New Job!

I got a new job and I start next week!

As I shared in a previous post, I had been contacted about a new employment opportunity. I was on the fence about whether I should even consider a new job offer since I'd be leaving my current 401K match on the table. After much consideration and the new company coming in with a 10% salary increase, in addition to several thousand stock options, I decided that I'd take a chance and make the move. I accepted the new job offer and I start next week.

It was a stressful few weeks as my current employer counter-offered in both salary and position. While this was a bit tempting, I went with my gut and I'm going to go back to a small company where I can make more of a difference and report directly to the CEO. This is exciting to me and I look forward to new beginnings.

As many of you who also balance the budget can understand, I'm dying to know what my new take home pay will be so I can figure out our debt repayment plan! I've been toying with a few options (aggressive versus more relaxed payment plan) and I'm dying to see what we can do. I'll likely get one check in August, but that won't be my true new take home pay amount, as the insurance money won't be taken out until September.

So, expect to hear about the new debt repayment plan sometime in September! I'm leaning towards the aggressive plan which will hopefully allow us to pay off all debt by December 2015.

Our New Plan!

(Photo Credit)

I think it's important to have a plan.

We look at our plan from time to time and tweak it as needed. We've done this quite a bit since we started on our debt repayment journey, about 2.5 years ago now.

We've had some recent changes in our lives that made us decide to re-evaluate our plan... we finished paying off our credit card debt, bought a new car, and I started a new job which gave me a sign-on bonus. Our previous thoughts were to use the sign-on bonus to pay for the new car, then budget about 1k per month to have it paid off in full within a few months. We also planned on taking a few vacations this year, while saving up for a house.

Well, the new job has some uncertainties that make us feel a bit uneasy. There is talk of furloughs, layoffs and restructuring. Without having a safety net (aka - a good sized savings account) to fall back on if these things happen, my husband suggested we hold off on paying off the car and save the sign-on bonus instead.

I had a hard time seeing how this would be a good idea at first because whatever savings account we put the money into we would not get interest higher than we were paying for the car. After being focused on reducing or eliminating our interest payments for so long, I couldn't imagine willingly paying interest on something. Plus, when we got the car, we planned on it being paid off fast, so we didn't haggle for a super low rate. The dealership gave us 5.49%. They said this was the best they could offer since we were taking advantage of some other discounts they were having. We figured over the course of a few months, our interest payments really wouldn't add up to too much. But, if our plan was to now save the bonus and pay the car off slowly, then those interest payments would surely add up fast!

I knew that the only way I could get on board with slowly paying off the car, would be if we could get the interest rate lowered. Well my new company has a credit union which offers a much lower rate, 1.69% if you have an account with them. I decided to apply for the loan and was approved. This helped me get on board with the change in plan and to reduce our payments a bit.

So, we now have two car payments (gulp), but they are doable. We also now have a savings account. We have decided to reconsider the trips we we thinking of taking later this year. We want to be smart and be prepared in the event that something bad happens at work. This is progress for us. This is especially progress for my hubby. He's a guy that lives in the moment and figures "it will all work out somehow." For him to be the one pushing for us to have a safety net and be thinking of the "what if's" says a lot.

My, how far we've come!

April, May, June, July...

I don't want to be one of those people that wish time away. Really, I don't. But, when you are this close to the end, how can you not wish for it to fly by?!?

I have some pretty big goals coming up and I'm just praying things stay on track so we can reach our goals. The last thing I want to be doing on my vacation this summer is thinking about how we "almost" got out of debt. Screw that! I want to be sipping a margarita and high fiving eachother for succeeding at our goal!

In April, we will pay off the taxes we owe.

In May, we will pay off CC #2.

In June, we will pay off CC #3.

In July, we will pay off the past child support owed.

Come August, we will be banking that cash that normally went to other bills for our future home. I get goosebumps thinking about it! I can't wait.

5 Months From Now...

Five months from now, we will be out of debt. Five months. Five. Months.

If all of my calculations are correct (including our new estimated $6K due for taxes) and my guesstimates on what we'll owe in interest, we should have everything (minus our car) paid off by the end of July.

This is just in time for our trip back East and for our celebratory vacation trip to Mexico. I can not wait. We've been a little less focused since the holidays, but it's time to pull it back in and get this thing done. That way we can come back from our trip refreshed and ready to start the next phase of our journey.

We're tired of living in an apartment and we want to own our own place. Paying these bills off are the key to saving enough for a down payment. It's essential we do this.

We've come A LONG WAY and are in the home stretch. 5 more flips of the calendar and it will be over. Ahhhhh, motivation, where are you? I need you back.

Questions : What do you do to help motivate you to stay on track?

Walking on Sunshine!

Yippee! We made our final payment to CC #1 today. I really feel as though I'm walking on sunshine. What a great feeling this is. I can only IMAGINE how wonderful I'm going to feel once all of our debt is gone. Let's take a look at the numbers so far...

Here's where things were as of July 28, 2011:

Original Debt $60,555.72

Debt on 7/28/11 $50,355.00
________________

Credit Card Debt
CC #1 : $15,217.69
CC#2 : $16,913.81
CC#3 : $0 (Paid In Full!)

Car Loan
$18,223.50

Here's the update, as to where our debt is today:

Credit Card Debt
CC #1 - $0 (Paid in full on 11/15/11)
CC #2 - $13,885.25
CC #3 - $2,905.30 (0% balance transfer card I opened a few months ago)

Car Loan
$17,130.09

For a total of $33,920.64

That means since July 28th, we've paid off $16,434.36 in debt. Not bad progress. Not bad at all! The next one that will go down is CC#2. The plan is to have that one paid off in March 2012. Unless, or course, if we win the lottery before then :)

Tomorrow is a big day for us!

Tomorrow is my payday. Well, tonight at midnight actually. And like a teenager waiting in line at midnight to see the next movie in the Twilight series, I'm thinking of staying up late so I can make our FINAL PAYMENT to CC #1 as soon as the money hits our account! I can't believe this day is finally here. The final payment will be in the amount of $1483.46. It almost seems surreal. It feels as though we've been working towards this day for so long.

We were able to pay this one off sooner than we originally anticipated. We were targeting having this one paid in January 2012. I'm pleased to say that we beat that estimate by a few months! I'm looking forward to sharing our new debt repayment schedule soon.

Although this is exciting news, we still aren't out of the woods yet. I plan to update our debt status this week so you can see where we're at. There's been a good amount of progress made since that last update in July. I'm excited to share our new numbers.

Have a great day!

It's so close, I can taste it!

Next Friday – May 13^th (oh crap, now that I wrote that I’m getting a little superstitious, but I digress…) Next Friday we will make the final payment on our taxes ($2472) and pay off one of our credit cards ($952) – I am so excited! We are finally moving in the right direction. It's such a great feeling!

As I shared before, I was slightly torn on paying the credit card with the highest interest first or this smaller one to get us going and I'm really glad I decided to pay this one. I NEED to cross something off of our list, even if it's relatively small, compared to the others. In this regard, I agree with Dave Ramsey's Snowball Theory. The interest that I will pay on the other card really isn't that much and the great feeling we'll get from knowing we're paying stuff OFF is going to be worth it!

Have a good weekend all :o)

Determined

First off, my apologies for not blogging much this week. I've been on a quest this week to find ways to lower our bills. I'm determined to find us less expensive housing and get my husband a new, better paying job. So, any downtime that I've had has been put towards those efforts. I think my eyes may fall out of my head! I've spent so many hours online searching and searching for housing and jobs.

The quest will continue into the weekend, as we tour local apartment complexes and search the want ads. Hopefully I'll have some good news to report next week! Have a great weekend everyone :)

So long cable bill!

We did it! We canceled our cable/internet. I'm still kind of in shock. Perhaps in denial too. I hate to admit it but we watch a lot of TV. Let me say that again... A LOT! I'm a bit confused, wondering what we are going to do with all that time!

Anyway, let me get to the story... My husband texted me on Friday saying that he thought we should get rid of our cable. I almost had a stroke! Although the idea was in the back of my mind, I never thought he'd go for it. So, I immediately agreed. I've been struggling with ways to reduce our monthly budget so that we could build up our emergency savings and start paying down our debt faster. Cable and internet are nice to have but definitely not necessities in life - especially when you're in debt like us. So, he made the call and canceled our service.

We went in to our local cable office on Saturday to drop off our cable boxes and internet stuff. While in the office, they had about 12 different TV's going at the same time and I could see my husband starting to second guess himself. Believe me, I was too! We stayed the course though and handed in our dusty old equipment.

I should explain that we are not going completely without some form of home and couch entertainment :) We have decided to still keep our Netflix account active. For about $10 a month, we do get a good amount of use out of it. Now, we're planning to get a lot more! There's got to be some old shows that we missed and good movies to catch up on. Also, I do get internet access on my work phone. Although the screen is tiny, it's still access! Lastly, I was able to score a wireless internet card for my work laptop, so I could use that at home as well. Although the speed it dreadfully slow, we're hoping it'll be sufficient to get us online as needed.

Yayyyy! So, that's my good - no, GREAT - news. It's only $120ish a month, but will certainly help us out. Oh yeah, one more bit of news - my hubby also willingly canceled his wrestling show account (about $4 per month). So, make that $125 going towards savings and debt. Today is a good day!

Question : Have you ever given up cable? If so, was it difficult? What did you end up doing instead to fill up all your spare time?

YNAB, Mvelopes and Dave Ramsey...

Until now, I've been using a simple budget that I created in Excel. However, lately I've been reading up more on budgeting ideas. I found Dave Ramsey and his baby steps interesting and have been considering following his approach and maybe even attending his classes. However, I've found some other budgeting software that sounds interesting. One program that caught my attention is called "Mvelopes." It seems to match up with Dave's philosophies (envelope budgeting) and makes it easy for people to track their envelopes electronically. Today I discovered You Need a Budget which seems to push the idea of not living paycheck to paycheck (our current problem) and makes it easy to track your money and get ahead. This also sounds interesting. My frustration is that as I'm trying to dig myself out of debt, I'm not interested in spending more money to buy a program to help me do it. I'm a smart girl and I think I can just use Excel and be fine... however, that approach hasn't worked great for me in the past. Right now I'm considering downloading a free trial version of YNAB to see what that's like. I'm hoping maybe I'll be able to get a few ideas for my spreadsheet which will help me along the way.

Question : Do you follow a certain system or philosophy in your get out of debt journey? How do you do your budget? Do you use any special software to track your budget? If so, have your experiences been positive or negative, it is worth it?

How large should your emergency fund be when you are broke?

Today I was reading an old posting on a blog called Wise Bread, about the size of your emergency fund. As you'll notice, my current savings is at zero ("...point zero" - for those Howard Stern or Animal House fans out there). Anyway, I'm smart enough to know that I need to start growing my emergency fund. What I'm unsure of is how big I should grow it. Since savings accounts are currently paying next to nothing in interest, any extra funds I have at the end of the month, I'd almost rather put right towards lowering our high interest debt.

I do plan to set aside $100 (or more) per month into savings, but at what point will my emergency fund be complete so that I can begin putting that $100 towards debt? I've read different theories on this one. Some say 3-6 months worth of expenses should be your target. That would take me a very long time to do and I think it's a bit more than I feel I want to do at this time. Others recommend $1000 as a good start. I'm worried that $1000 may not go far if I were to lose my job, especially given that our rent is currently at $1375.

I'm leaning towards my emergency savings goal being equal to one month of expenses - to start. I would like to increase that in time, but I think this is a realistic goal to shoot for. A quick analysis of my budget tells me that one month of expenses is about $4500. Wow. That's not rock bottom expenses though. It includes our current cable package, cell phones, NetFlix, paying a little extra on our debt, putting some in savings, etc. If I had to cut some things out and live on the bare necessities, I'm sure we could lower those expenses some. For now though, I'll think I'll target $4500 as our new emergency savings goal.

My current plan puts me meeting only half of that goal by the end of 2011. That would mean December 2012 is when we'd hit our emergency savings goal target. Hmmmm, kinda far off for my liking, but I guess some goals are a little harder to achieve to than others. I keep telling myself that it's a marathon, not a sprint and that we'll get there. We'll get there.

5 Year Plan

Okay... so I'm really anxious to get started on my official "get out of debt plan"! Before this weekend, I was toying with a pretty tight, but good, 3 year plan. Then, after getting the new car and engaged, it's now going to have to be pushed out to 5 years. As much as I don't like it, that's more realistic at this point and will give us a little more breathing room. Unless of course, I win the lottery. Which, I know some people don't like, but I do play! Someone has to win, right?!? Why can't it be me? :)

Luckily we'll probably plan a fairly inexpensive and simple wedding/elopement. We've both been married before and live across the country from our family and most of our friends, so this is the option that we are leaning towards. We both have fun in Vegas, so we're thinking of a quick elopement there. Not sure yet about a honeymoon. Wish we had a little more saved up so we could plan something nice, but it looks like that may have to wait...

This plan is important to me because I need to wrap my brain around how I'm going to get out of this situation. Dealing with debt is like a having huge weight on your shoulders. It's on my mind daily, often hourly, and it's mentally draining. Sometimes when I think about it all, I get really overwhelmed. It can feel as though you are drowning, in a way. Breaking it down into doable monthly payments, where there is at least a rough end date identified, helps me immensely. That's why I'm excited to get it all down on paper, to start the process and kind of in a way, to begin the healing.