Working to be debt free

Running in place

2010-04-06T18:38:00.000-07:00

Lately, I feel like paying on our debts is like running in place. A lot of sweat and effort, but you dson't seem to go anywhere.

This month, I have already paid $1,600 towards our credit cards. Wonderful effort. Except that it will not make a difference.

Except that my husband's truck and motorcycle are/were in the shop this month. He told me both would cost around $1,000. Will that be cash or check? Unfortunately, credit, please. The truck came back yesterday, and he was pleased to tell me that it ended up costing closer to $900. And he spoke to the motorcycle mechanic, who thinks the transmission/gears don't need to be worked on just yet, so that will be less than expected as well. Small comfort.

By any measure

2010-03-04T03:21:00.000-08:00

I like to read money articles on MSN Money. Yesterday, I read one about several simple tests to see if you are in financial trouble. Things like figuring your debt to income ratio, fixed debt payments to monthly income ratio, etc. Then you compared your results with the average for your income and age groups. By any of these tests, my family is in financial trouble. The article referred those in trouble to credit counseling and possibly bankruptcy.

I don't think I am in denial when I say that our situation is not quite so dire. Yes, I don't like our credit card balances. I have devoted an entire blog to our credit card balances, and fret over them monthly, eagerly looking at the numbers to go down. But we have a positive new worth, and one that is growing steadily over time, even with my student loans and our credit card balances. The two rental properties have significant equity.

We have a small savings, but mostly live paycheck to paycheck. We pay or bills every month, and other essentials. Yes, I would like to not have that toxic debt, and have more for savings and fun, but we are making it right now. Day by day. Month by month. We have weathered income hiccups, like short paychecks and shutdowns, in the past year. Syrely our situation is not as dire as that article made it sound, right?

Signs of recovery

2010-02-27T14:50:00.000-08:00

My husband works in manufacturing. So did my father, for that matter. Dad always said that manufacturing is hit the first in bad economic times. It seems to have been the case with my husband's factory. First a 10% pay cut for managment. Then lay offs, several waves, eventually of about 1/3 the total work force. Then a 5% pay cut for everyone else. Then the occasional week-long shutdowns. I had been happy that since the summer, he had been working full-time every week.

This month, he has actually had some overtime. An extra day for three weeks in a row now. He has a lot of seniority, so has had first dibs on the overtime. One extra day is an extra $150 in the paycheck. That is nice. I started drooling and deciding which debt to put the extra money towards. But I also wanted to let my sweetie enjoy the extra money too. Take-out Chinese for dinner tonight, and he bought the grill stand that he has been wanting for the camping trailor. He has been chomping at the bit for the weather to warm up so we can go camping, so it seemed like a fair reward for hard work above his duty.

My tenant officially gave her notice, so the house will be put up for sale as soon as poosible afterwards. I don't know how we will afford the mortgage without a tenant, so I hope it sells fast.

Tinkering with numbers

2010-02-23T19:28:00.000-08:00

I love tinkering with numbers. Haunted as I am with our debts, I closely monitor them. I do internal cartwheels once little milestones are reached, like our truck payment inching below $7,000. I have my spreadsheets of all debts, and update them every month. That is the only enjoyable part to the bills coming in the mail.

Today, I have another spreadsheet to stare at. The mortgage to one of the rental properties is automatically paid, and I don't receive any sort of a statement. While I generally knew the balance, I haven't known in years the actual payoff, or how much I am paying in principal each month. A three minute phone call provided that information. I am pleased to say that the payoff is $1,500 less than I thought. And because there is only another 9 years on the loan, there is more going to the monthly principal than I expected. That IS good news.

Another little bit of good news in the mail. I got to the mail before my husband on the right day, and saw the previously hidden credit card bill. He was pretty close: $825. At least he wasn't downplaying the balance.

Taxes are done. We owe federal around $300, and state close to $600. I guess it could have been worse. I don't believe in paying the government a day before we have to, so I won't be filing our return and writing a check for another six weeks. I still liked it better when we had a refund.

One of my tenants have officially given notice to quit. She will be out of the house in three weeks, and we will be putting the house on the market as soon after that as possible.

Are you kidding me?

2010-02-11T08:28:00.000-08:00

Confession may be good for the soul, but the jury is still out if it is good for a marriage. My husband dropped a little bomb lately. He has a credit card that he applied for, is in his name only, and I don't know much about.

Last day-after Thanksgiving, his mother watched our child, while my husband and I braved the crowds for shopping. He made several purchases for her and put them on that card, along with a couple small purchases for us. She promptly paid us, and I paid her amount immediately, and our amount a couple weeks later.

Now we come to my husband's revelation: There is a balance on that card. He started out by complaining that he was covering some household expenses with his allowance, like that card, since I hadn't paid it all off. I said that I thought I had by January, and queried further. Finally, the truth came out that he had put a few things on it like Valentine's Day (which I didn't let him get away with, since we had already decided to have a small V-day this year), and a few other things (which were not identified) and it added up faster than he expected. How much? $800. (I have a sinking feeling that number is low.)

I checked the payments that I made this morning. Payment made the first week of January, in an odd amount that was probably the whole balance. So whatever is truly on that card has been racked up in less than two months. What could he have bought in that time?

I am slowly coming to the conclusion that we have different ideas about living within our means. We are going to have to sit down and have a talk about this, and soon. Except that our current new-parent, sleep-deprived state isn't condusive to serious, rational and child-free conversations.

Ironically, our net worth is still creeping up, even with his shanigans. Because of other debt repayment, mostly. Between the rental mortgages, credit card payments, car payment, and such, we are reducing our overall debt by nearly $1,000 a month.

New plan

2010-02-02T05:15:00.000-08:00

The good news is that I made twice as much through my self-employment as I did last year. Almost as much as my husband did at his "normal" job. The bad news is that it makes a HUGE tax difference. As I enter deductions, I am watching the amount we owe go down, not a refund go up. At first, I was very worried: it showed that we owed over $1,800. Enter rental income and expenses, enter itemized deductions, and so on. The number has now dropped to owing $500, and there are still more deductions to go.

However, while the amount that we will owe keeps going down, I think it isafe to say there won't be a healthy refund this year. New plan needed. I can't count on any part of that for debt reduction. We may have to eat some of the deferred interest. We will have to see what kind of income I can bring in with only working part-time. Something tells me that I will be going to full-time within a month or two.

Actually, some of it was NOT miscalculation on my part. Even though his income was about the same, slightly less, our tax withheld was almost half of what it was last year. We didn't make any changes, so I attribute to the tinkering with withholding that our esteemed president did earlier in the year. That extra $13 per week didn't make an impact on our budget, but a $1,000 check would right now.

In happy news, the baby came a couple weeks early. A little boy, 8 pounds, 13 ounces, 20 1/2 inches. Healthy and happy. 18 days too late to maximize the tax benefit, but I won't hold that against him. Fortunately, at this age, I can bring the little guy with me to work for a while, since he still sleeps a healthy part of the day. The advantages of self-employment.

Six months in review

2010-01-12T08:28:00.001-08:00

As I look back on 2009, I find that we were very bi-polar on financial progress.

Our net worth increased. I inherited a newer vehicle. That helped. We bought a relative's camping trailer at 1/3 it's value, that helped. (Though there were extra expenses and payments for it, that I am mysteriously supposed to find room for in the budget.) Mortgages and vehicle payments went down, increasing the equity. 401K's have additions, plus some stock market recovery. All good.

But the credit card balances are . . . .slightly higher than they were a year ago. I still fret over my spreadsheet several times a month. Our monthly payments are nearly $700 a month, and yet little progress is being made. Some purchases, I agreed to. The camping trailer required a generator, or we wouldn't have lights, heat/air conditioning, or a fridge. We "camp" on my mother's property, so that is free, but makes the generator essential. Ok, that was a couple thousand, and I extracted a promise from my husband that we would have to watch non-essential spending for a while until we caught up. He said that he couldn't think of anything that he would want to buy. I should have gotten that in writing, because that only lasted as long as the next trip to the Harley store.

I open the bills, and more often than not, see a couple purchases that I knew nothing about. Ebay, Harley store, and God knows what else. Christmas is the perfect time for him to sneak spending, because he has the excuse for hiding the itemized bill from me, and only giving me the stub. I may know how much got added to the card, but not what it went for. "Christmas presents" is pretty vague, and I have a sneaking suspicion includes present FOR him FROM him.

The only reason that we made any progress at all on credit card balances is because I had to pay a lump sum on one of them. 12 months same as cash deals eventually have to be paid. I know the idea is to pay a little every month, so that it is paid off within the year, but I didn't have that extra in the budget to pay. Instead, I gave myself an $1,100 bonus near the end of the year when it was due. (Being self-employed has its advantages, and thank God I was very busy at work.)

There are more of those coming in the next few months, and I keep reporting these to my husband. 0% interest ending in February on a credit card with a $10,000 balance; $1,100 due in February; $1,800 due in April; $600 due in June. Oh, and by the way, I am expecting in a couple weeks, so may not have my usual level of income in the coming months. Why is it that these things keep me awake at nights, and yet he forgets them as soon as the words are out of my mouth? he just asks things like "what do we want to buy with our tax refund this year?" Um, nothing, I want to use it to pay some of those off.

We had a couple lucky breaks through the year. The refinancing piddled out. Which turned out not to be a big deal, since (unbeknowst to me) we had an adjustable rate, and our mortgage payment went down by $100 a month. And the dreaded principal payments never kicked in. I (try to) keep paying the original amount, letting that extra go to principal. I have reduced the required interest only payment by a couple dollars. That may not sound like much, but I am a believer in baby steps, even with finances, and a few dollars here and there can add up over time. Since we have a recent appraisal on our house, my sweetie had talked about trying to modify our loan, to see if we can turn it from an adjustable rate to fixed rate with the same terms without formally refinancing, but I can't do it since my name isn't on the mortgage, and he . . . . well, hasn't. I am just left hoping that we don't get bit by it in the future. We really need a larger house for our rapidly growing family ( going from just him, to him plus me, to him plus me plus kid, to him plus me plus 2 kids in less than 4 years) so maybe we won't be in the house long enough for it to matter. I have started reminding him that the primary thing preventing a larger house is our credit card balances. Maybe it will sink in some time when he starts to take it out of his wallet.

We also will likely be selling a rental property. The real estate taxes skyrocketed on it this year. Went from around $500 a year to over $2,000. I realize that I no longer live there and lose the homestead credit, but I still feel like it is exorbitant for a $100,000 house. For now, my tenant in absorbing the increase (she knows that I could have been getting that rent all along, and was just being nice and charging her what I paid), but she is looking for another place to live as we speak. Ironically, everything she is finding is either the same price or cheaper but smaller, so she has been looking without success for two months. I keep trying to talk her into buying the house, what with that $8K credit out there and all, but her credit sucks, so I doubt that she would qualify for a mortgage, even with me carrying the paper on a 2nd for the down payment. She is actively trying to repair her credit, but is still haunted by the ghosts of collections past, and it is a slow process.

If that property sells, I would clear at least $20K, and that is being conservative. I have already started hinting that the money should be used for debt repayment and not a motorcycle and/or truck upgrade, just so my husband doesn't start getting ideas. My mother is in favor of investing, but much as I would like to, I just don't think that we can right now. Paying off a large chunk of debt, would make a big difference to me and my happiness, and our budget. I have considered saving the money for a down-payment on a bigger house, but I think debt repayment would still be the better way to go.

But what debt? Say we clear $25,000. . . .

Truck loan is $7,000 (less by then), which would save $275 to $300 a month (I always pay a little extra) to our cash flow. But we pay less than $50 a month in interest on that, because a vast majority of the payment is to principal.
Second mortgage is around $10K (with an additional 3K in deferred interest--at least they don't charge us interest on interest) payment is $125 a month, almost all going to interest, I think the rate is 10% or close. Wouldn't help cash flow as much, but would save more in interest overall, and would put us having a little equity in our house.
Credit cards, of course. Total balances around $29,000. $3,500 of that will have to be paid in next six months (or we will get slapped with all that deferred interest.) Most at a reasonable 10-12% interest rate. Some at zero, and a little at credit card company's usual ururious rates.
There are a few medical bills that we are making payments on. Less than 2K, with monthly payments around $50 and no interest. Most of the time, the payment is made through a flexible medical savings account, so it would have little affect on cash flow, no interest savings, but would have a tax benefit if we are above the 7.5% threshhold for the deduction, which our health insurance premiums get us pretty close.
There are my student loans, but the interest is low and has a tax benefit, so those are off the table. Ditto for the mortgages on the rental properties and personal residence.

Credit cards have the highest interest, at least some of them, but are relatively low on monthly payment amount. Second mortgage and truck loan would have the best benefit to our cash flow (which extra money could go to extra credit card payments), but has equal or lower interst to the credit cards. Second mortgage would help with the overall goal of a larger house. Decisions, decisions. These are the thinngs that go through my head when I can't sleep. (I can't blame it all on money worries, though. I wake up numerous times a night to roll over in bed, go to the bathroom, see why the baby is fussing, get a drink of water, and generally suffer the discomforts of being 8 1/2 months pregnant.)

The government has kindly extended the house purchase credit to people who have owned their home more than five years (which my husband has), but the current expiration for that is April, and there is no way we could have all of the above ducks in a row by then, much less be able to find the kind of place that my husband would want. I keep mentioning it to my tenants, hoping one of them first-time buyers would buy the house they are renting from me, but they have bad credit issues that can't be cleaned up in time. Hopefully, Congress will keep extending the benefit until I (or someone that will benefit me) can take advantage of it.

As for my conflicts with my husband over spending. . . we have very little disposible income right now. Our income covers our fixed expenses (mortgage, utilities, credit card payments) and essentials (groceries, diapers, etc) with little wiggle room. I am hoping that improving our overall financial situation and increasing some disposible income would allow him to go to the Harley store once in a while and buy things we wants without using a credit card, and lessen his resentment over not being able to, which is what seems to lead to a "the hell with it" attitude that makes him just buy what it is he has been lusting after and face me later. (I curse the person at the Harley store that told him "it is easier to ask for forgiveness than permission.) I may be wrong. It may be that a little disposible income will only make him want more things, and we will still be in this neverending loop. Ever the optimist, I am hoping that progress now will bring some relief later. Not all of the increased credit card balances have been frivilous on his part. 10K of it in the past year was for medical treatment, either put on credit cards or on the interest-deferred accounts mentioned above. I don't begrudge that money, or blame him. I am just working hard to pay it off, and take the tax benefits from it.

I have already started gathering data for tax preparation. With a baby due at the end of January, and a refund coming, I don't want to procrastinate. I love how the tax programs start with income and taxes paid, so as you go on and add in deductions, you see the the refund slowly increasing.

The envelope, please

2009-06-08T08:38:00.001-07:00

I hate receiving credit card bills. I mean, I have never LIKED it, but before, I didn't mind. I would check out the new balances, imput the numbers on my spreadsheet, and hope to see the numbers consistenly going down.

Lately, that hasn't been happening. Lately, I look at the new bills to find out what my husband has bought recently. Well, not the what, but how much at least. What is this $141 at Sportsman? I knew he had bought a hunting bow and arrow (with God only knows what "essential" accessories), but he has been dodging the question of how much it cost.

The envelope, please. Ah, $580. No problem. If he is independently wealthy or has some sort of trust fund or other income that I don't know about, that is. What makes him think that we can actually afford that?

We have paid well over one thousand dollars in mimum payments on our credit cards the past three months, and the balances have gone UP by a couple hundred dollars. (During that time, we have paid less than $100 in interest, because of zero percent or very low interest deals, but the idea is to use that savings to reduce debt.

When I spoke to him about those dismal numbers, he said something about me finding him a second job. There are so many things wrong with that statement.

1. Why am I the one finding HIM a second job?
2. There are so many people unemployed right now, people are having problems finding first jobs, I can't imagine anyone hiring someone one a second job.
3. We don't need for him to get a second job. We need for him to stop spending money that doesn't have to be spent, and catch up on paying for the money that he has already spent.

To add to my worries, the refinance hasn't gone through for the house yet. There was some internal miscommunication with the bank, so they sat on it for no apparent reason for nearly two months. I was ready to say "forget it" and demand the appraisal money back, when the appraisor finally scheduled a time. Now, we are waiting, again.

Meanwhile, the refund money that I was saving for the closing costs . . . . is gone. I was afraid that was going to happen. Half of it went for new carpeting. I agreed to that because it was a very good deal, our carpeting was in very poor shape, and a few thousand dollars difference in the appraisal for the house will make a difference on our refinancing. The rest of the money just seemed to disappear. Week by week, month by month, I paid only essential bills, and yet would see extra debit charges that I didn't know about. Mostly auto and home improvement stores. Now, gone.

It may be OK, because I was taking out a second on one of my rental properties to pay off the second on our primary residence so that we would be able to qualify for the refinance, and I may be able to get enough from that to pay the closing costs as well. I don't like all this juggling of debt, but keep reminding myself that we will be paying significantly lower interest rates accross the board, and will have saved enough to cover the costs within a year, but this uncertainty for months is killing me.

Ironically, the reason I started all this refinance mess seems to have evaporated. My husband set up a interest-only payment on his mortgage. (This was before I was around.) That payment was supposed to go up to interest plus principal in April. With the lower interest rate on the refinance, we were goign to be making interest plus principal, but at about the same payment that we are making right now. In spite of that deadline, our payment hasn't gone up. Every month, I open the envelope, and every month, it shows the same payment as the month before. (Less a few pennies, because I round the payment up, and am making little principal payments as a result.) I believe that our mortgage company is one of those in trouble right now. Do you think they are preoccupied and haven't noticed that they were supposed to be demanding more money from us?

More for less

2009-04-14T06:55:00.000-07:00

Our cable bill nearly doubled this month. A year ago our company was merged/acquired, and our bill unexpectedly but delightedly went down by $40. I assumed that some sort of special promotion period had ended, since the "new" high amount was only a few dollars higher than the "old" high amount.

By coincidence, our cable box remote stopped working on Sunday, so I ran by the cable office to get a new one. While I was there, I asked about the increase. Sure enough, a promotional deal ended.

But then she asked me about the packages that we use and said "Let me see what I can do for you. It may not be as good as before, but maybe I can find something lower." Two minutes later, I was signing us up for a package that was $20 cheaper than the new high amount, but had more channels than we had before.

Two months ago, I contacted the phone company for my office, and changed packages. The end result was roughly the same monthly charge, but added unlimited long distance, which will take away a few dollars of charges a month, and means I can stop using my cell phone every time I needed to make a long distance call.

If you haven't checked it out for a while, contact places like your cell, cable or phone provider. Sometimes you can lower your bill, or get more for the same amount. Just by asking for it.

How many times can you spend money?

2009-04-05T06:54:00.000-07:00

This is a questions I feel someone should ask my husband. I am not sure that he really knows that you can only spend money once, and it is gone. Oh, I am sure that he KNOWS this in reality, he just seems to conveniently forget it when there is something he wants to buy.

"We need (we sometimes have different definitions of needs vs. wants) the fertilizer for the grass. Since we have the refund money, can I get it?" Well, the refund money may be sitting in our bank account, but we need it for the closing costs when we refinance the house. I haven't even entered it into out checkbook registry, because as far as I am concerned, it is already "spent".

And yet, there are eight bags of fertilizer in our garage. Apparently, the greenest lawn on the street is as important to my husband as food and electricity. As usual, I am left to juggle the budget and figure out how to pay for it.

I love tax season!

2009-03-17T12:19:00.000-07:00

Since I am not a tax lawyer, I don;t do them myself. But I have found that during tax time, people take their sizable refunds and pay debts, including their lawyer. I have had a VERY good month. In fact, I have enough to cover NEXT months expenses, and that just doesn't happen.

It makes me feel much better knowing I can weather some bad periods and not worry over every dime. It makes me feel much better knowing that I have been working my tail off lately, and it is actually paying off. It makes me feel better to think that if this keeps up, I may be able to up my "salary", and use that extra money to pay off debts faster.

Another reason to like tax season: my own hefty tax refund. Taxes filed last week. Taxes accepted over the weekend. Refund expected late next week. While I was planning to use that money on a chunk out of our debts, but alas, my plans have gone awry. We are going to need all of it for closing costs to refinance our house. We are shaving over 2% off the interest rate, so the savings will cover the closing costs in under a year. In fact, our total mortgage should be cheaper than the interest-only that we are paying right now. This is definitely a positive move. Still, it is a little depressing that I am not going to see the major drop in our balances that I was hoping.

Small victories

2009-03-14T12:45:00.001-07:00

Two credit card balances were brought all the way down to zero this month. The smallest ones, of course, but it still feels good.

One was a home inprovement store credit card. We bought a tool there a year ago. 12 months same as cash deal. It was paid off with a month to spare, and not a penny to interest.

The other was a department store card that I used once or twice a few months ago. Post-baby, none of my suits fit, so I NEEDED some new clothes for work.

Two down, too many to go.

Submitted

2009-03-05T09:48:00.000-08:00

The paperwork for the rental home equity loan is submitted. They called last night to request our taxes, the more recent the better. The 2008 taxes (97% completed) are locked inside a laptop that is currently in the shop. I gave them 2007 taxes, 2008 approximate income and business expenses, and 2009 to date (up to this morning) business income and expenses.

We are right on the line on the debt to income ratio that they will accept, so hopefully this info will kick us that extra inch over the line. . . .the in good direction.

Meanwhile, I am calling around to find the best rate for refinacing the mortgage.

Juggle, juggle

2009-03-02T07:39:00.001-08:00

After my husband's divorce, he filed bankruptcy. There were a lot of debts, and his ex-wife wasn't paying the ones that she was supposed to pay. At least, that is the version of events that I have been given, and I am not challenging them.

As a result, his credit was trashed, to say the least. He bought his house not long after, but financed 100%, at a high interest rate, making interest only payments. A year later, he had to install a new furnace, and re-do all the duct-work, paid for by a second mortgage, also at a high interest rate. Enter me, with my excellant credit rating, and more money savvy. There was a pre-payment penalty on the mortgage, so there wasn't much I could do about any of that, until now.

In exactly one month, the pre-payment penalities disappear, which means now I CAN do something. Also in exactly one month, the principal payments start, which would put the mortgage payments outside of what we can actually pay.

The good news is that my husband's credit is far better than it was 8 years ago. From bad into fair range, probably pushing into the good range. The bad news (for anyone living in a cave recently) is that the mortgage market has been falling around our ears. We can re-finance the mortgage, but only 95% equity. We are under water on the house, so have to figure out a way to do that.

The best solution I came up with is to take out a home equity loan on on of my rental properties (one that has 50% equity), pay off the second mortgage, and refinance the first.

I hate the idea of simply juggling debt around, but I am juggling towards significantly lower interest rates. At a normal interest rate, we can be paying interest plus principal, for about the same monthly payment as now, if not a little less. I am cleaning up some messes that were made a few years ago, so there will be some work and pain involved.

I don't blame my husband. He did what he thought was best at the time, and I can't say that faced with the same set of circumstances, I wouldn't have done the same. I am just trying to get our financial ducks in a row again.

Do the math

2009-02-25T06:18:00.001-08:00

My husband is off work again this week. They shut down the factory for a week because of poor sales. There is talk about shutting down the last week of the month for the foreseeable future. We will, thank God, be receiving unemployment, but that is still less than he brings home in a week. Plus, in the coming weeks, we have to make up the health insurance premiums for this week a little at a time, so the next few paychecks will be a little light as well.

My husband thinks this is a wonderful time to do some home improvement projects around the house. Specifically, lay ceramic tile in the bathrooms. We already had to tile. I bought it a few years ago for a house, but never saved enough for the labor to install. I squeezed enough out of our budget to buy the mortor, grout and sealant a few weeks ago. I thought that maybe a project a home would keep him out of trouble.

I didn't plan on the "extra" costs. Namely: beer. I bought the usual weekly case on Saturday, plus we already had some in the fridge. The beer fridge is now devoid of beer, a mere three days later. I realize that he has some help (two buddies at the same factory that are also off work right now), and free beer is an inducement for the cheap labor, but a case and a half of beer in three days seems like a lot to me.

Foolish me, I was planning to squander our few remaining dollars in the checking account on diapers for the baby and groceries. We have only been out of bread for four days.

Why is it my husband thinks that less money coming in means we have more money to spend?

Uncle Sam loves children

2009-02-18T05:56:00.000-08:00

My six-month old may be too young to get a job, he is doing something to earn his keep. My husband and I will be receiving a nice hefty tax refund this year. Between my reduced income because of the baby (when you are self-employed, there is no paycheck when you aren't working), my husband's reduced income because of short weeks and temporary layoffs, and our first use of a dependant deduction, our refund will be four times greater than last year.

I, naturally, wanted to splurge on a small indugence on both of us, and send the rest to a credit card company. My husband, naturally, has a long shopping list of things he wanted to buy. He finally convinced me of one expensive purchase by playing on my maternal instincts. He pointed out that we really need a gun safe in the house with the baby. I can be trusted not to play with guns, but our child can't. My husband was only about 3 or 4 when he broke into his father's gun cabinet and trotting down the stairs with a loaded rifle, so obviously a mere gun cabinet isn't enough. We need a safe, which has the bonus of being thief-proof, fire-proof, and flood-proof, as well as child-proof.

We were using a 12 month same as cash deal (after the store met a competitor's price and knocked of $150), so he didn't even have to wait until we actually receive the refund. So, the refund, when we actually receive it, will go to pay off an interest accruing credit card.

That will make me feel better, especially after the last six weeks. We had a small credit card meltdown. I managed to successfully weather the month-long layoff and delay in receiving unemployment (he was back to work for two weeks before we finally started receiving unemployment benefits, don't get me started), when my husband needed some pricey dental work. Three implants, to be exact. I thought the worst would be with the oral surgeon that placed the implants. $3,600, but we found a deal with 18 months same as cash. Ok, That isn't too bad.

Then came the crowns over the implants. $6,000, not a dime covered by dental insurance. Will that be cash or check? Well, I had run out of creative solutions. He put it on a credit card. Sigh. I couldn't think of anything else. I believe that it was 0% interest until June, but I still don't like it. An extra $10,000 financed in the past two months. How discouraging. I didn't even want to blog about it. I am trying not to give up, and seeing the numbers drop after teh tax refund soon will help. Sigh.

Squeezed a little tighter

2008-12-23T14:14:00.000-08:00

Just when I thought our money couldn't get any tighter, it does. My husband started his layoff yesterday. Officially, that is, because he worked only a few hours last week, and it wasn't until Thusrday that someone noticed he had been sent home after an hour or two all week, and finally told him not even to come in on Friday. Times are tough all around. At least he has a return date in the end of January, because a lot of the staff at his factory are on indefinite layoff.

I filled out his unemployment information this morning, but there will still be one week without income. We don't know what his benefits will be yet, but it will likely be slightly less than his weekly paycheck. Squeeze from the left.

Meanwhile, my husband has become enamored with a new shotgun. He HAD bto have it, of course. I heard fears that our new president-elect will be banning every existing hunting weapon hid first day of office, or that the one he likes will be discontinued, or that everyone is buying shotguns so the stores are running out, or look at this wonderful deal. The part I didn't hear about was where he expected to magically find the money for it. I worry every month of paying our bills as it is. . . .He did get a great deal, and has 12- months-same-as-cash, and he bought it anyway. Squeeze from the right.

Sqeeze from the left, squeeze from the right, and I am in the middle.

Three steps forward, two steps back

2008-12-05T07:20:00.000-08:00

The process of paying down credit card debt has been a series of steps forward and steps back.

Some of the steps back were things put on the credit cards for necessities, such as a vehicle repair. Some for non-necessities, such as a leather motorcycle jacket that my husband apparently could not live without and finally wore me down into agreeing to let him purchase. Some for unique situations, such as the purchase of a tool my husband needed to do a side job that was going to pay for that tool and then some. but fell through. Imagine the look of horror on my husband's face when I dared to suggest that he simply returned the unused tool. This was purchased with a 12-months-same-as-deal, but the monthly payments I have been making are that little bit less that I can put towards other debt.

The other steps back is being squeezed from the other side: less income means less money to put toward debts. Every bit of progress I have made in reducing our daily expenses gas been met with an equal or greater increase in a different expense or drop in income. Or both.

I combine our insurances for houses/vehicles, and my husband's overtime disappears. I reorganize debt to reduce interest rates, and health insurance goes up. We pay off a vehicle, and a new baby means some added expenses and maternity leave. We receive notice of property taxes (I know this is late notice because we haven't been doing our job well, but full payment due for the year in 10 days, please) and a week later, we receive the details of the "holiday shutdown" for my husband. A few days holiday pay, a few days vacation pay, and the rest unpaid til mid-January. (What holiday are they talking about in mid-January?)

The end result is that we are paying half towards credit cards than we were this time last year. I know I shouldn't whine. Times are tough all around. We have a roof over our head, and food on the table. I am up to 60% of pre-baby pay, and am working as much as I can to build it back up. Manufacturing is always hit hard and early in rough economic times, but it is also among the first to recover. My husband has been there for over 16 years, so should survive even massive layoffs, and he said that lean times in the past have always been followed by lots of overtime a year or two after. We just need to sqeak by until then.

The Balancing Act

2008-11-24T09:19:00.000-08:00

When we got married, I had excellent credit. My husband's was not so good, for reasons I can explain a different day. That means that I immediately starting switching around our debts, taking advantage of my superior credit.

I transferred much of our debt into lower-interest chunks. I took advantage of those "0% interest for a period of time" offers, and switched things around. Yes, I know that I pay a transfer fee, but that is less than amonth or two of the original interest, so I am saving money overall.

Right now, nearly all of our credit card debt is on two cards, that are interest-free right now. In six months, give or take, an interest rate will kick in. By that time, one of my other cards will "miss me", and try to lure me back with an offer of 0% on balance transfers.

I like knowing that when I send in monthly payments, I am paying down the debt directly, not paying interest first.

The Cost of Hunting

2008-11-23T10:13:00.000-08:00

My husband and I seem to be having an unspoken disagreement about hunting. Yes, I agree that hunting can be a source of food. Healthy food, since venison is a very lean meat. But it costs more than he thinks. Hunting license: $60. Ammo: $109. Guns, clothes and deer stand: expensive. Gas to drive to his uncle's farm: cheaper than it used to be. Coming home empty-handed: annoying.

Hunting is not free food. Hunting is not even cheap food. Hunting is a hobby, and one that we have spent more on this year than I have spent on groceries this month. And no, you can't buy a new shotgun or scope.

Second Day Confession

2008-11-19T08:07:00.000-08:00

I intended this blog to be a place to vent a little about the looming debts, triumph about debt milestones, and confess about debt mistakes and setbacks. I didn't expect to be confessing on the second day, but this is what I am doing. I screwed up this week, and it cost us $33.

Our vehicle insurance is automatically deducted from our checking account. Our budget has little fat, so I hate automatic pay features, because one or two days can make such a difference. I agreed to it for the insurance because it had a not-insignificant savings. Except that this week, I forgot to transfer enough money to cover it, and wham, overdraft charge. (This happened a few months ago, when I tried to transfer money to cover it, had problems with the bank system, and got slapped with the charge. I whined to the bank, and they removed the charge, but they siad I only had one freebie like that. So I am stuck with it this time.)

I am countig every dollar these days, so I really hate when my stupidity costs that much money. We don't need to tell my husband about it, do we? Maybe I will just stop being annoyed with him for breaking something in a fit of anger that we had to then replace.

Journey of a thousand miles

2008-11-18T12:47:00.000-08:00

The beginning:

I am part of a mixed marriage, financially speaking. My husband is a wonderful, loving man, but he is a spender. I am a saver. I worry about paying the bill each month, while he (seems to) think that we have a magic bank account that refills itself every month. I watch our credit card balances every month, sweating and fretting over every dollar, while he (seems to) forget they are there until I remind him.

We have been married a year and a half now, and our little guy is three and a half months old. I came in with two houses, a car loan, a student and a little credit card debt. He came in with one house, a car loan, and a bit more credit card debt debt. A brief period of blissful denial (aka, the honeymoon) resulted in a bit more credit card debt. Before I realized it, I, who had with only brief and recent exceptions, paid my credit cards off every month, had a massive pile of debt on credit cards.

My husband works in a factory. I am self-employed. During our brief marriage, we have seen expenses increase because of the baby, gas prices, general inflation. At the same time, income has decreased because of my maternity leave, disappearing overtime, and less hours at work. This pushes our budget from both sides, decreasing both our lifestyle (to his chagrin) and debt payments (to mine).

So here it is. The chronicals of a thousand mile journey to get debt-free.