creating a debt free life

Posts tagged ‘owe’

Happy new year and thoughts on this new year

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 !!!

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The true key to getting debt free

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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

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

What does wealth mean to me /you ?

 

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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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Debt updates, and why do we let fear make our decisions about money ?

I was happy this morning to pay off a very old debt, I should have paid off three years ago, and I am not sure why I did not  ? They offered me a settlement but I paid the entire thing, I owe it, and would not feel right not paying it off. It was an old utility bill and that 306 bucks I never have to think about again.

I also paid off some recent small and large medical bills, totalling $364.00 paid to file our taxes and then they will take out the taxes we owe in the next few days and we are done.

For years we have paid huge tax  bills each year because we did not have enough taken out. For some dumb reason, we thought we would have a hard time living on the amount we would be left if we had enough taken out. We relied on his bonus every  year to pay the taxes when they came due saving up the differance when the bonus was not enough and often having to give the IRS the 105 to set up payments and then we paid interest each month until it was paid.  We finally bit the bullet this year , went down to zero deductions and guess what, we are fine. We are paying off debt, able to pay our bills and eat, and once we  see that huge amount come out of our account this month,$ 2908.00 , whew, we will never have to do that again. Next year we will at the very least break even, but what I can see so far, we might even get a bit back and that will be wonderful  !! That has not happened in way too long.

It is funny how we let our fears control us and end up making dumb money decisions becausae of it. Had we just tried the deductions, we would have found, we are fine.  We would not be paying out this huge amount right now. I can only imagine how fun it will be to get  his bonus next year  and  not need to pay taxes with it !! I cannot wait !!  For the first time in a decade or more, since we had kids home to deduct, we will not have to dread doing our taxes. Even if I am wrong and we still owe, it would be so little, a couple of hundred, but I  honestly  think we might get a couple of hundred back the way it looks, so that is exciting !! It could be even more than that, but it looks like at least a couple to a few hundred back, and that is huge to me !!

So, no more fear based decsions. I think just paying off debt takes away fear. Every bill you never have to pay again, makes you feel stronger. Debt makes you feel powerless. I hate calling and getting online every month and paying those bills, each one I pay off is  ten minutes back in a my life each month, not much, but the stress of worrying about them, the weight of them, plus that  ten minutes per bill adds up and so the freedom I will feel each payday when those bills are gone is tremendous !!

So, to date our debt repayment total is, adding in our tax bill, $5,476.00, Two credit cards are paid off,  and  four more are slated to be paid off as the car insurance settlements come in so that is very exciting . Next month I will update as I get those paid off.

So, I am very happy with our progress and look forward to reporting another 2800 being paid off  and maybe even more depending on extra overtime and any money I can make on my jewelry sales !!

Thanks for stopping by, I look forward to more updating soon !!

updates

Been off line a full week  because of a week of visting grandkids.

This week we start our official first week on our new budget. Robin,  one of our debt coaches set up our new budget and we have a set plan for every dollar. Our spend every penny plan. S E P .  This past week we took the first bit of money from our car accident  accident and paid off our first card of our debt snow ball. How exciting to finally see one debt gone. I will be paying another hundred today on the second bill and  will be chipping away until it is gone, which when we get some more insurance money  should take care of it, and number three. I am so thrilled to see the snow ball starting.

So, starting  this week it will be tight, but we are not the least bit upset about the tight budget, we are so excited to see this process starting . We look so forward to seeing the debts disapear !! Once the bills are paid off, what freedom we will have !! We are determined to get there as fast as we can !!

So, as we go along I will share what we learn and our progress here. It was hard to be offline for a week, but I am back now and excited to be seeing the debt snowball start !!

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 !