competing priorities
From this month’s Net Worth Update:
“I did OK, I guess. It’s home improvement season, so I’m not sure how much progress I’ll be making in the coming months. We got some landscaping done (paid in full up front), and we bought some furniture (No money down, no interest for 12 months – we plan to have it paid off in the next couple months, and yes, this does mean that I have another credit account – but I wanted it, because we’ll be buying quite a bit of furniture this year). But we’re still saving for the future (wedding, baby) and I’m paying down my student loans – about $300 more than the minimum payment per month (The $300.00 comes from the payments I was making on other bills that I have now paid off.) My car payments are mostly principal at this point, which is great. And all that money in “cash” includes money we’re saving to spend on the wedding (the planning/spending for which is already under way), so I’m not sure how much stock you should put in that number. And oh yeah, how ’bout that bear market? I’m down about 10% from last month.”
I’m still up about$400, but it would be so much better if I hadn’t lost that amount in the market, and if we hadn’t bought furniture. But look, we need furniture. Our hand-me-down furniture has literally fallen apart. My room is atrocious. That’s bad for my peace of mind. I’m not too worried about the additional debt. We’ll be paying it off in the next few months. And still, that doesn’t really matter, because after it’s paid off we’re getting carpet and more furniture.
The good news is, we pay for this stuff with the money that’s left over after we contribute a big chunk of our money to our various savings goals and the household expenses. The other good news is that we’re only buying one home improvement at a time. We know we can’t afford do everything at the same time while continuing to save, so the one-at-a-time approach will keep us able to continue saving and paying down debt. I have no interest in being miserable and completely dissatisfied with the decor of my house just so that I can boast about being debt-free. I will spend my money on things I want to have – I’ll just do it as responsibly as I can think to do it. We have savings and steady work, so now is the time to take advantage of being dual-income-no-kids.
Although, I’ll admit that I hate it when my net worth graph doesn’t shoot up in the air.
pleasant surprise
I updated my net worth (with a few minor details yet-to-be-updated, like the big reduction in my student loan amount and the actual amount of my stocks’ value) and lo and behold, there was a $6,000 net worth increase sitting there staring me in the face! Wow. Praise God!
This progress, despite my newest material acquisitions – clothes, a smart phone, a data plan, weekly visits with a personal fitness trainer – is nothing short of amazing.
Here’s my latest net worth explanation:
“The amount shown in my net worth is incorrect because I’m having technical difficulties with one of my student loan accounts and with my ShareBuilder account, so I can’t see the actual balances. Until I can get these numbers, the amounts shown here are incorrect.
I used my tax refund to pay down some student loan debt. I made my last medical bills payment in April. Yay!!! That is why my “other debts” category has gone down. Another reason it’s declined is because I’m paying back the $7,500 tax credit from 2008 through payroll deductions, since 2010 is the first tax year in which Uncle Sam will start getting his money back from the homeowners who took the 2008 home buyers’ tax credit (i.e. “loan”) – which, in my case, is sitting in a bank account collecting an insulting amount of interest (when are the rates going to go back up?!?!?) and augmenting our emergency savings.
Mister Ant and I have been saving for our wedding expenses and for start-up costs for a family (no, we’re not trying yet!).
The credit cards get cleared by the end of each month, and I’m pretty much using them for rewards points. My main priority is to use the payment amounts I no longer have to pay to the medical bills to pay down my smaller student loan. I’m really excited about seeing that final 0.00 balance when I log in one day! I hate this loan with a passion.
I haven’t been saving much in my IRA, because so much of my money is going towards wedding/household savings and debt reduction. Apparently I lack the drive/discipline to contribute regularly to the fund, but at least I am saving something somewhere, and next month after open enrollment, I’ll start contributing to the 401K at work, since I become eligible this month. I looked into converting the IRA to a Roth, but it’s really not worth the initial tax costs to me right now.
Someone dinged my car, but not so significantly that it would have been worth paying my $1000 deductible, so I took some value ($500) off of the car, since the body is no longer in “excellent” condition.”
But, perhaps most importantly of all – my net worth has broken the -20,000 mark and I feel like I’m oh-so-close to going positive! I was so excited to see that, and then my jaw dropped when I saw that I’m 77% closer to a positive net worth than I was when I started this journey three-and-a-half years ago back in 2006. Oh joy! Negative 87K seems so far away now. I mean, what’s another 16K? I’ve already improved by about 70. This is so awesome!
y’all just don’t know
I’m doing better than I was. I should finally be out of credit card debt, AGAIN, by the end of this month. I’ve done the math. It was hard – there’s my account, there’s the Anthill account, there’s the W4 filing, saving for the wedding – all of that has to be coordinated. It took a long time just to figure February out. I’m trying to automate as much as possible. Easier said than done. Since there’s a first time for everything and you can only pay bills based on what’s in your account at particular times, there was a lot of “calendaring” the money coming in and the money that needed to come out. February is pretty much good to go. I’m hoping that, between Mister Ant and I, we’ll be able to put this thing on autopilot by the time the snow finally melts…
That should give me some time.
algebra?
Mister Ant and I are putting our finances together. For us, that means checking our credit reports, figuring out how a joint account could benefit us, and working together on debt reduction (mostly student loans and the mortgage) and savings for long-term goals. I actually had to do some algebra! We now know what percentage from our respective checks is enough to take care of household expenses. It’s a different dollar amount for each of us, because we have different salaries, but it’s the same percentage, so neither of us gets burdened more than the other – or in other words, a fifth is a fifth, a quarter is a quarter, or a third is a third for either of us. Our percentage is 32%. This means that 1/3 of our collective net monthly income pays all the household bills, so if each of us put 32% of our income in a joint account, it would cover things like the mortgage, household incidentals, utilities, entertainment, etc. This would leave us with 2/3 of our net monthly income to divvy up for savings, debt reduction, and a spending allowance.
That’s just the beginning, though. We should also have to figure out a percentage for joint savings goals, once we nail down a joint debt reduction plan. The days of splitting bills like roommates are over. Soon, our joint checking account will be paying our bills, instead of one of us reimbursing the other for their share of paid bills. But this takes a while, with all the other things we’re busy with to distract us. There’s lots of scribbling, and lots of communicating. But it will all be worth it. Our opinion is that money should be the last thing we have to worry or argue about as a married couple if we’re proactive and smart about our money management.
Mister Ant is happy I’m blogging again. He wanted me to tell you guys Hi!
*sigh* happy new year
Oh the horror!
The triumphant spirit I had this time last year has given way to contrition this year. If I don’t want to feel like this in 2011, some things are going to have to change.
I made a deal with myself that I could keep my head in the sand until the end of December. I allowed myself to turn a blind eye to the hard numbers, buy whatever Christmas presents I wanted, eat lunch out if I felt like it, ignore contributing to my retirement account or my stock purchases, ignore my debt reduction goals… I did all of that. I am done with that. This has been such a mediocre year! I feel like I haven’t moved forward and like I’ve abandoned my goals.
I’ve been so busy with my new work hours and other activities, and I used that as an excuse to slack off on my diligence with checking the numbers and blogging about my progress or the lack thereof. I even finished 2009 with credit card debt because of a house improvement and a very expensive engagement gift I wanted to buy.
Which brings me to my newest motivation – marriage and babies are only as imminent as my (our) ability to handle our money correctly and progressively. I have a renewed commitment to debt reduction. The credit card debt will be gone by the end of the month. The medical bills will be gone by June. The car note will be gone by June 2011, and only because we have to save for our ceremony, since we will not incur debt for it. by June 2011 – mark my words – my only debt will be the mortgage and the student loans, provided the Lord helps us to avoid emergencies.
Regarding savings, I have found that it’s harder to keep the money I save. This year, I wound up spending what I saved so that I can avoid using credit cards and avoid raiding the savings I had already. I’m not completely uncomfortable with this, but I would like to increase my savings. So, I’m counting on the 7.6% raise I got at the end of the year and the 401K program at work, which kicks in for me in a few months, to help me feel like I’m making saving progress.
My challenges to debt reduction and savings will be home decorations (we’ve made improvements/repairs but hardly any decorations) and the wedding ceremony. I hope to do everything for the cheapest prices we can get, and I’m willing to compromise on those things in order to achieve the goals I want. I have to use better time management and abandon my excuses if I want to do that! So here goes…
Oh and one more thing, I told myself that I would only update the value of my home once a year, so there it is. My actual net worth progress has been kind of stagnant, and the bump seen this month is due primarily to the increase in the market value of the house (which I listed conservatively last year).
back on the saddle
As my latest net worth update says, “I have finally included the doggone medical bills. (In “other debts.”) So there, $2000 more debt. And it’s taking a while to pay off because I have other things to take care of – house repairs and decoration, mainly. I’ve had very few indulgences because I know I have all this debt. I know it’s been a while since I’ve updated, but honestly, I’ve been discouraged by the slow progress with paying off debt and building up my investments. Most of the progress you see has just come from making minimum payments and saving to use cash instead of credit. This update is as of the middle of October. It’ll be another month-and-a-half before I do another update on the net worth, at the end of November.”
Anyway, this blog has been calling me back. It’s good for me to see where I stand, and I’m really glad I forced myself to do this update and see the numbers. It’s really not as bad as I thought it would be – not as bad as it could be. But I’m not finished with home improvements. In the next month or so, I’m going to be spending even more on the house repairs. Right now, the name of the game is to at least maintain and not slip backwards. That means continuing to pay in cash, avoid new debt, and pay down on debts, if only the minimums.
I fell off the record keeping horse – doing nothing more than balancing the checkbook. But it really does help to know your situation and keep tabs on it, so here I am, hopping back in the saddle.
bad girl
Things are crazy. I have more medical bills than I thought I would have – payment plans out the wazoo. Mister Ant and I had a cash flow problem that has since been fixed. We bought some electronics. We took a weekend trip. Home improvements in the works. We have finally started to use our central air. I did a little shopping.
Part of the reason I haven’t done my net worth update for July, three weeks into August, is that I know I don’t want to see the number. I know that isn’t right, but it’s where my head is now. I was just so happy to see that I’d finally recovered from getting the house. I don’t want to see what the medical bills have done to my progress. I don’t want to hold myself accountable for missing July’s contributions to my IRA and savings. I don’t want to deal with the fact that I aimed to pay off my car and one of my student loans and yet I haven’t paid any more than the minimum required payment on either of them.
I’m eating, my bills are paid, and I can buy things I want from time to time. My credit isn’t destroyed. I know my checking account balance. For now, that’s all I can handle.
my goals have changed
I am working a lot. I am working out after work. (Aren’t you proud of me?) I had the work done on the roof. Now I have other projects to do before the weather gets cold. I have some water damage outside that needs fixing, ASAP. So, heeeeere we go! My trip was great, and I didn’t come home broke, which is always a good thing. I didn’t spend any money this weekend. My bills are paid through the middle of August. I’m in more debt though, ’cause I put a big ole TV on my credit card. It’s OK, though. I won’t let it stay there long. My deadline is the end of September. It would be sooner, but with home improvements and the medical debt (which I’m paying on a payment plan), I won’t just knock it out with every available cent. In fact, if I didn’t absolutely need to work on the water damage, I’d wait on that too, but I have to have that worked on now. That is not an option. The good thing is that I’m not taking any major trips in the next few months, and I don’t plan to make any other big purchases for the house outside of non-cosmetic necessities for a while.
I am through with my goals for the moment. There is too much going on with the home improvements and the medical bills. There were some things that I didn’t absolutely need, like the TV and the weekend getaway, but I can afford them, and if I had it to do all over again, I would have made the same decisions. I am enjoying my summer and enjoying the fruits of my labor, for the first time in years. It’s nice to have these little luxuries, and I believe I have earned them.
But I am not comfortable with the TV and medical bill debt. I am not happy that it’s almost August and I haven’t paid anything extra towards my small student loan or my car loan. But it is what it is. I just know what my goals for 2010 will be, without question. For the rest of this year, all I want to do is get rid of my TV and medical bill debt, contribute to my IRA and savings when I can, have the money to pay next year’s insurance in full when it’s due in December, and make some house repairs – a new door, a garage door opener before winter, and a fix for that water damage before the first snow. With less expenses coming up, I want to get as much of this done as possible before the utilities start to go up in the fall and winter months.
Thank God for a cool summer. Here’s to praying for a warm fall. 
out of the hole
It was Boston Gal, I think, who told me that it generally takes someone about six months to get back to where they were before they bought a house.
Well here I am, six months after I bought my house, and my June net worth is finally back to the same level of progress that I was at before I bought the house. I am investing in my IRA again. It’s great.
That said, I’m doing half the stuff I feel like I should be doing. I’m finally starting to spend money on some things I want for myself and for the house. Spending a lot. A lot. I still have the medical bills, which I’m paying on a payment plan so that I can have cash flow for the other stuff I’m trying to do. I think I’m finally at the point where I’m done with binging and starving when it comes to spending. I’m trying creative use of all the things I’ve learned to get this far so that I can have a better quality of life without sacrificing long-term goals in the process.
It’s an adjustment. It’s a little scary. A lot of times I feel like I’m messing up. But I’m continually learning.
over time
I did one thing off of yesterday’s list. I put the purchase on a credit card. I’ll pay it off over the next few paychecks, piece by piece. I know that may cost me some interest. It’s worth the convenience to me.
Instead of paying the large medical bills up front (I’ve paid all the small ones, and the big ones are the only ones left), I decided to set up a payment plan. If I want, I can pay more than the minimum. And there’s no interest involved. This way, I have more cash flow for the things I want to do.
As long as I continue to save and pay off debt, I’m allowed to do whatever I want…
