Sunday, February 10, 2013

Let's Talk Money

I highly feel money is something that needs to be talked about, right out there in the open. I think logically if you can't afford something you should say no. I don't think one should have credit card debt, I think one should pay cash. If you can't afford it save for it. To pay cash for something and to know it's all yours, you owe no one anything is such a good feeling.

So years ago we were saving for a newer van, when my old van kept breaking down, it was seriously one thing after another, digging into our savings to repair it and move on. I think the last thing was when the door fell off, Just fell off. Luckily this was right after we dropped of kids at school so I changed my whole day around and found someone in town to put the door back on. Knowing it's on it's last legs and it's costing us more to keep then we had. We went looking. Well needless to say I HATE car shopping. OMG. Although the first van we paid cash for it. We took one of our first tax returns and paid cash. It was a nice feeling and of course we wanted that again, but in maintaining the van in it's last days costs us a small fortune.

So when we saw our current van we put about 1k down and had to finance the rest. Now looking back BIG mistake. We allowed the car dealer to finance us, they had to shop around because the car was over 100k in miles apparently a big no no. In shopping around our credit was checked over 20 times. In doing that our credit score took a big hit. So now I'm pissed because there is no way I would have given permission for 20 hits. Although you don't know this until weeks later when the hits are recorded. Although we stuck to our guns and did a 3 year loan, with a payment we could logically not afford. But we made do, I was able to pay x amount a week and by the due date I was paying the amount if not more. Last year we took a hard look at our money and found money and decided to pay off the van, we paid every extra penny we could find. Although found that was hard. Why?

Well we had kids in school, not just any school. A lovely private school which we adored. But it was pricey, it took our whole tax return to pay for the year. So for a few years we didn't see our tax return. Now we also live about 20-30 minutes away from the school. You drive that daily. You add in errands. And you are spending 125 plus a week in gas. You add in very sick in laws who are asking you to do a lot of extra driving and you hit a wall and have to take a loan out for gas. Of course we won't open a gas cc, no we take a loan from the 401k. And we somehow make it through the in laws medical issues in one piece.

In the middle of last year, I started to really think about the money and all we are spending sending them to school. Not only paying the school, gas, all the extras at school, errands or extra running. Things added up. So after a few month debate it was decided we would bring home the kids at the end of the school year.

One of the best choices we made. Although we didn't "see" the extra money savings for awhile. Maybe about September we started to see it, so I started Christmas shopping, we made a big ole list of what we are getting the kids and family and I went to work trying to get 1-2 things a week, either by amazon, ebay or coupons and deals at stores. The rest of the money savings we started to pay down the van again.

So knowing in December we were going to use the tax return to pay off the van we decided to take on a Mortgage challenge, now that we are "seeing" the extra savings by staying home, I could logically pay the mortgage an extra 100-150 a week. Thinking after we hit x amount we would cut that in half and work on building our savings.


Hubbys' truck took a turn for the worse and is currently sitting in the driveway well he is taking my paid off van to work and back. He HATES my van. Although I LOVE the gas savings. So I hate the thought of going out and getting another car loan. We will just start saving the extra mortgage money. Well except for the day my brakes went out (well I was driving the van!) fixing my brakes took all we had saved. So we need to start again.

Well except we had a hay emergency come up. Our hay guy is running low and we had to pre-pay for the hay, we LOVE this hay as it keeps our goats nice and big and healthy and I don't have to grain them in turn saving us money. We have to feed less which in turn saves us money. So as of last week the hay guy is paid up through July and starting this next Friday we start saving again.

I'm going to try well saving to throw a little at the mortgage. Still would like to see a dent this year. I also need to find some money and up our retirement. We are lacking there. But I figure as soon as the 401k loan is paid off I will take that money and max out our retirement savings at work. It's a company match, anything left over will go towards Mortgage.

I am reworking numbers and cutting things, but seriously there isn't a lot to cut. We got hit hard with the Payroll Tax hit, like many people did. We had to find 80 dollars a month, who has that just sitting around? So we cut our garbage service down to twice a month. We took his truck off insurance since it's just sitting in the yard. We had to cut the food again.

So we got our tax return last week. The second I saw that I logged in and paid off the van. It's nice to have that gone. We are getting a handful of things I had set aside, I also decided I'm done living in a past due world. All of my bills come in past due. So I don't get bills I get notices to pay by x date or this will be shut off. So I paid off the garbage. I will try from now on to add 5-10 a month to the other bills and get them caught up. I also paid off all the medical we had sitting here. It was nice to be medical debt free for about 24 hours. Well until I got a bill for 500 plus dollars. Talk about crapping your pants. As luck would have it, I sent them a payment that morning so our bills crossed in the mail. I will wait for an updated bill and then figure out how to pay off the rest.

Anything left of our tax return next Friday will be sent to savings where it will sit and hopefully not be touched. Although scared to keep it in savings. Our plan is to keep it in savings hopefully add to it and when we go and talk to our money lady next November we will take the money and finally open our Roth IRA's and start to build a retirement.

I'll tell ya this was the first tax return we got to see in over 3 years. You add that to the savings in gas we see every week, and we are going OK, not great by any means, but OK. Money is tight, and we live without very often. But debt is going down and we should be paying cash for a newer truck soon, we should be able to make a dent in mortgage, maybe not this year, but next, we will be able to start to build retirements.

Now I'm cheap, I am so very cheap, my train of thought now is, do I really need to buy it, or can I do without, or do it cheaper, can I put my savings and send it to the house. How cheap can I go? So I bought spelling for the kids. This program is so very highly rated, but I'm too cheap to by the magnet tiles that go with it. Thinking I can do that myself for next to nothing. So I cut up white squares, I found some abc letters in my stickers. I will laminate them and I have sheets of magnets from other projects  I will use those scraps and for next to nothing I have saved. I am always talking myself out of something, thinking can I wait until x. Well you can wait a little while more, well you can wait some more. Then it goes on sale and I jump all over it.

Amazon is good for used books. I would be shocked if I have spent over 200 in schooling for the kids. Because I watch things we need, wait until they fall into my price range and jump on them. I buy math, English, and history far in advance so I can watch and wait for a good price point. I never need anything today.

Having the garden has helped us saving ten tons on our food budget. As always I'm always thinking can I do this meal cheaper? Can I use one of my jars verses something. Or can I can this to use in the future. Although I have a home depot list going and it's ever long, so every week as we are doing errands we stop by and spend 10-15 a week working on my list. I just got something big off of it so now my list should move pretty fast now. From needing bricks for a new bed, to needing bricks for the new herb garden, to needing compost for this or mulch for that. Just stuff. As we find we need something it's added to the list.

So we will continue to work on the 401k loan, it comes out of the paycheck weekly so I really don't think about it. We will save for the truck, we will work on paying down the mortgage well make a dent in it. We will work on small projects around the house. We will keeping aiming for 100% debt free, well building a retirement. We will continue to live as cheaply as we can.

The boys and I do a money class every Monday, they get their allowance and we talk about where their money should go. Tucker is a big saver and is doing well, Ethan is a big spender and not doing well, so had to install rules for him. X amount must be saved before you spend. Then after the spending another x amount before spending again. That seems to be working today. We are very open with the kids, the budget is often left laying around and if we have no money we are honest, there is no of this because we don't have any money. We have papers on the fridge that keeps track of the debt, so they are seeing the mortgage go down, we have a list of medical and they see that go down as I pay or add as we get a new bill. They have been OK with, well we can't afford that today. If they have questions they can ask anytime. I want us as a family to be very open about money.

As my parents and I are not. And will never be, they hide things and it's annoying. They lost their house but it hasn't closed yet, they won't take my advice. So now that it will close (maybe) in 2013 they will have a very lovely tax bill. I have informed them of this and I was blown off by my mother saying no the bank will pay the tax bill. Hum NO the bank writes it off and the IRS comes after you. You would have thought a 25k looming tax bill would have sent them into high gear to try and close their house before the end of last year? Nope, because they won't take my advice, they have an agent who they think knows what he is doing, now I was an agent, I have closed many short sale homes, we close homes within 30-35 days of a contract, why has this taken 6 months plus to close? Because your agent doesn't know what they are doing. I gave my advice they won't take it I'm done. But they are getting about 3k from the bank in "moving costs" now "if" they see this money, I'm willing to bet the money will be gone within days of receiving it. They won't be saving for that 25k plus tax bill that is coming their way.

But I'm willing to bet I will get the whining about the tax bill won't I? Well lets see you didn't take my advice and I know how to unplug my phone. Honestly I see an agent and a Real Estate office that needs to be sued at this point and I would sue for the amount owed in taxes, forms are not being filled out, calls are not being made, the agent has no idea what he is doing the broker should have taken over. But my parents won't use, nope they will whine when the IRS takes their income and they can't pay their rent. People don't understand when you loose your house it's not a free ride. My parents didn't save a cent from not paying the mortgage, they will be hit with a tax bill that will take all their income, in turn making my mother work long past retirement age, or wiping out retirement to pay off the IRS. I sit here and think, wouldn't it have been easier to pay your mortgage? or not take out a loan on an all ready paid off house? Yes, their house was paid off, but they wanted a motor home (which they are currently selling) and they wanted this and that and before long the 100k they borrowed was GONE. Shocking how fast that money went. It just went and now they can't take the new carpet and new paint and such with them.

This is where I'm installing in the kids to save and then buy. We don't need to take out loans we save and buy later. And yes we had to take out a loan, BUT in laws were very sick and we needed gas money, it's not like we were out wildly spending. It's not a good feeling to owe someone or something. I think of the bank as something. If hubby looses his job tomorrow the loan comes due, we don't have that kind of money. If hubby looses his job we can't afford to pay the house. We almost have three months of mortgage saved up, but only mortgage, we would be sitting in the dark with no TV and only eating food from the garden. So when the 401k loan is paid off that will be a good day. When the mortgage is gone that will be a good day OK week. Last Thursday night was a good night, as I printed a receipt for paying off the van and put it on the fridge. Lots' of tears on my part.

We will get there, lots of baby steps. We have come a very loooooooooooooooong way, from 40k plus in medical debt, not knowing if you can pay the mortgage and to today. We are on a good road now and it feels really good. I want the kids to have this feeling, I don't like the thought of them living in fear over debt. That is not a good feeling.

Keep track on the right hand side of the blog. It's where I have put our debt. Every week I run my numbers, how much has our debt gone down, verses how much have our investments gone up. One day the numbers will even out right? Also every week the kids and I curl up and watch Suze Orman on TV. I have a Dave Ramsey book within sight, I always glance at that and it keeps me on track, because he is watching do you really need to buy that? Oh bought the book at Goodwill for 3 bucks, verses the nearly 30 brand new. Why pay new when you can buy it used? But on the Suze show the kids like the approved or denied part. They are always trying to guess, if the person has debt it's easy she says no, if no debt it's usually a toss up here.

But I suggest opening up your debt, talking about your debt, paying off your debt. The money you are spending in interest is shocking. I know this because I see all the mortgage interest I pay monthly and I am so sick. If you didn't have the debt and could save the money how much would you have saved up? Ever do that math?


1 comment:

Anonymous said...

You give excellent advise. Baby steps all the way in our house.
We have two large goals with monies, this year. Pay off our only regular credit card by July 1 and 2 mortgage by July 15. Right now we owe $940.00 on credit care and $4,200.00 on 2nd mortgage. Every week we pay on these things and are right on tracks to doing both. I want a smart phone so, so badly but won't until these are paid off.
You give me such strength with what you do to save. Please keep this up and keep posting how it is going.