Winding Down
Posted: May 19, 2012 Filed under: Uncategorized Leave a comment »This coming Thursday will be our last week coordinating about 35 or so people in the Financial Peace University (FPU) class at our church. It’s been a wonderful time and I’ve learned a lot from revisiting the lessons and hearing people’s stories.
I found that by sharing our story people realize “hey weren’t not alone in this”. In fact, I was really surprised by how much people were inspired by our dumb mistakes. Hopefully I won’t continue to inspire them in that way.
About halfway into the class we realized that we needed some additional voices in the mix. So we got people in the class to share their success stories. Also we got some Endorsed Local Providers (ELPs) from Investing and Real Estate to attend. Finally, we got some FPU graduates to share their successes and provide some hope to others. That variety really helped energize the group.
My wife and I are really blessed to be able to work with such a great group of people and be supported by our church. I plan on presenting the new curriculum in 2013!
iBuyer Beware
Posted: March 25, 2012 Filed under: Buying Stuff, Frugal 2 Comments »I’m enjoying teaching Financial Peace University (FPU) and we are at Lesson 6 “Buyer Beware”. I have a real life application of it: I want a new iPad. The entitled side of me, outfitted in high end performance clothes and pulling up in a 7 series BMW, wants an iPad because
1. Well doesn’t everyone in America already have one? I’m feeling left out…
2. We’ve worked hard getting out of debt except the house so I deserve it…
3. I will shrivel and die if I am not holding an Apple product at some point during the day…
So let’s walk through the steps outlined in the “Buyer Beware” lesson
1. Wait overnight before making a purchase: Done. I’ve waited overnight several times. So I can get one right?
2. Carefully consider your buying motives. No amount of stuff equals contentment or fulfillment: My buying motive is indulging in a “want”. Sure it’s a productivity tool (not just a toy) for everyone in the family but it’s not like it’s a refrigerator. We can live without it.
3. Never buy anything you don’t understand: Well I may not understand everything about it but I can learn. No further comment.
4. Consider the opportunity cost of your money: This is built-in since there are other things that are truly needs compared to a iPad. A car without A/C for over 2 years. A $759 bill for a busted drain in the shower.
5. Seek the counsel of your spouse: Done. We both agree that we should save up without slowing down our emergency fund.
So as much as I don’t like my own answer–”hold up there hoss…it’s not a need right now…let’s save up for it” I need to practice what I “preach”. Sorry Tim Cook. You’ll get my money soon enough.
WE ARE DEBT FREE!
Posted: February 25, 2012 Filed under: Uncategorized 2 Comments »Yesterday we paid off the credit card which was our last debt (except for the mortgage). That completes Baby Step 2 in the Dave Ramsey 7 Baby Steps. We filled out the form to set up a “Debt Free” scream on the Dave Ramsey Radio Show.
It’s been a long two years but it’s been worth it.
No A/C in the car for 2 years…worth it
Broken dishwasher for 4 years…worth it
Spending time doing a budget every two weeks…worth it
Saying “no” when you didn’t want to…worth it
Sacrificing the near term for the long term…totally worth it
Also this week we started teaching Financial Peace University at our church. What a great way to reinforce the teaching and reminding ourselves to stay on track.
Receipt Revisit
Posted: February 11, 2012 Filed under: Uncategorized Leave a comment »I recently came across a gaggle of receipts from 2000-2001. My wife and I pawed through them like archeologists to discern “who was this family…and what on earth did they do with their money?” For some reason, I saved all of the receipts but DIDN’T DO A BUDGET. I’m bewildered why I would save receipts “after the fact” without planning on where to spend the money on the front end.
For some background, in 2000-2001 we lived in Andover, MA, which is a beautiful classic New England town. I was working as an engineer at Philips Medical Systems and had a 5 minute commute to work (and sometimes rode my bike to work before it was cool). Although the house was tiny (800 sq ft) we invested in Andover since it was a desirable town and home values went up. It was a great starter home. We had one child at the time so that configuration worked.
Looking at the receipts, we recalled how we lived back then:
- We shopped local before it was hip. We felt the allegiance to the local shoe stores, health food stores, etc. But we obviously weren’t price-conscience to go along with that.
- We definitely had “it’s our first child and we’re going to give him the best we can” syndrome. It’s common with first time parents and there’s nothing inherently wrong with it. But now I realize that a 2 year old does not know if the book was from a yard sale or the independent bookstore downtown. We’ve proven that with our 3rd child. She’s content and we probably have spent 1/20 on her compared to our first.
- We didn’t think about prioritizing things. I saw a receipt for yard word (mulch delivery). I know it’s important to keep your yard looking nice but that should be a low priority if you have debt and other things to clean up first.
- We had an interest-only equity loan to fix up some things on the house. We paid over $400 a month on it for an interest-only loan. Can you say “stoopid”? Yipes. We saved that statement to remind us how we acted back then.
But if you saw us back then you’d think that we were completely normal. We lived in a nice albeit small house in a quaint New England town. He’s an engineer and she stays at home with their adorable toddler. And look they have wooden toys and eat organic food from the health food store! They must be all set…
Financial Peace University comes to St. Thomas More in Decatur, GA
Posted: February 5, 2012 Filed under: Uncategorized 1 Comment »This weekend I manned the Narthex at our church, St. Thomas More in Decatur, GA to create interest in Financial Peace University (FPU) class coming on 2/23.
I was overwhelmed with the interest. Over 30 names were collected and even if less than half of those end up attending, it will be a full class for sure. I’m grateful that there’s been a lot of interest in the program. Sometimes you get so isolated just working your own plan and listening to the Dave Ramsey show podcast. I want to make this class a lot of fun and engaging for people!
I’ve had an OUTPOURING of interest and support and I feel really blessed for that!
2012 Goals
Posted: January 8, 2012 Filed under: Uncategorized Leave a comment »
Happy New Year!
My guess is that saying “Happy New Year” will become blase next week so I’m going to squeeze it while it’s socially acceptable.
I’m glad that 2011 is gone. While it was great that we paid off a lot of debt, it was year of sacrifice to make that happen. I started the blog in May 2011 and we were in the thick of it at that time. Murphy made a few visits with broken A/C in the car, dental work, broken refrigerator, etc. But now I see Baby Step 3 in the horizon and I’m excited about the future.
I’m now a believer in the powerful of purposeful written down goals and as such I’ve created my 2012 goals:
- Be debt free but the house by end of Feb 2012 (Baby Step 2)
- Have at least $10k in the emergency fund by 12/31/2012 (Baby Step 3)
In the spirit of transparency, here are my additional personal goals
- Exercise 3x a week for at least 30 minutes at a time during 2012
- Weigh 170 lbs by 6/1/2012
- Put up insulation and plywood in basement by 12/31/201
- Finish walkway by 12/31/2012
- Be hired into a new position by 12/31/2012
What are your 2012 goals? I hope that you have a wonderful 2012 and continue to check in with blog posts during the year.
Observations from the Pre Christmas Zone
Posted: November 27, 2011 Filed under: Frugal, Giving, Uncategorized 2 Comments »I’m continually amazed at how much effort is put into the message of “buy things because things = happiness” during November & December. As a result, there’s real effort involved in staying disciplined this time of year. With that effort, you can enjoy spending and giving but staying within budget and not going into debt.
Here’s how our family has made it happen since our TMMO journey began. I have to attribute this all to my wife because if Christmas shopping was left up to me, I’d be one of those losers at Walmart or the QT gas station on the way home from work the day before Christmas scrapping the bottom of the gift barrel for our 2, 8, and 12 year old children.
1. Save up the gift cards you get during the year and use them at Christmas for gifts: My wife and I got some gift cards during the year for various holidays and such. This is the delayed / no pleasure part of the Total Money Makeover that must look really weird to people. Here’s what we do: we don’t use the gift cards on ourselves but save them to use on the kids. Bingo! Instant money. Of course watch for expiration dates or fees for no usage.
2. If you child is 0-3, they don’t need new or expensive things: Here’s another tactic that must appear odd: our 2 year old doesn’t care if the pony toy came from Target, Walmart, or a neighbor’s yard sale. So we pick up various small things during the year at yard sales or bargain basement prices for the little one. She’ll be delighted with the bounty. We will probably spend no more than $20 on her this Christmas. She’s 2 years old and she can’t read the Learning Express catalog yet.
3. Save up for Christmas when you get a surplus at another time during the year: We get paid bi-weekly and there are a couple of months with 3 paychecks. We put away some extra money into a Christmas fund and ear-mark it. Then when December hits…voila!…Santa’s sack o’ cash.
4. Make it a short list: As any parent will tell you, once you have children the theme is “it’s not about YOU anymore.” And that is especially true at Christmas. We don’t buy gifts for relatives (which was an easy sell because I’ve been laid off twice, each time in early December) and I don’t exchange gifts with my wife. Another “how freakin’ odd!” part of doing a TMMO. I don’t need anything other than the basics that we already budget for. Sure it’d be nice to get a pressure washer or a Keurig coffee maker (I love those things) but is it critical right now since we still have credit card debt? People always think that’s the “guy” talking and that my wife would really prefer to be lavished with gifts and resents me for being frugal. Not the case. Even though the income I make has my name on the paycheck it’s really OUR money. But she feels odd taking that money and buying me something. If there’s something I need, we save for it, budget for it, and buy it. I am blessed with a practical wife.
For full disclosure here’s what we’ve spent on our three children for Christmas gifts: $200 total. Supplementing that is about $60 in gift cards that represented no outlay on our part.
Everything will be better when…
Posted: October 15, 2011 Filed under: Emergency Fund | Tags: Debt Free Leave a comment »I am getting ahead of myself. We plan to be debt free (except the mortgage) by end of February 2012. Right now, we’re “staying the course” on our debt snowball. It’s just mechanics now: $800 a month in the budget to pay off the credit card. And when I get my bonus in February, that will be the final nail in the coffin. Easy peasy lemon squeezy.
So what’s the problem?
I keep thinking that once we’re debt free somehow everything will be different. Don’t get me wrong–it will be AWESOME–but it’s not I can go out and buy a bunch of things we’ve been wanting the day after our debt free scream. For example, our dishwasher’s been broken for 3+ years. The car hasn’t had working A/C in 2 years. It’d be nice to get some of those things take care of…right away.
My point is that if you’ve done Baby Step 2 in the Total Money Make Over (paid off all your debt except for the mortgage), you’ve probably undergone a major behavioral change. So we will continue to do a budget, prioritize our spending, and be intentional about our money. But every now and then I get delusional and think that Benjamin Franklins will fall from the sky after we’ve paid off the credit cards. Doesn’t work that way. You still have to work at it to win.
Quick Update
Posted: October 4, 2011 Filed under: Uncategorized Leave a comment »I haven’t posted in a while. I’ve violated my original goal of a post a week. I won’t list the excuses because who wants to hear that garble!
The latest news is that we’ve paid off 90% of our debt! The guitar I sold netted $3,500 which was applied to the snowball “toot sweet”. We have$6.4k left on credit card debt. Boy does THAT feel good!
Our monthly snowball amount is $800 so that would be 8+ months of continued payments but my annual bonus is delivered in February and that will polish off the remaining portion like the Cookie Monster attending Thanksgiving Dinner at the Keebler Elves’ House. I dunno…that’s what came to mind.
Here’s some current thoughts around our Total Money Makeover Journey.
- This is still basic work…doing the budget, tracking the spending, adjusting the budget when life happens. But it’s completely worth it!
- This is about changing behavior. And once we are debt free we won’t go back to the previous behavior. That’s why this program works.
- I’m thankful that I have a good paying job to make this happen.
- We are truly blessed.
Sell so much stuff that the kids get scared…
Posted: August 27, 2011 Filed under: Selling Stuff Leave a comment »Dave Ramsey will say “sell so much stuff that the kids get scared…” to describe the gazelle intensity to raise the money to get out of debt. Many callers on “Debt Free Friday” will also say that line when describing the actions taken to get out of debt.
We’ve definitely taken that approach too and it’s part of the sacrifice to “grow up and get out of debt”. Combine the selling with the “not buying stuff while you’re in debt” tactic and you will have a pretty spartan house. Our dust bunnies have an open road to freely roam in the house.
Bachelor Era: I used to amass picture books about guitars, cars, etc. as well as other items in my “lounge years”. Now with 3 kids and a demanding job with a significant commute, you won’t find me relaxing on the couch looking at coffee table books. We had a big yard sale and unloaded these items to the tune of $400.
Drums: I had a 1963 Ludwig 3 piece. It wasn’t rare but it was desirable. Sold on Craig’s list for $400. I played them but was pretty much a hack.
Guitars: I used to play guitar professionally (but still had a career outside of music) but as other commitments have become more prominent I can’t maintain music at the same level as in years past. It was a tough decision but right now it’s more important to be debt free than have things from my past collecting dust. I sold an acoustic, classical, and archtop (see below) and will net $5,000.
I just sold the last guitar in my collection. It was “my baby”–a handmade archtop jazz guitar by John Buscarino. Keep in mind that when I bought it in 1997, I didn’t go into debt. I had saved up for it. I used it regularly until about 2006. It’s bittersweet to see it go…
I sold at Gruhn Guitars in Nashville (ironically in the same metro area as Financial Peace Plaza) for $4,500 (it went up in value). Just like getting out of debt, it took a long time to sell the guitar – 16 months but it was worth the wait.
Hey kids want to know what being a grown up looks like? The money will go towards paying off our debt…and my wife needs dental work that is covered at 50% meaning we pay $1,000 out of pocket.
