And then we wanted to leave the crappy apartment, of course!

We built a modest home in a great area. We moved in July 2008 - and beside the mortgage we now had, and those ever-pesky student loans, we managed to stay out of further debt, largely due to a couple of unexpected cash windfalls.

But, alas, the self destructive spending returned as it always did, and shortly thereafter my aging Jeep began to act up. We purchased a nice used SUV - on credit of course.  And then, six months later, my husband's car needed major repairs worth more than the car itself,  so we financed yet another vehicle.

Since then we managed to pay off our credit card bills one more time. Murphy then again came to call in the form of two unexpected surgeries in our family, and despite having health insurance, we were left with some pretty hefty bills. Of course we fell right back into credit card debt again...except now, we had a mortgage, two car payments, the student loans, AND the medical and credit card bills. We were worse off than ever, albeit in nicer surroundings. Frustrated and tired, I vowed to find a way off the debt rollercoaster, once and for all.

In August of this year, facing my 35th birthday, I decided I'd had enough. Over the years when I was motivated and paying down debt I read every personal finance book, blog and message board I could. I revisited those sources and began to formulate a plan. Dave Ramsey's ideas stuck with me, especially since he advocated for an emergency fund - something we have never consistently had. In many of our worst debt crises, a cushion would have helped significantly if not solved our problem. Why hadn't I thought of this before? This August, I started cleaning our basement and garage and selling everything I could on Ebay, Craigslist, and at garage sales. In only a few weeks I had earned $850 outside of my normal job! I was stoked! I was only $150 short of Dave's recommended $1000 baby emergency fund. Then I would be rolling on eliminating debt next. I had a Plan for the first time in a long time.

So what happened?  Well, Murphy did, of course! (Murphy's a real bastard if you ask me.) My SUV needed some repairs. Luckily, we had the money in savings to cover the bill.

A strange thing happened when I left the auto repair center after picking up my SUV that day. I realized something: I had needed car repairs. I didn't stress about where the money would come from. I didn't reach for plastic. I had the money for what I needed. And while it sucked dishing out all that money, I felt.....calm.

Amazing.

Flash forward two months:  I had another epiphany this weekend. I was reading a personal finance blog (surprise) and the couple I read about became debt free this past Saturday, 10/9/10. The author went on at length about how they did it, and how good it felt to be free of the debt burden.

I thought: I said the same thing, but as I paid things off, I never stopped using credit.

I got up, went to my wallet, took out my cards and locked them in the safe in our basement.

Three days later, and here I sit, typing away on this beautiful fall day in Maine as I enjoy the sun. I haven't used credit or debted in any way since Saturday. And I began this blog. And you know what? I'm okay. I'm really fine. The sky hasn't fallen because I carried cash only.

And that's a good feeling.

Why Now?

It's time. I have, in the past, done tons of research and even managed to clear our credit card debt...a couple of times, actually.  But the truth of the matter is this:  since I was eighteen years old, I have always owed someone something.

Wow.

My husband and I each came into our marriage with debt. We have, from time to time, managed to rid ourselves of large parts of it. But it's never been gone completely.

Today is our wedding anniversary. What better gift to ourselves than commit to changing our future? Our daughter is old enough now that she asks questions about money. What should I tell her about managing finances if we can't manage ours?

This is why it's NOW.

On Saturday, 10/9/10, I took my credit cards out of my wallet and locked them in the safe in our basement. (My husband doesn't carry any and hasn't for years.) From here on out, it's cash or debit only. And that's why I entitled this blog what I did...because the simple truth is, though I have often paid down debt, I've never actually stopped spending. This time, it's different.

There. I said it. That was a load off my chest. Up next...the dirty laundry. I'll lay all the debt dirt out there. I'll start with our story.

Taking a Deep Breath

Good morning blog world:

Well, here I am, joining the ranks of personal finance blogging with my own little blog. I'll be using this space to share my thoughts as I embark upon a journey to kill debt, build wealth, and live a great life.

The hows and whys of my debt and how it came to be will come in a seperate post. Suffice it to say...it ain't pretty.  (Is it ever?) 

If you're seeing this post, welcome. I hope you come back for more.

Have a great day,