Wednesday, August 6, 2014

My 5th Blogiversary and an Update

Happy 5th Blogiversary to me!  This is post number 1133.  Even through the bumps and bruises, I still enjoy it.  There is a wealth of knowledge out there....and support.  No, not everyone is nice and supportive, but I am thankful for those of you who are, and continue to read my boring stuff.


So yesterday I talked about all the bad stuff....so onto the good stuff.  I had a really hard time writing this post, as it is more difficult for me to see the positives.  I feel like any number I post will be criticized that it isn't good enough. 

The Positive

The side bar has been updated to reflect balances as of this week.  We have officially crossed over into the Fabulous 50's!  Bring on the poodle skirts and greaser jackets! As a whole, we are down over $8700 from a year ago; we took a hit when we added $6000 back in when we bought G-man's car.  However, we are down over $9200 in the past 6 months!!! 

The retirement loan is over half way paid off, and we look forward to having that $380 per paycheck back in the budget.  The interest we pay on this is FAR lower than what we were paying on the debt when it was on the credit card.

The student loan....is boring.  It is last on the list to be paid off.  So there isn't anything interesting to say on this subject. 

The credit card...was hashed out yesterday.  Not alot positive to say other than we have over $700 in Cash Back (not including the current statement earnings at 5% back for gas stations).  I sort of think of this as a back up emergency fund.  We really would like to use this money for something larger....but we could use it as a snowball payment as well.

My car....one more payment (+ $30) and it is over 50% paid off!! 

G-man's car....we have paid $2,000 on this loan in 9 months, and is 1/3 paid off!

Probably the most "exciting" part of the side bar is that Medical/Dental is currently at ZERO.  In full disclosure, technically there is a balance at the kids' dentist from Bossy's extraction in July...the FSA took forever to send us the money, which arrived yesterday morning.  Now I can pay the bill.   We still have $417 left in our FSA, which we know will mostly get eaten up once the kids' dental cleaning processes....add in a few co-pays....and I am guessing by September that FSA will be gone.  However, we have been saving for that day and as of this posting, we have over $700 put aside for the last quarter of the year (and it will be closer to $850 when FSA runs out).  We are hopeful that we won't need that much, and we will be able to re-allocate those funds.

And I quick nod to the EF.  We currently have $2700 in there (although I would only use the last $500 of it if I absolutely had to.....).  It will be exciting to see it hit $3000 in a few months.

ETA:  I realized I updated the side bar incorrectly and it should read 90%...I will fix it when I am home....phone won't let me!

In light of the move being back in play, we have held off on making a large snowball payment.  I was so tempted, just so I could make the final number even better.  But in the end I decided to wait.  If the move falls through, it will go to the car or the credit card (still wavering on that one).


And in looking back over what we have learned in 5 years:


Interest.
In the past 5 years, the biggest change for the positive has been getting rid as much higher interest debt as possible.  Some of it was paid off, some of it was consolidated.  But we went from paying between 11.99 to 19.24% interest on 38k of debt, to paying 1.85%.  At least we know that the majority of our payment is going to principal now.

And while many people disagreed with the length of time it took us to get rid of the most recent round of medical debt...we didn't pay any interest on any of it. 

"Sinking Funds" and Savings
I first heard this term on the blog Deliver Away Debt, where the original author had set up mini savings accounts for specific purposes.  He funded the account, and then drew off of it for the expenses.  That method really resonated with me.

So now we pre-save for things we know we will have to pay for down the line.  While there are still a few more categories that need to be folded into the mix...this is leaps and bounds ahead of where we were.  We had the tendency to use a 3-paycheck month to fund things like the semi-annual water bills or the property taxes.   We never saved for the vet bills, even though we knew that 3 cats would be going to the vet. Now these expenditures are folded into the regular budget and funded over time.

If you are interested in how we have been able to use these accounts for the positive, I included some links. ( I really need to get better about labeling my posts....it is a PITA to go back and find all this stuff!!)  Right now we save for Camp (from Jan-May/June), Christmas (June-Dec), Car Maintenance (although this poor account has been drained numerous times!!), Medical (for co-pays and bills after our $2,500 FSA runs dry), Cats, Kid Activities (not including Camp), G-man "fun" (formerly known as the Boat Fund), Irregular Bills (water, personal property tax, and trash), and Household bills (which is really just my way of trying to get a month buffer on the bills so I can pay them all at once).

As for savings...we have our aforementioned EF at $2700...a savings account that floats between $1200-$1500 and is connected to our checking account.  We have Cash Back money and over 22,000 of Swagbucks.  And over $4000 in savings in the sinking funds.  I will not drain all of this down for the sake of debt....but I do toy with draining SOME of it.  I have a level of comfort right now knowing that I HAVE this in case of a HUGE emergency.  Most of it is ear-marked for things, but I do know that if I had to, I could liquidate it.  I have never had a feeling of security in any of this.....and this is as close to security as I have ever been.

Stuff
We also rarely buy any "stuff" for the sake of buying "stuff."  If we went to Target, it would be easy to throw a few extra things in the cart.  But now, we tend to go get what we need....and we leave.  Trust me, I have my days that I wander the aisles and it is tempting.  But it is a rare treat that something leaves the store with me.

This isn't to say we don't periodically replace things.  For example, our towels and sheets were starting to shred, so we used a gift card I got at Christmas to buy some more.  I only bought what I was able to get with my gift card.  I would have loved to get more but we didn't have it in the budget to spare. 


If you are still  reading....1 million Gold Stars to you.  This was very long and should have been divided....but I didn't.  Sorry!

Thanks again for coming to my house to play for the past 5 years!!!




23 comments:

  1. Congratulations on five years and the debt reduction. Even though some of the numbers might not have gone down as much as you wanted or expected them to when you started the blog, you've still achieved a lot. And I think putting things like accounts in place to cover less frequent but still regular costs is a huge step. I've done that for years but this year is the first time that I haven't also raided those accounts for things they weren't actually intended for. This week, I've just finished paying most of my bigger annual expenses (moved here at end July so everything falls due then) - and I did it using last month's salary rather than the money I did have saved up for them. Which leaves me, for the first time, with something still left in savings after paying for everything. It's a nice feeling. And, for me too, a huge boost towards feeling a bit of security.
    I feel for you on the labelling posts thing, too. I've been good about it the last year or so but still haven't gone through older posts properly. I would recommend, if you decide to do it, to make a list of labels you want to use first. When I started using labels, I would just add them as they occurred to me and my list is totally out of control, with quite a few that really are so similar they could be merged. One of these days...
    By the way, is there any chance you could add the Archive button to the blog? I've only read sporadically through the archives as it's kind of a pain difficult to have to keep clicking "older post", always starting from today and working my way back.

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    1. Thanks! I actually have another post in mind about where I thought we would now. But I do feel good about some of the changes that have happened over time.

      I took the archive button off when I realized that my labeling was so far gone that no one would find anything anyway! But can put it back. :)

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  2. Retirement loan, I can definitely see the benefit of using the loan to pay off higher interest debt. But one thing I haven't seen mentioned in your blog(probably just missed it) is, are you still contributing to your retirement fund(401k)? If not, you're missing out on compounding interest opportunities you can never get back.

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    1. This was discussed WAY back in the beginning of the blog. No, we are not contributing to the acct (and it isn't a 401k....it is a TSP, which is the gov't version of a 401k, but it does have some different rules). We had a financial advisor at that time (who we fired) who convinced us to stop contributing because we needed the cash flow to make our budget work. So we did. At this point, yes...we have missed out on that interest. We had discussed starting to contribute again last fall, right before the car died and we then needed to have 2 car payments.

      However, we do have about 111k in the account right now. (it was 114k...stupid market!)

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    2. As they say "pay yourself first" contribute to it and then work out the budget after. I know for me, whatever 'extra cash' I seem to have always disappears on a 'need'. So I put a big amount into 401k first and then worry about bills and debt and needs after. The way I look at it, if you stop sawing towards retirement to pay off bills and fail. you double fail. if you save towards retirement but fail at the debt, atleast you still have the retirement savings. Good luck Mysti!

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    3. Unfortunately, the payment structure that is in place doesn't allow us to change it right now. I agree that "pay yourself first" is a great idea...but because of things we did in the past...it just isn't an option right now.

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    4. As soon as you possibly can I hope you will at least start contributing the amount required to get matching funds for the TSP. That is free money as I am sure you know.

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  3. Wow Mysti way to go! Under $60,000 that must feel great! I love your posts especially when they are long.

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    1. Kim, you have always been one of my biggest cheerleaders! Thank you! I am happy to be in the 50's....but I am already trying to figure out how to get into the 40's! LOL

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  4. This is awesome! You are doing great!!!!

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    1. I wouldn't say awesome or great...but it is heading in the right direction. Thank you though!

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  5. Well, I tried to comment earlier, but somehow it didn't work. I think you're doing great - I'm curious about how much you actually started with. I know that it was about $76k in loans, but that didn't count your retirement loan, right? So you've paid off $18k PLUS whatever you have paid off of the 401k loan. What is that total? Now that you've reduced the interest rates and are paying more principal, things should speed up. Good luck!

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    1. This comment has been removed by the author.

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    2. The if you add in the 1st retirement loan to when I started the blog...we were in the 83-84K range.

      I would really have to crunch numbers to see how much we have actually paid. For example..we paid off $10k on a car loan. Since then we took out $18k more in car loans, but have paid back almost $8k. So that is $18k we have paid just on cars, but we still owe $10k at this point. We are at net zero for progress.

      I said yesterday I lost track of how much we have actually paid. If you look at the Geek page...you will see we started at $76k, dropped to $63k, rose to $80k, and are now at $59k(ish). Just there we have paid $34k. Add in $7k for the retirement loan...and now we are at $41k.

      See what I mean??? All those mis-steps and backslides....some of which were our fault, and some of which weren't....they all add up. If it had been a straight shot....we would have been out of debt by now.

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    3. I understand what you are saying - you have gone up and down on each debt category over the years. But at the end of the day your debt has gone from $84k to $58k in 5 years. If you just look at the overall totals, you've paid off $25k or nearly 30% of the grand total. That is a huge accomplishment!

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    4. I appreciate your support!!

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  6. I love that you are prepping for the future! WE have savings accounts for Christmas, car insurance, car repairs, a $1k emergency fund, a house down payment, grad school and a new to us car fund. I'm sure I'm missing something...
    It is hard to get started on this path, but you don't have to do everything at once. Start off slow and then you get to a point where it's just common pracitce

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    1. Our car insurance and maintenance are one account. But it is great that you have so many future plans. I wish we were able to save for big purchases, but not in the cards at the moment.

      When we first started pre-saving...it was hard. now it is all just part of the budget.

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  7. Seriously, stop beating yourself up. You're doing great! I love reading your posts. They make me feel so...normal. Especially when you blog about agonizing over various life decisions, and just life in general. Love to follow your thought process. So many times I've read a post and rushed over to my own spreadsheets to play with the numbers and see if it would work for me. Thanks for so many lightbulb moments! I'd also like to add that it's nice that you talk about family, work, and things other than just the numbers. It makes it so much more human. Life isn't just about numbers, although 90% of the personal finance blogs I follow focus only on that. Thanks for keeping it real. Keep up the good work!

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    1. You are too sweet. I hope that something I have learned along the way has helped you out.

      Life is so much more than numbers...and life gets in the way sometimes. Heck, I get in my OWN way sometimes. But my main goal when I started blogging (other than getting out of debt!) was to show that life HAPPENS. Plans are great, but curveballs HAPPEN. And you need to figure out how to back up and punt.

      Keep on going....if we can do it, you can do it!

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  8. Happy 5! I Love your blog, please don't ever quit! I think you're doing great given the situations, we all want to see you succeed!

    HS

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  9. CONGRATS on the great progress! I really enjoy reading your blog.

    Something similar that has helped me A TON is saving for those expected periodic expenses. Something that doesn't have a due date every month, but will need to be paid for eventually. I hated scrambling for the cash when it was time to get my hair cut or the car needed an oil change.

    I now have multiple 360 Savings Accounts set up for various yearly goals (many of them already aimed at 2015).. Christmas, photo sessions (important to me specifically), gifts, float trip, etc.

    In my cash wallet (expenses I dip into more often than once/year) I have cash set aside for car care, pet care, household/personal items, etc.

    It's been such a relief to have the CASH to spend.

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