Saturday, January 31, 2009

Looking for inspiration?

These are some posts that I have enjoyed this week.
Miss Money at M is for Money has an awesome series on getting out of debt. If you are struggling with the motivation to start on or continue with your debt reduction journey check out her posts.

Finally Frugal celebrated her one year blog anniversary this week. She has paid $4500 in credit card debt and is finding all sorts of frugal tactics.

I love reading the end-of-month updates from Won't Go Down Without a Fight , No More Spending, Sharon Rose, and Shaking the Money Tree. Keep up the good work!

Wednesday, January 28, 2009

Budgeting Tools

Personal finance blogs are full of wisdom and encouragement. Here are some posts that I enjoyed this week.

  • Money Funk has developed a spreadsheet to track your budget and spending, including a bad debt to income calculator.
  • Get Rich Slowly has a list of favorite posts, including "How to Get Out of Debt". His blog is full of timely articles and great financial advice.
  • Lynne at Being Frugal is doing a series on budgeting and has reviewed Pear Budget as well as other budget tools.
  • Ms Money Chat at My Money Chat tells why she loves Mint software.
  • SVL at The Digerati Life has a review of the YNAB system along with a 10% discount code.
  • Jolie at Shaking the Money Tree and Amber at Becoming Debtfree in 2009 have had great success this month with a cash-only envelope system. Their results in January add to the evidence that using cash only reduces spending. I wasn't very successful when I tried this last summer, but I think the key is finding a system that works for you. Check out their methods and results.

I really enjoy and am encouraged by all the above blogs. I highly recommend subscribing to them if you are on a journey to becoming debt-free.

Tuesday, January 27, 2009

Personal Finance Goals: Week 3

It's almost the end of the month and I'm updating Week 3--just a little behind!

Financial Goals:

  • I'm still enjoying using YNAB. I don't have a large unexpected expense fund yet, so with the car repairs and new running shoes for DS, I am over budget this month by 8%. At least this gives me a number to try to beat for next month!

  • I probably can't make by goal date 1 of July to be debt-free, but I'm not going to change it until I see how Feb. goes.

Personal Goals:

  • I'm still walking the dog every day and working out 2x a week. Gretsky's walks are pretty short--about 1/2 mile. I will try to increase this as the weather improves.

  • The exciting news for me is that I joined the local astronomy club and attended Astronomy Day at the local community college. My plan is to attend at least one meeting this spring to look at the stars. I also plan to take a Master Gardener class, which starts in February. I have wanted to take this class for the past two years, but have been too busy. I think this is the right time. The class costs $80, but I feel it is a worthwhile investment. I hope to be able to apply what I learn to landscaping my steep walk to the river.

I am pleased with my progress this month. I am learning how to get my financial house in order while enjoying life. I appreciate the encouragement and suggestions given in comments. It's nice to know that other people struggle with and are overcoming the "debt monster"!

Tuesday, January 20, 2009

My Debt Story

It's sad and hard to believe that in October of 2005, I had no debt except for my mortgage. I had paid off a credit card and a 6 month computer loan and was debt-free, except for mortgage. The missing component to my finances was having a plan, knowing what to work for. Other than saving $300/month for DD2 upcoming college expenses, I didn't have a savings plan. I thought I was financially fit and responsible. The next 20 months would prove me wrong. By June of 2007, I was $13,700 in debt and still thinking I was financially fit and responsible!

My journey into debt included the transmission going out in my Jeep, getting a store credit card to get 10% off a gift (really stupid!), getting two 12 month-interest free cards, one to pay for professional board certification, and the other to consolidate two big purchases. Another factor was that my income decreased, but my spending stayed the same, so that every month I went farther and farther into debt. I finally woke up in June of 2007, when I read Dave Ramsey's Total Money Makeover. I listed all my debts and was shocked at how much I owed. For some reason, I had been telling myself that I owed $7000. Talk about denial!

The first two months of my TMMO were difficult, because I had to learn to not use my credit cards and to live within my means. The debt totals did not come down at all for several months, which was very discouraging. I found that several experiences helped to keep my spirits up. At first, I kept reading TMMO and working on my debt snowball. Next, I found Dave's website and discovered personal finance blogs. I was encouraged and inspired by the journeys they shared with their readers. They also shared tips and tools (like budget spreadsheets) that kept me inspired to keep plugging away. My debt was coming down, albeit slowly.

Starting this blog in August gave me another boost of encouragement and accountability. Writing about my goals and updating my progress (or lack of it) helps me to stay on track. Plus, I am learning a little more about blogging and personal finance. It's a win-win for me! I would encourage anyone who is on a journey to become debt-free to consider a personal finance blog as one way to learn and stay accountable.
Right now, I am really enjoying my journey into financial wellness. When I finally get debt-free this time, I want to have a plan to stay financially healthy and the knowledge to implement the plan.
Can anyone relate to getting out of debt and then getting back in due to lack of a plan? We will not repeat the same mistakes again!

Monday, January 19, 2009

Thriving on Less: Simplifying in a Tough Economy

Leo Babuta at Zen Habits has a free e-book called Thriving on Less. A quick glance at the table of contents shows that the book contains insight into finding your path to intentional living and financial peace.

Table of Contents

1. A Simple Lifestyle

2. Focus on the Essentials

3. Thriving on Less, Not Struggling

4. Focusing on Enough, Not More

5. Make Small Financial Changes First

6. Look at Large Expenses for the Long Term

7. Changing Your Spending Habits

8. A Guide to Getting Out of Debt

9. Tools for a Frugal Life

10. Resources

I recommend downloading and reading the book. It's only 27 pages and will encourage you perhaps remind you of some principle or incentive that you haven't been paying much attention to.

Two reminders that I'm going to implement are deliberately rewarding myself for reaching goals and making a 30-day list to cut down on impulse buying.

Saturday, January 17, 2009

Weekly Update- Week 2

Track spending with YNAB weekly. Check.
Begin sinking fund account-transfer to ING by March. I'm keeping my funds in checking because of the 5% interest rate
Pay off $6000 in credit cards by July 1 Send in MSA.

Save emergency fund of $3600 by Dec 31 At $890.

Work out or walk (1 mile) 2x week. I will revise this. I need to do more.
Walk Gretsky every day. Yes! Even in the bitter cold!
Do Flylady routines. About 60%. Keep working on it.
Bible study. Not yet
Learn something new. Not yet--join astronomy club
Compost bin/garden Not yet
Monthly house project. Not yet--recover chairs, put up basement curtains.

Frugal Trenches has inspired me with her post on frugal shopping and soup menus.
New practical goal: Make soup once a week!

Tuesday, January 13, 2009

Side Bar Update

With January's payment, my debt went down to $5400. At this rate, I have nine more months to go :(. I want to be finished with debt in six months.
Goal for this week: Send in for medical savings account reimbursement. It may be enough to bring me back on target.

Saturday, January 10, 2009

$75 for 1st 30 to sign up for debt help survey

Bob at Christianpf is helping with a new debt help web site. He has the information and the link. To qualify you must have >$5000 in credit card debt and at least two other types of debt. Sounds interesting!

Friday, January 9, 2009

5% Interest on Checking!

My local credit union is offering 5% interest on checking accounts. I switched my account today and also deposited my emergency fund in it. The requirements for the account are: to use on-line banking once a month, use a debit card 12 times a month, have direct deposit, and get statements on-line. The only thing I'm not currently doing is using a debit card. I plan to use the debit card for gasoline and grocery purchases. We'll see how the debit card goes for a month. I don't think I will misuse it, but I didn't think I would overuse credit cards either!

The 5% interest rate almost sounds too good to be true. What do you think? Are banks in other places doing this promotion?

Update: I found this article on LazyManMoney about 5% checking accounts.

Thursday, January 8, 2009

Why I Need to Plan Ahead

My plumbing repairs are complete: new kitchen faucet, new garbage disposal, new connections under the sink, bathroom sink unclogged and one pipe replaced--all for $300! I chose to get the less expensive, 1/2 HP disposal, which saved $80. It is a little louder than the more expensive model, but not worth the extra $$. I'm really happy with the results and the price.
This repair is a good reminder for me of why I need to save for unexpected expenses. I know that with a house come repairs and upkeep expenses. Instead of ignoring that fact of life, I need to prepare for it with a house repair fund.

January Week 1 Update

Time for a weekly progress report on my goals. I think weekly checks will help keep me on track.

Track spending with YNAB weekly. I'm really enjoying keeping track of my spending with YNAB. I enter my spending amounts and YNAB automatically updates my budget, so I can see at a glance how I'm doing. If I overspend in one category, like the house repairs, then I am reducing another category, like CC payment :(
Begin sinking fund account--transfer to ING by March . $50 in it so far.
Pay off $6000 in credit cards by July 1 Already behind on my goal of $900/month because of plumbing repairs.
Save emergency fund of $3600 by
Dec 31 At $890.

Work out or walk (1 mile) 2x week. Yes!
Walk Gretsky every day. Yes!
Do Flylady routines. About 60%.
Bible study. Not yet
Learn something new. Not yet
Compost bin/garden Not yet
Monthly house project. Getting the kitchen and bathroom sink repaired was costly, so this month's project will be recovering 2 dining room chairs (today!), because I already have the materials.

I just remembered that I need to send in for reimbursements from my medical savings account. Maybe I can meet (or at least get closer) to my goal of $900 CC payments!

For next week: Focus on Flylady routines. Life is fun!

Monday, January 5, 2009

Plumbing Solutions Cost $$$

I got an estimate today to have my kitchen sink repaired. I need a new garbage disposal, a new faucet and new pipes beneath the sink. I'm going to buy the faucet and disposal and the "handyman" is going to install them. I think the cost of installation is pretty reasonable, $100.
I've been pricing disposals online and it looks like there are three categories: low price (1/2 HP), medium price (has sound insulation, 3/4 HP), high price (1HP, "whisper quiet"). I'm thinking that the medium price one will be best. Does anyone have any information about disposals?
I will pay for the repairs with my debt snowball, so I will be sending less to the credit cards this month, but the balance still be going in the right direction--down!

Saturday, January 3, 2009

Confession from 2008

Here it is:
I used my credit card to buy Christmas presents online, so now my CC debt is up to $6000. This shows me that I am not cured of the CC habit. To help my rehab, I applied for a new debit card and changed my address at the bank. This should give me the tools I need to avoid future charges.
This also showed me that I don't have a handle on my budget, because I thought I would have enough cash for Christmas, but there is nothing left-over and I charged $300. What happened? Tracking my spending in 2009 should make the picture clearer.

I need to cut up the card, but I'm afraid I will need it in an emergency.

I keep remembering Sharon Rose's quote, "Slow progress is better than no progress". I'm better now than I was when I started in 2007.