I Am Exhausted!

Getting out of debt takes a lot of work and effort. I am exhausted! However, this makes me never want to have a cent of credit card debt ever again. 

After 5+ months of “tightening my belt” and kicking up the game at work to earn extra money, I finally see the light at the end of the tunnel. Two of my three credit cards are paid off, my personal loan is gone and the remaining balance on my third credit card is to a point where I feel freedom is right around the corner. I can increase my 401k contribution at work so I can hopefully retire someday. The money that I used to send for minimum credit card payments will soon be saved for Keilah’s college. She is growing so fast – it seems like yesterday she was a baby! 

At the same time, keeping money and my budget top of mind can be tough. I still catch myself with unneeded products in my cart. Last night I had to talk myself out of a roll of tin foil (because I wanted a new shirt instead). When there was no money left in my account, I had to quit spending. I told myself, "There isn’t any other option." The other day, I spent $70 (of my weekly $200 allowance) on two pairs of jeans. I kept the tags on and waited a week to see if I still felt comfortable in them.  One pair was a perfect fit. And when I tried on the second pair, they just weren’t right so I knew I impulsively purchased them. Plus, when I didn't have enough in my allowance for a full tank of gas, I knew they weren’t in the budget, too.

Has anyone else gone through something like this? What’s your spending story?

Give More, Save More

I can’t believe it is November already! Thanksgiving is right around the corner and Christmas will be here before we know it. And we all know what that means – extra expenses! The holidays tend to be expensive – with meals to cook and presents to give. 

Last year, my family and I came across the following video: http://vodpod.com/watch/1160954-advent-conspiracy and instead of giving each other “sweaters” that we never wear anyways, we gave homemade gifts. This year, we plan to do the same thing. Keilah and I have already started making gifts out of clay for my parents. I found a tub of air dry clay by Crayola at Target for $5 and there are lots of project ideas online at www.crayola.com/canwehelp/products/AirDryClay/gallery.cfm. For my sister, Keilah and I plan to make a picture frame – that spells out a word in pictures. Check out this website for ideas: www.alphabetphotography.ca. We also found a bag of corn husks for under $5 at Wal-Mart. My mom use to collect corn husk dolls when we were kids, so Keilah and I went online to learn how to make them (http://www.teachersfirst.com/summer/cornhusk.htm). 

For more home-made gift ideas, visit http://familycrafts.about.com/od/giftstomake/tp/HomeMadeGiftIdeas.htm or for more ideas on how to give gifts that mean so much more than a gift certificate, visit http://adventconspiracy.files.wordpress.com/2008/09/give-more-gift-info.pdf. This sight also has a PDF that gives additional ideas on how to save money at Christmas: http://adventconspiracy.files.wordpress.com/2008/09/25-ways-to-spend-less.pdf. 

Overall, this year Keilah and I are looking for ways to connect with the people who matter most – instead of swiping the card. I hope all of the links above can help you do the same. And please, post your money-saving tips!

Escaping the Paycheck-to-Paycheck Living

Last weekend, I took Keilah to a dance clinic put on by an area high school dance team. Keilah was apprehensive about attending but was excited for the event after I told her about the games, t-shirt and pizza (included with the $25 fee). At the end of the clinic, the kids – approximately 75 – put on a show for the parents. Keilah was overwhelmed with the big group and ended up not doing the dance with the kids. At the time I was really bummed but now that I’ve had a week to think about it, I have realized – don’t try to talk your kids into an extracurricular activity they don’t want to do! Next time, I will ask Keilah if she wants to go and if she says no, I’ll save the money for an activity that she will enjoy. 

Outside of managing Keilah’s school activities, I’m focused on healthy cooking and portion control. I’ve noticed a lot of foods have recipes right on the box. For example, the StarKist Hickory Smoked Tuna Pouch has a great quesadilla recipe and the Tomato Pesto has a great bruschetta recipe. MMMMM!!! The best part is the recipes are just enough for one or two meals. When cooking for one or two people, I’ve learned that I need to cut most recipes in half OR invite a friend over for dinner to avoid wasting food. I can only handle leftovers for a couple meals. Also, last weekend, I went out to eat with a friend and instead of ordering two entrees, we split a sandwich. 

Saving money in inconspicuous ways has been top of mind lately. Also, Scott Hoerth, my financial coach has challenged me to escape the paycheck-to-paycheck living.  He suggested that I budget a month in advance. I’ve been working hard to live within the $200 per week allowance but now I am writing down my bills, their totals and “assigning” them to each paycheck. I know ahead of time that the first paycheck of each month goes to the Alliant and US Cellular bills while the second paycheck of each month goes to the Madison Gas and Electric bill. 

Overall, saving money and budgeting is becoming a huge part of my life – and the reduction in my debt makes me feel lighter each day!

The Big Picture

A few weeks ago when I met with my financial coach, Scott Hoerth, he asked me to think about life after Project Money.

I’ve gotten very focused on debt reduction and I think it is motivating and exciting to think about life out of debt. The hundreds of dollars that I am putting towards my credit card each month will soon be available to me. And to ensure that I don’t go back to impulsively spending my money on the latest furniture trends, clothes, etc. I thought I’d spend some time writing about the big picture – my long term financial goals.

Right now I am currently contributing about 2% of my income to my employers 401k. I am going to need to increase this drastically if I’d like to retire at some point in my life. Goal Number #1 after paying off my debt is to increase the amount of money I put into my retirement savings.

Ever since I lost my job last year, I stopped tithing and donating to non-profit organizations. I’d like to get back into the habit of using 10% of my income to support local churches or causes that help to make our community and world a better place. Goal Number #2 after paying off my debt is to re-establish my tithe.

Another big priority for me is to establish a couple different savings accounts. For example, I would like to buy a house in the country and I know I will need a down payment for this. Also, at the rate Keilah is growing up, college will be here before I know it and I would like to be able to support her financially in this endeavor. Plus, I have a deep desire to travel and upgrade my vehicle. Goal Number #3 after paying off my debt is to start saving for the things I want most in life.

Proactively planning and saving for expenses and purchases is proving to be a much better way to manage my money. I am excited to see that the light is at the end of the tunnel – paying off my debt is possible and is actually happening quickly. I am also interested to hear about what types of money management situations our readers have experienced. What is your success story? 

Importance of a Savings Account

After meeting with my financial coach a few weeks ago, I realized I impulsively paid over $600 on my credit card. I thought I had planned ahead by paying the bills, putting lunch money in Keilah’s school account and filling the tank and fridge. But I didn’t take into account my weekly allowance of $200 – leaving me with six cents in my checking account for two weeks.

Even if I have all of my basic needs paid for, I feel an increased urge to spend when I don’t have any money in my checking account. I want to go out to eat, buy a purse, get a haircut, etc. even more when I only have 6 cents. I think a lot of people experience this - I see friends on Facebook setting their status to, “going to the mall to spend money I don’t have.” Historically, I would give into my urges to spend and swipe the card. “What’s $30?” I would think. Or even “$100. I’ll pay it back later.”

But later never comes and the $30 here and $100 there adds up. Fast. If I kept my old spending habits for another year, there were a lot of could haves. Could have lost the house, the car, the dignity. My Dad provided me with an article of another family that felt this way, too: http://customsites.yahoo.com/financiallyfit/finance/article-107752-2691-0-how-one-family-shed-106000-in-debt?ywaad=ad0035. They were over $100,000 in debt but, “through frugality, determination and hard work, they are now -- other than a mortgage -- debt-free.”

Since I am in sales my income often fluctuates which often makes budgeting a challenge. One of my previous sales managers told me to adjust my income to my lifestyle – I think it was an effort to challenge me to sell more. However, I have found that adjusting my lifestyle to my income is necessary to a stable financial future.   

I feel like I have to pay off the things I’ve already spent my money on before I can spend it on things I really want. Freezing the credit card has been great and the longer I don’t swipe the credit card the better I feel.   

Which leads me to the importance of a saving account – when my checkbook was at 6 cents, I had to borrow $50 from my savings to make it through the two weeks.  This amount was paid back when I was paid but only spending $50 was a real accomplishment. Taking money from the savings account that I worked hard to build helps me to spend less. When sliding the card I borrow a lot more money since I didn’t have to work for it.

I have been asking Scott, my financial coach, if I can take my savings account money and apply it to my credit card. He explains that in an event of emergency (or budget under sight) the savings account prohibits me from falling back into swiping the credit card. So even if it is $200 or $500 - establishing a savings account goes a long way.