creating a debt free life

I have been reading more and more about social security lately and the debates on when to take it get very heated. Many people argue that their parents died young so they want to take it the minute they can and not risk losing out on retirement time.

I have done a lot of research about social security and as people in the mid fifties , like my husband and I, make thier decisions, they have more than that to consider.

For one, just because a parent or parents died young, does not mean you will. Health care gets better every year and we are learning more and more how to eat and  live for longevity as well as the fact that your attitude toward aging can  have some impact on how you age, but that is not what this post is about .

I am concerned that people are not keeping up with  social security and what is going on with it. The fact is, in 2033, if nothing changes, benefits will be 25 perecent less per month for everyone. So, if you are planning to retire around that time, or will be collecting social security after that date, for any length of time, you need to seriously consider when you plan to retire.

The funds that the government is using to pay the full benefits will run out by 2033. Keep in mind they have already changed the date once or twice before, staring with 2042 ten years ago,   and then our statement said 2037 back in 2010,  so it could happen sooner. But by that date for sure , the only money they will have to pay social security is what they collect each month from the working people checks, which is estimated to be around 75 percent of benefits owed. At that point, everyone will have thier benefits cut by 25 percent even if they have collected full benefits for ten years or more, it does not matter, that is how much they will pay everyone, 75 percent of what is owed.

So, when considering the age to retire, consider that if you are scheduled to have full retirement at 67, that money will be cut by 25 percent in 2033. For us, my husband can retire at 67 in 2028, which means he has five years after that  and his benefits are  cut 25 percent. HOWEVER, if he works just three additional years, he will earn 8 percent more each year, bringing him up to 24 percent more for those two years he can collect the full amount until the decrease happens in 2033 , and at that point, we only lose 1 percent from what we would have gotten at 67. Which means my husband has to work until 70 to get aprox what he would have gotten at 67 if they were not cutting benefits. That is a big difference. 24 percent is a lot. If he lost 24 percent of his social security at 67, that is a huge amount less then we will lose at 70. He will have earned enough those extra three years to basicly cover the loss he has two years later when he is 72 years old.

We will continute to work hard to stay healthy and we tell our kids we plan to live until 110. Will we, maybe, maybe not, but we believe it is very possible to live a very long and healthy life . We are planning a very extended trip to Europe in our early 70s. We are not concerned about all the elaborate break even debates if you take it early and work, and all the agruements out there about why we should not wait to take it. We look at it as simple math. We get to keep more per month  if he works three years longer, and for him 62 is not an option, he would get so much less money it is not even worth the conversation. That is only 8 years from now. He will be 54 this month. So, he will work until 70, maybe even 71, we are not sure, just to save a bit extra as he can work and collect that year. And you no longer pay in after 70 which is nice too . It is not like he does not get vacation and days off, he just still goes to work for a few years longer to give us a better retirement. To us, that is worth it. You can retire at 67 if you have other means of support and just not collect social security until 70 , that is an option as well if you have other streams of income , like a working spouse, and a pension.

Now, if someone has severe health issues and the possibility of them living to 70 or beyond is in question, that is a different conversation altogether. But healthy people should really consider the long term ramifications of retiring as early as possible, when we are not really sure how it will go. How much will they cut it, and when will that actually be ? It is very possible the time line could get moved again to an even sooner time. My husband and I  might never see the full amount for even those two years, but at least we have some control over how much we lose by him working those extra three  years.

I get really crazy when people want to retire at their retirement age of 66,again, healthy people that have no reason to believe they will not be around a while. They get an extra year of growth, and an extra  year of 8 percent, 32 percent more, and they just give that away !! My husband works with a lot of guys that plan to retire between 62 and 66, and it is a lot of money to just give away.

So, just research it all. Consider that you could live longer than you think you will and having more money as you get older is never a bad thing. If you can physically do your job until 70, you should at least do the math and consider it. You can check your own statements at the Social Security website and find out what you will make at the differant ages depending on when you retire . Also figure out what 25 percent less will be if you will be collecting after 2033, which is 18 years from now. Anyone in thier mid fifties, this is really important to your future to make the right decision. If you have enough pensions and retirement savings, you might be able to take that loss and not miss it, but many of us, we will feel it if we lose too much so I just want people to consider everything. For us, those three extra years are crucial to having enough income for retirement.

Thanks for stopping by and I would love to hear what you think. I am not trying to provoke, not by any means. I am honestly concerned about people that do not understand what will happen, that might not have heard about the benefits being cut. I support people making the decision that is best for thier lives,as each person has to make thier own decision based on how they feel , and where they are,   but I just want them to have all the information so they can make the right decision and have no regrets !!

Thanks,

Stephie

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Too long without posting !!

I could not believe when I looked and January was my last post !! Wow. We have had a busy year or two.

In 2012 we made the choice to let our daughter and her husband and kids, who had been living with us for a few years after moving to Texas from Calif to restart thier lives, rent our current home. We had owned the house for ten years at that point, and had wanted to move up North an hour away to live closer to my husbands work and see how we liked it up there and figured it would put our house in safe hands, and give them a huge break on rent as our mortgage was well below current rents in the area and they got a much bigger house.

We signed a 14 month lease on a nice apt and settled in much closer to work so my husband could get up an hour later, leave much later , and get home much earlier, shaving about and hour and a half a day off his comute. We loved the pool, and the lovely views off our balcony, we had a creek bed between us the apartments on the other side of the complex

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It was a lovely apartment with a lot of room and other than some neighbor issues , normal in an apartment with others so close, it was relatively quiet, and very comfortable. We even got some snow to enjoy that winter !!

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We purchased new sofas which we did pay off during one year promotional so we paid no interest

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and found this lovely table and chair set, with two leaves , not shown, for a few hundred dollars at a thrift store, so we were living in a lovely place, with some beautiful new things and enjoying our life.

 

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Then the holidays came around and I realized how far away an hour is. I rarely saw everyone, and missed our small town Christmas events we loved so much, and the holidays were just not as fun as normal and we knew we would have to go back. We loved the apartment but we missed our house so much .

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It is old, needs SOOOO much work, but it was ours and we love it. But, the problem was, at that point in time, our kids could not leave it. Our son in laws family had joined them from Calif, to see if they would like to live in Texas. So, no one would have rented to that many people and pets. So, we had a few options.

 

Stay put, not an option, as much as we loved it up there, ( and miss it now ) we  missed our kids, grandkids, house and our cute little town more .

rent a house in town, but with rents so high we really did not want to do that.

Buy a second house to live in while the kids rented ours

BINGO.

So, we thought, it will never happen. We had just purchased a brand new Passet and had a five hundred dollar payment. Not to mention we already owned a house.

But somehow, some way , we bought a house. Cute three bed, one bath house, We figured we would be in it  until the kids could buy a house with his parents,  a couple of years, which was the plan. Then we would rent it out.  We moved in the start of Aug 2013

 

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Well, by November it was clear his folks were not staying and thier plan was to move back to Calif in Jan. So, over Thanksgiving weekend we had the kids over without his parents and jokingly, sort  of, asked if after his parents left they wanted to trade houses. They were so excited and we made the plan to switch houses in the spring after we got a fence up around the property for security and safety for thier kids and pets.

So, middle March 2014 We took one day to switch houses. It took 12 hours almost to the minute and we were back in our beloved house.

So, we have been back in our cute 90  year old cottage for six months now and we plan to get back to our debt repayment again. We spent way too mcuh money on these moves and when we moved into the new house, we bought all new appliances as we had left the washer dryer here for the kids, rented a set at the apartment and then also needed a fridge and bought an amazing one for the new house . The kids have been paying us for the appliances a couple of hundred a month, so that helps at least. They have them almost paid for, at the price we gave them.

So, six months later, we have a ton more debt,  and a house we have to do a lot of fixing up to, which we would have anyway, but  now we see it every day !! No regrets, we are so happy to be home. It feels wonderful. But we are not happy about the debt we see ourselves in .

So, that is our last two  years, and now here we are plannit to restart  our debt snowball again.

We did pay off a lot of stuff before we moved out of the apartment, several credit cards that we have never used again, but we borrowed heavily to get into the house, and now we are starting over with a huge car debt and credit cards we ran up for the move and the appliances and all the little stuff we had to do when we moved ino a house that was very outdated.

The kids are still renting the house, but are in the process of figuring out how to buy it from us. We thought it was an assumable loan, but it is not. According to zillow in one year it is worth a ton less than when we bought it, which does not add up as they said the same price as the appraisal at the time, but now it says it was worth a lot  less when we bought it, so I am confused by that.

The problem we are encountering is, we cannot sell it to them via a home mortgage, as we will lose money. We will have closing costs that we just cannot justify as we will be losing a lot to sell them this house, , some of which we just did not realize but we cannot lose more. So, I am not sure what they will want to do, rent for a while and see if things go up, do a owner finanicing plan, we are just not sure . They want to talk to some banks, but we told them, we cannot sell it to you if it costs us more money. They love the house, they want to buy it really bad. So, we will have to see how we get this situation fixed, but they agree it has to be fair to both sides. When we thought it was assumable it would have been, no cost to us, low cost to them, so we will see. They do not plan on doing anything for a while, they have to figure out what they want and it will be at least the start of the year before we discuss it more. If they were to finance it, thier costs will be much higher as well , closing, down and all that. We cannot help them, both because, we cannot help them and the bank said, we cannot help them, and they have to pay us back at least our down payment as that was the agreement. So, not really sure how it will all go, but I know we will find a way to work it out for all involved.

So, for now, our priority is to get back to our debt snowball in the next  few months, after bringing our savings back up to where we need it  to be. We have about 1500 but we need a lot as emergency because  if my husbands mother , who still lives in Calif ever needs him to go out there for her if she has an emergency or sadly one day when  she passes and he has to spend weeks out there taking care of things with his sister, we have to have a months worth of money in the bank to give him time to do so and it not affect us at all. Work will give him the unpaid time off, but we need the money to cover our expenses . So, I think we are going to do a full months expensies, plus travel expenses, which might be as much as five grand, which would make us feel so much better.We do not plan on needing it for years, she is not 80 yet, and in good health , but we have to be sure we are covered just in case.  Another thing we plan to do is just add a bit to the mortgage each month to get the principal down a bit each month. We have owned it 12 years but refinanced a couple of times to get better terms, not to take out money, you cannot do that in Texas without a ton of equity which we have never had,  adding to the  mortgage, so we still owe a lot and still owe on our PMI for another 14,500 to get to that 22 percent to drop it. So, we have a lot of work to do. 40 bucks a month brings it to 200 a month toward the priciple . That is our goal, to get us 2400 minimum paid off per year.

It is becoming increasingly clear , with retirement just 17 years away if he works until 70, that will have to really work hard to get out of debt, pay off the mortgage and save for retirement. That is for another post, but these concerns have gotten us back on path to saving and paying down debt.

So, life kind of took us on a loop, or we took ourselves on a loop I suppose, they were decsions we made. For now, we own the two houses and look forward to finding a way to sell the one to our kids. If they chose to not buy it, we will rent it to them until they move and buy else where and then rent it out for income as the rent would be more than the mortgage by quite a bit.

We plan to stuff away as much money as we can to get that five grand and then start paying off one debt at a time, as fast as we can per the debt snowball. We do have some promotional   balances to watch so we have some things that may have to be paid out of order  or maybe even before savings are exactly where we want them to be, to keep from getting hit with interest, but only one is due by the end of the year for a few hundred and the rest do not start to  hit until march next  year so we are keeping our eyes on these things and plan to knock each one out before they cost us money.

So, that is where we are at, and I hope to be posting some real debt repayment as well as savings each month. We are very determined and I plan to start reading all the wonderful personal finance blogs I follow and just work hard !!

Thanks for stopping by !!

Stephie

 

 

 

Happy New year dear readers !! I cannot quite believe the year is ending and a new  one is about to begin !!

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This is a set of wine charms I just made and  had to share on this blog, so perfect !!!

I am alone in the house today with my thoughts and wanted to kind of do an informal review of the past year. How did we do with our finanical goals, well, ehh.

We started out the year with our wonderful coaches and they helped us a lot, thanks to you Jeff and Robin !! We paid off a lot of debt with money from a car accident and were on our way to debt free and then decided to move back to our home town and buy a second house as our daughter and family were renting our home and due to the amount of pets and people they would not have been able to rent elsewhere.

We had to buy applicances for the house, light fixtures and some other things, and we ended up with some debt again. Most of it interest free for two to three years, but still debt. We kind of fell off the debt free wagon in some ways.

We still paid off a lot of stuff but end of the year when overtime went away and things were really tight before we could get our savings back up to a grand we ended up using one credit card again

We are not proud of this, but we are not letting it get us down.

We are starting this new year with renewed excitement about getting debt free and we still plan to make our coaches and ourselves proud !! Losing the overtime when he was injured at work, showed us the worst case we had worried about for yearsand it was not as bad as it could have been. Now he is released by the doctor and back to his regular work and overtime . We will get our savings up to a full months living expenses and then knock out debt this year. Usually only a grand is suggested, but we want a full month of living expenses plus a few hundred , for peace of mind. My mother in law lives in another state and if she were to have issues and David needed to go back there for a few weeks to a month, I want to know he could. FMLA would allow him to go, but money , or lack of, could be the reason he could not go. The additional amount needed to be a grand over living expenses  eventually will get put in there once we knock out a bill or two to make sure we have travel expenises if we had to leave. We have a lot of debt left to pay off and I will post on that another time. I do not have everything in front of me but in Jan I will sit down and figure out the debt owed and debt plan.

Despite some set backs last year, we are excited to move forward into the next year. After a long discussion with our daughter and son in law, it turns out the new house is much better for them now that our son in laws family has decided to move out, and back to where they had moved from so we are doing the work needed to get this house ready for them and in a few months we plan to switch houses and they will buy this one from us in a few years when they are ready !! They love this house we just bought  as much as we love the one they are in, so we are both very excited to make the switch !! We will gain more house and rooms, but they gain a set up more suitable to them and an attached  one car garage we  used for storage but as it has heat and air in it, they will use it as part of the house. The previous owner was about to expand into the garage and had a vent put in and working when he died and his widow we bought from was never able to do the expansion.

It will be an interesting few months, a lot of work, we have to put a six foot fence around this house, with kids and a huge dog that can jump a short fence, that is mandatory to them moving in here.Also since the owner we bought from owns the house next door, it was her moms and she sold us this one to buy that one from the estate,  so since 1964 when both were built there has never been a fence between the houses and she has a dog too, so fence is mandatory !! Our son in law will be helping with the fence and we are all very motivated.

A busy year, lot of wonderful goals and plans and I will be writing more about it all as the year goes on.

I hope everyone has a wonderful year in 2014 !!!

Thanks for stopping by !! here is the home we are moving back into !!! Our beloved 90 year old cottage !! That  picket is our first and biggest project when we move home, it is a mess !!!

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here is the home we are in now, but selling to the kids !!the yard art and flags are the sellers, she took them next door !!!

our new house 1

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We have been working on getting debt free for a while now, and we are doing good, some steps forward and back, but now that our move is complete that should be done and it should be all forward now.

The importance of having that emergency fund has become very clear to us this past few weeks and we are going to make sure to get that in place again.  But sometimes an emergency fund does not help if you are not thinking.

The key I am going to get to starts with an experience we had this past weekend.

We were on our way to our grandaughters third birthday and were supposed to stop for ice. We wanted to wait until we were close to get it and found a store not far and on the way. My husband gets out of our truck to go buy the three bags of ice and does not even get around the front of our truck and comes back a bit panicked,  ” I forgot my wallet !!! “”

He had changed into new pants and forgot to put his wallet into his pocket. This is completely out of charactor for him.

I jump out to use my card , we get the ice, get to the counter and then I remember, oh crap, I lent my debit card to Cam  ( our collage age son, just moved home and tight the week he started a new job after the move which broke him. I gave him my card to put some gas in his car to start his job. He is delivering pizzas so would have cash each day after that one fill to take care of it.

I remembered then that when the new credit card came for the one I cut up, I put it in my wallet in case of emergency as we have no savings right now, and I got it out and paid for the ice and we went on our way. No problem I will pay it off when I pay the bills next week, it is only 8 bucks.

So, I get online today, and pull up my balance and I am shocked …. 68 bucks, ?   WHAT  ???

So, I start searching the site and then I find it, a 60 dollar fee to have the card. What in the heck was I thinking to pay that per year the last few years, I was not happy .

I called, canceled the card, paid the 8 bucks and the card is getting added to my wine glass.  Cut up smaller than this, but it is a start, but this time it is a truely dead card. No way to use it and no new card coming.

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So, pay attention, the cards are out for thier benefit, not ours. The banks make a great deal of money on us just on interest, and yet, they feel the need to add fees to that pile they already make.

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They could not do it if we did not agree to it and pay it.  I do not need that card, I do not want the debt and I will not pay it.

So, look at your accounts, even if you cut up your cards and make sure , I would have gotten a bill for 25 bucks if I had not made that purchase and went to the site to pay it.

No one cares about your money like you do ,

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So, what is the key in my title you ask ?

The key to getting debt free is paying attention.  We need to pay attention to all the little things we do that add up. How many people have more than one card with a fee ? They could be paying hundreds a year. This sixty bucks was for a small 600 dollar credit card, that is insane. I consider myself an intelligent person but have not been acting very intelligently when it comes to money and credit.

So, my advice is to check out all your cards. Get rid of the ones with those fees even if you are not getting rid of all your cards. Shop for a better card to transfer any balances too and then cancel that card and be done with the fees.

There are many cards with no fees and in fact,  Capital One, the card I canceled has many cards without fees, so I could in theory find another Cap 1 card that does not have a fee and apply for that, but I want to be debt free and that is not an option for me.

So, just be smart with your money and pay attention. It is so easy to nickle and dime those fees and over time it really adds up to a lot. Although 60 bucks IS a lot.

Thanks for stopping by, I would love to hear your thoughts on credit card fees !!

Stephie

Finances for life

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I have discovered that working on your finances and working to get rid of debt is the same as trying to diet to lose weight. There are no shortcuts and diets do not work.

The only way to lose weight is to figure out what works best for you long term. What changes you can make to your eating habits that you can sustain for life and  make a plan based on those changes that will help you not only lose weight but  maintain that weight loss for the rest of your life .  It is that simple. Make a plan, based on what is working to get you to your goal and then maintain that plan to keep you were you want to be. Small fun rewards should be factored in, a planned meal that is not in your plan, but really IS in your plan becausae you figure it in. That is how to lose weight, and keep it off .

The same is true with personal finance.We came in all excited last year. We were blessed with a wonderful couple to be our debt coaches. We applied to win a debt scholorship and were working hard to pay off debt. It was not sustainable. It was not sustainable because our heads were not completely in it right.  We thought we had our heads on straight, but we were still in that diet mentality. We had not gotten it , not really.

LIfe is up and down, and changes day to day . YOu have to have a plan that you can maintain and that you can adjust to help you through all of lifes quick turns.

We were living in a lovely house we had owned for ten years. Our daughter and her husband and kids had moved in with us from out of state where jobs were few and they needed to find a new life in an area where they could afford to live and find jobs. After three years they were ready to move out and on thier own.  Before they had moved in we had talked for years about moving up an hour away closer to my husbands work.  He has been at that job for ten years this month. We thought we would love him having a short drive and enjoy having more time together. So, we told the kids they could rent our house as long as they needed for our mortgage payment, as that was way cheaper than the rents in our town for a house that would work for them until they were ready to buy thier own house and at that point we would make our house a rental. That had been our plan since we bought it in  Feb of 2002 eventually buy another house and rent out that house, so everything was falling into place.

We loved the change and the excitement of moving for about three months. Then the holidays hit and we were an hour away from our kids and grandkids. We missed them and the holidays were not that fun being so far away. We k new we would not be staying up there but would be moving home. We just had to wait it out until our 14 month lease was up Aug 11 , 2013.

Early this  year we bought a nice used car , a  2011 Passet ,  because we only had one car and when that car died on a thursday, my husband had to rent a car to drive to work for the  weekend until it could be repaired so he did not lose an incredible weekend of overtime and his regular pay on Friday. We knew we had to get a second car and we bought that nice used VW Passet from a dealer. It was a dealer owned car, a loaner car that buyers used when thier new passet was in the shop for maint or repairs under warrenty.

here is the picture the dealer took for our personalized  calendar the day we bought our first Passet.  Yes, I said first.

picking up our car

Great car, wonderful price, we had just bought it when we got our debt program started and we had such regrets about that purchase and wondered what we had been thinking but what was done was done and we had to live with that decision, and then three weeks later, we were involved in a pile up on the high way. My husband missed hitting the pile up in front of us, but we lost our car anyway because of a car coming up behind us, swerved to miss us and his large enclosed trailer hit the back corner of our car and it was totaled. We were so excited when he was able to stop and then bam, what a shock !!!

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most of the car was pristine, just that back corner totaled it. We thought it would be okay, but on the road, we could not see the full damage.

When we went to see it at the repair place , we were devestated, we did not even recognize it as we walked up.

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We had not put a dime down and had not made a payment on this car and we still ended up with some money to put toward debt and that is what we did. We paid off a few grand in debt, we were thrilled. We did get another car, a trade in from the same dealer but it was a horrible car and we had to keep taking it in so after a month, still no payment, no  money down, we traded it in for the 2013 we are driving today.

Ironicly, we got the personalized calendar weeks after we lost the car !! I still have it but we never did use it, lol !!!

This all happened end of Jan through March. IT was a crazy four months. Who buys three differant Passets in four months ? We did.  But we ended up with a good car but like Dave Ramsey says, we paid a big stupid tax for it. We had to trade in the trade in and even thought it had only been a few weeks, we lost some money on it in the trade in. We did  get a great interest rate at 1.90 but we have a high balance for six years.  Not ideal for paying off debt and wealth building and if we could go back we would do the entire thing over. I console myself that the thousands we got from the accident more than covered  what we lost in the trade in. But it was still a dumb situation. We do love the car, and it looks very much like the one we lost, but has much better features because it was a new 2013  model. We plan to drive this car for at least 10 year and probably longer to be honest.

The car is a blessing now that we moved. David drives it to work and the savings in gas from not having to drive his 1998 GMC full size extended cab pickup to work pays for aabout  half the car payment so that is a good thing.  Not putting those kind of miles on an already old truck is good too. We hate using up our 100,000 mile warrenty in four or so  years instead of the seven allowed, but it saves us a ton on gas.

Fast forward to June and we knew we were going to be moving when our lease was up Aug 11. We also knew our house was not an option. Our son in laws parents had moved from out of state too and were staying with them until they got settled and ready to get out on thier own, a plan we knew about when we offered to rent the house to them  and partly why we wanted them to rent it. No landlord in our area would rent even a large house to five adults, two kids, two cats and three dogs. We , knowing what  incredibly clean and responsiblle people they  all are, had no qualms about   it, they will leave that house cleaner than they got it. But that option being off the table we could either rent in our town  and pay upwards of 1000 a month or purchase a second home, IF they would let us.

So, we decided to try and we were able to do it. So we ended up with a 750 payment instead of a 1000 rent. It might go up a bit once the tax people find out we paid more for it than the previous owner did, so that 750 will probably go up next year to 800 to 850 but still much less than rent would be.  We were able to buy another  inexpensive house, more of a starter than the one we already own. A bit smaller, although much bigger living areas that our other house which is wonderful , but  only one bath and three bedrooms in comprarison to the two baths and four bedrooms and two living areas we had in our other house. But it is ours, no landlord and the money goes toward our own home ownership and not  to another  person to pay off thier house. We had to save up 3,500 to pay off our old 401 k loan from five years ago, and get a new one for enough to put down 8 grand on the house , with closing costs, and pay for the basic  move. We had borrowed a grand of the money to pay off the loan so the first grand of the 401 k went back to  our daughter who loaned us the money. We closed on our house the start of Aug and moved in Aug 5, with a week to clear out the apartment we camped with basics as David took stuff home after work every day and then we moved on the 10th with a moving van.

We have been in the house two months and buying another older house has been expensive. We had to replace mini blinds, light fixtures and  put in some shelves and buy paint , it has been ongoing. No regrets as we just hated renting for that 14 months we moved away so we are so happy to be in our own house, but the maint., and repairs on two homes is a bit overwelming at times, but we are ever grateful we have both of the houses. We have a lot of updating to do as we can do it. There is a huge pantry closet that is set up to be made into a second bathroom with sewer already set up under it . We have to put in a slider door in the living room where a window is,  to get out into the backyard from the house as it is not practical going thorugh the garage to get to the back yard , so we basicly do not use the back yard. There is also no fence between our neighbor, the lady that sold us the house and her house, which was her moms house and why she sold us ours, to buy her moms. We need to put up a fence as her dog is in our yard and barks under our windows ,  and I am uneasy letting the grand kids out there with a dog, even a nice dog . for now we are going to put up a ranch type wire fencing and steel stake fence until we can justify spending what we need to on a six foot privacy. The door and second bathroom will have to wait, and with our son moving in this month, also planned, one bathroom will be a huge challenge for sure !!

Our debt payment, beyond minimum payments, went on the back burner and we actually added a lot of debt to our list, washer, dryer, fridge, microwave, all for no interest for 36 months, so at that is good. We started getting into some bad habits again, eating out way too much and not paying attention to our spending.  Unfortunately, our default setting. What we have always done. We pay our bills, that is never an issue, but we spend, not save or pay off debt when we are not paying attenion. We spend any extra.

It had to stop.

My husband was able to get a new credit card and we put almost  all our old debt on it , every single card but the Best Buys that the appliances are on and one large card I have that I also had put some debt on  at at a much lower interest rate . His new account is interest free for 18 months on those transfers, It has a lower interest rate than all the cards have even if we could not pay it off, but we have to get that paid in the 18 months.

We have a new plan. Take his bonus the start of the year and pay off our personal loan that we took out to help our son start school and helped with our move up to by work.  With the 260 per month  freed up, we will attack that 18 month debt to get it all done by the time the 18 months is over. Then we will attack the card I paid bills off with and  the Best Buy debt. If we stay with our plan, we should be debt free except for the car and houses by the end of  2015, probably  even sooner, but that is a good and achievable date to have it all paid off.

All our credit debt, the transferred, old debt on my card,  and current Best buy comes to 16,300. 00. This does not include the loan we will pay off next March, 2014 . It does not include the 401 k loan either. After paying off the loan which will be 2500 by the time he gets his bonus, it should be enough to  pay off another 1500 to 2000 if his bonus is what it usually is. Lets just  say 1300 for easy math,  which will take us to $15,000 left on our debt.  That is a great start and then we will have the 260 a month times  nine months in 2014 and 12 in 2015 which is 21 months and comes to 5460 to put toward that debt, and then that gives us a balance of aprox 9540.00  Another bonus in 2015 should erase at least  3000 and  most likely more, but I am being conservative here, and that leaves a balance of 6540 to pay off over the 21 months. That is only 311 a month total, including the minium paid on the interest free cards  so the more I bring to the table each month, the sooner those can be paid off.

Our emergency fund got hammered by several big car repairs, along with the move,  and so we are rebuilding it. I should have it back  up to 1500  this month due to some wonderful and unexpected overtime . I am going to do 2000 instead of 1000 because of the fact we do have two old homes and three cars, our son drives one of them until he can buy a car. That one , in fact, is the one that has cost us so much. It is an 89 and a good little truck , but a lot of maint type repairs hit us all at once. We still have a few small ones to do, but they will fit in our budget.I should be able to get that 2000 by the end of the year.  We are keeping the holidays really cheap, and plan to stick to that plan no matter what !!

So, I am optomistic that we can pay off all our c redit debt by the end of 2015 and my goal is to do it much sooner !! then we will hit that 401 k loan with the debt snowball, all the minimums from the paid off cards  and that 260 a month, plus the bonus, and then the car. I would love to pay off that car a year and a half early and that will be my goal as we get the other debt gone.

I am hoping to be able to bring in some income. I am working hard on my jewerly and eventually I want to get a job but right now it is just not going to happen.  But I am going to make sure every dollar I can make, and every dollar my husband can make goes to where it is supposed to go.

I made a promise to be transparent when we started this journey. I have not been here on the blog much and have not said much about our mistakes because I wanted to speak to Robin our coach first, I owed them the truth before I put it here. She was wonderfully supportive and I promised her we would make them proud .

We had messed up and fell into old bad habits.  Grocery shopping and not keeping on budget and eating out too much and picking up stuff for the house, needed stuff, but stuff we should have budgeted in over time.

Stupid , old habits.  Just like going off a diet, it causes shame and frustration with ourselves.

We are now actively working on both weight loss and the debt repayment and are excited about our future and what we can accomplish in the next few years. We have a lot of dreams and goals and before we can even start working on those, we have to get the debt taken care of.

But now we have a plan, one that is maintable, one that can take us to our goals. We had that before, but now our heads are on straight and we finally “get it  !! ”

So, I wanted to update and  tell what we have been doing and about our journey and our future goals.  I want to have a place to be accountable and to keep track of our progress . I wanted to be completely honest about our mistakes and now we plan to fix them.

Thanks for stopping by, I appreciate whoever takes the time to read my blogs ,  and always love any advice or personal stores people would like to share here , so please comment if you want to share !! I would love to hear from you !!!

Stephie

love this old avon bottle I found at a friends yard sale

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One step back …

Since my last post we have moved into a home we purchased. For some reason this move h as been one of our hardest yet !! We had rented an apartment closer to work to see if we would like it, and we did not . Our home is being rented by our daughter and her family so we bought a second home.

We did a lot of the things you are not supposed to pull this off. Took out a 401 k loan, Suze Orman would skin us alive for that, but we only had 20 grand in the account and borrowing half allowed us to pay off the old loan and pay for the closing we had to pay and the five percent down on our 104 grand house. We had to pay to rent the truck and gas and all of that, and whew, it was a mess.

We had no washer and dryer, no fridge, so we got out our Best Buy cards and bought them with 36 months no interest.  We hope to get them gone in about 24. We just got a zero interest card for 18 months with a way lower interest rate after those 18 months if we do not manage to pay off the three  cards we plan to transfer , although we should have no problem doing so. We will divide the balance by 18 months and get it paid off.

So, we are backwards a bit, but still just as determined to pay off debt. Just a detour, or as I put as the title , a few steps back. In  March we will pay off our largest payment, his credit union loan with his bonus and that will free up almost 300 bucks a month  to pay down the new credit card and when that is paid off it will all go to the Best Buy account since that has the longest no interest amount and by March of 2015 whatever is left his bonus will take care of  and leave enough to tackle anything else we have not paid yet. The car is the last thing we will tackle, but once all the other debt is gone, we hope to take that six year loan and turn it into a four year loan, maybe even a bit less. I would love to make it three, but four is most probable at this point.

So, we took a few steps back, but we will get caught up very fast and get back on track. The whole point was the mortgage on this new house is only 750.00 a  month, to rent it would be  300 more a month. So, whatever it took us to pull this off, we are happy to own the house we live in, well, the bank owns it, but at least we are not renting !! We are paying much  less than rent would be, and very happy to be back in our home town and close to our family again !!

I will be posting on a more regular basis,  but I have been posting on my beading post a bit more regularly if you want to check it out. IT is not always beads, but usually is !!

Thanks for stopping by !!

Stephie

 

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Another blogger posed the question, what does wealth look like, or mean to  you. I did not have to think long. She suggested some things, among them nice cars or house, but to us, that is not what we are going for.

 

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Wealth to us, my husband and I means security. Freedom. When you owe money, you are in many  ways, working for the  company you owe. You work for them, not yourself. You have to plan your life around work you have to do to pay those debts every day. Now, I know there is money you make that does not go to them. But  if you have substantial debt, you have a lot of hands held out each month and often times, when you include your mortage, they get a lot more  of your check than you do. Period the end.

We have dreams of course. We want to pay off our house and we want to buy a building downtown to start a business. With no mortgage, that is possible. With a mortgage, possible but stressful and not probable.

Retirement for us  has never meant to stop working and just play golf and sit around be lazy. Quite the opposite. We want a business to run, something we love to do when he retires from where he works now,  so we keep active and busy . We want reasons to get up every morning. A purpose. We want to be part of the community and get involved with community events and enjoy being out in the world.

David will never retire from working. He is very vocal about that. He saw his own father retire and sit in a recliner and die. He refuses to own a recliner. They are not allowed in the house. He will retire from the company he works for between 70 and 75 years old.. What age depends on where we are on this plan. How much is saved, do we have our building already, how much security do we have in place.  We have just over 18 years until he is 70. We cannot waste any time. We have  to get our debt and house paid off asap so we can make the  decisions that affect the quality of our golden years. Now a days  you can expect to live into your nineties and maybe even 100 and that is our goal, we joke we want to live until at least 110 , and we will try to do that , but we want to live until the day we die, not  be in a  nursing home or sick, so we are working on our health as well.

Some things are out of our hands, but we are grabbing  what we can control. We are working to get thinner and healthier. Can we prevent anything from happening, no, no one can, but we are thinking positive and planning for a long full life. We CAN pay off all our debt. We CAN save up a huge nest egg both for emergency and retirement. We CAN walk and eat right. So, we CAN do a lot. We also CAN plan and plot and come up with a great retirement business that will keep us alive and happy and excited to get up every morning.  Something we can do together.

So, this is step one, which is very critical. Pay off our debt.  Every single dime, including the house. Then save. Save money like squirrels save acorns.

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Once we have an 8 month emergency fund and have enough money going into the 401k, then we start saving again for our business. There is nothing romantic about our plans. Nothing edgy. It is just staying the course and making sure we do what we need to do to make things happen the way we want them to happen.

We recently read a quote that said something to the effect of , dreams without plans are wishes. I have no clue who to give the credit to, but it is so true. If you dream, but never make a plan for that dream, it really is just a wish. It will probably never come true.

Things happen and that is okay. As long as we have our emergency fund, it is all good. Occasionally our savings will be  redirected to emergency to rebuild if something like a blown water heater, or air condiioner malfunction happen, but then we just rebuild what we had to spend and, once done, back to where we were at. Simple. Easy to follow.

Lets face it. Budgets and diets are both alike in many ways and people resist them for the same reason. It is more fun to not do them. Eating and spending what you want sounds like fun, but is it really ? At the end of the day you are fat and/ or broke and that is certainly not fun.

We had  50 grand in the bank once. Years ago.  An inheritance. What an amazing feeling that was. But getting laid off and being out of work for months before he had the job he has now,  and having to do major overhauls on two baths that were close to unusable, and some foundation repair and put up fences, and and loaning to our grown kids who were in need at the time, who did pay back every cent within a few years, just kind of ate it up. Very sad.

I want that feeling again. It was so fun to walk into a store and KNOW y ou could buy anything you wanted cash, but are choosing not to. It was fun to know we could pay cash for a car, but did not !! We loved that feeling and cannot wait to have it again.

So, we know how it feels, so we are working toward that feeling  of security that money gave us at the time.  Wealth to us is many things, but not fancy cars and houses. If we have those one day great, but they are not high on our list no matter how wonderful they are !!

So, what does wealth mean to you ? How do you define it ? It can be a very defining question !!!!

Hope you enjoyed my scrabble piece and chain  play and my modge podged acorns, I love playing and making things to put on my blog !!!

Thanks so much for taking the time to come by, it  means a lot to me !!!

Stephie

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