Free and Fun

As part of our “getting out of debt” plan we are having to think of fun and free things to do as a family and a couple.  We budget ourselves 3 “out to eat” meals per month, two for the family and one for a date with a spending limit of $50 per meal (less if we can, depending on where is chosen).  We also budget $100 per payday for a family fun activity.  So, if we want to do anything else and the budgets are depleted then it has to be free.  This has been a little difficult for us because we are all different in what we like and it’s hard to agree on something.

My husband and me love to snorkel though and we recently discovered this activity together.  It’s such an amazing experience each time.  We can’t get enough of it.  We go usually once, sometimes twice, a week.  As a family we have come up with things to do, it’s just a matter of getting our kids to stop complaining and start enjoying.  We enjoy hiking to waterfalls, the free parks, the beaches, etc.  There are things we haven’t done yet like the street festivals with the Eisa Drummers.  We are still discovering things and hope to build an extensive, diversified list of choices.

It’s so important for us to have this list of choices or we know we will have a hard time staying on budget.  We are still in the process of breaking our bad habits and replacing them with good ones, so as long as we have an already made list of choices each time we are itching to do something, I am pretty sure we can avoid the money trap.  I want to make sure that as we are paying off this debt we stay on track by allowing us to have some fun along the way.  Nothing too fancy or too expensive, but enough to know that we are doing something great for our future while still enjoying each day to the fullest 🙂  We will limit what we do now so we can have more fun later!!

Minor Setback With A Lesson Learned

Overdraft fees!!  Enough said for many, I’m sure.  They are the little evils of the financial world that can take you 3 steps back after you took 1 step forward.  They are frustrating and nothing but profit for the banks.  I can’t blame the bank though, even though I want too and can think of a few reasons why off the top of my head, but I can’t.  It is our fault and only our fault.  The sad thing is it was all over 34 cents!!!

Yes, you read that last sentence right….34 cents.  That’s it, less than $1.00.  The simple explanation is that a charge that was withdrawn from our bank account a couple weeks ago was put back in the account last week.  Well, I didn’t realize it, and today they took the charge back out.  That put us in the hole a whopping 34 cents.  It’s our fault.  We have a bad habit of using our current bank balance as our guide to what we have.  This isn’t the first time this has happened though so we know better.  I know not to trust the balance the bank is showing 100% of the time.  I know that sometimes they are updating their systems and it’s not correct or something happened like it did today with charges being put back in and taken out a few days later.  I know that we need something else in place.  I just didn’t realize the horror of it until today because it’s usually for a larger amount and the $29 overdraft fee is small in comparison.  But, that $29 fee compared to a 34 cent overdraft brings it all to light.  The bank has not charged the fee…..yet…..but if, and when they most likely will, I will be calling to try to get it reversed because that’s a ridiculous charge for that small of an overdraft.

Now what is the lesson that I will be applying to the future from this moment forward?  Well, obviously not rely on the bank balance to let me know how much money we have.  I am going to make a spreadsheet as soon as I post this with a formula to deduct every purchase from the running balance.  Not the banks running balance, but our own.  We will put our paycheck at the top and add that to the next line which will be the existing balance.  From that number we will then deduct daily any and all purchases made and keep our own score.  Just like with a checkbook ledger, just no checks.  (Remember, we cut them all up to eliminate that temptation).

Taking a big breath to calm my nerves of frustration and moving forward with a better plan in place.

How We Are Paying Off Our Debt Plan

Now that we have all our debt written down, our debt thermometer made, our plan set….here are the details on how we will get it done.  We are using the “snowball” method that Dave Ramsey teaches.  I am sure most of you have heard of it at least.  Basically we put a set amount of our discretionary income (income left over at the end of each month) and put it towards our first debt we are going to pay off.  In our case it is a credit card with a $500 balance.  The minimum payment on this credit card is $20 per month but we already pay $40.  The extra amount we are going to be putting towards our debt each month is $1,000 starting in March.  Once that debt is paid off then the $1,000 plus the $40 payment on the credit card will be applied towards our next debt, which will be our Japan cars.  And on and on it goes.  So each time a debt is paid off, the extra money you put towards the next debt will be bigger because you are adding the previous debts payment to your already existing extra payment.  Does that make sense?

Now, we are actually going to be paying off that credit card before we  start the official “getting out of debt” date in March so our debt that we begin with, or at least continue with, at that time will be the Japan cars.  Paying off our debt in this manner should have us debt free by the end of 2016 🙂  We are hoping to do it in under 2 years so we will be adding as much extra money as we can each month on top of our $1,000 extra payment.  I hope to hit our goal sooner so we can start working on our savings goal too.

I will be posting updates on how everything is going, things I learn along the way, any hardships that we come across during this journey, when a debt is paid off and updated pictures of our debt thermometer as we paint it red so stay tuned and if you haven’t already follow my blog or subscribe by email!!

Job At Home

I am happy to say that I got accepted as a transcriber that I can do from home.  It’s $20 per hour of transcribed audio that I turn in.  Of course it takes me longer to transcribe an hour of audio but hey, $20 is $20.  I worked about 3 hours today and earned a little over $15.  My daily goal is $10 or more so I can contribute $300+ to our budget to paying off our debt a month.  That will definitely get things paid off faster!

I have to say that I am so very thankful for being able to be a stay at home mom for my kids and I am even more thankful for having some money making opportunities from the home.  The ones that don’t cost money to make money, like this transcriber gig, are even better.  It is a blessing for me and for our debt 🙂

So my goal is 4 hours of work spread throughout the 7 hours my kids are in school each day during the week, and at least 2 hours of work on the weekend days.    On top of the transcriber gig for Transcribeme.com I am also a transcriber for ChaCha.  The pay is measly and the calls are slow and sporadic but every penny that I can throw towards our debt extra that I can make, I will take.  A little determination will take me a long way, and I am one determined chic!!

 

 

Our Debt Thermometer

  Here is our debt thermometer.  It lists all of our debts, how much we owe, and is on our hallway wall.  It’s a space we have to pass every single day, many times a day.  Here is what we will be doing with it.  For each debt we pay off will paint the section red and write down the date we paid it off.  We will do this until we are debt free.  We will leave it on the wall for as long as we are in this house to remind us everyday of our progress, our goals, and when we are debt free to stay that way.  I am excited to use this method 🙂

Credit Report and Score Reality

Today we decided to start getting our free credit reports, once every 4 months, and with each credit report we get we will get our current FICO score for that particular credit agency also.  Today we got my husband’s report through Experian along with the current Experian FICO score.  He has 7 negative reports, one of them is something we currently are still paying on.  No public records, nothing in collections.  The one negative that we still currently are paying on is a credit card that we had 30 day late payments on a few times since we have had it.  This is actually the first debt scheduled to pay off and should be done fairly quickly.  The FICO score is currently 605.  Not good but better than last year.  Last year the score was around 520.  So, we are making progress.  We are focusing on paying off our current debt which is all under his name except for my student loans, so in the long run everything will slowly get better and be proven through both avenues of credit report/score and our personal finances.

Each time I get our quarterly reports/scores (I will eventually get to my own) I will post an update with any progress, or not, that has been made.  We are also putting together a spreadsheet of our debt and balances, and our credit scores to track them going down and up.  And I decided to use part of my home as a daily visual reminder of what we are doing to help keep us on track…..it’s going to be in our face everyday, something we cannot avoid seeing.  I will be making a separate post specifically for this as soon as I get it done and we start using it.  Can’t wait for this one!!

I Have To Get A Job

Part of our get out of debt plan is for me to get at least a part time job.  I am going to wait until after our trip back home in March to visit (we are getting free plane tickets since we extended our tour in Okinawa) before I start looking for a job outside of the home.  The reason for that is because I don’t want to get a job and then less then 6 months into it ask for an entire month off.  I personally think that wouldn’t be right for me to do and if I were the employer I would say no.  So once we get back from our trip I will start applying for work outside of the home.  I really want a 9-5, Monday through Friday position, so that I can also fulfill my responsibilities at home as far as my kids and their schooling goes.

I did however just get accepted in a work from home position as a transcriber.  This is done online and I transcribe audio files and submit them for review and for each hour of audio transcription that is accepted from me it’s $20.  The pay is weekly and the work is supposed to be continuous.  I am really hoping that this type of work is worth the pay so that I can work from home, continue to be the stay at home Mom for my boys, bring in money to help pay off our debt and on top of that be able to set my own hours and take off time I need whenever I want too.  We shall see how this goes.

I haven’t worked outside of the home since I got out of the Army in 2002, so for almost 12 years.  That’s a long time!  It’s a little intimidating to try to get back into the workforce in that capacity.  I was going to start babysitting again in my home but my husband asked me not too.  I have done that twice since we have been here and it’s amazing money because a lot of people need an hourly sitter on this island.  I was making $1500-$2000 per month doing this but it took up most of my time and our family time.  I have a hard time saying no to someone who asked me if I could babysit for them.  It became stressful and I was extremely tired.  So, out of respect for my husband and family, I am not going to go that route this time.  I am going to give this online transcriber job a go and if it doesn’t work out I will start applying for jobs outside the home in April and I will just be patient until I (hopefully) get a job that will work well for myself and my family.

Wish me luck on this part of our journey!!

Good Debt, Bad Debt

I read a lot of personal finance books.  I like to gather every ounce of knowledge I can get to help me further my efforts in paying off our debt.  In anything I do or set my mind too, I always go about it by reading as much as I can.  The latest book I am reading, and many other books I have read on finance, talks about good debt versus bad debt.  It baffles me though!  I know that buying a home, student loans, and things that can help you be worth more is considered good debt.  Some books even encourage people to take on those types of debt.  I also know that these are things that most people cannot afford to pay for with cash and this is their only choice.  We will probably one day be a part of the “good debt” in home ownership ourselves.  But it still baffles me that the term “good debt” is used.  In my opinion debt is debt, not a good thing, something that enslaves you to someone or something else for a period of time.  Something that always costs you more in the end.  Something that can build up and get out of control so quickly.  What is so good about that?

Again, I understand what the term “good debt” means, I don’t need it explained to me anymore.  I totally get it.  I just don’t agree with the terminology used in describing home ownership debt, student loans, or any type of debt that adds to your own personal worth.  When we pay all of our debt off, the only type of debt we will ever put ourselves into ever again is buying a home when we are ready.  Other than that, we will never go into debt for anything for the rest of our lives.  Any cars will be paid for in cash, no more credit cards (not even for emergencies), no personal loans, nothing!

It feels so good to know that when we pay off our debt that’s it.  It feels good to know that when we are ready to buy a home we will be able to afford it without any issues because that is the only debt we will have.  It feels amazing to know that when we do have the debt of home ownership we will be able to pay off that debt faster then the contract states because of having no other debt to pay on.  I can’t wait for that day, if that day ever comes of us owning a home.  Although I would love to own my own home one day we are still debating where we want to settle and depending on what we decide will determine the answer.  But, I don’t define our success with our finances on whether or not we own a home, so either way the excitement of knowing what our financial future holds will keep me motivated to reach the goals we have set for ourselves.

Good debt, bad debt…..debt is debt no matter what type of debt it is.  Always remember that!

A Great Success!!!

As you all know in 2002 we had to file bankruptcy because we could not afford our combined debt after my husband’s divorce.  It took 10 years for that bankruptcy to fall off, which it did last October.  It took another 6 months for our credit score to be updated after that.  On top of the bankruptcy falling off we paid off about half our debt in 2011, right before we moved to Okinawa, Japan.

One of our debts is our car loan.  It’s for a Saturn Outlook 2009.  We owe just under $18,000 on it.  The only way we could get that car in 2010 was to have my Grandmother be the buyer and my husband be the cosigner.  That did two things for us when we were in need of a vehicle.  One it allowed us a lower interest rate with her as the buyer and two, it allowed us to start building good credit.  We were thankful for both.  The only thing that was painful (doable for us but painful) was the payment which is $695.01 per month.

We have been paying on this vehicle for three years now and have paid almost $30,000 on it.  That’s ridiculous I know but we had to trade in our two vehicles in order to get this car and we had a lot of upside down which made the price of this car go way up.  Sad but very true.  Now, why did we get this vehicle?  Well, one reason and one reason only.  We couldn’t get the van we had at the time registered in the state we were in because it had my husbands Grandmother as the cosigner and each time we went to register it in NC they kept telling us that we couldn’t because we needed additional items or the rules had changed in some way for our situation.  I tried for over a year to get that vehicle registered and was unsuccessful.  So not only did we have trouble due to the fact that the van wasn’t in our name alone, but I was driving an illegal vehicle.  So we finally decided that we had to get another car to avoid anymore issues with the van we already had.  Did we need another cosigner yes….but we have not had any issues with registration with the new car.  Very weird to me, still makes absolutely no sense what the problem was with the van, but it is what it is at this point.

Why am I writing about our car?  Well here is the big news!!!  We decided that in order to make more money available each month to help pay off our debt and to get our vehicle loan in our name only we would try to refinance the remaining balance.  We were very skeptical, especially going through our bank, because in 12 years we always had to have a cosigner for any type of loan or pay an outrageous interest rate if we didn’t.  I really didn’t think we would be approved, but we were!!!!  We do have to pay the car down for another six months because they can only loan 80% of what the vehicle is actually worth so our balance has to be about $3000 lower before we can actually get the loan, but we were approved for a little more then what we owe on it now.  Why is that big news???  Because we didn’t need a cosigner, it was approved for what we were asking, and the past 10 years of doing what we could to better our credit score is finally paying off and can be seen!

I am so incredibly proud and happy with our progress.  It’s a great feeling to not have to ask for anyone’s help so we can pay our debt off quicker.  It’s a great feeling to know that we have improved so much that we can do it on our own.  It’s a great feeling to not have to rely on anyone else to better our financial road.

I read this quote right after we heard the news that said “I may not be there yet, but I’m one more step closer”.  I don’t know who said it but that is exactly how I feel right now.  A great way to end my day 🙂

The Truth About Our Debt

I believe this will be the hardest post for me to write.  This is the post where I publicly put our debt, honest and real with no blinders, out for the world to see.  I am anxious while writing this.  I am going to keep it simple and to the point so here it goes.

All of our debt is as follows and this is current as of today August 29, 2013:

Student loans:  $22.031.73

Credit Cards:$4,336.32

Car Loan:  $17,814.32

Japan cars:  $13,075

Personal Loans:  $16,885.35

For a grand total of $$74,142.77

Our goal is start paying off this debt with the snowball method March 15, 2014 and if we are able to make some progress before then but that is our official start date.  We plan on paying off this debt in less then 3 years, we are hoping closer to two years.  In order to help us achieve this goal I will be applying for a job beginning in March to add to the amount we can put towards this debt.

Again, please no judgments as this is our debt and ours alone to own and escape from.  Ok, pushing publish now!!