Saturday, April 14, 2018

Our First Year of Debt Repayment In Review

One year ago, we decided to finally get our financial house in order. I can't remember what, exactly, prompted our shift in mindset: there was no single crisis or issue that brought us around. But the balance in our bank account was persistently paltry, we worried constantly about unexpected bills, and we really had no idea where our money was going. We would buy things and just hope we had enough to cover the purchase. It was scary.

Around the same time, I started watching re-runs of Til Debt Do Us Part and Money Moron. While I didn't want to put myself in the same category as the people being coached/yelled at by Gail Vaz Oxlade, the truth was that I could fully relate to their choices, experiences and fears. I saw myself in them. I devoured as many of these episodes as I could, taking note of the advice on budgeting and debt repayment plans. Then I announced to Fortysomething that I was ready to make some changes.

Last April, we finally started the long, slow process of turning this ship around. We've made an enormous amount of progress since then. Here are some of the highlights:

April and May 2017:
  • We took a full inventory of our debt.
  • We made a debt repayment plan.
  • We opened a savings account.
  • We finally made a budget. Here's what it looked like:

    (At the time, our debt included our car loan ($300/month), our student loans ($600/month), and three credit cards on which we were paying the minimum, for a total of $700/month).

June 2017: 
  • We started this blog as a way to track our journey, record our story, and engage with the personal finance community. Check out our first post: Introducing the $76K Project.
July 2017:

August 2017:
September 2017:
October 2017:
November 2017:

December 2017:
January 2018:
February 2018:

March and April 2018:
So there it is: one year of persistent, sometimes frustrating financial work! I'm amazed at our progress and by how much we have learned, and I can't wait to see what we can accomplish in another year.

Tuesday, April 10, 2018

Debt: Nobody Said It Was Easy

Money in the $76K household is tight. We're awaiting medical bills related to the Kiddo's appendectomy, and although it's possible that the total cost of surgery won't be as high as I'm expecting it to be, I'm still very much on edge about it and want to keep a tight grip on the budget until we know where we stand. At the same time, we're determined to make a significant credit card payment this month ($1000) and plan a small but fun birthday celebration for the Kiddo.

Although we're paying all of our bills on time and making progress with debt repayment, there isn't a lot of room for extras and non-essentials:
  • We still don't have a real kitchen table. We're eating off a tablecloth-adorned card table and sitting in folding chairs. 
  • We've had to delay the purchase of other furniture, such as bar stools for our kitchen counter. (The horror!)
  • We're not going out to eat as often this month.
  • We're being more selective about paid activities. The Kiddo's summer soccer league is a go. The running series is not.
I'm not complaining about any of the above items. The card table serves its purpose, we make tasty enough food at home, and I can walk out my front door and run for free every day. We're good.

However, we've come to the realization that our uncompromising budget will necessitate one difficult sacrifice: we'll likely need to cancel the trip that Fortysomething and the Kiddo were planning to take back east this summer. The original idea was to have them fly out, rent a car, and spend two weeks with Fortysomething's parents, siblings, and other relatives. It's something Fortysomething hasn't done in several years. The Kiddo barely remembers what his cousins look like.

Needless to say, nobody is happy about this, especially my son and his grandparents. But the trip seems financially ill-advised given the likelihood of steep medical expenses. The price of plane tickets will be in the hundreds of dollars, even if we're able to offset the cost with our limited Southwest points. Then there's the car rental, the gas, and the inevitable restaurant meals and kid activities. We just can't afford it, is the truth.

Fortysomething is fine with canceling. As usual, he's Mr. Logical: we don't have the money, thus we can't go, end of story. Me? I feel tremendously guilty. I know how much his parents were looking forward to seeing both of them, and as they're getting older, I want them to spend time with us. Life is fleeting, and we need to make time - and sometimes spend some money - for the people we care about.

But is it worth accruing more debt at this particular time? I don't know. I don't think so, but in this case, I'm not 100 percent sure. Either way, it feels like a risk. A part of me is holding out hope that the medical bills will be miraculously low and we'll be able to book the trip anyway.

As anyone who has ever tried to dig out of debt knows, this process is full of ups and downs, triumphs and frustrations, successes and setbacks. Life is damn expensive. Even though we have the  best of intentions, and even though we're armed with the confidence that comes with paying off $17K in less than a year, it would be incredibly easy to backslide - not because we're buying lattes, avocados, bar stools, and fancy vacations, but because life is unpredictable and full of gray areas. 

I'm not complaining, but I will say this: times like this emphasize just how debilitating debt can be. Debt sucks. I'm sick of the way it limits us. I'm sick of having to make sacrifices for it. Situations like this just stoke my determination to get out of debt as soon as we possibly can. I can't wait.

Wednesday, April 4, 2018

Five Goals For April

I recently made a comment on Twitter that people need to live more in the moment and stop focusing so much on the future... but the truth is, I'm kind of a hypocrite in that respect. I find that I'm more grounded in the present when I'm anchored by some clear, achievable goals.

So in April, here's what I hope to accomplish:

(1) Write six blog posts. In March, I managed to publish five. Not bad considering that it was a hectic month, especially at the end. Writing is a valuable outlet for me (I'm writing this while on a much-needed mini-break from working today), and writing here keeps me motivated to pay off our debts. My longer-term goal is to move the blog to a different platform and expand on content, but for now, I'd be thrilled to simply hit the "Publish" button more frequently.

(2) Update my blog roll. I've been meaning to do this for weeks. Several folks on my current list seem to have disappeared, and I want to start following several of the PF bloggers I've met on Twitter. (Tell me if I should add you! I will!)

(3) Find a way to pay our recent medical bills without going further into debt. I have absolutely no idea how much we're going to owe on my kid's recent appendectomy. Between urgent care, the ER, surgery itself, anesthesia, and one night in the hospital, not to mention the toothpaste, socks, and breakfast the nurses insisted that we take (anyone who has ever been to a U.S. hospital knows you will be charged for every single item of this nature), I expect that we'll be looking at a total bill of a few thousand dollars, even with our insurance. My out-of-pocket cap is $4000, but we just don't have that much cash on hand right now.

Regardless, I am unwilling to put any of this on credit cards. We will pay what we can via my HSA, and then I will call each vendor to insist on a payment plan. Worst case scenario: I will ask my family for a loan.

No. More. Debt. The end.

(4) Drink more water. We live in an extremely dry area. When I don't drink enough water - and, well, I never drink enough water - my skin dries out and my running suffers. That's got to change. I'm not going to force myself to drink a specific amount (so, yeah, not a particularly measurable goal), but my water bottle is going to become my new BFF. I'm going to drag it everywhere with me.

(5) Do two strength training workouts per week. I have absolutely no trouble meeting my weekly running goals; I so enjoy being out on the trails that it's easy to motivate myself. That's not the case with strength training. Although I see it as a vital aspect of being a healthy runner, pushups and squats and the like just aren't that much fun for me. However, I think I can commit to two 30-minute workouts a week, especially if I schedule them before I start work in the morning.

We'll see how this goes.

What about you? What are some of your current goals, financial or otherwise?

Our First Year of Debt Repayment In Review

One year ago, we decided to finally get our financial house in order. I can't remember what, exactly, prompted our shift in mindset: th...