Monday, September 5, 2016

So what changes are we making?

The last few days I've talked about the Debt pickle we're in, how it happened and why we are trying so hard to get out of it. Today I wanted to just kind of go over the things we are doing to help remedy the situation.

We made a budget. We've "had" a budget before but it was pointless because we never used it. Laughable actually and a waste of paper. So we have a budget for September and so far ( a few days into the month) we are doing okay with it.

There are certain things we can't do anything about; like our childcare. Our son is 4 and has the most amazing babysitter ever. She watches him 4 days a week and my father in law watches him on Fridays. We have to pay her of course what she asks, which is comparable to day cares in our areas and she provides breakfast, lunch and snacks. She's just awesome. We'll pay her until Fall of 2017 when little man starts school...

We got rid of cable years ago, but right now have Netflix, Hulu and Amazon prime. Netflix I think we will keep and I've already paid for Amazon prime for about 9 more months (it's a yearly fee). I checking into cancelling Hulu though. That would save us 11.99 a month.

I've budgeted $450 a month for groceries with NO eating out. I haven't been to the store yet this month ( September) but will have to go soon. Although it wasn't too many years ago I was feeding our family on about $280 a month, but all the kids are bigger now and the costs have went up, so I think $450 is fine. Looking back we were spending at least $600 a month on groceries ( gulp) and between $100-$150 a month on eating out. We didn't even eat out much but with 5 of us, it added up quickly. The sad thing is that if you would ask me how much I am spending a month and I would probably have said oh about $400..... Man I was clueless.

So point being,now we have a plan. We know what we were spending and have ideas and thoughts on what to spend going forward. We also have a plan for saving for my tuition in the Spring which will be due in January and we won't have to put back for the summer since I'll be getting paid all summer now.. We'll need to build up some savings for other expenses like emergencies and such though.

Anyways, it feels good to have a plan. It feels okay to have a start.

Sunday, September 4, 2016

Our reasons to get out of debt

So the last two days I've posted about our financial distress situation. I won't rehash that. We've made some super bad decisions....

So what do we really want to do with our lives? With our money? With our family?

My husband and I have always wanted to buy some land up in the mountains. We have a specific little town in our state about 3 hours from where we live currently that we have fallen in love with. The town, the people, the landscape. It's where our heart is. We go there several times a year hiking and such and dream about having land there. Maybe just to camp on, or put a small camper on. Maybe to build a home on one day. But we want some land there.

We want a small creek, and it needs a well, and acreage for the kids to play on, and room for a few animals. We want to be remote, and not see another person or home from our place.

There is a small college about 30 minutes from there that has the program that I teach in, so it's possible that I could get a job there and my husband does computer-y type stuff so he might be able to work from home. A lot of ifs but it gives us something to think about. Perhaps we just weekend up there, and the kids and I say there in the summer and my husband come up after work on Fridays. We've talked a lot about this imaginary piece of land we want. But I think it energizes us. It gives us something to look forward to.

We were hoping to be able to buy some land within 4-5 years but I'm thinking now it may be 7-8 years. The problem is that it will be a big fat never though if we don't do something about it today. We have to get debt paid off and get some savings built up. I honestly think if we work super super hard and stay focused it could still be within 4-5 years. I hope that motivates us to really get moving on this debt needle.

Besides that dream, we need to be better role models for our kids. They aren't super greedy or materialistic, but I also don't think we've taught them about money as well as we could have. They don't know that we are having trouble right now, they still have food and snacks and clothes so all is well. But we want to be able to leave them a legacy and to help them be successful.

Saturday, September 3, 2016

So what happened? How did we get so far into debt?

Yesterday I talked a bit about our family being in financial distress. It's a hard realization. But I think it's like other problems: until you realize that you really do have a problem, it doesn't seem real to you.

So we have a problem with money. Not necessarily with making money; my husband and I both work hard and have good jobs. We just aren't spending it wisely, and not saving it for rainy days.

We have debt. We have student loans, 1 car payment ( thankfully one is paid off) a mortgage, 2 credit cards, medical bills and a mortgage. Dave Ramsey would say we "are normal". He also would say normal people are broke. Ugh. We are.

The problem really happened this summer. My last paycheck was May 15th. I wouldn't get paid again until August 31st. We had put a little money back for summer, but not near enough for what we needed. I mean what was I even thinking? Why did I not sit down and actually map out how much money we would need? Lesson learned. We were way way short.

Early on in the summer we went on vacation with my husband's family. We do this every other year. My father in law rents the house, we pay for everything else. Although we didn't live it up on vacation, there was the extra expense of gas, groceries and eating out. We spent money that we should have been saving for the rest of the summer. I'm just being honest here guys, we messed up.

I took two classes towards my PhD this summer, and we paid out of pocket. Although, I'm thankful we had that money we could put towards my education without additional debt, we should have saved more.

Things like our mortgage and electric bill needed to be paid, but we didn't have enough to cover it from my husband's checks, so out comes the credit cards that we haven't used in sooo sooo long. Ugh.... again I'm thankful we were able to pay, but we are just in a mess.
So we are going to stop digging. That is what it comes down to. We have got to stop getting further into debt.. We have to start making progress and get some savings built back up. Tomorrow I'll talk about our future goals, then I'll talk about things we are doing to hopefully help. After that I'll get back to just posting on the regular happenings around the homestead with some updates thrown in every so often.

Happy Homesteading Y'all.

Friday, September 2, 2016

Financial Distress

Financial Distress; typically you hear that term when describing a school, company or business. However, that is where my family is at this point. Since I do about 90% of the spending in our family, I'll take blame for it, but it's here and it's bad.

I mean we're fine. We just have been super dumb about our finances. So here is the thing; on most things I'm super frugal. I mean we grow a ton of our own food, I can a lot, we have chickens for eggs, we don't buy a ton of extra wants. I thought we were doing good.

But I haven't gotten paid since May 15th ( I work for a university) and even though we had put "a little" back for summer, it wasn't near what we needed, so we got behind on stuff, we used credit cards and it's just a mess. A few things popped up that needed fixing, a few medical bills and doctor's visits came around, my middle daughter broke her glasses and we had to pay out of pocket for a new pair, and we just overspent.

You may or may not recall that I'm about 3/4ths of the way finished with my PhD program and we are paying out of pocket for that. We did have enough to pay for that, as we had a separate account set up for it, but that's just an extra expense we have right now. We both though agreed that I'm so close, that if we buckle down and just save that the small amount I'm paying out of pocket is worth it. Thankfully I receive scholarships for most of it.

So on September 1st ( yesterday) the hubs and I chatted about it. Actually it was quite a discussion for quite some time.... and I think we are both very very committed to getting things under control. We laid out every single bill and payment that we have and discussed. We talked about things we are both doing that are not conducive to the goals that we have. We talked about financial behaviors we have that aren't good for us. It was actually very therapeutic.

So here we are. On Day 2 of our journey. The first thing that I think is helpful is that back before July 1st started I opted to start getting paid all 12 months instead of just 9 months. This is the first year that our university has offered that, and although that means my check is smaller each month, I will get one all summer.

Tomorrow I'll write more about "What happened?" also known as " How did we get here?". It's a mess folks.

Others are no doubt dealing with a realization that the debt is overtaking their life, and I welcome you to follow along on our journey. Some of you have gotten out of debt years ago- good for you! Others may never have bitten the debt ridden apple- even better. I think we can all learn from each other!

Happy Homesteading!