creating a debt free life

Archive for the ‘daily stuff’ Category

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

 

 

 

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Living stress free with an emergency fund account !!

We are in awe of how far we have come. Never in our married lives have we had an emergency account to cover a, well, emergency. We lived check to check and ever had a dime between pay days. It did not seem to matter how much income came in, it was spent.

Well, we had to get our emergency account in place before we started to pay off debt, and what a blessing that has been.

Yesterday my husband was late coming home, he had to stop by the auto parts store to get coolant as it was all gone in his truck. We have a brand new radiatoar, thanks to our brand new emergency account a few weeks ago,  and now here  we are with another issue. He called around and found out it is possibly a head gasket but the truck cannot be driven and we cannnot get it into the shop until Monday, an already scheduled vacation day and so he had to call Hertz to pick him up for a rental car as he has some overtime coming up this weekend, plus work today , so he had to have a car.

So, after he  had made arrangements with our mechanic for Monday , and we made arrangements with our daughter to borrow her husbands truck for the week when he is down there to drop off the truck with the tow truck , as our son in law is in Kuwaitt right now, so we only need the the rental for the weekend, and got home with the rental , my husband looked at me and said. Wow. This has been amazing. When have we ever had such a huge emergency, 114 for rental, possible 850 for car repair could be less if it is not the head gasket , although it probably is,  and not had to use a credit card or panic trying to come up with the money to get it fixed. We have the money in the account , so no stress. It is amazing !! We actually had a few hundred extra we had  not anything with yet, so it will helpe us a lot so we do not have to take our entire emergency account.

We are so happy with this journey we are on. We are slowly getting the debt paid off, and for the first time in years, paid the IRS off on the 15th, $2900 bucks instead of paying it off over the next year with high interest and penalty fees each month, and have managed to take our deductions down enough so we will not owe next year and may even get a bit back. We have a set budget and though we have been paying all our bills every month for the last ten years,  and have good credit because of it, we seem to have more money every month because we are not spending every penny left over like we used to. With our balances being paid off, our credit score is going up every month ,  as our large balances were keeping our debt high so that third of of credit score was low because our debt to income ratio was bad. Now, four cards gone, an old utility bill  paid,  old and new medical bills paid and some balances lower on the other cards and more cards will be knocked out each month until they are all gone. We are shooting for the end of the year being debt free !!

I am so grateful to our wonderful debt coaches, Jeff and Robin and to  Jeff Rose from the Debt Movement who set us up with them , as we are so motivated by all the help  and advice we have gotten from thier experience.

This is a great journey to be on. I strongly urge anyone reading this, who is in debt, start now.  The benefits are great. The feeling of being in charge, instead of the bills being in charge, is amazing !! We have so much hope for the future now and feel that we can accomplish so much !!

Emergencies have no power over you when you are prepared. Of course in time we need a bigger emergency account. 1200 is a good start, but  if a roof needs to be replaced, if you h ave a  AC or heater go out, 1200 will not cover it. But once we are debt free, first thing is geting it up to a six month emergency fund.   It is a great start !!

Anway, wanted to share how great an emergency fun makes you feel.  It did what it was supposed to do, covered an emergency and kept us stress free. It is a wonderful feeling !!

Stephie

Budget every penny

This week, a bit late, we are doing our March budget with the Spend Every Penny  budget. With this way of budgeting you tell every single penny where it is going for the month, and when you are done adding up what you are spending on each item, and subtract it from your projected income,  zero should be left over.

We are getting a late start. We were warned it takes up to three months to get this down, but between our car accident, my husband being sick, dealing with the  paperwork for the accident, and having grand kids over pretty much three weekends in a row, we got side tracked big time.

Next week, our coach Robin, will have our weekly spread sheet done for the month. That will make next months projections fairly seamless as most of our bills stay about the same.

We will have in that budget, all bills, both the household type, rent, utilities and etc, and the credit bills, along with allotted food, gasaline, our personal blow money, our combined entertainment money, which is not a lot now, but wil get better over time. Paying off debt is the most important thing right now. Also,category savings,  some allotted for future vacations and medical bills. In time we will have more categories, but for now, we are starting with the basics.

I am excited to get moving and see what we can get paid off and our goal for every penny to be paid off but our house, is end of April 2014 but we will try hard to get it done sooner !!

After adding it all up with current  balances we have a total of $18,748.74 in debt, not including the house. The house is 100,896.83 which gives us a grand total of  $119,597.57. Of course we only plan to get the non mortgage debt paid off in 16 months, then we will start working on that mortgage. Once the debt is gone, we can really start doing some damage to that loan as well.

We are shooting high, but I think it is possible to do this. If we do not quite make it, we will be very close .

I will update each month on how much debt we have paid off for the month before, in other words, first week of April, I will post what we paid off in March and so on , with our new balance. These will be in the monthly update category.

So, we are pretty excited and look forward to breaking up with our  debt forever !! What a wonderful day it will be, the first day we wake up debt free !

One Week later today

It has been a week since the accident and things are still a bit crazy but we are starting to see the light at the end of the tunnel.

We have had so many hoops to jump through and calls to make and questions to answer to get the loan paid off, and the gap insurance to fill in the , well, gap !!

We had to cancel the extended warrenty and the hazard insurance , sign and next day papers to our insurance company as they are going to get the car paid off and then get reimubursed by the other insurance company. We still have to get copies of the doctor bills and get the cars info from the insurance company for the gap insurance company ,  once they take possesion of it. On and on and on, wow !!

The end result will be however, the car will be paid off in full with no money out of our pocket. We put no money down and had not yet made our first payment, which is not due until March 12th . So, we basicly got to borrow the car for three weeks. So sad, but true. Not how we expected this to turn out. As much as we had regretted the purchase when we started with our debt coaches not long after we purchased it, we had planned on attacking that payment as soon as the other bills were paid. We loved the car and it was what it was and we would have paid it off as soon as possible. We are choosing to look at this sad situation, seeing a beautiful brand new car destroyed is never a happy day, as a blessing in disquise in our pursuit to be debt free. Now we can get out of debt much sooner and pursue our dreams even faster !!

We did spend a bit more than we should off on convience eating, something we tried to avoid, but the sheer exhaustion just made cooking hard a few days. We are back on track with home made food and will take that into March.

I am so grateful we bought the GAP insurance, that was something we made sure we had. That was not an option. We have never needed to use GAP on previous loans, but that is the nature of insurance, you hope you never need it, but prepare in case you do !!

We are trying to get back on track with our assignments with the debt coaches too and that is a priority now that things have settled a bit. David still has to take a couple more vacation days to get the rest of this stuff taken care of. He cannot take care of the calls at work, as he can make calls, but no one is ever there when he calls and the nature of his job is he is working all over the buliding and is not able to answer the return calls. Phone tag is the result. So, he will take off the next two days to get all our ducks in a row. We also have to get that rental car back as well.

Anyway. We are just as determined as ever to get debt free. We had planned on dealing with the car loan after the rest of our debt is gone but now the car payment is gone and we will not buy another car any time soon. Not on our radar at all , not anytime soon.

The main lesson for us, is how wonderful having that emergency money was !! No stress when the truck radiator blew the day after the accident, and that was huge !! we have to build it back up and that is our first goal, then the first bill on our debt snow ball will get blown up !!

The only sad thing for me is, we had gotten the car for me to have some freedom and to get a job, I only got to drive it once, home from the dealer. Never got to go job hunting. So, gonna work hard on my jewelry and blogs and do my best to earn a bit each month to get the debts paid OFF !!I hate being home bound, but until we can get rid of the debt, no car for Stephie, lol !! Just how it has to be for now !!

I appologize for not being around much, but over the next week you will see more from me as I get back into the swing of our lessons and sharing them with you !! We will be making up our March budget as well and that will be fun, never used a spread sheet before !!

Thanks so much for stopping by !!

Stephie