Is it easier to save?

Whenever I have needed to save money, like large sums of money, it has always been something that has been fairly easy for me. Many years ago I had two months to save $2,000 for a vacation with my grandma. I did that and then some, no problem. When I needed to save money to move to Kansas City, no problem saving up the money in a few months. Saving seems to be the easy part for me.

Even now, just a few days after my husband and I decided that we needed a hefty savings fund to pay for his lawyer and medical bills that we know are coming down the pipeline. ONE WEEK ago and already our savings account is at $3,929. (And Mr Woodpecker has another $1,500 check that is a wedding gift in his wallet that we need to cash – so there is easily our $5,000 goal and then some.)

What baffles me the most about all of this is how can I so easily save  money on one hand – and then be terrible at paying debt off on the other. Surely paying off debt is no different than saving money. It can’t be “compounding interest working in my favor” on these savings accounts. I’m looking at ONE WEEK at a 0.9% annual interest.

Perhaps it is just that I’m more encouraged by the total going up than a total going down?

Perhaps the immediacy of knowing that we WILL need this money? Paying debt is “saving” for purchases I’ve already made and purchases in the future that I haven’t yet planned. Saving right now has a very specific  goal: Keeping us from being crushed by medical bills in the next few months.

Instead of trying to analyze why saving money seems to have such a simple nature to it and paying off debt so difficult, maybe I should just say “interest be damned” and just save money until I get a pot big enough to pay off each debt in full. I’d still be paying minimums, of course, but perhaps if I can easily come up with $3-5,000 at a time using savings as a goal that I can just then transfer these amounts in huge chunks to my debt rather than just paying off the debt little amounts at a time.

Who knows… perhaps I’m not better at saving than I am at paying off debt. Maybe it is just easier to see because it grows, and debt just gets little chiseling and then BOOM monthly charges that work is gone.

Either way, I’m happy to report that our savings is growing. Our debt is remaining steady. And hopefully we’ll have enough saved to pay the onslaught of medical bills we know is coming.

The Hardest Part: Waiting

At the end of September/beginning of October, Mr Woodpecker and I embarked on a crazy journey. We decided that we couldn’t see us going “gazelle” intense for years and years until all of our debt was paid off. We’d lose focus, get A.D.D., and eventually just give up.

We decided instead that what we could do was pick a debt and attack the crap out of it for 6 months until it disappeared.

See, all that Mr Woodpecker and I have are “big debts”. We don’t have little $1,000 debts here and there that add up to a lot. When we started one of our smallest debts (and most tormenting) was my credit card debt at over $14,000.

When we did a snow ball calculator to figure out how long it would take to pay off the credit card plus both our student loans the number came back at over 5 years. Honestly, we just couldn’t do that. It was… well… 5 years of gazelle intensity? All that said to us was that we’d have maybe 6 months of gazelle intensity and then just gazelle burn-out.

So we opted for our own plan: Six months of super intensity to pay off one debt and then reassess. (Our initial plan was to save our full emergency fund at this point.)

I thought the hardest thing might be the lack of eating out. It isn’t.

I thought maybe the hardest thing would be having to say no to friends to weekend trips or expensive nights out. It isn’t.

I thought the hardest thing would be giving up day care for the dogs. It isn’t.

I thought the hardest thing could be living off of only one income and putting the rest on to the credit card. It’s not.

I thought the hardest thing would be working two jobs during a very demanding time in the school semester. Not even close.

The hardest part, by far, is waiting. Because we have a plan set. We have the goal in mind. We’re on the right path to get there. And now all we can do it just wait.

Getting the job at Kohl’s was the most emotionally satisfying choice that I made in this whole process. Yes, I hate getting done teaching 7:30am-5pm and working at Kohl’s 5:30-10:30pm and repeating that the next day. I hate that I have worked just about every day in the past  4 months between both jobs. I hate that my time with my fiance has been reduced to him visiting me during a 30 minute lunch break. But what I love more than all of that is the text I get every Friday morning that tells me that my paycheck has been direct deposited. Every Friday morning I get a reminder of why I’m doing all of this. And the first thing I do after I get that text is log on to my account and submit a payment in that exact amount to my credit card.

The frequency of my paychecks with Kohl’s is like a little energy-jolt motivating me forward. Making each payment exciting. Each week I get to tackle my debt problem, not just twice a month.

But it is so hard waiting. Waiting for the end that will be coming in a few short months. Waiting. For that last payment to be made. Waiting for the end of my credit card debt. I hate waiting.

Obligatory 2013 Goal Post

Mr. Woodpecker and I sat down yesterday and made our goals for the 2013 year. We’re very excited about accomplishing these goals in the next 12 months (or at least making significant progress on them).

  1. Pay off credit card debt by April 30th, 2013. This is going pretty well so far, we have about $8,500 more to go. We’ll definitely be half way there by the end of this month. This goal will have to be accomplished before we can do the rest of the goals. Step in the next 48 hours: Worked at Kohls and paid almost $600 off within 2 days of making the goal.
  2. Have wedding with family present completely debt free. We want a debt free wedding. And a kick ass honeymoon (see step #5). I think we’ve finally reached a decision about our wedding: Cancun wedding at an all-inclusive. The ceremony is free, the reception is free. All we’ll have to pay for is airfare, room, and photography. It is more expensive for our guests, but it is more affordable for us. And we’re giving everyone we want an “out” with the option to celebrate with us at our pot-luck reception at our house afterwards. Step in the next 48 hours: Contact the all-inclusive to see about reserving a date.
  3. Build fence for backyard (debt free). We want to put a fence in the backyard for the dogs. This has always been the thing that we wanted to do as our first “home project”.  Step in the next 48 hours: Looking in to doggy door options online, since we already have the fence guy we want to use and an approximate cost ($1,500).
  4. Set up 10% of both our incomes going to retirement, set up wills, make sure beneficiaries on retirement and life insurance are updated, make sure amounts on life insurance are appropriate. I feel like since we’re getting married this is pretty obvious that we need to do this.  Step in the next 48 hours: Find ourselves a marital attorney for wills, discuss pre-nups, etc. Contact financial adviser to set up meeting (free service provided by my employer).  Retirement and life insurance above our work minimums will be set up after goal #1.
  5. Go on kick ass vacation (A.K.A. – a honeymoon) debt free. See comments on goal #2. We’re doing this!

Under $10,000!

I was going to make a post when Mr Woodpecker and I finally got under $10,000 on our credit card debt. Except I missed it. By about $1,000. (Ooops!)

It happened so fast! On the first of this month we had $10,511 in debt.  And as of today? We’re at $8,949!!!

Now that we’re in the 4-digits it feels SOOOOO good. We both gave each other giant high-fives when we hit below $10,000. Now that we’re at less than $9,000 the next milestone is half way! Can’t wait. =D

Insane 6 Months: Two Weeks Down!

Mr Woodpecker and myself are doing our “crazy intense” 6 months to pay off credit card debt. So far we’re a few days over 2 weeks down and we’re doing an excellent job at paying down debt.

As I mentioned before I got a part time job at Kohl’s. I’m also tutoring a girl once a week at $40/hr. 100% of the money from these two things is going to debt.

Also, we’re living entirely off of my salary and Mr Woodpecker’s paycheck is going towards debt reduction or medical bills.

Due to all of these factors we’ve managed to so far pay down almost $2,200 in the past two weeks!

For the remainder of the month there should be another $200-300 that will get applied to the debt. It’s just encouraging to see such a big number this first month. In two weeks we’ve managed to pay off almost 15% of the credit card debt. So we’re only a tiny bit behind schedule for paying it off (we’d need 16% paid off per month), but the money will pick up quit a bit at Kohl’s the closer it gets to Christmas, and I’ll get a fairly substantial overload paycheck in February to help tip the scales in our favor for paying this off.

I’m super excited! Can’t wait to get this debt GONE!

Working at Kohl’s

I’m finally past training at Kohl’s and am REALLY enjoying working there. The people I work with are super nice and the management has been great to me so far. Everyone is so helpful and willing to answer all the questions I have, also every has such a positive attitude, which is very awesome. I’m also getting really good hours and they have (so far) been really willing to work with my schedule (which is really open, but still, it is nice that they’re so accommodating to my life).

The awesome thing is that I get paid every Friday. So as soon as my Kohl’s money hits my bank account *BOOM* I put that money on my credit card. So this week it was only $53 (1 day of orientation, 1 day of training). The next one will also be small (1 day of training, 1 day of work). However next week I’m scheduled for 21 hours and the week after I’m schedule for 20.

So far I’ve helped close once (2nd day of training) which was *not* fun. Having to put all of the stuff back on the racks that customers don’t end up buying takes me so long because I have no clue where anything goes. So it takes me half an hour to put away the same number of items that experienced employees can do in like ten minutes. I know this takes time and practice, but I really just prefer doing things I’m good at (I know, I know, how  can I get good at it if I don’t do it?)

I’m glad that I’m getting so many hours and can’t wait to work more. I’ve helped so far 2 students and 1 coworker – it was awkward – but that’s the price I pay for working at a store just a few blocks from my school. I’m just glad for the extra income to help pay down this debt. At this rate it will be gone in no time! (I’m expecting great things 😉 )

My new job!

In my post “Six Months to Freedom” I told you all about Mr Woodpecker and I’s plan to eliminate our credit card debt in 6 months.

Part of the plan to pay off this debt in 6 months involved me getting a seasonal job. I applied for around 8 jobs online. Within the day I heard back from Kohl’s. I was in for an interview on the following Thursday. On Saturday they called my references. On Sunday they called to offer me a position. Wednesday I came in for orientation and following Thursday I started training. I’ll be working Point of Sale (POS), which means I have to solicit credit cards. But I also get to talk with people, which I love. It doesn’t pay super awesome, but it is higher than minimum wage. I’m just happy to have  a job. So far I like my manager a lot, which is great. I am still in training, so we’ll see how I like the job once I start working more hours.

I also put an ad up on Craigslist for tutoring and a girl contacted me. I offered a rate of $40/hr. We met a few days later for 2 hours. A very easy $80 made. She is a great person to tutor, very smart, just is taking her Chemistry class online and needs a little guidance. Hopefully we’ll be meeting a few more times before the end of the semester. (Don’t worry, she attends a different school than the one that I teach at, so there is no conflict of interest.)

I am excited about the new job. I’m excited about getting this date paid off. So far this month we’ve paid about $1000 on the credit card, it is a great start to this 6 months of insane, gazelle intensity.

We Won!

The place where Mr Woodpecker and I were taking out Financial Peace University class was having a Facebook contest to send people to see Dave Ramsey in Nashville. We had to “Like” the company’s Facebook page and then write a comment about how FPU has changed our lives. And guess what! Mr Woodpecker and I won!

Here is the YouTube video of the call. If you listen all the way through the call (once they get Mr Woodpecker on the phone) you’ll see why I love him so much. I’m so excited to go and meet Dave Ramsey. What do you say to someone who has had such a large impact on your life?

Updates from SS4BC

  • Mr Woodpecker and I start our first week of our 6 month plan to eliminate all of our credit card debt. We had our “financial summit” meeting today and it went well. We agreed on a budget and are good to go.
  • I’ve applied for about 8 seasonal jobs so far. I’ve heard back from one. Went on a group interview, and they called my references tonight. So I take that as a good sign, but we’ll wait to see how everything falls in to place.
  • This week marks my 6 weeks of maintenance on Weight Watchers. In 4 months I lost 35 lbs. I’ve maintained for 6 weeks now. I have every intention of keeping this up, for a lifetime.

 

I know, this is a short update, but the next 6 months promise to be very busy for me. I can’t wait to be debt free!

Growing Up Fever

The last few months I’ve been itching for something. It as if my body or mind or very nature has been craving something to prove I’m not longer a child but instead a “grown up”.

I keep wanting those basic things that you think about when you think of  “adulthood”.

A husband.

Kids.

A house.

The husband thing I obviously can’t run out and go get. I’m currently in a wonderful relationship with Mr. Woodpecker (if you’ve read Still Life with Woodpecker, you’ll understand why this is his nickname). However, we’ve only been dating for 9 months. And while it is serious, for both of us, we’re not at the point of thinking of marriage in the short term. Which there flies out kids as well.

So what is left? A house.

Thus why you find Mr Woodpecker and myself looking at open houses on Sunday afternoons. Doing MLS searches during the week. And tomorrow morning we’re meeting with a realtor to find out the entire process of home buying since we’re both property virgins.

Here’s the thing:  I’m the girl who has written post about post about why someone shouldn’t buy a house. Look, this post I even made a LIST of reasons why someone shouldn’t buy a house. No, I’ll wait, go look. And what do you know? I STILL fit just about every “do not” on that list.

I still have debt.

I want a house to feel “grown up”.

I don’t have 20% down.

I don’t even have a full emergency fund.

I know that all the signs point to “No, you can’t afford a house!” But there is this emotional, gut feeling that says “You want a house. You need a house. Go get a house, it will all work out in the end.”

So I’m looking. 

Last night I was reading Dave Ramsey’s The Total Money Makeover before I was going to sleep and of course as “fate” would have it he talked about buying houses in the section I was reading. And again it was reaffirmed to me: He said that saving for a down payment on a house should come AFTER you pay off your debt and AFTER you build up your emergency fund. Exactly what I knew 2 and a half years ago when I wrote the darn post about not buying a house.

When Mr. Woodpecker asked me how much of a down payment I thought I could afford I said “Well, I have about $8,000 in mutual funds, and if I bought in August I should be able to come up with $10,000 total for a down payment”.

WHAT THE HELL?!

I can imagine a scenario where I can have $10,000 IN CASH by August for a HOUSE, but I can’t come up with $12,000 to finish paying off my credit card?! What sort of backwards world am I living in?

So here’s the plan:

Step 1: Get out of debt. (DUH) Use the money that I thought I would be able to get as a down payment and use that to pay off my stupid debt.

Step 2: Save for emergencies. Without the debt monkey on my back, I can get to $5,000 in 4 months after I pay off my credit card debt. Maybe even sooner. (If I get fired, I have to be notified a YEAR in advance, making job loss a situation that isn’t as concerning for me as it is for most people because I’ll have a year to find a new position before the income stops.)

Step 3: Save for a down payment. I can get to that $10,000 down payment in another 8 months. I can start looking once I hit $10,000 and then keep looking until I find MY house after that. Depending on how things go with Mr. Woodpecker in the next year, who knows, maybe he’ll be contributing to this as well.

What this means is that instead of getting a house in August of THIS year I could get a house in August of NEXT year. However, by waiting a year I can eliminate debt and have a larger emergency fund. These are great “peaces of mind” for going into a home ownership situation.

I still want a house, badly. However I’ve decided I’m going to use this home desire to fuel my motivation to get out of debt and get my savings bumped up.

Here’s hoping…