creating a debt free life

Posts tagged ‘save for emergencies’

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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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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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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Living the lifestyle

I have not been posting much and for that I appologize. Not much to write about honestly. We are  just doing what we are  supposed to be doing. Making minimums and paying off the next bill on the list. Four down and five credit cards to go, so that is very exciting !!

We have had our share of emergencies. Close to 2 grand in car repairs, weather warming up and we both realized we are at our biggest weight and needed some clothes , and some repairs that have to be completed on our house.

Currently we are saving to move. We had moved up  by my husbands work to save money on gas but the combination of being so far away from everyone we know, a full hour plus and living in an apartment with a pretty bad upstairs neighbor, we are moving when the contract it up. I have reached my limit. Loud walking is one thing, but a kid leap frogging himself all over the apartment as late as eleven at night, we are done. It is so stressful, words cannot even describe it. No complaints have worked up to now. The manager sent them a letter right before we left for five days, so we will see if it worked. This kid is up until as late as one in the morning on school nights, it is crazy. We just  have to get through a few more months,  and hopefully by Aug 1 we can be in a house back in our home town. We will rent down there until our kids and our son in laws parents purchase a house together and we can move back into our house.

We both  cannot wait.

We have 1400 in savings. I had more but we just spent 1200 on the  lastest car repair. That one hurt. Manifold gasket and it needed a tune up very badly. Air was bad and we had them put dye in when they charged it last summer which allowed them to find and repair the leak. In North Texas, air conditioning in your car is not a luxury !! We replaced the car that was destroyed in Feb, no payment due until June. Hated to take on a payment, but we have to have a more energy efficent car or the gas once we move will be around 500 a month. the car cuts that in half so it only costs us the differance between what the gas was and what it is with the car. About 131 a month. Insurance is only another 39 a month. Great credit and great driving records. We had not planned to buy yet, but an end of month deal under the value of the car was just something we could not turn down at this point. We will need this car come Aug 1 if we do not want him driving his 15 year old full size pick up a 100 miles round trip a day.

Anyway. We are still doing good. Buttoning down our groceries at this time. Beans and rice for a bit, and I am being literal. Beans, rice, a bit of meat and veggies, that will be most dinners . We have to get about 4 grand in the bank, 1000 to 1200 first month rent for a house, and then the same amount as the deposit. We are hoping for less, but planning on the highter amount !! Then the amount we need to rent a U haul and move ourselves, which should not be a lot. Most of our stuff is still at our house. We have a good size storage barn, a gardening shed and a work shop. They are all full !!!

Big building in back is our storage barn, white buiding in back is our gardening shed. Cannot wait to move home, but it will be up to two years.

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just one side of the fence we have to repair. Only the posts are good, all the slats and stringers are bad. About 800 hundred bucks  to do the entire fence  when all is said and done, but about 30 bucks a section so just a bit at a time.  We hope to finish by the end of summer. When we bought the house eleven years ago we were told it was just lightly sprayed after it was put together, with nails So, raw wood on raw wood and the neighbors sprinkers just rotted this side completely . The other two sides are not as bad, but still pretty bad as the previous owner had all the sprinkers aimed at the fence. It was only a few years and we havce owned it 11 years, but the damage had already started.  So, we are doing it right this time, thick coats of paint on each piece before they are screwed together and put up with L brackets. It should last a lot longer this time. We will also be able to take off bad pickets easily and replace them and bad panels will be easy to remove in the future.

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The opposite side

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the front which is the best of the three but still pretty bad.

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We have two front windows, old sash windows that no longer are openable  and we have to replace them but that will not be much . We will replace for now with the  inexpensive windows the previous owner used on the rest of the house. Our dream one day is to replace them all with the old fashioned, but new dual paned  sash windows, but that is a ways away !! So many other things to do first. Really, once these two projects are done, the rest can wait until we move back into the house in a year or two. Debt paying will be our priorty and then that six to eight month emergency fund.

So, that is what we are up to. We took our entertainment, and  blow money , for the month and our weeks food and gas to drive out of state to my husbands cousins house, we are very close to them and had not seen them for five years. They had some wood and flooring they wanted us to pick up so they could clean out thier garage and it gave us some great stuff for the house. Win win. . We had a nice trip and did not have to spend a dime while we were there . We ate at home and the meal  we had to eat on the drives each way, were covered by the  money set aside. We had never really budgeted for a trip before so this was very exciting. It was the most relaxing and fun trip we have ever taken because we knew our budget and stuck to it.

So, anyway, this is what we are up to. I will make sure I post at least weekly. For now, work on house and save every penny When the savings is where we need it to move in three months, then back to attacking the debt . Five more cards to kill off and then a credit union loan. Very exciting !!

here is a couple of pretty pictures for our drive

We left at five thirty am, so we got to see the sun come up , so pretty !!

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just one of the amazing meals they served us, we were spoiled rotten by good home cooiking , thanks so much guys, you are the best !!

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drove into the sun set on the way home !!

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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

Stuff happens, be prepared !!

I am so grateful we had just started our program to pay off debt when yesterday happened.  We had a day that you hope does not happen but you should prepare for, just in case.

A car accident.

It was raining and wet and we came around a corner and  my husband was faced with three  vehicle  and a trailer pile up, we both thought we would hit it, but he managed, against all odds to stop about five feet before the accident, we were so happy and then he looked in his side mirror, yelled a swear word, and bam, we were hit.

We were lucky. The full size picked up managed to change  lanes, but in changing lanes quicky, his trailer spun around and wacked the back driver side corner of the car, ripping the wheel off and breaking the axil. Other damage to the back happened as well.

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That is the rear wheel, it is bad. The rest of the car is completely unhurt as far as we could see. Not sure if any debris hurt it, but it seems fine. Side airbag came down and we sat in shock. I was terrified we would get hit again. I sat a bit frozen for a few minutes. David got out and checked and came b ack and told me it was pretty bad.

so, we were certainly not emotionally prepared, but with our 1000 savings in place, we could cover the expenses we incurred. Fifty bucks to the car rental, just a hold until we give it back, our insurance is paying for our rental car.

We did  get fast food after we got the rental car, we were a bit shell shocked and had to go shopping for food, and were not up to it so we got Mc Donalds and went home relax. We had to pay 80 for both of us , to the doctor for after hour appts, but that is much better than the 100 or more each we would have paid for the ER and we got excellent care from our own doctor office. That will be reimbursed almost imediately by our insurance and will be put right into our bank account by them as soon as we get the reciept in to them.

After the doctors we did go to the store and pick up some groceries to make dinner. It was not what we wanted to do, but we knew we had to. So, we did. We were so exhausted it took everything to cook after our day, but we were proud of ourselves for being responsible both with our money and health by eating a home made and healthy dinner.

Whatever happens with the car, we will take any extra money and use it to debt snowball our bills. If the car is totaled, we will not replace it at this time. We will take time to pay off debt and save up to get another car. If repaired, we will take any money recieved and pay it toward the debt snowball, after replacing any money from our emergency fund. I t hink we can actually cover it from our grocery and entertainment funds, we  might not even have to touch the emergency money.

So, even just starting out,  having that emergency money is crutial.  We should know by Monday the fate of our new car. We have not even paid the first payment yet. It is really crazy.

So, make sure before you start your debt repayment to have that emergency fund started. Knowing we had  money in the bank to deal with this situation made it so much less stressful. Words really cannot convey how much it helped our peace of mind.

By Monday we should know if we have our car or not. At that point we can settle the claim as we have no real medical to worry about. My hubby was on vacation and has taken one additional vacation day to recoup. We are still a bit sore , and then Saturday he can return to work. No lost wages, no medical treatment to seek, that helps a lot.

The accident was caused by a big rig stalling, so you just never know what life will throw a curve ball at you. Having that emergency fund there will give you peace of mind when something unexpected happens.

Also, check on your auto coverage. Make sure you have enough,  make sure you are not left high and dry. Get  uninuranced motorist. We have it, should not need it, the guy had a current insurance card, but you never know if they  missed a payment and you are stuck with the bills. Be responsible and protect yourself. You may need it that day and that is what insurance is for.

We are so grateful we are fine. I have sent many thanks to God for that. We walked away .

Many thanks to the firemen and police officers that took such great care of us all. They even took us to a gas station to meet our ride. Never rode in the back seat of a cop car before, very interesting and so uncomfortable. Glad I live a life where that is the only reason I will ever ride in a cop car !!

We were so grateful for the ride, it was cold and far from bathrooms, so it was wonderful and much safer for our daughter in law to pick us up there !!Thanks Melissa, we are so grateful for the ride to the car rental place. We appreciate it so much !!

So, we learned a lot, luckily in a good way as we were prepared. I cannot wait until we are debt f ree and we can build up that emergency fund even bigger !! Having money to help you face an emergency give you such peace of mind.

Thanks for reading !!

Stephie

My Financial Fitness Workout for the day

My wonderful coaches send me my fitness workouts for the day. Today was to watch their video on the Financial Success Formula and I want to share it with you here, you can see the video on their site, the link is http://www.debtfreesquad.com/debt-free-video-2-the-success-formula/

I urge anyone struggling with debt to go to thier site, thier link is also to the side of this post, Debt Free Squad. ———->>>>>>>

So, what is the Financial success formula. It is to take the letters in the work SUCCESS and use them to show you the formula to success in building a debt free life.

This is Jeff and Robins not mine, but I want to share it with you becuase it is very important. I may at times use my own words, but the formula is theirs !!

S  is for SAVE  You must build a 1000 emergency fund before you start working on your debt. If you do not have a emergency fund as a safety net, then the first time you have an emergency it will be an excuse to use credit again. Build up that emergency fund and then start paying off your debt. Save for big ticket items. It is so easy to do the same as cash, but I will tell you this,  if you are the type to do that, you are probably not going to get it paid off in time, and you will end up with a boatload of interest tacked on when you hit that magic date where you interest free period runs out. My husband and I did that at Best Buy, I just KNEW we could pay it off in 18 months, but life gets in the way and 18 months later, 700 bucks got dumped on our already huge 2500 credit card bill and then since we were  over the limit, they charged us even more. That is one of the first  cards we cut up and put in that wine glass when Jeff and Robin suggested strongly we cut up our cards. Save for that flat screen tv, save for that pool table or spa. Do not be lured in by those wonderful same as cash promises, they are misleading and they count on you not paying it in time. No store is thinking of you when they do offers like that, they are thinking of how much more you will spend if you think you will not have to pay interest.

U is for Unity. Have respect for your spouse and family and make sure you sit down once a month to make out the budget TOGETHER !! Also, you must set a limit on spending and make sure to discuss purchases over a certain amount before they are made. Jeff and Robin chose 100 bucks, and that is a good amount. I know a lot of people spend that without thinking and certainly do not even consider talking to t hier spouse of family about it. But you need to do that. David and I are the same. We always discuss large purchases. Problem was, we never said no, now I really doubt we will even have those conversations now,  if we have 100 bucks, it will go to debt.

C  Clutter. Many times when your finances are in a mess, so is the rest of your life. Clutter takes over and you look around and you are surrounded by the bad choices you made that got you to this debt filled life. Go through it, donate , have a yard sale and make money to pay down some debt  or to start your emergency fund.  Find those bills in the office mess you are living in, in fact, Jeff suggest that is where you start. Find those bills and then you can figure out exactly what the mess you are in is, and how much you owe, that is a huge step, so clean up your life so you can feel the burden of that clutter lift and feel better about your life.

C  Control.  Track your spending. Most of us do not realize how much we are spending in a month. Write down every single penny you spend, cash or debit. Yard sale, write it down, grocery store, gas station, write it down. You will be shocked at the end of the week, let alone month, of what you have spent , most of the time not even being aware of what you are spending.

Get on what Jeff and Robin call a S E P plan, which is a  S pend E very  P enny plan.  Write it down, no exceptions so you know what you spent every single day.   So, when you look at the money  in and out at the end of the month, you can account for every single penny. Do the envelope method. Put away money each week for food, entertainment, clothing, gas, vacations. If you assign money to the envelopes that is it, that is all you have. If you spend it, then you have to wait until the next pay day to fill that envelope back up . So, you  have to watch what you spend. Make it a game to see how long you can make it last. I know  how easy it is to spend money. We had gotten to where once the bills were paid for the month,, we would go to the grocery  store and just buy what we want. I have been shocked at how much the stuff added up to when we checked out. Way too much. It is so easy to be impulsive in the store but the envelopes keep you on track. If you spend too much at the check out, guess what, you have to put something back. That is what everyone used to do years ago. I remember doing it many times before overdraft became common place. You could not spend more t han you had. And you might not use overdraft, we didn’t,  but you are still spending money you could pay down debt with. So, use the envelopes, plan wisely and when it is gone, you are done until payday.

E  Excited, GET EXCITED about getting out of debt. Picture yourself debt free, imagine how wonderful it will be. You have to get excited, you have to be motivated. No white knuckling here, or it just will not work. You have to have the right attitude , it is very important.

Jeff says,  Get started, focus, stay persistant, stay consistant, and have hope, hope that you can do this, know you can do this !!

S    Security, have the right insurance, car, health , auto, streamline them and make sure you are not paying more than you need to. We did this recently and saved a lot. we were way over insured on our car insurance. Once you have the 1000 in your savings for emergencies, you can probably go up on your deductables because you will have money to pay it if the unthinkable happens and you have an accident.

Get a will, and put away money for your future. If your company matches, contribute to the 401 K  available to you, , if they do not match, fully fund your Roth IRA and make sure if you are  married, you both do. 10 to 15 percent of your income should be  your goal, if you cannot do that now, that is what you need to work up to.

S  Spiritual  Pray with your spouse and family about financial matters and as Jeff says, things will start coming in line. I agree with this. Prayer is so important to success in changing your life for the better.

Read your Bible, the Bible has over 1000 verses about finances , so you can really learn a lot. Jeff and Robin have many of their favorate financial Bible quotes on thier site. Worth reading for sure !!

Give, if you cannot currently give money, give your time.  Help someone else. Sometimes it is our own families we are helping and sometimes others, but help. Not only is it a great spiritual practice, you will feel good when you help someone else and that will help you to reach your goals. When you feel good about yourself it radiates to other parts of your life.  I believe myself it comes back to you as well.

My debt free c hallenge for this week is to write down and keep track of every single penny. I also had to watch this video and post it. I will make sure I can see it every day.

I am learning so much and will share what I learn. Share with everyone you know and send people this way and to Jeff and Robins site if they need help. No one has to do this alone. There are so many people willing to teach and share and be there for each other.  We are just starting, but have learned so much already. We are so lucky to have teachers that have been where we are and can lead us out of this mess into the light of a debt free life !! We are so blessed and grateful !!

I hope you will decide to join the debt free challenge. I cannot wait until the day we wake up debt free, and actually free. Free from bills that keep us from doing things we want to do.

Thanks for stopping by !!

Stephie