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.

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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!

December Reading

One of the things I just don’t have time to do when school is in session is pleasure reading. This December my book choices have been mainly non-fiction. Mostly about money (and a little on weddings). Here’s what I’ve been reading so far this winter break:

1. A Practical Wedding by Meg Keene

I knew that planning for a wedding could lead to me being insane. Paralyzed by choices. Bridezilla-type attitude. So I checked this book out from the library to get some practical advice about not going crazy with wedding stuff. After I finished the book (on the plane ride back from Vegas), I decided that there are only a few things that are important to me for the wedding:

  • A party with all of my family and Mr Woodpecker’s family.
  • Amazing photography.
  • Financially responsible.

That’s it. So for now Mr Woodpecker and I have decided to follow the advice of the many readers who are able to look at this objectively, and we’ve decided to postpone ANY wedding planning until after the credit card debt is paid off. We still have a general date in mind, and it may be that the wedding is more “thrown” together than detailed plans, but both of us just want to focus on one thing at a time. Debt first, then wedding.

2. Rich Dad, Poor Dad by Robert Kiyosaki

This book really kind of blew my mind, but in a way that it made me think about earning money very differently than I had before. It made me actually understand the difference between an asset and a liability and understand how rich people think differently than poor/middle class.

And I know this is probably not the conclusion that most people come to, but it also made me realize that I’m okay being middle class. I’m okay not being rich. I’m okay with not thinking out of the box. And I know that isn’t what the book was supposed to do and I’m definitely okay with applying some of the techniques to build assets, but it also made me realize that I just don’t care enough about money to be rich. And I’m just fine with that.

3. Smart Couples Finish Rich by David Bach

I read Bach’s book in about 4 hours. I loved it. Couldn’t put it down. I even took breaks after each chapter to talk with Mr Woodpecker about what I was reading and learning. The basics? Figure out what your values are and make sure that your spending aligns with your values. Mr Woodpecker and I sat down and made our list of personal values. I was actually really surprised by some of the things that were most important to him and it was great for me to communicate to him what I thought was important.

What really sold me on Bach’s book was his chapters on goals and on baskets. His three main “baskets” (or areas we should be saving money) are for retirement, security, and dreams.  The retirement makes sense, obviously. Security included things like health insurance, life insurance, wills, disability insurance, etc. Again, things that made sense but I definitely needed a reminder of how all of this fit in with the marriage I’m about to enter in to.

The dream basket really sent me through the roof. He instructed the reader to sit and dream and imagine about what they *really* want in life. To be outlandish and dream big. Then to share these dreams with your partner and figure out what the couples shared dreams would be. When I shared my two big dreams with Mr Woodpecker he loved them and even had similar ones of his own. So what are my 2 big dreams I’d like to work for?

a. I want to work and save enough so that some year Mr Woodpecker and I can travel for an entire year together around the world. Perhaps working online in the process or maybe we just quit our jobs for a year and just travel. Those details aren’t worked out, just the dream of being able to travel at our own pace around the world. Expensive? Yes. Doable? Absolutely.

b. I want to own a home on a decent size piece of land. One of my main values is “Peace of Mind”. And part of this peace of mind is knowing that if “anything” should happen I have the ability on what I own to sustain myself and my family for a moderate amount of time. This means I’d like to have an orchard, my own family garden with vegetables, and some chickens for eggs. I’d love to have some acres for kids to play on and build tire swings and tree forts. And perhaps a lake for the dogs to swim in. Oh yeah, and also, I’d like this piece of land to not be too far away from town. Good thing I live in Kansas where something like this is actually possible and not to unreasonably expensive.

 

So what’s next? What book recommendations do you have for me? I’m due to go to the library tomorrow and would love some great recommendations!

This is what happens when you don’t plan.

When Mr Woodpecker and I first got engaged we discussed the plans for the wedding. He wanted to get married after we got out of debt (should happen in around 4 months from now). I am totally on board with this plan.

I then brought up how we will save for the wedding expenses. Mr Woodpecker thought pretty strongly that we shouldn’t pay anything for the wedding expenses or save anything for the wedding until after we are out of debt.

While logical in a boy, single minded focus kind of way, it really isn’t practical.

For instance, we are leaving for 2 days next week to go to Vegas, look at venues, and take our engagement photos. All wedding related expenses. And little of it we have the money for since we didn’t start saving anything when we first got engaged.

We ended up paying for the airfare and hotel with money in our checking accounts, but for the engagement photos I had to secure the photographer – which meant a 50% deposit. Which meant money I didn’t have. So where did I turn? The trusty credit card. Money now, pay later.

This lead of course to me shopping for a dress for the engagement pictures – which led to me shopping for a dress for the wedding – which led to me finding the perfect dress. Which led to another $580 on the credit card. So BOOM – almost $800 of progress on the debt destroyed in a matter of a few days.

Then Mr Woodpecker had an emergency expense of $750 that had to be paid the very next day. We used his emergency fund for this. And now I’m just…grrr… angry and annoyed at how easily I slip back in to habits.

But it reminded me very clearly that if there is something that I know I’m going to spend money on THAT’S OKAY. I just need to PLAN for it.

So Mr Woodpecker and I sat down today and discussed it and I told him there was no way I won’t be able to spend money on the wedding until just the month or two before the wedding. That I was going to need to put down deposits and buy invitations and all of that stuff. So I can’t just have no budget. We need to set aside money now, each month, to pay for wedding stuff or I’m going to keep using the card.

He finally saw my point of view on it and we’re going to build our budget for the 15th assuming some money towards the wedding. Initially I’ll probably just use the majority of it to pay off the money I’ve already spent, but I do know that Save the Date cards will be the next big ticket item and perhaps even a down payment on a venue next week.

The wedding stuff is already stressful for me. I don’t like making decisions and feel like I constantly have to. Every day eloping just sounds better and better. Except I really, really, really want a party with all my family and his family together. So might as well make that the wedding, right?

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: Six Weeks Down!

Mr Woodpecker and I are working really hard to get all of the credit card debt paid off in 6 months. We’re now through 6 weeks and we’ve done an amazing job so far. In 6 weeks we’ve paid off $4087 in credit card debt!

It feels so good to pay it off! Here are the nuts and bolts of how we’re paying this debt off:

  • Living on my salary and putting his salary to debt payment.
  • I picked up two part time jobs: tutoring for $40/hr for 2-4 hours per week and working ~20 hrs/week at Kohls.
  • Mr Woodpecker has picked up my responsibilities at home while I work more.
  • Trimming the fat on our budget for things that aren’t necessities.
  • Sticking to our budget!
  • Talking regularly and openly about our budget and what we spend on things.

The stuff above is actually the easy part. The hard part I’ve found in the past is motivation. Here is what we do to stay motivated about getting out of debt:

  • Every time I get paid, I put it on the credit card immediately. I get texts from my bank everytime Kohl’s pays me. So as soon as I get that text I log on and put that exact amount on the credit card. On my way home from tutoring, I stop at the ATM and deposit the money. Then when I get home I put it immediately on the credit card. This keeps the money from being spent any other way. Last month I ended up with almost 15 payments on the credit card. Some large, some small. But all felt amazing!
  • I keep a record of our payments on the fridge door. Every time I make a payment I write it on a piece of paper that is on the fridge with the date of the payment. Seeing it there every time we open the door reminds us of what we’re doing and keeps us going. Mr. Woodpecker has told me that this is his biggest motivator because it is “right there” every time he goes to eat.
  • We celebrate every payment and milestone. By celebrate I mean high fives, hugs, and kisses. When I put a $58 payment on the credit card it is awesome to know that I have a partner who will congratulate me on that and be just as excited as I am about it.
  • We got engaged. Okay, not everyone can do this. But now we’re extra motivated to pay off this debt because we want to start our married life without it and we don’t want to have our wedding until it is paid off and we can save for our wedding and pay for it in cash. This is also another amazing motivation to keep us going.

I won’t lie, the past 6 weeks have been exhausting. Working 45-50 hrs per week at my normal job and then going to my part time job in the evenings and weekends is just hard. I miss him a lot. And he misses me. The only way I can do this is knowing that he is taking care of everything at home while I’m not there and knowing that it is only temporary. It has definitely made us cherish the 1 or 2 nights a week that we get where I don’t have to work  all the more!

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.

Points and Dollars

It has been 9 weeks since I’ve joined Weight Watchers. And officially I’ve lost 15.2 lbs. I will weigh in again today and I’m anticipating that I’ll get my 10% weight keychain today (which I’ll get at 16 pounds).

The thing that I love the most about Weight Watchers is that you actually can eat (just about) whatever you want. You just have to budget for it. So if I absolutely have to (want to) have my 9 point beverage – I can. I just have to give up points for dinner or lunch and instead fill up on tasty, tasty fruits and vegetables. I feel a lot of freedom on Weight Watchers because of the fact that I don’t FEEL like I’m on a diet. I know I’m losing weight, I know I’ve starting eating healthier, I know that I’ve started exercising more, but I don’t feel like I’m dieting.

Last night Mr Woodpecker and I went to week 1 of Financial Peace University. Keep in mind, this is my second time through FPU. It was Mr. Woodpecker’s first. He was pretty apprehensive about going because he came from a family that didn’t talk about money, so the idea of talking about money with complete strangers was frightening to him. After the first meeting he was so excited. We talked about money and savings and our goals for about 2 hours afterwards. It was wonderful.

It was FIVE YEARS ago that I first started my financial journey. And to be perfectly honest, I’ve been a wheel stuck in mud the entire time. I start to get somewhere and something backtracks me. Moving. New job. Moving again. Etc. Always an excuse.

I wondered to myself last night: “Why can’t getting rid of debt be more like Weight Watchers?”

In a way they are the same. In Weight Watchers you have points to spend. In life you have money. You only have so much of either and after that you’re out.

But money isn’t as easy. In Weight Watchers I can spend my points each day as a fresh new day. I wake up and there are new points waiting for me! Yesterdays points have nothing to do with today’s or tomorrow’s and I always get a fresh supply. I can eat a cake or a brownie, or whatever I want as long as I can load up on veggies in my other meals.

Money? Well, by the second of the month most of my money has already been sent out for bills. Those don’t change. They’re always there. It isn’t like if this month I want a new TV I can just skimp on the bills to buy the new TV. And the money doesn’t refresh daily, or even weekly. And today’s mistakes? Those definitely effect tomorrow when it comes to your budget. I only get 24 paychecks a year, if I mess up one or two that can have a significant effect on the rest of the year.

Also, I’ve felt at many times while trying to get out of debt that I had to do “gazelle-like intensity” to do it. Which works for some people, a lot of people. But five years later, I find that all “gazelle-like intensity” does for me is leaves me burned out.

I can do intensity for months at a time. But eventually I find myself slowly losing the intensity and then thinking: “Yanno, I should just buy this t-shirt. I love it.” And that leads to the next thing, which leads to the next. And suddenly instead of paying $1000/month on my debt I’m down to just $250/month on my debt which is barely over minimum.

So, while I can’t make my money be just like Weight Watchers where I get points to use HOWEVER I want, I can make it a little more SS4BC friendly. Simply: I need to give myself a little cash each month for “fun”. Money that I can use to buy myself a t-shirt or those cute shoes or to pay for whatever little thing I want. So instead of my wants for things leaving me in a money tail-spin, they’re planned parts of the budget.

This week Mr Woodpecker and I are working on our budgets together. I’m excited for this new journey in life that we’re taking together.

One of these summers…

It is officially my second summer as a new professor. I swore to myself that I would give myself SOME time to relax, unlike last summer.

Last summer I was running high school day camps, taking a 2.5 hr per day class (Calculus, for refreshing and fun), and teaching a 2.5 hr per day class. It was exhausting. By the time August rolled around I had enough money/time for a 3 day trip to San Diego but that was my “summer vacation”.

This year is going along the same pace. I’m almost finished with the teaching (online, which is my first time), we’re finally done with the summer camps for high school students, and this past week I started doing my summer research. And in that I’m teaching a class to high school teachers next week, having friends and family visit at 3 different points this summer, oh and trying to keep up on unpacking, hanging things up, etc on my new house. I’m already exhausted. Thankfully I have nothing planned for August so I’ll relax for about 2 weeks before my contract begins. I’m sure that people will be contacting me half way in to that for meetings and questions, etc.

Financially speaking, Mr Woodpecker and I are going to start going to Financial Peace University starting next week. I haven’t told him a lot about it, just that it will help us learn to set goals about money together and talk productively about money. So far we haven’t had an issue. I made up a budget for myself while he was sitting next to me playing video games and he kept looking over and asking questions, which I think is a very good thing.

Then we went through and talked about what our financial goals are together for the house and personally.

It was a really good talk.

I’m excited for us to take this journey together and so thankful that I have a partner who wants to put in the time and effort  to make this work – together.

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…