KaBOOM!!



Every good debt snowball needs a good stick of dynamite to set it off.  The faster you can get it rolling, the faster it will grow.   In July we got wind that a stick of dynamite was coming our way.. we just didn't know exactly when.  Dean is an electrical engineer and works for a good company.  We have been blessed many times over in recent years that as round after round of layoffs were announced, Dean was always spared.  But less hands on deck means more work for everyone else, so Dean and his fellow team have had to work extra hard on their different projects.  The company has been good though, and has rewarded the hard work with an annual profit-sharing bonus last year and this year.  Now I wish I was talking about a lot of money here, but it comes out somewhere in the 3 - 4 K range.  Last year we paid off a credit card and took a short vacation.  And then we promptly racked up charges on the credit card over the past year because we hadn't changed our ways.  Oh well - at least we have nice vacation memories - nothing to sniff at.  But nothing to show for it either.  We had no idea if he was going to get another one this year, but as luck would have it - yes!  Then we 'met' Dave Ramsey.  We have seen the light so to speak, and have been humbled.

For the past month, we have lived on a very hairy edge.  We have had to use every financial life line we had to get by.  We cashed in stock options.  ($300 - big deal.... but it paid for groceries and gas), we cashed out a small investment fund... ($125), we had to spend our birthday money to keep the balance in the checking account to keep from going negative (when things get better, we both promised ourselves that we would spend that birthday money on something fun, as it was intended).  As we used each life line, I could hear a ricochet in my head as if a taut wire was cut and the ends were flying apart with a loud crack.  We were NOT going to use our credit cards.  Because we couldn't.  They were each within $100 of their limits.  The past six months have not been kind.  So many 'things' have come up, each with a pressing need, and our spending far out-paced any time in the past.  Our day of reconciliation had come - and yes we were humbled.  A couple of days here and there I fed the kids and only nibbled myself.  We cleaned out the cupboards.  We rationed milk, eggs, flour, sugar and the gas in the car.  It was raw, hard and intense.  And I never felt so alive!

I won't say that I ENJOY this experience, but it certainly brings a clarity to your life that was previously unknown to either of us.  I mentioned to Dean how frightened I was when we cut our last life line last week (the stock option) and he said that he felt like it was a freeing experience.  It was a testament to our faith.  God was guiding this experience, and asking us to trust that if we let go, that we would at last be truly free to take this problem by the horns and really deal with it.  Okay - just a moment here, because Dean never talks like this.  Only one other time that I can think of, when Dean mentioned divine intervention as the way we were brought together in the first place.  I'm sure that Dean's family thinks that I have drummed religion out of Dean's life.  I haven't.  I didn't drum it out of mine either.  It just sort of 'happened' - for both of us.  When you feel dead inside, the spark of faith starts to sputter.  We both have strayed from feeling 'moved' by much of anything, until now.  The process is working, we always manage to find a dollar or two in the time of need, and we have to have faith that it will continue.  And for that, I give thanks and feel truly humbled.

The day that the stock option money was supposed to be transferred to our account (last Friday), we had already experience a slight reprieve from the day before, when I sold about three things from Craig's List.  We had $45 dollars and we felt rich!  lol...  Then Dean checked the bank balance that morning, to see if it was there yet, because the city bill HAD to be paid ASAP.  You can't deal with the rest of your troubles when you don't have power or water.  Low and behold... there was the bonus.  The heavens opened up and 380,000 pennies came raining down.  What a gift!  And we were not about to waste it.  On with the program!

Baby Step #1

The first step to Financial Peace (besides STOP using the credit cards) is to put away an emergency fund.  The typical amount is one thousand dollars.  This way, if a true emergency crops up, you don't run to your credit cards to cover it.  Done.

Baby Step #2

Pay off your debt using the Debt snowball method.  We paid off every item that we were behind on.  Luckily, we were only behind a month on about four things, so it didn't take too much.  Then, we took aim at the first debt on our list.  Checking account overdraft.  This little cretin is such a pain.  We pay it off, and it just comes back.  Again and again.  We are going to see if we can just get this option removed from our account altogether so it doesn't happen again.  Or at least decrease the amount that is available.  Next, we took aim at the next debt on the list.  One of Dean's credit cards.  We threw one thousand at it.  The next regularly scheduled payment is due at the end of September.  Here is where the debt snowball method comes in.  The overdraft loan payment was $30 each month.  Now we don't have to make that $30 dollar payment anymore, but we keep it in the budget anyway, and apply it in addition to the next credit card's minimum payment of $88.  So we now pay $30 + $88 towards that card.  When that card is paid off - hopefully by early spring, we will put $30 + $88 + minimum towards the next card.  The the snowball just continues to grow and grow.  In the meantime, any extra money that comes our way, or that is not spoken for in the budget will be thrown at the current debt target.

For one glorious afternoon and evening (last Friday) I felt like a huge weight had been lifted.  We even went out to eat.  And then felt immediately guilty the next day when we paid every thing we could and realized that our food budget for the rest of the week was going to be strained.  I spent 3 hours just shopping King Soopers for produce and Walmart for everything else.  I only had $150 in our grocery cash envelope, and there I was going up and down the aisles, with a calculator, trying to make it all fit.  I put eleven items back.  I still came out $11 over, and had to take it from the gas cash envelope.  That means we are back to gas rationing.  Sucks.  But I like being back on the hairy edge.  It keeps you honest!

It is the best feeling to finally get our snowball rolling. 

It feels dy-no-mite!!

(okay, that was cheesey...)

"Sell so much of your 'stuff', your kids will think they're next"...



So we are in the midst of a massive Craig's List sell-off in order to raise funds for our "stick of dynamite".  I've managed to off-load a handful of baby items and a couple of other things so far.  I like Craig's List - it is very efficient.  It can be a pain to get stuff posted on there, but it is worth it because things typically disappear within 24 hours.

Here are some tricks...

* Take a picture.  Nothing is better than having an actual picture to look at.  Make it as flattering a picture as possible.  Keep in mind of what is in the background.  Nobody wants to see a messy room behind what it is you are selling - it is distracting.  I have taken to creating a 'staging' area on my kitchen table.  I spread out a light yellow table cloth on the table.  I remove all of the chairs and shut the blinds.  It makes for a wonderful neutral backdrop.  If it is big, I move the kitchen table out, make sure the floor is clean, and put the item on the floor.

* Include as much information as you can in your post.  I have no shame - I'll admit it - I copy and paste like a demon when it comes to giving information.  I'll steal descriptions from Amazon, eBay, other Craig's List posts - all in the name of saving time.  Since a lot of what I am selling is brand name - like Fisher Price, I can find product descriptions pretty easily.  Give accurate dimensions, descriptions of any defects and so forth.

* Include bonus info like that it came from a non-smoking home, that you have owner's manuals, and stuff like that...

* CLEAN IT!  Vacuum it out, wash it, scrub it, dust it...anything to remove any and all traces that suggest use.  You want it to look pristine.  - Same goes if you are holding a garage sale instead.

* Include your phone number.  When people see something they want, they typically want it NOW.  If you give your phone number, that says (at least to me anyway) that I will be much more likely to get what I want - and quicker too.

* Give your first name with the phone number, and also include your husband's.  If you don't have a husband, invent one. Ex: If interested, please contact Kirsten or Dean at xxx-xxxx.

* Use your best judgment when inviting someone over to view or purchase the item.  I've only had female customers so far, with the exception of when we sold our stove and our W&D.  For all of the females, I went with my gut.  I've haven't had a bad experience yet of getting an 'off' feeling.  Mostly it is just mom-to-mom kind of stuff, and that always makes me feel good.  We chat about our kids, exchange money and goods and we're done.  Any other time, I arrange a pick-up in the evening, when Dean is home.

* If you are selling a lot, keep a spreadsheet.  That way you can keep track of when you listed it, how much you are selling it for, when you sold it and how much you made.  Kind of cool to look at it over time. 

* Always check current listings before you put your item up.  No one will be interested in your bouncy seat if there are five others currently available too.  Best to wait a couple of weeks and try again.

* If you are patient, dedicate a safe place to keep stuff while you are selling it.  That way, if you have to wait to post something, it will stay clean and in one piece.

* Immediately delete a posting after you sell something.  It's only courteous.

* Wait until the right season.  Choose September/early October to sell that Halloween costume.  Don't try to sell inflatable pool toys in January.

*Wait a few days, and if there are no bites, go back and choose the option to renew your posting.  This is a new feature - and you can move your item back to the top of the stack.

*If you can, post your stuff late on a Friday night or at the crack of dawn on Saturday.  Early Saturday morning Craig's List addicts will start calling!

Lastly - don't blow your money that you make selling the stuff.  Take it directly to the bank, and put it towards your debt snowball.  Buying all the crap you just sold is how you got there in the first place!!

CHEETAH! Ruuuuuuuuuuun!

If you know of Dave Ramsey...you know what I just said.

If you don't know of Dave Ramsey - get to know him.

TODAY



"Owe no one anything except to love one another." - Romans 13:8

Last week my mom gave me the second-most precious gift in my life.  (The first of course being my life). That may sound dramatic, but you will understand what I mean in a moment.  Mom offered to watch the kids if Dean and I wanted to go down to our church and sit in on a session of Financial Peace University.  I didn't even hesitate.

We may not be the most regular (ahem) of church-goers, but we have heard of Dave Ramsey.  I have seen his name mentioned in blog after blog - glowing reviews about how his financial advice turned their lives around and gave them their freedom from debt.   I skirted around investigating his ideas, but I always shied away because I feared that this was one of 'those' programs... 'Jesus said to do this', 'Jesus said to do that', 'Salavation cannot be yours if you are in debt...' 'You must tithe your first-born to get right with God'... okay, okay, I know I am being facetious, but when the social media-driven Christian Conservative message pendulum swings so far to the right (at times), you can't help but feel alienated and...well, like a loser if you just don't feel the same.  This isn't a religion/spiritual blog, but isn't it funny (ridiculous?) how religion and finances (and politics too, for that matter) get all tangled up with each other?

I am happy to report that it is not one of those programs.  He is funny.  He mentions God.  He mentions Bible passages.  Yet - it is the kind of message I understand and feel at home listening too.  I wish he were a minister as well - I would go every Sunday.  (Now that is saying something)  The Bible passages are advice from the ages that still rings true today.  Here is the most pertinent...

"The rich rules over the poor, and the borrower is servant to the lender." - Proverbs 22:7

Okay - I need to breathe for a moment because I have just quoted the Bible.  Twice.  Not my style, but you have to understand where I have been, and where I want to go...

Where I have been:

How old were you when you got your first credit card?  I opened my checking account when I was 16.  I don't recall exactly when I got my Visa bankcard, but I am guessing it was around 18.  I knew a little bit about credit - some from tidbits shared by different teachers in high school, and some from my parents, and some from my friends.  Guess whose advice was the worst?  Guess who I listened too?  At my Visa card's website, I can see every transaction since 2001.  I have shredded the statements that go beyond seven years, but I can still go and visit with my stupidity any time I want.  I can revel in all that I am still paying for.  Wedding flowers ($600) for my first wedding.  A painting on my wall for my 30th birthday ($300).  A honeymoon in Mexico ($2500).  Emergency surgery for the stupid cat that ate a pin ($1,000).

DEBT IS STUPID

Every few months my credit card company was so kind as to raise my limit.  How nice of them.  My limit is currently at $18,300.  I owe $18,170.  Did I mention that I, myself, am not employed?  I don't put stupid stuff on my card.  My card's purpose for us, for the past three years, is to make up for the extra days left of the pay period, when there are more days than money.  We gotta eat.  We gotta get gas.  Yet the stupid comes from not having a plan when we get the paycheck in the first place.  If you don't rule your money, it will rule you.  We would always marvel at how the entire check would disappear in a matter of 24 hours after receiving it.  (Bills!  I swear!)  Then we had 13 more days to figure out how to survive until the next one came.  Debt currently acquires 45% of the monthly take-home pay.  That is utter stupidity and it is no way to live a life.  I don't want to serve this master anymore.  You can't imagine the stress it places on our lives.  I won't say that our marriage is stressed - thankfully we are both on the same page - we just never knew how to break the cycle.  Until now.

We expect that it will take around 36 months to work our debt snowball. 

Total credit card debt $27,000

Student Loan $5,000

Second Mortgage $27,000

Car $16,000

401-K loans $4,000

Personal loan $15,000 (?)

These numbers piss me off.  I haven't looked at it quite this way.  Ever.  I was afraid to.  We aren't extravagant people.  We just made a lot of little mistakes along the way - and they have added up into pretty big and nasty numbers.  We married the wrong people the first time around.  Funny how you have to take a financial hit to get out of a marriage.  The second mortgage you see up there?  I took it out two months after my first husband left me.  I had to pay my parents off for our wedding expenses ($12,000).  I had to pay him his share of the home equity (minus his half of the wedding expenses), so the house would become mine alone ($14,000).  Had I known then what I found out about him later, I would have sued the bastard for adultery and he would have paid ME!  Instead, I get the insulting luxury of continuing to pay this debt month after month (which has only gone down by $1,000 in seven years), while he blew his windfall on a new pick-up truck.  Jerk.

See?  Debt just eats away at your soul.  The student loan for the degree for the career that I don't have.  Stupid.  The personal loan to pay the lawyer to get custody of the child.  Not stupid, just heart-wrenching.

You may ask (I know my mother does) why are you putting such personal stuff on your blog?  Because I am mad.  Because I want my life to change.  Because a lot of my personal hurts are tied up with all of the bullshit I just talked about.  I won't heal unless we deal with this mess - and it helps to write out my hurts.  Because we won't move forward and be able to provide our children with the experiences they should have when we are scrounging for loose change every month.  Because I know it will make a difference for us, and I hope that the experiences that I share will help others.  Maybe you?

"Deliver yourself like a gazelle from the hand of the hunter, and like a bird from the hand of the fowler."

-Proverbs 6:5

You are the gazelle, running for your life.  The cheetah represents debt.  It will hunt you down.  It will follow you all the days of your life - if you let it.  Run like a gazelle!  RUN!  Focus with all your energy and might to get away.  Focus on ridding yourself of the chains of debt.  All good things are possible when you believe it.  Prayer helps too.  I may have to rethink my personal position on that one...

The Art of Gift Giving

My 40th birthday (at the time of this post) has recently come and gone.  My family had asked what I would like to receive for birthday gifts.  Long ago, I decided I wanted an iPhone when my new-every-two time period was up with Verizon, so I could ditch the droid that Dean passed on to me a couple of years ago.  So what did I want?  iTunes Gift cards so I could get some long-awaited music and so forth...

Here is the nice thing about my gift choice:  it doesn't take up space.  (well, okay - it takes up a little space inside my purse).  It doesn't need to be dusted, washed, stored...  See where I am going with this?  It is not a 'thing' per se.  We have way to many 'things' in our house.  Accquiring 'things' is how we got into present problem finacial situation in the first place.

Several interesting gift-giving issues came to light this birthday:

• When purchasing a gift for someone- ask for guidance, then follow it as best as you are able
• Don't push a certain type of gift just because it will help your social agenda
• Don't offer to take the person shopping for their gift, yet leave them with no idea about how much you planned to spend - that is a very uncomfortable situation
• Don't spend more than you can afford
• When in doubt, give cash.  It's not tacky - it's perfect!
• You can never go wrong with chocolate
• Surprises are a good thing - yet expect that there will be some anxiety involoved.  Especially when dealing with an introvert...

(Consider yourself lucky.  I orginally wrote this post ten days ago when I was in the initial throes of working through an intensely unpleasant experience involving.. well.. a certain person's idea of giving me a birthday gift.  Not a happy experience.  It all went wrong with items 2 and 3 listed above.) 

PS - Always follow good blogging advice.  Let particulary acidic blog posts lay low for a few days until you are in a much calmer emotional state. 

I'm at the end of my rope..

Money has been on my mind a lot lately.  I don't know how it can't be... I have hungry children to feed and narry a dime to feed them with.  I'm not kidding.

We are currently running alongside a cliff, the edge of financial doom, slipping on the loose gravel.  I have lived the life of paycheck-to-paycheck for so long now, I don't really know how financial security is supposed to feel.  What is really scary though, is when you drag your dependants along with you.

I am frustrated enough, tired enough and scared enough that it is time to make some pretty radical changes to how we handle money.  My husband is too.  Of course we have been saying that ever since we got married, but it gets scarier every time we go through a mini-financial crisis.

Our current debt crisis began building about several months ago.  I liken it to the ripple-effect, and I blame the boy scouts.  And karate.  And oh yeah - swimming lessons.  And four children's birthdays.  I blame the boy scouts because of the sheer amount of gear that we have needed to procure in the past six months.  The karate and swimming lessons because they didn't ask me to run numbers and see if the monthly fees actually fit within our budget.  They are supposed to remind you to do that, don't you know?  And four birthdays.  Four very expensive birthdays.  Two in February and two in May.  All of it paid for by a buy-it-now, figure-out-how-to-pay-for-it later kind of thing.  Problem is, there is no more room at the end of the rope, now.  We have never used up all of our rope before.   Scary business.

Constant interruptions...

Sleep, riches and health to be truly enjoyed must be interrupted.

- Jean Paul Richter