dcsimg The Get Rich Slowly Forums • View topic - No More Excuses

  GRS Home  Forum Home
Bank Rates Center
   Savings Account Rates
   Money Market Rates
   Highest CD Rates
Insurance Rates Center
  Auto           Health
   Life              Home
Mortgage Rates Center
  Mortgage Rates
  Mortgage Quotes

Last visit was:
A place for Get Rich Slowly readers to ask questions
and exchange ideas
It is currently Thu Sep 18, 2014 12:50 pm




Post new topic Reply to topic  [ 11 posts ] 
Author Message
 Post subject: No More Excuses
PostPosted: Mon Feb 16, 2009 5:12 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
ok, here we go, our journey into "no more excuses" land actually started in September 2008, however now that we are starting the toughest part, I have decided I need to be held accountable. so here we go, please feel free to offer tough love if needed or just your honest opinions. I know that even if nobody reads, just getting the stuff out in writing will help us achieve our financial goals.

The reason I named this topic "no more excuses" is because I have realized there is nobody to blame for our financial situation other than ourselves and nobody else is going to help us out other than ourselves. not because people might not want to help us, but because we are adults and it is our responsibility.

More details coming soon, but again, this is the year of no more excuses, and just getting it done.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: our story is full of dumb money mistakes
PostPosted: Mon Feb 16, 2009 6:29 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
our past story of dumb money mistakes is painful to think about and write, let's say we have paid our stupid tax many times. And not only being stupid, but plain irresponsible. So I will not go into details of the extended past, but I will just give you a snapshot of last year - 2008.

We had no idea what a budget is, I mean, really we knew what a budget was but we never had any, or I thought we did not have the discipline. Or we thought that we worked sooo hard that we deserved this or that or that.

So even though between the both of us we earned 91,000 gross last year, we started missing or being late in mortgage payments around February 2008. Then during the summer, to avoid paying summer camp for the kids, we invited my recently retired parents to spend several weeks with us, and we ended up spending even more in utilities and groceries than we would have spent on summer camp (again, no budgeting or planning properly). Without taking into consideration that we were late in the mortgage, we took off on a trip to Disney World (budget conscious trip, but again, the money would have been better spent on the mortgage---hellooooo!) .

We came back from the trip in September and the harsh reality of our irresponsibility started kicking in, we were late in our mortgage payments, had balances in several credit cards, we were living literally paycheck to paycheck, student loan in deferral, mortgage upside down....NO savings/emergency fund whatsoever. No clue at all, no savings for college, just an overall feeling of despair and DENIAL about our situation.

I was bearing the burden of this, just because since we got married 10 years ago I have been handling the finances in our marriage, so I must say I am primarily responsible for this mess. I was never wise enough or tried to be a good steward of the resources we had.

So, there were all of this bad news on the news, the fact that we were apparently in a recession and I realized that if something happened to either of our jobs we would be in a very bad position, for starters I had no clue and no organizational system for our finances, we had no savings at all. I just felt so overwhelmed by all of this. Yes me, a grown woman, a marketing manager who has dealt with marketing budgets ranging up to 1 million dollars and I was intimidated by our 90k annual budget.... I felt ashamed. How could I be so responsible with my budgets at work and so irresponsible with my own family's finances? What was I teaching to my kids? Would they be burdened by student loans as well? What would happen to us at retirement? Would we have to work because we want to or because we HAVE to? Would we ever reach our household improvement projects, would we even have money for Christmas? How much longer would I need to be late in payments before anything bad happened (i.e. foreclosure)?

I was humbled by all of this situation, honestly to the point of desperation. I simply prayed to God to grant me wisdom to manage the resources He was giving us and for help in turning around our finances. I knew we could not do it alone. I already knew God is our Provider, he always provided and we have never lacked anything, but now I recognized I needed His help to manage our finances.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Re: our story is full of dumb money mistakes
PostPosted: Mon Feb 16, 2009 6:39 am 
User avatar

Joined: Thu Mar 27, 2008 4:24 pm
Posts: 353
Location: St Pete
nomoreexcuses wrote:
I simply prayed to God to grant me wisdom to manage the resources He was giving us and for help in turning around our finances. I knew we could not do it alone. I already knew God is our Provider, he always provided and we have never lacked anything, but now I recognized I needed His help to manage our finances.


You are in a tough spot, but really it is not as bad as you think. You and your husband are gainfully employed, and everyone is healthy. You can overcome this.

I am not a religious woman, but I do believe the expression goes 'God helps those who help themselves.' If what you want is to break the cycle of living life on the financial edge, you must increase your income and/or decrease your spending. Your cash flow appears healthy, but if you are spending a large portion of your budget on late fees / penalties / interest etc, then you need to go into cash flow overdrive. Have a yard sale - Craigslist anything not nailed down in your home - offer services for cleaning / home repair / house sitting / dog walking / etc. Go on a cash freeze - eat at home until the food is all gone, spend nothing except for gas, utilities, etc.

It isn't easy, but it is entirely achievable. You have to do this for yourself, for your marriage, and for your children. Best of luck to you.

_________________
Becca


Top
Offline Profile E-mail   
 Post subject: Our budget
PostPosted: Mon Feb 16, 2009 6:48 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
Well, my prayers were answered. who knew I would find such great information and encouragement in the internet? I heard about Dave Ramsey and started reading ferociously (got the books from the library) and well, the first thing I needed to do was for starters to know what we owed and to whom and due dates, etc. (I am talking other than monthly expenses). Here was our list:

My mom's credit card - interest free until Feb 2009 - 735.00
Sam's Club - 638.00
Kohl's - 600.00
Lowe's (my dad's) - interest free until August 2009 - 638.31
Student loan - $22,522 in deferment, next payment May 14, 2009 7.875%
Mortgage - $312,518 6.875% monthly payment $2,252 but since it is in repayment until May 2009 we are paying $2,822. This includes insurance and taxes. the actual interest only payment is around $1,790. upside down since the market value now is around $260,000 (we bought for $329,000 in May 2007

Do you see a pattern here? yes, because we had no emergency fund, my mother and father would help us every once in a while by charging into their credit cards and we would paid them later. Last Christmas we also opened a bill me later account for gifts and thankfully were able to pay it with our refund last year (and so we had paid Sam's club and Kohls but managed to charge them up again.) Anyway, our pattern every year was charge stuff, pay it off with tax refund. Let my parents pick up the tab and pay them later etc. Bad bad.

So once we made the list of debts, next step was working on our budget since we had NO CLUE where our money was going.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Re: our story is full of dumb money mistakes
PostPosted: Mon Feb 16, 2009 6:50 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
specabecca wrote:
nomoreexcuses wrote:
I simply prayed to God to grant me wisdom to manage the resources He was giving us and for help in turning around our finances. I knew we could not do it alone. I already knew God is our Provider, he always provided and we have never lacked anything, but now I recognized I needed His help to manage our finances.


You are in a tough spot, but really it is not as bad as you think. You and your husband are gainfully employed, and everyone is healthy. You can overcome this.

I am not a religious woman, but I do believe the expression goes 'God helps those who help themselves.' If what you want is to break the cycle of living life on the financial edge, you must increase your income and/or decrease your spending. Your cash flow appears healthy, but if you are spending a large portion of your budget on late fees / penalties / interest etc, then you need to go into cash flow overdrive. Have a yard sale - Craigslist anything not nailed down in your home - offer services for cleaning / home repair / house sitting / dog walking / etc. Go on a cash freeze - eat at home until the food is all gone, spend nothing except for gas, utilities, etc.

It isn't easy, but it is entirely achievable. You have to do this for yourself, for your marriage, and for your children. Best of luck to you.


Thanks so much Becca, you can bet the reason we are doing this is for our marriage and children! Thanks for the encouragement.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Re: our story is full of dumb money mistakes
PostPosted: Mon Feb 16, 2009 6:51 am 

Joined: Thu Apr 05, 2007 3:05 pm
Posts: 1337
nomoreexcuses wrote:
mortgage upside down.


I wouldn't worry too much about an upside-down mortgage unless you are planning to sell your house soon.

If you're planning to live there a long time, it's likely that your home will recover in value by the time you're ready to sell. So you can cross that off your list of worries and just focus on getting back on track in your mortgage payments.

You might want to look into refinancing, though. You're paying nearly 7% interest; mortgages now are down around 5 percent or less and you'll save many tens of thousands of dollars over a long-term mortgage with lower interest rates.


Top
Offline Profile   
 Post subject: Our budget
PostPosted: Mon Feb 16, 2009 7:19 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
the first month with a budget was October 2008. of course as with any first time budgeters, stuff came up that we had no idea would come up and that helped us refine it (...still some stuff comes up now 4 months into the process :) ) Anyway, October 2008 our goal was simply to learn how to budget. because we knew where each cent was going (even if it was unexpected in some way we were able to cash flow some car repairs. we did not save or pay down debt, but we put all our account current (less the mortgage which we negotiated a repayment plan) and cash flow these repairs.

before even creating the budget I knew one of our black holes for money was food. I could go to the supermarket on Friday, Saturday, and Sunday and spent 70 each time and still not buying everything we needed (again, no planning) plus I would get my daily coffee (because it was "just" 1.50) and lunch out a couple of times a week for 7 to 8 bucks. Mu husband is a chef, so we love good food and having good ingredients so we felt that we deserved to have good food in the house because you know, we dont have any other vices.... so yes, we "deserved" it. When I decided to go back into our bank statements and run the numbers for a couple of months before we started budgeting I was flabbergasted when I saw that some months we spent 800 to 900 in food (groceries and dining out) for a family of 4!!!!!

Well, this is what our monthly budget looks like now:

Groceries - 300 (cut down on eating out, the daily coffee, bagging lunch for me and the kids, shopping sales, using coupons, etc.)
Gasoline - 150 (thank God for gas prices going down, learning how to drive effectively, carpooling, etc)
Giving - 550 (for a while here giving 10% of our net instead of the gross, though we prefer to give 10% of our gross)
Daycare (pre-k for daughter and before/after school care for son) - 1,050 (this will go down to 600 come september 2009 when DD goes to full day kindergarten)
Water/Sewer - 55 (varies through the year as low as 40 as high as 65)
Electricity - 150 (varies as low as 75 as high as 225)
Cable/Internet/Phone - 125 (just went up from 105)
Cel phones -105
Car Insurance - 87.61 (just went down from 135 last year)
Life Insurance - 33.75 (my hubby's)
Homeowners insurance - 41.58 (this is for when stuff around the house breaks down, still debating whether it is needed or not)
Mortgage - $2,825 in repayment, goes down to $2,225 in June 09
Total - $5,473

My take home home pay - $3,986
DH's take home pay - $1,500 to $2,500
minimum take home page $5,486
(I get paid twice a month and I am salaried, earning the same amount every paycheck, health/vision/dental and my life insurance are deducted from my paycheck). DH's get paid twice a month and his paycheck varies depending on the overtime, so we created a budget that would work with the bare minimum.

I am debating whether or not to shave off about 25 dollars for the landline, since we both have cel phones, I am not yet sure about that.

As you can see, we are house poor. even at the regular payment amount (which includes taxes and insurance) it is 40% of our minimum take home pay. I must confess it was even worse (I recently received a promotion with a 5 k annual raise). we knew this when buying the house, but again, not a wise decision. we are not in a position to sell right now since we are upside down (value is around $260k)

Well , once we saw where our money was going and established some limits, it was easier for us to tackle paying down debt and establishing short/mid and long term goals.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Re: our story is full of dumb money mistakes
PostPosted: Mon Feb 16, 2009 7:20 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
brad wrote:
nomoreexcuses wrote:
mortgage upside down.


I wouldn't worry too much about an upside-down mortgage unless you are planning to sell your house soon.

If you're planning to live there a long time, it's likely that your home will recover in value by the time you're ready to sell. So you can cross that off your list of worries and just focus on getting back on track in your mortgage payments.

You might want to look into refinancing, though. You're paying nearly 7% interest; mortgages now are down around 5 percent or less and you'll save many tens of thousands of dollars over a long-term mortgage with lower interest rates.


Thanks Brad. The problem is with my blemished credit I am afraid to even look into refinancing, we don't have the equity for it so I think we would not qualify anyway, right?

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Our debt and our savings
PostPosted: Mon Feb 16, 2009 7:28 am 

Joined: Mon Feb 16, 2009 5:07 am
Posts: 7
Location: Northern Virginia
my husband has been working plenty of overtime since November, so this is what we have been able to accomplish:

All accounts current
Saved BEF 1k sitting at ING account - Nov 2008
Paid off my mother's credit card, 735 - December 2009
Paid off Sams 600+ and Kohls 600+ - January 2009
Paid off Lowe's (my dad's) 638.31 - February 2009
Added 2,800 to savings thanks to tax refund - now savings stand at $3,800! as of yesterday.

We are feeling elated now because of all the accomplishments, excitedly planning for next steps and goals.

Because I was responsible for many of our mishaps in the past, my husband really had to see he accomplishments happen before he started becoming as excited as I am.

Paying off the student loan next seems slightly daunting. and of course we have our other goals which I will write about next....

Spilling all of this out helps me clarify my thoughts and it makes it all seem more tangible and achievable.

_________________
me - 33, hubby - 37, son - 7, daughter - 4


Top
Offline Profile   
 Post subject: Re: Our budget
PostPosted: Mon Feb 16, 2009 7:58 am 
User avatar

Joined: Thu Mar 27, 2008 4:24 pm
Posts: 353
Location: St Pete
nomoreexcuses wrote:
Giving - 550 (for a while here giving 10% of our net instead of the gross, though we prefer to give 10% of our gross)


As much as I appreciate those who give, you should do so when you are being truely generous. Suze Ormand talks about this in her book, Women and Money, and sets out these rules to follow:

Suze Orman wrote:
To me, honest giving must always observe these six rules:
1. You give to say thank you and out of pure love. Not to
get something back. A true gift has no expectations on it or
demands.
2. Whether it is a gift of time, money, or love, you must
feel strongly that your gift is an offering. It should be
given freely and out of pure love.
3. An act of generosity must never adversely affect the
giver. When you give money that you do not have to give,
that gift adversely affects you.

4. An act of generosity must be made consciously. You
must be aware of how your gift will affect its recipient and
make sure it will not be a burden.
5. An act of generosity must happen at the right time.
You must be able to afford to give your gift, whether it is a
material item or the gift of time.
6. An act of generosity must come from an empathetic
heart. Your generosity should be directed to those who move
your heart, those you feel need your help and will treasure the
help you give. Giving should enhance you, not diminish you.


I think you should think long and hard about this 550 you are tithing. Your children need you to ensure there is a roof over their heads. They need parents who can weather a financial storm, should one arise. Personally, I think you should pause tithing while you right the financial ship. However, if you are very passionate about tithing, consider an alternative.

Consider giving that same 550 every month in volunteer hours in lieu of cold hard cash. Based on your take home pay, I'm calculating that you personally would need to volunteer 19 hours a month to equal that 550. Even if you did just a day a month (8 hours), you could cut your tithe down to 317. If the whole family volunteered together for one 10 hour day a month, your 550 would be paid in full (Mom = 29$, Dad = 15$, son = 6$, daughter = 6$).

Also, I didn't see any mention of retirement savings in your budget. Is this just deducted straight from your paychecks?

_________________
Becca


Top
Offline Profile E-mail   
 Post subject:
PostPosted: Mon Feb 16, 2009 9:17 am 

Joined: Mon Feb 04, 2008 7:35 am
Posts: 1148
Location: Maryland
I have to agree with Specabecca, $550 is a lot to pay for tithes for one month when you can't afford your house. I would consider lowering this until you're back on your feet.

Also, what is the second homeowner's insurance ($41.58) for? What types of things are covered? You already have homeowner's insurance, so I would either find a handyman that can fix those smaller things, or try to take the best care of your things as you can. I'm thinking the 41.58 per month is a ripoff compared to what actually gets fixed under the plan that you have.

I will commend you on finally realizing that things need to change, and I'm glad you paid off your parent's cards. I bet they were happy too. :)


Top
Offline Profile   
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 11 posts ]  Moderators: kombat, bpgui, JerichoHill, Fiscal Fitness Moderator


Who is online

Users browsing this forum: No registered users and 4 guests


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB © 2000, 2002, 2005, 2007 phpBB Group
Theme created StylerBB.net & kodeki