Sometimes among the mountains of papers from school, laundry, dishes, walls that need to be painted, doors to be stripped, roof that needs replacing and bills to get paid...we just have to start laughing. There are days that Kari feels they may have to carry her away in a straightjacket. The children have peanut butter and jelly stuck on their faces as we go into the store...we now know why the thumb lick was started...mom's in all the craziness just don't get the faces washed. In our dream world the house projects would only take half the time we planned instead of twice or three times longer or the laundry would wash itself. Sometimes we lay down to bed at night and hope maybe the shoe maker can loan out his elves to do our dishes while we sleep. The boys always seem to want to wrestle in the kitchen when dinner is being made and what is it they do to get that crud stuck on them? In the hustle and bustle of a family of 5 (oh wait, and the dog) we think..."wow this is quite a task!" What were we thinking taking on our finances amidst this chaos?!
Then the reality sets in...if we had stopped and looked around...really thought about this 10 years ago we wouldn't have to be learning new money habits now. This is a kicker...one of those that if you could kick your own behind...you would! We know we have to learn our lessons so we can prosper; and, that failure is really the road to success. But hindsight being 20/20, this one is tough to swallow. Living within one's means is a simple but annoying concept. Sometimes living within your means is hard work, its difficult and just plain old boring. There are so many fun things to do, to buy, to see, and to eat. With credit just a swipe away why not? Ummm...sure...how about NOT because our Europe trip in 1998 just got paid off or because we are paying credit card payments on who-knows-what that is who-knows-how-old!
We have learned that the #1 reason why we have had to work twice as hard to dig ourselves out of this hole is because we spent a long time with our heads in the sand while the hole was getting bigger. The change in our economy is a wake up call that the status quo isn't going to work anymore. We still have a ways to go to get the rest of our debt cleaned up and start making up for lost time to save for retirement and college. But that's just how it is. We can sit here, play the victim or have a pity-party. Instead we have pulled up our boot straps and stepped into the slop...with a lot of time and effort and a whole lot of laughs over the last several months it finally feels like we can see level ground.
This week we are celebrating having what it takes.
That is what we said as we walked out of the bank and paid off our first of four credit cards. We feel lighter today...it seems pieces of plastic with all those numbers attached to them really makes them heavy. And now with one less "anchor card", we feel just a little bit lighter with each step. Paying off debt is an amazing feeling and it makes you want to pay off even more. And more importantly, never get into it again. We are more determined than ever to pay down the next one even if the issuer doesn't really want us to.
One thing about our family is that we try to buy local and keep our money local when we can. What we have discovered is that something that seems local might not be. The first credit card we paid off is one that Darek has had since his freshman year in college. He got it from his local bank close to his home town. Now this bank is all over the nation and when we walked into a local branch to get our payoff amount on the credit card, we discovered just how much this bank was not "local". We walked up to the teller and said "we would like our payoff amount on our credit card please," and she was unable to do that for us and no one in the bank could either. So we called the customer service number on the bill. Guess what? They couldn't tell us either...not until the current payment was made. Then they could apply the interest and then tell us what was left. Very frustrated, we simply over paid the credit card and they will have to issue us a check for the few dollars or cents we go over! What a pain for all involved! But we do think it will be nice for them to send US a check for once!
You would think that the bank you have the credit card through would be able to tell you what you owe and would be willing to help you pay it down. Well that's what we thought at least. Then we thought is this the norm for all banks...nope...it is not the case. A quick call to Summit to get our payoff amount takes no time at all and (put on your shocked face) they can actually tell you what your balance is! You can talk to someone who knows what is going on. As we have discovered in our 11+ years as Summit members is that if the person you are talking to doesn't know...they will find someone who does! Wow! Imagine that, real people helping you solve real problems for everyone's benefit. What an amazing concept. We sure do hope it becomes the new norm.
This week we are celebrating...well...of course paying off a credit card!
In our last blog we were celebrating that our summer is paid in full! That got us reminiscing about our summer and all the things we have done and how great it feels to know we won't be paying for those activities for the rest of the year. Our favorite activity cost $25 for the whole year! We went hiking almost every single week this summer at one of the many wonderful state parks! The fresh air and fun hiking trails are amazing...Dodgeville has a waterfall, Spring Green has an old shot tower and our local Stewart Park (Free) has wonderful off the path trails that the boys thought were...to quote Cree "an awesome adventure". Each new park was a new adventure and another opportunity to tune out the world and focus on our family and our connection to nature.
We are sure to pack our lunches and snacks and water so we didn't have to stop for something quick while we were out...you know the quick somethings that always seem to add up to $20. When we hike with our boys who are full of more energy then we seem to have in our pinky fingers...they get to run and jump and be as loud as they want to be. The best part in our opinion is we get to have adult conversations, anyone with children over the age of 1 know how precious that time can be. Since our life right now is fairly focused on money we usually talked about how to budget for things or if the budget is working and more importantly what we want for our future. We find that we are energized to keep up the daily grind and often come up with great ideas when on the trails!
This week we are celebrating money left over after the bills are paid!
Have you ever read the book the Tortoise and the Hare? In this book the tortoise always wins. It is in our nature to want to run full speed ahead and finish first but with a financial journey it is just that...a journey; and, it is going to take longer to finish the race than we have in endurance for if we run at full speed the whole time. Finding a good pace is how we expect to finish the race…slow and steady. When we refer to the race we are not talking about Project Money but what we are really getting from Project Money. The race is later on in life when we have changed how we use our money and have taken what we are paying monthly in debts today to fund our tomorrow. When we are sitting on the beach enjoying the fruits of our labor. When we have paced ourselves so that our investments and money management skills allow us to come and go as we please. When we have an agenda all our own...not the bosses agenda or the creditors agenda!
Don has a great idea to consolidate our debt and get lower interest rates. One way to do this is to use the collateral in the car. This is a bit heart wrenching for us because we own that car free and clear. If feels good to drive it with NO PAYMENTS! We think it might even get better gas mileage since it isn't dragging around a payment book! That being said though using our car to reduce our interest helps us pay off this debt faster and we will have an amazing motivation to get that clear title back! However, that plan is on the back burner. See when you keep charging and borrowing your debt to income affects your FICO score...those little numbers that get you your interest rates, ability to rent and even get some jobs! Missing a payment can lower that score too and as much as we hate to admit it publicly...both of those things have affected our FICO score. But in just 3 short months Darek increased his score almost 18 points! Of course that is 1 point less than we need to get a decent interest loan on the car. At first this was a major bummer but we try to find the silver lining in everything.
The first credit card getting paid off is the one that has the highest interest...the same one we missed a payment on and our interest rate took a double digit hike! We have a special place for this card in our people we never want to do business with again, place. We want this card and this company out of our lives. That is a huge motivator. When we were planning to roll our debt using the car as collateral this card was going to go a way. Yippee...no more payments to them. That sounds awesome but spending the next 2 months paying them off and actually writing out those checks just solidifies our position to pay this stuff down. When we write the last check to this credit card it will be from the hard work and dedication we have put forth in our new money journey...not a consolidation but something we did! What an amazing feeling of accomplishment. We did it. We rolled up our sleeves, found a good pace, and got it done!
This week we are celebrating summer, paid in full!
We have mentioned in our blogs that we use a cash envelope system and we have talked about it with Greg Jeschke from WKOW channel 27 news who is interviewing the Project Money families. So you may have read or heard us talk a little bit about this vintage way to use money. However, this week wanted to spend a little more time talking about how we make it work. We have discovered this simple change has made such a huge impact on our relationship with money. When our coach, Don suggested the cash envelopes it was on base with what we were thinking that maybe this would be a good option for us. Wow was that an understatement....a good option yes....a life changing event is really what it has become!
We had the same excuses and fears everyone on has. "I wouldn't want to get up to the check-out and not have enough money" or "It's hard to get to the bank for the cash" or name your excuse...its just an excuse and there is always a reasonable way to get around any excuse. The first concern we had was getting to the check-out and not having enough money. Well if you have to put something back it only takes once before you figure out how much money you are going to spend either by writing it down as you pick up items or by keeping a mental tally. When we go to the grocery store we take our list which is on an Excel spreadsheet that also has a box for how much that item costs. We write the total of that item into the box and at the end take a few minutes to total it up so we know before we get to the check-out if we need to put something back. And yes we do know how hard that is since it is Kari and the 3 boys that do most of the shopping while Darek is at work. Usually we are tallying the shopping list up at the end of the trip when all 3 boys are totally done with the store...they are like little Tasmania devils trapped in a box trying to get out! Without bribery or threats we have figured out that having the older 2 total up the columns using the calculator, we get a grand total and they stay involved and focused. The baby...well that is another story. We take a snack just for him.
When we buy anything we first look at the cash in the envelope that it would relate to and make sure we have enough. Sometimes we don't so we have to ask "do we wait a month?", "do we really even need the item?" If it is truly a need and not a want and we do not have the money then we can get the money from our emergency fund. We have one for little stuff, one for big stuff and one started for 3-6 months emergency coverage. Since we have set goals for these accounts, and for the first time actually have savings, we are really enjoying watching these grow! It is almost an obsession to see these grow to make our future less stressful and knowing there is money to cover incidentals. The best part is they are all part of one account at summit so we can view them all at one time and we can transfer between them as needed.
Back to the envelopes...we found that the first few months of using the envelopes we would run short in a few categories. For example we have set a monthly dollar amount for our recreation envelope that at the end of the year will cover a few dinners out, soccer, pool passes, swim lessons, state park passes and a few other items with a bit of overflow for who knows what. Well that will be great next spring when we have a nice surplus in the envelopes. But for us, soccer, pool pass, swim lessons and park pass hit us all within a 2 month period...right at the start of Project Money and our envelope system. We were disappointed that we had to take the money from what would have been our savings but as we said, next year it will be there without a trip to our savings account! That is an amazing feeling to just know the money will be there!
The absolute best part of using the cash is that our checking account looks so clean and it is easy to balance most of our account since it shows the auto withdrawals for the house, utilities, insurance etc. If we are short on cash for the envelopes then we simply write a check from our main account for the amount needed to cover...just like any bill. In our case Kari is a server and makes the majority of her money in cash and we also cash her paychecks to help fund the envelopes. When she is no longer a server we will simply write a check for cash to cover our monthly cash expenses just like any other bill. So there are no excuses.
In the end using cash only prevents us from buying things we don't need and in a few weeks probably won’t even really want. It makes budgeting and tracking so much easer that we now realize we actually have money to save! By opening an online-only debit card through a separate checking account at summit we can even deposit cash for items we may want to purchase online!
This week we are celebrating that we have not made one purchase on a credit card in 6 months!!!
Its the end of the month again. Last month we were looking good financially then the valve stem on the tire decided it was done doing its job, and with an all wheel drive vehicle, all 4 tires needed replacing. Thus, that is where the extra money went. Now on month 2 of Project Money, we actually have money left to put towards our debt snowball. For all of you who aren’t familiar with the term, it means to pay minmum payments on your debt except for one and start paying that debt off as fast as you can. In our case this is our highest interest rate credit card. Once that is paid off, take the next debt payment along with the extra you had been paying on the first debt and pay it off, and so on, and so on until you are left with… well… income that you could, oh I don’t know, INVEST with! Which in some way shape or form, we are all after.
Since our highest credit card debt ever was $30,000 - and 1/2 of it was house projects on the house we sold 3 years ago - it was a great feeling to pay off almost half of that all at once with the sale of the house. Now the rest is up to us. It feels daunting sometimes but keeping the perspective that in a short time our consumer debt can be gone feels good and gets us pretty motivated!
This is not an overnight task. We did not get into debt overnight, so it only makes sense that we will not get out of it quickly, besides there is not a quick way to get out of debt. Anyone who says there is stands to make a profit from you.
There is only one way to do this. Roll up your sleeves, and start throwing snowballs. Any size will do. And when you start doing it, you may realize something, something that we have just realized ourselves. There is another way of living, you can live by your means and not by someone else’s. You can create the life you want and not live the life of something you don’t. You will realize that you have the power to make this world exactly the way you wish and if you are like us, it will be a world for the better.
As we start our snowball to pay down debt we look forward to finding ways to let investments snowball to our future. We have found new ways to save and new ways to live with what we have and save for what we want. Our children are learning valuable lessons and our family is having a blast through the process. We now realize that each day we eat rice and keep the lights off and don’t buy that latte and sell things we no longer use, is one day closer to our dreams.
This week we are celebrating knowing where our money is going and having some to save!
We know we are amazingly lucky to get to be a part of Project Money....if we win the $10,000 we can put a new roof on and not have to go empty the buckets in the attic after every rain....but the best part of all this is that we just found out that everything we are learning you can learn too! Did you know Summit Credit Union offers help to everyone? We didn't know that!
The folks that help are called Financial Services Specialist, sure they can help you with "traditional" banking stuff, but they also train you to learn how to help you with your financial troubles and goals. No we do not get extra points for blogging about this info...sure wish we did, but we really want to blog about it because we thought if we had met with someone years ago, would we be in a better place today? Possibly, but that is water under the bridge.
Something we thought about is that Don, our financial coach, is amazing and our personalities work really well together. So I asked Don...what if someone comes in and doesn't like the financial services specialist they meet with? He told us that at our branch - on Old Sauk Rd - there is 3 financial service specialists! So be diligent, if you get with someone you don't jive with - try another. After all, it is easy to find reasons to NOT deal with your finances. Don't let the person you are working with be another excuse! We strongly encourage you to make the time to meet with a financial specialist several times, because it can be difficult to get all the info in only one or two meetings.
We observed this week that Don has mentioned looking at savings several times since we started meeting with him. We both wanted to do that and have heard Don talking about saving and understood what he was saying but we didn't "get it". This past week when we were talking about it we had a light bulb moment and "got it"! Kari does most of the spending first because she is more of a spender, but also because organizing comes naturally to her. She keeps the house stocked with the little things...you know, toilet paper, dish soap, hand soap, toothpaste, groceries....the list is endless. So the thought pattern is always about what we will SPEND our extra money on! The new mind set in the Faber house is how much money can we save each month. Even if that savings will be for an eventual purchase...siding, windows, new boiler, retirement. We think about our money in a savings first mind set...not a spend first mind set. This has really opened up our thought pattern and we really look forward to keeping more of our money!
So we mentioned that we have been using envelopes to pay for our daily expenses. Some other great suggestions from Don are to look at ways to reduce our interest rates! This month we are looking at ways to move the debt around to get lower interest and fixed payment times. We discovered that by using our car we can save a lot of money in interest and have a fixed pay off time. This comes full circle to something we did right before Project Money started. By purchasing a used car with cash, we were able to negotiate a great below blue book price. Now we have this extra money to help us pay our debt down faster and with less interest over time! The bonus with all of this debt moving and faster payment is that we are setting ourselves up to increase our credit score. As we look to our future investments - house and saving for the big stuff - we may not need much in the way of loans, so a credit score isn't a huge priority for us. But, if you ever want to purchase anything with a loan, a high credit score is the only way to get the best interest rate.
This week we are celebrating that the new tires for the car were paid for in cash and that we are changing our mindset to a save first thought pattern.
Sometimes you think you’ve squeezed all the juice out of the lemon. But if you give it another try, there’s still a little more juice left.
Seven years ago we started a quest to have one parent home with our children. It is a part of why things got put on to credit cards that maybe wouldn’t have if we had two, full-time incomes. That being said, over all of those years, we have found some amazing tips and tricks to save money. We have never had cable TV or satellite TV. We got rid of our telephone land-line that amazingly enough costs us more than our cell phones to use. We also choose to buy “pre-loved” merchandise at a discount price, rather than paying full price for similar items. Some of the biggest changes we made years ago were to cloth diaper our children. And we are not talking about a diaper service, but actually using cloth diapers. While this increases our laundry utilities slightly, it saves us in purchasing diapers as well as extra trips to the store to buy diapers. On top of that, we went from being a two-car family to a one-car family. Tricky, but it can be done and saves a bunch!
With our desire to live on the “less is more concept”, we came to a realization that the “little things”, “it’s for the kids”, and “it’s for the house”, were getting us into trouble with our finances. With renewed vigor, we are looking at money saving tips again!
We love fresh produce, and find our local farmer’s market has the best price on in-season produce. We continue to support CSA (Community Supported Agriculture) by purchasing our shares through Vermont Valley Farms in Black Earth. The added bonus to this is we get a $200 rebate back from our health insurance provider when using the CSA. This year we will put that rebate into the grocery envelope to ensure we are not scraping by to make payment for next year.
We also have comparison shopped several stores to find the best price for the food we buy and use local ads to purchase the item we are looking for in bulk. For example, one store might offer a buy-1-get-1 on our kids’ favorites “Back to Nature Classic Rounds”. We go there and purchase that item in as many quantities as the budget will allow. The key to this is to not open more boxes than what you normally would. Just because you have 10 boxes does not mean you need to eat them all in one week. We found that labeling the boxes week 1, week 2, really helps.
We are looking into using more coupons which is a great tip we got from our fellow project money player Cassie. And not just for groceries, but for car repairs, eating out, and our favorite thrift store (I know, coupons for a thrift store but they are out there!). Since our food budget is $500a month for 5, we buy as much whole, natural foods as we can and purchase a few inexpensive fillers on the cheap such as buying pretzels for our hummus.
We have found that being weekday vegetarians and weekend carnivores saves us lots of money. Allrecipes.com and Allcooks.com have many great meatless dinner options that do not require any out-of-the-ordinary ingredients. Funny part is that it is helping our waistlines as well as our budget!
As for having a life, we are finding lots of cheap and free ways to hang out as a family. We love our summer pool. It is only $90 for a summer of fun! We have used the zoo more and plan to attend local music-in-the-park events. The state parks have a plethora of fun for only $20 a year and the dream park in the Madison area are some of our kids’ favorite stops. We realize as we search, we live in a wonderful area for fun and free things to do as a family.
What we discovered in this process was that going to all these fun places unprepared is one of the “little things” that got us into trouble. We now take our treats and lunches to go so we don’t get caught in the “oh let’s just grab dinner out” or “it’s just ice cream”. Ice cream for a family of 5 can get pricey!
As we continue to tweak our budget and get amazing advice from Don, we are excited to see what next month brings.
“Bad” habits are EASY, aren’t they? Seriously, think of all the bad habits you can. They didn’t take practice, did they?
We have our cash envelopes and a budget and we are sticking to our plan. Now we know where all the money is supposed to go…but where is it actually going? The big things are easy to track like: the house payment, student loans, utilities, insurance and all our friggin’ debt payments. But it’s the little things like: groceries, stamps, gas, dog food, pool passes -- those things that seem small, but really add up.
That’s where the daily ledger comes in. Our coach suggested keeping track - daily - of where our money is going. We suppose it’s to make sure our budget and real life actually work together. We are both neat freaks -- “a place for everything and everything in its place” kind of people, so you would think this simple task would be an easy habit.
But the rub is actually doing it. Opening the ledger each day, and saying, “OK, what did we spend today? What did we earn today?” and writing it all down. Not every other day or putting off for the next day or the end of the week. Even if there is nothing to enter, just opening it up and acknowledging that it’s there and that it is the key to our success. Good money habits will keep this financial journey on a smooth path.
“They” say that it takes approximately three weeks for a habit to stick. So if we had started entering our data daily, by the end of the week it would have been a habit. So let’s see…three weeks from today, we should have a really nice habit of checking our envelopes, verifying our basic living expenditures and of course, making daily entries into the daily ledger.
Now, if we can just crack the nut of getting the boys in the habit of putting their clothes in the laundry basket…
This week, we are celebrating our cash envelopes -- and not spending more than what’s in them!
Summit has been amazing and Project Money (here in referred to as PM) is a God send. We have been trying to make serious changes in how we use and think about our money, and we now know why we have ignored our money and let it have its way with our family! Budgeting and keeping up with it is hard in the wake of life!
May has been a whirl wind trying to get our finances in order and budget prepared to start the PM journey. Along with all of that I (Kari) totaled our car, took Coen on his first ever plane ride to Texas while Darek, Cree and Chay worked on a new fort for the back yard at home. Also, with trying to keep up on house projects, daily cleaning, and the end-of-the-year school activities, it has been tough make sure the budget is a priority! However, Darek and I very excited to have a budget for the first time ever. It is great to see where our money is planned to go; and, tracking where it actually goes is just as exciting. Understanding where our money goes actually helps us keep some!
Our coach, Don, has set us up with envelopes that we put cash in to spend on the normal day-to-day expenses. What a fantastic idea! Since working on getting these started, we noticed we spend less with cash. It looks like it is time to change the family motto from "you only live once…" to "why put off until tomorrow what you can do today."
The things we are celebrating this week are – thanks to the insurance money and the fact that we’ve become more conscientious about money, we were able to replace our car in cash! No car payments! Wahooo!!!
PS – if any one of the three Angels that came up on our accident on CTY PD on May 11 read this blog….I just want to say from the bottom of my heart THANK YOU!!! I didn’t get your names but I will never forget your kindness!
