Our first year of Financial Peace...

I am very pleased to report that this first year has been a tremendous success in the effort to curtail our spending and gain control of our finances.  I am proud to say that we have now gone an entire year without using our credit cards.  Not even once.  Yay!!!!!  We removed them from our wallets a year ago - and have never looked back.  That.  Feels.  Awesome.  Neither of us ever felt the urge to dig out one of the cards - even when phenomenal sales and promotions for this, that and the other was going on - and we have FPU to thank for that.  Dave Ramsey's very frank talk about the evils of credit have truly sunk in.  Now, we are dealing with the conundrum of what to do with the couple of accounts that were paid off this past year.  Do we close them or keep the open credit so that our FICO score looks better?  Not sure what to do.  My gut tells me to close them and get rid of the evidence!!

So what was the year like?  We have been working the program - although our best months were early on - while we were actually taking the Financial Peace University Class, last Aug., Sept, and Oct.   After the class ended, we slowly slipped off the bandwagon as far as totally keeping on top of what our accounts were doing at all times. This means that we still struggle with keeping up with the checking account balance and getting bills paid on time - simply because we get buried in mail everyday, and I can't keep up with all of the paperwork involved. In order to prevent stuff from being late, all of our credit card payments and bills where the amount due is constant are all automated. It's the utility bills that are killing us because the amounts are always changing, and I just let the mail pile up... and you get the idea.

Paperwork is my biggest nemesis. When you add the financial stuff on top of the medical stuff (six family members tend to generate a lot of dr. appointments throughout the year..) on top of the homeschool stuff... it is the financial stuff that always gets the short end of the stick in my case. Which is wrong. Ensuring our solvency should be the number one priority, but sadly it isn't.

Finding an accounting method that works for us is still on our to-do list. Dean created an excellent cash-flow worksheet for us - and it works - when we use it. The problem is, we have so many different 'bills' every month - the debt, utilities, classes, memberships and other expenses that the list is long, and detailed. It's the details that make it difficult to keep up with it every paycheck cycle. The system is at its optimum when we use it - and when we don't, it's anybody's guess how much is left in the bank - and I hate that.

We've built up and blown through our emergency fund three times this year. BUT. It's proof that it works. If it wasn't there, the only survival option would have been credit.  So babystep #1, build an emergency fund of $1,000 is the key to making it work.

We've also set up a pretty detailed "Commission" (read - 'allowance') system for the kids to help them learn the financial ropes as well. It is newly implemented, so I want to see how it works before I say anything about it. We also purchased Financial Peace Junior for the kids, and will be working through that this fall.

So! Obviously, judging from the volume of my posting, finances aren't that exciting to talk about - especially when you're not rolling in the dough! :) The good thing is that they are never far from my mind. Our budget is tight, tight, tight, and there were some pretty hefty budget busters in play last year. Christmas was one of them, home projects and activities such as scouting, karate and so forth.

It's been a good year, and I really look forward to this coming year and seeing the domino effect of the snowball we started last year.  It's rolling fast and furious, and a lot of debt will be retired this year - we can't wait!

Back in the saddle

http://www.flickr.com/photos/katkamin/6462625847/

The holidays were brutal.  But I am here to say that we made it through without using our credit cards to make up the difference.  We did, however, decimate our emergency fund.  Making kids happy on Christmas morning is an emergency right?

We didn't go overboard, (really!) but we didn't go into the holiday season with a plan, either.  There was no time to prepare.  We worked hard all fall to build up that emergency fund, start up the debt snowball and shove it down the hill.  There were no pennies left to even think about Christmas. 

So here we are and the chips are falling.  We have a whopping twelve cents left in our savings account, so we are back to square one.  The good thing is that we are not experiencing the post-holiday blues like we have in the past - by opening up the credit card statements, one after one, and being consumed with remorse.  For that I am very, very thankful.  We have not used credit since August, and it feels sooo good!

We finally pushed up our sleeves and had the long-needed budgetary meeting this past weekend.  We haven't had a plan since the beginning of November, and it is nice to see where we are heading.  It is a busy time right now... karate lessons are going up in price as Jordan has moved up a level, lots of activites with scouts for both Jordan and Rylan are adding up to dollars here, dollars there... and we don't want to be caught empty-handed.

Relearning the lesson to just say 'no'

Dean and Jordan will be foregoing a boy scout ski trip this coming weekend because we had an emergency repair to the dryer last weekend.  Dean did the work and saved us a boatload of money, but the part was just expensive enough that there is little left beyond grocery and gas money for the rest of the week.  Dean would have had to pay for the lift tickets this past Monday to hold their spot, and there just wasn't enough left.  We had to back out... but that is the kind of decision-making that has to happen if you are going to commit to getting out of debt. 

I am having to say 'no' to a painting lesson with friends this coming Friday night, because - again, there isn't that much room for error during the next pay period.  We have already mapped out the cash flow, and it is apparent that hardly anything can be shunted back into the emergency fund.  We are being hit hard with annual drudgery like vehicle tags, vet visits and the like...

Getting out of debt is not a quick thing.  The process for us will take a long, long time.  This coming holiday season, though, we are going to be prepared with A PLAN.  I don't like looking into an empty wallet and feeling the fear, day in and day out, that we are just an emergency away from serious trouble.