Tuesday, November 21, 2017

Winning, November 2017 Edition

I almost - but not quite! - slacked off on posting the November edition of WINNING, a series in which I identify our accomplishments in an effort to stay positive and motivated throughout our debt repayment journey


As hard as this season has been with respect to my job and the never-ending slog of digging out of our financial hole, we've had several financial and personal wins lately:

(1) Per our new and improved repayment plan (I've dubbed it The Monster Repayment PlanTM), we dedicated $2200 to debt repayment this month!:
  • $1330 to Credit Card #2
  • $275 to Credit Card #3
  • $201 to Student Loan #1
  • $393 to Student Loan #2
If this plan is sustainable (and I think it is), we'll pay off both credit cards by the end of next August - possibly earlier, if we get a tax refund and work bonuses.


(2) Thanks to Win #1, we now have a total debt load of less than $70K (to be precise, it stands at $69,771). That's still a lot of debt, but considering that we started off at close to $78K last April, we've made some major progress. It feels amazing to hit this benchmark.


(3) Despite the hefty repayment sums dictated by The Monster Repayment PlanTM, we'll still be able to put $600 into savings this month. That brings our total emergency/sinking fund to almost $3000.


(4) I finally made a decision about our 2018 health insurance. The choice was between my current traditional PPO plan and a lower-premium high deductible health plan plus health savings account. After asking for tons of advice (thanks, blogosphere!) and crunching the numbers, I settled on the latter. We'll spend $100 less per month on premiums, while my employer will funnel an additional $110 per month into the HSA. Honestly, I couldn't pass up the free money. Plus, the maximum out-of-pocket is $4000; while that's no small sum, we feel it's something we can cover if we need to.


(5) Fortysomething received two major accolades at work: He won a teaching grant for his classroom, and he earned a teaching award from the students and administration. Although he's been in his current position for only four months, it's clear he's absolutely thriving and sees this gig as a long-term commitment (which promotes long-term job stability, which in turn promotes longer-term financial stability).


Progress! It's happening! It's really happening!

What about you? What are some of your recent financial accomplishments? (I want to know!)

Friday, November 17, 2017

Update: Work and Life Epiphanies

Recently, I've written extensively about work anxiety, insomnia, and the sustainability (or... non-sustainability?) of my people-oriented, customer-facing job. I've talked about how my doctor recommended that I actually quit my current gig, even if I don't have something else lined up with which to replace it. I've seriously considered the possibility of going it alone, taking on contract work, turning to the marketplace for my health insurance, and crossing my fingers that it will all work out.

If I sounded like I was agonizing over what to do, I was. I am. Trying to analyze difficult circumstances and make big life decisions is an uphill battle, especially when you're depressed, sleep-deprived, and not thinking all that rationally.

This past week has been better. Work has slowed down. My sleep has improved (it's still not great, but at least I'm not staying up for multiple nights in a row). PLUS, I've had not one but TWO epiphanies that helped me view my job conundrum in a whole new light:

Epiphany #1: Maybe the issue is not so much the requirements of my current job as the fact that I'm still grieving the loss of my previous career. I won't go into the whole story here, but I used to be a college professor at a small, idyllic liberal arts school. After my first year of instructing a handful of introductory science courses, I started to suspect that teaching wasn't my calling. I was decent at it - my evaluations were good, and I connected with my students - but I hated the grading, I hated the bureaucracy, I HATED faculty meetings, and I hated the whole tenure process. I stuck it out for two more terms just to make sure it wasn't simply first year doldrums. I resigned after the second year feeling 100 percent certain that I was making the right decision. Fast forward a few months: I applied for my current job on a whim and landed it primarily because I had some solid transferable skills (including the ability to pass as a people person).

While I don't miss teaching (like, at all), I do miss science and the science community. Being a professor was my entry card into that world. I miss it the way you might miss an old flame whom you loved deeply, but who just wasn't right for you. Do I regret the breakup? No, but that doesn't make the grief any easier.

I've been in this current job for almost 10 months, and over that time, I've scoured the job ads almost every day, searching for a science gig in my town for which I'm qualified. Nothing's panned out, but I keep hunting. And hunting. And hunting.

The problem with this never-ending job search is that I always feel like I have one foot out the door at my current place of employment. This week, I realized that a sizable chunk of my stress comes from being in that position - in, but not all in; always searching for something different instead of investing in what I already have; constantly pining for the past. Busy times are always stressful, but I'm pretty sure they're even more stressful if your mind isn't totally in the game.

So I've made a decision: I'm going to apply for one more job that popped up in my search last week, and then that's it. For the next few months, I'm just going to focus on my current work. I'm going to invest myself in this job. That doesn't mean I'll do this forever, but I desperately need a break from the what-ifs. If other opportunities present themselves in the meantime, I'll consider them... but I'm taking a break from actively seeking them out.

Epiphany #2: My primary goal right now isn't to find my dream job. It's to get out of debt. Clearly the two aren't mutually exclusive; I may eventually land said dream job AND get out of debt. But if we're just talking goals and which one I want to focus on right now, it's doing what I can to help my family establish a stronger financial foundation so that we have more freedom in the future (and you know what? That is a perfectly legitimate, laudable goal.)

So no, I will not be quitting my current job, which offers excellent benefits, requires very little thought outside of the nine to five, allows me to work with people I genuinely adore, and generally provides exactly the kind of stability we need in order to reach our zero debt goals. Instead, I'll be making more of an effort to give what I can to the job and seeking out in-house opportunities to utilize my strengths and experience.

That said, I will be actively working to reduce my work stress, especially during this current slow period. I'll be finding a good therapist between now and January. That way, when things pick up again, I'll have better coping skills and someone I can turn to when I just need to vent. 

I've made my decision, and just by doing that, I feel so much better.


Sunday, November 12, 2017

October Budget Review: Grumbly Progress

When I was 24 years old, I hiked through the Alps. We started in Germany and wended our way down to Italy via Austria. I had little previous hiking experience, so the first few days consisted of blistery foot pain, utter exhaustion, frequent spills (I'm not the most coordinated person you'll ever meet), and constant hunger. But I didn't really care, because every time I looked up, I caught another glorious view of the mountains. Far off in the distance was our destination, and I knew we were going to get there one day. In those first few hard days, those views sustained me.

Fast forward three weeks: I'd transformed into a seasoned and efficient hiker. I could walk all day long with just a brief rest at lunch. My calloused feet were inured to my stiff boots and the rocky ground. I'd figured out how to pace myself, and I wasn't tripping as much. 

You'd think, then, that the trip became easier with time - but it really didn't. The further we traveled and the stronger I became physically, the more mentally worn down I felt. By the time we arrived at the Italian border, I was sick of eating rehydrated food, sick of going to bed in my stinky sleeping bag, sick of the same four trail ditties that my trail buddies would sing on repeat, and generally sick of walking. The views were nice, sure - but I just wanted to get to my destination and take a shower, thank you very much. 

Had someone come by and offered to drive me the rest of the way, I probably would have said yes.

Despite the fact that so many aspects of the hike became easier with time, there seemed to be an inverse correlation between time on the trail and mental stamina.

I've noticed a similar phenomenon with our debt repayment. At first we were clueless and clunky with our budget. We regularly over-spent. On several occasions, we forgot to account for all of our bills and accrued late fees. We made plenty of mistakes -  but we kept going because we felt thrilled at the thought of creating a better financial situation for ourselves.

Fast forward six months. We don't make those rookie mistakes anymore, and the budget is dialed in. Take October 2017, for example:

Sure, we went a bit over in the "Other" category (I blame my birthday), but we still came in $20 under budget. For the most part, we spent what we planned to spend. We even put $500 into savings... and we paid off the car. This month, we're ramping up our debt allocation to $2200 so that we can put our repayment into overdrive.

We're doing almost as well as we possibly could be doing, and yet the main thing I feel about this debt repayment process right now - and here's where I keep it real (and whiny!) - is that I'm sick of it. I'm sick of being in debt, and I'm sick of digging out of it. I'm sick of seeing thousands of dollars go to our creditors each month instead of into our own savings and investment accounts. 

That's how I would characterize our journey in October of 2017: We're doing it, and we're doing it well, but we're not particularly happy about it. This journey is long, and exhausting, and frustrating. I mean, we're totally getting there... It's just not always fun. But we're moving forward, one grumbly step at a time.

Now that I've got that out of my system...

How did your October go?

P.S. That Alpine backpacking trip? It was one of the most worthwhile experiences of my life. I look back and appreciate all of it - the good and the bad, the inspiring and the painful. And that's how I'm hoping to see this debt repayment journey when I reflect on it in a few years.

Disease Called Debt

Thursday, November 9, 2017

Sometimes, You Can't Just Walk Out.

I've been dealing with some intense work-related anxiety (see previous work issues post here, where I explain what bothers me about my job despite my awesome coworkers, considerate boss, and amazing benefits). The anxiety has, in turn, sparked a debilitating wave of insomnia the likes of which I've never experienced before. I've gone entire nights without sleeping; earlier this week, I went almost two nights without sleeping and was nearly delusional by the time I finally conked out at 4 AM. Zzzquil has become largely ineffective because I've used it so often that I've developed a tolerance. I've blazed through all of my sick days and even dipped into my vacation time. I've lost five pounds without trying.

Fearing that I'd get fired or at least hauled in by HR for a friendly chat, and utterly tired of being tired, I called my doctor and begged for a same-day appointment to discuss my options. She did the usual physical tests, all of which were normal, and then dove into an extensive mental health questionnaire. I broke down when she asked how often I feel overwhelmed (answer: Every. Single. Day.)

She sat down and looked me in the eye.

"Listen to me," she said. "I can give you a prescription for a sleeping pill. We can talk about some cognitive behavioral therapy. But my honest opinion is that this job is becoming toxic for you. You need a new job. Ditch what you're doing, because it isn't good for you."

Then she brought in an in-house therapist to chat with me. The therapist had the same opinion: "Life is too short to be unhappy at work. Sometimes you just have to walk away. Nothing is worth more than your health."

I get what they're saying. Health is wealth: not going to argue with that. And there have been days when the easiest thing in the world would have been to get up from my desk, pick up my coat, and walk out for good. I'm 100 percent certain that I would have felt immediate relief. Maybe I'd even be able to sleep.

But here's the thing: for the sake of my family and our finances, I can't just walk out; I think it's irresponsible/naive/flippant of anyone to suggest I should do so. Sure, I might feel better for a day or three, but then reality would set in. How would we pay our bills? How would we deal with our debt? Would we have to purchase health insurance via the Marketplace? (I'm all for healthcare that includes those of us with pre-existing conditions, but my premiums would be three times what they are now.) What's worse: financial stress or job stress? 

If we lived in a big city with a wealth of employment options, I might be able to get away with giving notice before having something else lined up. But here, jobs are scarce; I competed with at least 50 other applicants for my current gig. It's not as simple as just sending out a couple of resumes. Finding another job will take months. 

Right now, I'm willing to look for other work (and have been doing so for weeks), but I'm unwilling to walk away from financial stability. I just need to find a way to handle the stress of my job. I'm already doing things like getting outside at lunchtime, enjoying my interactions with coworkers, meditating for a few minutes a day, taking deep breaths in between clients, and appreciating that I have a job, but there must be something else I can do to improve my situation in the short term. 

Or at least, improve it enough so that I can sleep. (The sleeping pill my doctor prescribed is hit or miss: some nights it knocks me out within minutes; other nights, it almost seems to have the opposite effect, making me feel wide awake instead of drowsy. Maybe there's a better option out there.)

My biggest fear right now is that this won't improve, I'll continue having to miss work, and I'll be forced to quit because I literally can't do my job. 

I don't know what the answer is, exactly, so I guess we'll wait and see. But for now, I'm forging ahead, plans (and salary) intact. 

If you've been there, done this, I would love to know how you handled it. I feel like I'm between a rock and a hard place right now, and although I know I'll figure it out eventually, it's definitely a trying time.

Friday, November 3, 2017

Help Me Out Here: Picking A Health Insurance Plan

Fun fact: when I was pregnant with The Kiddo - this was in the pre-Obamacare days when pregnancy was considered a pre-existing condition-slash-disease - I was completely uninsured. Yup. We paid for nine months of prenatal care, ambulance transport, a hospital stay, a blessed epidural, and a C-section completely out of pocket.

I do not recommend this approach. 

There's a longer story here, one I will share in the future, but the point I want to make in this post is that I don't take health insurance for granted. Ever. I have great coverage now, and I'm thankful for it every single day. Everyone deserves this kind of security in their lives. (Surely we can make this happen, America.)

Given our past health insurance nightmare and our current debt reduction mission, I am super uptight when it comes to picking health insurance. Open enrollment rolls around and I obsess. This time, I've narrowed it down to two possibilities. Although I've spent the last week weighing the pros and cons of both, I can't decide:

(Note: Fortysomething has complete coverage through his work, so my insurance covers myself and The Kiddo.)

Option 1: Preferred PPO

Monthly premium: $150
Family deductible: $500
Maximum out-of-pocket: $2000
Preventative care: $0
Mental health: $0 after deductible met
Office visit co-pay: $35 after deductible met

Pros: The premium is totally reasonable (see "but" below), max OOP is low, deductible is decent, mental health costs nada (which is amazing)

Cons: BUT my paycheck is laughable to begin with. I really don't make that much, so the $150/month premium matters. The co-pays matter. The Kiddo and I are - knock on wood - pretty healthy. We don't have any ongoing prescriptions, and the amount we spend per year on medical expenses is usually far less than the $1800 we'd spend on the premium. 

Option 2: High Deductible Health Plan + HSA

Monthly premium: $52
Family deductible: $2700
Maximum out-of-pocket: $4000
Preventative care: $0
Mental health: 10% after deductible met
Office visits: 10% after deductible met

Yearly employer contribution: $1400
My (self-imposed) minimum contribution per year: $1300
Max contribution allowed: $6,900

Pros: My employer would be giving me extra money (the thought of this makes me so happy); money put into HSA is pre-tax; HSA rolls over from year to year. I could use my HSA when I go to the doctor.

Cons: What if we end up in the ER in, like, January? We won't have much money in the HSA yet, and we'd have to dig into regular savings. (I could also set up an FSA when I enroll in benefits.)

Both plans are great... I'm just being all nitpicky and Type A about this. 

What do you think? What would you choose? Or... is this kind of a wash, with both options being equally good?

Sunday, October 29, 2017

Six Month Progress Report and An Ambitious New Plan

As I mentioned in a recent post, we've been on our debt repayment journey for the past six months. It was back in April of 2017 that we assessed our debtload, made a budget, and started allocating $1600 a month towards repayment of our $76K+ in credit card, car loan, and student loan debt.

This was what our debt looked like by June, the month I started tracking every single penny (keep in mind that our actual starting amount in April was even higher... but I don't know what it was because I wasn't documenting the total at that point):

Talk about some big, bad numbers.

Six months after setting off on this journey, I can tell you that we've made some major progress, and we're more motivated than ever. Some highlights:

(1) We paid off Credit Card #1. We did this at the end of July, once we realized that we had enough money in savings to make it happen. Although the original balance of $1553 was nowhere near as high as the other CC balances, paying it off felt like a big accomplishment, and it motivated us. Plus, it freed up another $150 for CC#2.

(2) We ditched our car loan! We paid it off last week as my 39th birthday present. With a balance of only $600, I just wanted to say goodbye to this monthly bill. So we shuffled some money from savings to checking, called the bank, and made it happen. That's another $300 we can allocate to CC#2.

(3) We saved some money! Right now, we have an emergency fund of $1000 and a holiday/sinking fund of about $1200. We're planning to continue contributing ~$600 a month to savings. Yes, paying off debt is the priority, but we also want to build a more secure financial safety net. Our savings account is one component of that endeavor.

(4) We increased our incomes by taking on worthwhile side hustles. I'm kind of obsessed with the side hustle concept right now because it's really helped us with respect to saving and debt repayment. We were able to pay off CC#1 and the car earlier than planned in large part because we had those extra earnings available.

(5) In total, between June and now, we've dispatched more than $5900 in debt! If we count the debt we repaid in April and May, that total is >$7000 (To be honest, I'm too lazy to go back and calculate the precise number). Moreover, if we continue with our current rate of debt repayment ($1600/month), we will be completely out of debt by March of 2022:

(5) WE'VE DECIDED TO PUT OUR DEBT REPAYMENT INTO OVERDRIVE! After crunching the numbers again, I realized that if we increase our monthly debt repayment budget from $1600 to $2200 - something made possible by our side hustle income - we could be debt free BY NOVEMBER OF 2020. 

According to the $2200 plan, the payoff schedule looks more like this:

And this isn't including extra cash that could come our way in the form of raises, bonuses, or tax refunds, much of which would go right to debt repayment and further expedite the process.

I'm... astounded. I thought this would be a five-year process.

Of course, this new, ambitious plan depends on us maintaining our side hustles (Fortysomething and I both want to, but the gigs aren't guaranteed over the long term), and who knows what unexpected expenses could derail us, but I think it's worth a shot. Worst case scenario: we'll have to back off a bit if we have some tight months.

Bottom line: I'm thrilled with where we're at after half a year of highly imperfect yet dedicated debt repayment. Now we just have to keep going!

Disease Called Debt

Wednesday, October 25, 2017

10 Things We've Learned About Debt Repayment

Although I started writing this blog back in June, we officially commenced our debt repayment journey six months ago, in April 2017. Our financial overhaul was inspired by a sudden, deep desire to offload our $76K in debt (consisting of credit cards, student loans, and a small car payment) so that we didn't have to go through our entire lives with that weight on our shoulders.

Something needed to change. We made a plan, constructed a budget for the first time ever, and dove in. Somewhat miraculously, we've stuck with the process for half a year. We've made plenty of mistakes along the way, but we've also made significant progress, something we'll share in more detail at the end of the month.

Let's face it: debt repayment is a long journey.
Maybe you're at that point, too. Maybe you're ready to take action and ditch the debt. If so, this post is for you. We can hardly call ourselves financial experts, but we do feel like we've learned some lessons that might be relevant to others who are on a similar path or who want to start their own debt-destroying journey:

(1) A long-term debt repayment plan composed of short-term benchmarks is essential. To develop our plan, we took a brutally honest inventory of all of our debt, including credit cards, student loans, and car loans; decided on a general repayment approach (we chose a hybrid of the debt snowball and debt avalanche methods); figured out how much money we could allocate to debt repayment each month (for us, that's $1600); and calculated how long the process would take via the What's the Cost debt repayment calculator

We also identified short-term benchmarks. These include credit card payoffs, payoff of our car loan, and establishment of a basic $1000 emergency fund.

Both the long-term plan and short-term goals are important. Obviously, the long-term plan is designed to get us to our overall goal, but given that it's going to take upwards of five years to achieve full debt repayment, we need the short-term benchmarks to stay motivated.

The Very Expensive Feline does not care about goals. Except nap goals.
(2) Budgeting is key. It's key for us, anyway. It helps us plan out our expenses and avoid accidental overdraft of our bank account (something we used to do on a fairly regular basis). It took us a while to configure a workable budget - the first two months or so were admittedly a bit of a mess -  but nowadays, we know what our monthly bills entail and when they're due, and we're taken by surprise far less often.

(3) That said, a budget is also a constantly-evolving entity. When I made our first budget back in April, I was under the impression that it should be the same from month to month, which led to frustration early on. Then I realized that a successful budget is a flexible budget, one that we can adjust depending on season-specific needs and one-time expenses. For instance, back in June when we had our fans running almost constantly in our hot little apartment, I budgeted for a higher energy bill. In October, I budgeted for the purchase of winter gear.

(4) Debt repayment requires difficult, sometimes painful decisions. As it turns out, when your salary is limited and you have debt repayment goals, you can't have everything you want. For instance, Fortysomething would love a new iPhone to replace the cheap flip phone he bought when his old phone died, but it's just not in the budget right now. (He's a total tech geek, so the whole flip phone thing is quite un-fun for him. I don't blame him a bit for feeling that way.) Vacation to a distant locale next summer? Probably not. New work clothes to replace my worn and fading work shirts? It can wait until the new year. Rental car when we visit relatives over Christmas? Nope, we'll just have to ask my dad if we can occasionally borrow his minivan. Fewer dinners out? Just the way it is now.

We're not suffering from real scarcity, so I can't complain much. But when you're used to getting what you want when you want it, putting the brakes on immediate gratification can be challenging. It can be tough to say no even when you know it's the right thing to do.

Exotic vacation? Nope. Just a trip to the local lake.
(5) Free activities are more abundant than they might seem. We were used to paying for entertainment - movies, festivals, concerts, etc. - so we thought relying on more free activities would be difficult. As it turns out, it really isn't. We've ditched anything with an entrance fee and have spent more time hiking and running outside, seeking out free movies and fairs, and hanging out with friends. The local paper offers a running list of no-charge activities, so we keep an eye on that and attend the events that look most appealing to us. 

Library books: always free.
(6) A side hustle can be a game changer. I've written extensively about our side hustles, gigs that brings in a few hundred extra dollars each month. Our regular income doesn't leave much room for savings - so instead, we use our side hustle earnings to beef up our savings account (once we reach our savings goal, the extra cash will go to debt repayment). It's a lot of extra work, and it's totally decimated my beloved evening Netflix veg fests, but I regret none of it. Aside from generating extra income, it gets my mind off of my regular job, gives me a chance to do something I love, and makes me feel more job secure. I highly recommend a side hustle if you're paying off debt.

(7) Even if your ultimate goal is debt repayment, you still need savings. We're determined to pay off our debt as soon as possible, so it's tempting to take any and all extra money and throw it at our credit cards. However, we realized early on that we also need a financial buffer in the event that an unexpected expense lands in our laps. We started by building up $1000 in emergency savings, then decided to add on a holiday/sinking fund. This way, if we do find ourselves saddled with an unforeseen expense, the monthly budget won't get derailed or sink us further into debt. We'll just cover it with savings.

Big recent win for us: we used savings to pay in full for new tires.
(8) For maximum effectiveness, everyone in the household needs to get on the same financial page. We've found that unless we're all working towards the same goal, it's easy to get derailed. So we talk a lot about debt repayment and how it will benefit us in the long run in an effort to constantly motivate ourselves and each other. Everyone (even The Kiddo, though to a less specific degree) is aware of the budget and where we're at each month with respect to earnings and savings. Both Fortysomething and I are devoted to this debt repayment process and hold each other in check when it comes to planning and spending. Again, we don't always do it perfectly, but we're making progress.

Disclaimer: the VEP does not care about being on the same financial page.
She's kind of a rebel like that.
(9) Comparing yourself to others can be a debilitating mistake. I say this, and yet I have to admit that it's something I struggle with on a regular basis. It's all too easy to look around and think that everyone else is in a better financial situation than we are: they have their own houses, they take more interesting trips, they have more flexibility in terms of how they use their time... Every time I fall into this rabbit hole of comparison, however, I realize that it's completely unhelpful and enervating (and, because appearances can be deceiving, it may also be utterly inaccurate). So instead of playing the comparison game, I try to focus on everything our family has in terms of resources and opportunities. 

(10) You have to celebrate your wins. I try to do this each month in our "Winning" posts (recent examples here, here, and here). Celebrating our accomplishments - however small they might seem - helps us stay motivated and positive. They also counteract that tendency I have to compare myself to others. Debt repayment is a long road, so it's essential to acknowledge every benchmark and every example of habit change.

Onward to the next six months! I'm excited to see how much progress we make and what we learn in the process.

Disease Called Debt

Winning, November 2017 Edition

I almost - but not quite! - slacked off on posting the November edition of WINNING, a series in which I identify our accomplishments in an e...