Friday, September 25, 2009

Handling Ms Brown

Since we have started on the Debt Snowball, we have started to receive calls from debt collectors and one in particular has not been pleasant. Her name is Ms. Brown and she keeps calling about Felicia's court reporting bill. A little background on this bill: Felicia was going to CRID, the Court Reporting Institute, and she decided to leave early because she was in her last trimester of pregnancy and it was difficult to get around with her steno machine. Before the quarter started she told them that she was taking a leave of absence and would return after the baby was born, but they talked her into signing up for the quarter and told her it would be okay if she did not finish the quarter. It turns out they wanted her to attend until her student loan paid them and then allow her to drop, but the student loan did not pay them and now they want to collect from Felicia.

Ms. Brown called Felicia one day and started to tell Felicia that she was in "breach of contract" and needed to make this debt a priority. Now, I do this for a living and I have told Felicia before that a lot of collectors want to make you mad so you will show them by writing a check to them. So she stayed calm and asked Ms. Brown to mail something stating that she owes the debt. Ms. Brown began telling Felicia that she had already sent something in the mail. She then started trying to collect from Felicia and Felicia continued to tell her that right now she would not make arrangements until the proof came in the mail. Ms. Brown continued to tell Felicia that she was in "breach of contract" and how it was a priority. Felicia gave Ms. Brown permission to speak with me about it and Ms. Brown asked why Felicia couldn't handle this on her own. Felicia, again, gave her permission to discuss the matter with me and Ms. Brown continued to say things to Felicia like "you can't handle this, " "you need to handle your debt," and "you're not strong enough to handle this on your own." Felicia stayed calmed and kept letting her know she had permission to talk to me about it. Ms. Brown, finally, said to have me call her.

When Felicia gave me her number, I called right away. Ms. Brown wanted to begin the conversation by letting me know her version of the conversation with Felicia. I stopped her immediately and told her I knew about the conversation and to talk about the business at hand. Ms. Brown started to tell me that Felicia was in "breach of contract", that this was a priority and wanted me to make payments now. I advise her that at this time, we were not able to but in a couple of months would be able to make arrangements and she said that I was refusing to pay. I advised her that I was not refusing to pay, and that we would pay any debt that we owed. I advised her that I would need the proof of the debt in order to begin making payment arragements. Again, she told me that we were refusing to pay and she would notify her client. She told me that we had a chance to voluntarily pay and so naturally I asked what were the involuntary ways to pay. Again, I do this for a living and knew she couldn't tell me unless they were ready to do them. She did not answer the question and just kept saying this was a priority and we were in "breach of contract." At the time of this conversation, I knew nothing about what kind of debt this was. I did not know if this debt was secured by a promissory note or not. But I did know that when a collector uses "breach of contract" they are trying to scare you. The goal is to throw out a legal term to make you feel like you broke the law. I was not getting upset but Ms. Brown sure was. She kept trying everything in the book to make me mad and it was not working. She finally said that she would let her client know we were refusing to pay and would verify our employment and then she hung up.

A few minutes later, I called her back. I wanted to make sure that she knew that we wanted the promissory note or the contract that we were, supposedly, in breach of. This is where I got wise. She said that she would contact the school for the original documents but if they did not have it, Felicia still owed it. Then she said she was not going to send it and she was not going to help us out unless we help her out. I just kept asking her to send us the original contract and she kept saying she was not. Finally, after she was mad enough, I said that I was simply asking her to send the original contract that Felicia was in breach of and she stated that she was not going to and for me not to call back unless I was making arrangements and she hung up again.

After we got off the phone with Ms. Brown, Felicia called CRID and found out that there was no promissory note and we were not in breach of contract. Felicia wanted to call back and let Ms. Brown know and give her a hard time. I told Felicia not to and if she called back to let her know then. Well, a week later she called back and told Felicia that she had a contract and Felicia let her know that there was no contract. The wind was taken out of her sail and again Ms. Brown hung up. The best defense against the creditors is to know the law, FDCPA. For work, I have to take a training module on it every year. Dave Ramsey has good advice for dealing with debt collector and you can check it out here. My advice is to not lose your cool; they know if they make you mad enough you will pay them.

Thursday, September 24, 2009

Handling Hiccups

Lately, we have had some weird things happen at the house that has caused us to get a little off track with the budget. In spite of these things, we have not touched our emergency fund and have just found other ways around these emergencies. Our dryer and our stove are busted. We are renting and the land lord had us call a appliance warranty company but for both appliances they claim are unfix-able and not under warranty.

We are waiting to hear back from the land lords to see what they want to do about it, but nothing yet. The dryer is a simpler problem to work around because we can take the clothes to our parents house and wash them while we visit, Felicia's mom will sometimes take a couple of loads and do them herself for us, or we can go to the laundry mat. The stove on the other hand is little more difficult especially since we don't like to cook anyway and now we have to learn to bake instead of cooking Hamburger Helper. I am kidding but when we cook it is pretty basic. We do eat a lot of Hamburger Helper, spaghetti and meat-sauce, and Doritos casserole. Needless to say we have been eating out more, but we have also used the slow cooker to make pot roast, and used the oven to bake lasagna. It has set us back a little.

We had planned to pay off our two smallest debts to get us off to a great start, but we are only sending off a payment in full for the smallest debt. We are a little disappointed but the way we look at it, we have behaved like adults and found a way around the hiccups without giving up.

A lot of our little debts, are ones that have been around for years that we have not paid anything on and we are looking at changing the debt snowball around a little. We are thinking about paying the doctor bills, and student loans first. We are still going to list them by smallest balance to largest and work through them. When all that is done then with the same intensity we are going to settle on the other debts. We are not really concerned with our credit because we messed that up a long time ago and our main concern is to work this snowball so we can be debt free.

Wednesday, September 23, 2009

Added More To The Snowball

We have had to add a few more things to the debt snowball. The new Total Debt amount is $21,625.22 so that leaves the Total Remaining at $20,637.89. Three debts got added to the snowball, and two of them we knew were coming and we were just waiting on the final tally to come in. See back in May, our daughter got sick and she had to spend 3 days in the hospital and she had to have a procedure done. After the insurance paid their part there was $1,403.00 left to pay. Thank God for insurance!

The third bill is one we forgot about. Felicia was attending a court reporting school here in Dallas that we were paying for on credit (student loans). The last quarter she attended she dropped early because she was in her 3rd trimester of pregnancy and it was hard for her to maneuver with her steno machine. As a result of dropping early, the student loan did not pay for the classes and the school is now charging her for it ($1,508.00).

It looks like if we pay the minimums we can have our debts paid by June 2015. That seems like a long ways to go so Felicia and I have given ourselves 2 years to be debt free. Now, we just have to figure out how to get there.

We are going over our budget and trying to figure out what we can cut back on and how to save more money. We have cut $60.00 from the cell phone, and $20.00 from cable. We know we need to get rid of storage which is $82.00 a month. We haven't use any of that stuff in storage in three years and we probably are not going to use it. We are working on getting rid of the stuff and applying that money to our debt. Also, I get a little overtime every once in awhile and have a chance at a monthly bonus and whenever we get that we can throw at the debt. At times my monthly bonuses can be bigger than my regular monthly pay, but we can't depend on that every month, some months I hit goal and others I don't. Even with all of that, we still need to generate more income so that we can meet our goal.

Felicia is working on selling her sock dolls and jewelry to help with the debt snowball. I am trying to figure out what I can do to generate more income. First thought for me was to get a part time job, either at a bar, a restaurant, or overnight grocery stocker a few nights a week. I am not above doing any of that if need be, but our concern is time with the kids. If I go and do that when will I have time for the kids? I know something is going to have to give and I may have to go out get the part time because being debt free will be better for family in the long run.

I have read about how people have generated second incomes by working at home and I am researching now, to figure out how to do it. One idea I have is to make money blogging. I like blogging about our journey and if I can create a little income doing what I like to do anyway, then I say go for it. I know it is not going to be easy, not everyone who tries it is successful. Felicia and I talked about this and have decided to give it a try for six months. If I do not make money in six months that doesn't mean I am going to stop. It just means I will need to get a second job or work on another way to make extra money.

Blogging has been a way for me to hold myself accountable for the financial decisions that I make as well as help anyone that is embarking on the same journey by showing them what we are going through. It has been great for me to go back and read earlier post to see how far we have come in a short time. We used to be horrible with money, we are not perfect now, but we have come a long way.

We know it is going to take a lot of hard work and sacrifice to get where we want, but we have to keep up our gazelle intensity. We keep reminding ourselves that "If we live like no one else, later we get to live like no one else" This a something Dave Ramsey says everyday on his show.

Tuesday, August 25, 2009

Paying Off Our Debt!!!!

We are officially working on paying off our debt!!!

We started this financial journey with $18,714.22 in debt and paying some of the minimum payments while working on the $1,000.00 emergency fund, we have paid $987.33 of it. Now, we have a total of $17,726.89 to payoff and by using the Debt Snowball and calculating only paying the minimum payment we will be debt free September 2014. Wow, that is 5 years from now! Felicia and I are committed to throwing whatever extra money comes in at our Debt. Throughout the year we do get extra money that we could use like my bonuses, my overtime, Felicia's sock monkey sales, and when we save money shopping. I know we can we get this done before September 2014. To keep track of our progress, I have added a Debt Snowball Tracker on the Top Right of this blog.

What kind of debt do we have that adds up to $18,714.22?

Looking at everything I put into the Debt Snowball it looks like $192 is from a checking account that went in the red when I wasn't working for 4 months in 2006, $103 is an old gas bill from an apartment we lived in when we were engaged, $114.00 from library books that we were never returned, $385 from an old medical bill of mine, and $18,023.22 are student loans for the both of us.

Our snowball has us paying off our smallest debt, $103.00, in 2010 but with extra money from overtime and a small bonus, we can take care of this one on September 15, 2009. Doing little things like this will add up in the long run and help us get through our debt faster. We are ready. Watch out debt, we are coming for you!

Friday, August 21, 2009

Celebration!

WE DID IT!!!! We have finished Baby Step 1!!! We have a $1000.00 Emergency Fund!!!!

Right now, it feels good to have $1,000.00 in savings. Checking off this step has encouraged us to keep going and we are ready to tackle Step 2, which is to pay off our debt using the Debt Snowball.

Felicia and I worked hard to accomplish this. We had to hold each other accountable to sticking to the budget we both agreed to. It is not easy, especially when you get invited to parties, dinners, and going out with friends, but we are doing good saying no when the money isn't there. Living on the envelope system is not as bad as I thought it was going to be. If the cash is there, we use it and if it is not, we don't spend it. We are working on taking this momentum and applying it to our debt snowball.

Because we budget and stick to it, we knew what day we were hitting this goal and budgeted some celebration money. Felicia and I got her parents to watch the kids while we went to dinner at La Cubanita. It was awesome, we had a good time without feeling guilty for spending money on ourselves and we also talked about how great it will be when we finish Baby Step 2.

When we were done eating, the waitress brought us our check in a little black folder and we got out our envelope and put our cash in the black folder with plastic pocket for credit cards. We kept talking and finished our drinks while we waited for her to bring us the change. We were celebrating so the place we were eating at was a little more expensive then the places we normally go and used a $100.00 bill to pay. The waitress kept walking by and looking at the folder but never picked it up. The fourth time she came to the table, picked up the folder, and asked, "Is your credit card in here?" But before we could answer, she then said, "Wow! You carry the big bucks with you" and then said something like not being used to people using cash. My wife and I looked at each other and smiled, because we knew that our dinner didn't have any interest rates attached to it!

We are living like no one else, so that later we can live like no one else!!!

Wednesday, July 15, 2009

Gazelle Intensity

Last Friday, I saw what Gazelle Intensity looks like when a spouse has it. I did not know what it was at first; I saw Felicia getting mad and frustrated and I tried to step in. Felicia and I were talking about not being able to go to the Taste of Dallas or not being able to buy something that we needed, and she got frustrated. What I was expecting from us was that we would temporarily lose our minds and do what we wanted to do. But before I could react, Felicia pulled out the envelope system and started placing cash in the right envelopes according to the budget. She was getting frustrated because she thought that the math was not working out, but she ended up being right on with the figures.

I saw her saying that this was too hard to do so I took over the envelopes and checked the math. She had it right. I started to say something like "it's going to be tough but we need to keep at it" or something to that effect that could come off as encouraging or lecturing. I stopped myself because I realized that she was still going on with the plan when in the past we would have just said "forget it." This anger and frustration she had was what Dave Ramsey calls the "Gazelle Intensity." This intensity allows you to gear up for saving money and attacking debt. She is fired up and ready to go!

We are now counting every dollar that comes in and leaves our hand. We budget money called "BLOW" which is money that we can use for whatever we want without feeling guilty. This month we budgeted $50.00 for BLOW and Felicia got her half of it on Friday and went to Barnes and Noble to spend it. When she got back home, she told me that even though it was classified as "BLOW" money, she still felt guilty for spending it. She didn't spend the whole thing, only buying a paperback book and a drink from the cafe but she felt bad. I have been listening to Dave Ramsey off and on for a year now, and recognize that Felicia has the Gazelle Intensity. I am going to keep the pace with her and not stand in the way of the Gazelle.

Go Felicia Go!!!

Monday, July 6, 2009

4th of July on a Budget!


This week, we do not have class due to the 4th of July. All this week will allow us to continue to put into effect some of the things we learned. Our budget is still on track, we have had to make some adjustments but not from under budgeting. There were a couple of categories where we budgeted too much money, so we re-allocated those funds. The thought behind the re-allocation is to not have money floating around, but to spend every dollar. I even got an extra $8 dollars in my paycheck that helped us with some of the 4th of July expenses. The nervousness I was feeling after we did the budget has helped us stay on track. We try to make sure every dollar is well spent and it feels good. The next time we get paid is 07/10/09 and we are pretty sure our money will last that long.

I was really nervous about the grocery envelope, it is getting kind of low, but I just looked in the kitchen and we have enough food to last until payday. However, we still may need to get some bread, milk, eggs, and cereal, but I think there is enough to get all of it with what is left.

We even had a good 4th of July weekend on a budget. On July 3rd, we went to see a free firework show at Addison's Kaboom Town. It has been real hot lately, so went later than normal and ate before we went. Eating before we went saved us some money and we parked in the parking garage Felicia and I used to work at and it was free. For the actual 4th, we budgeted $50 to go to the Grand Prairie Air Hogs game where my aunt reserved the pool in center field and we swam and watched the baseball game from there. The tickets included a buffet from 5:30 to 7:30 and free refills the whole night on sodas. After the Air Hogs won the game, then we got to see a Firework show from the pool area. It was a great weekend and it did not break the bank. Some of the extra money from my paycheck went to Anthony's snow cone that he did not even eat, because as soon as he saw the pool he wanted right in.

We are still working on our Gazelle Intensity but I think after this first week of our real budget we are off to a good start.

Sunday, July 5, 2009

Week 4---How much can I SAVE, INVEST, BLOW, and GIVE if I had NO payments?

On June 28th, we had our 4th class of FPU and it was all about DEBT. I think this is the part that drives people to look into Dave, they hear bits and pieces about his program and getting out of debt, but when they hear him talk about never BORROWING money again they are quickly turned off. For Felicia and me, we liked that part. This lesson is about how to get out of debt, taking an honest look at what it cost to finance things you could save up for, and what you could do if you had no debt.

How to get out of debt? Listening to Dave on the radio, I know that when I hear a new caller talks to Dave the first things he will tell them is to get on written cash plan, stop borrowing money, start saving money, and work the debt snowball. I know what you are thinking, "you need to listen to a radio show to know that." Well, sometimes you do. Sometimes you need a stranger to knock some sense into you! If it was that easy to do, we already be doing it. It would not take an economic meltdown for the national savings rate to finally increase. I guess it doesn't matter how got here, but that we are her. Now, we are on a written cash plan, and saving money. We are almost done with Step One and will be moving to Baby Step 2 in August.

Our homework for this week is to put the Debt Snowball together and figure how long it will take for us to be debt free.

When are you considering if you should follow Dave's plan or not, ask yourself this: How much can I SAVE, INVEST, BLOW, and GIVE if I had NO payments?

Sunday, June 28, 2009

1st Budget Committee Meeting...and the 2nd One!



On the 24th of this month, Felicia and I sat together and had our first Budget Committee Meeting. We instituted Dave's rules and got through the meeting without an argument. The goal of the meeting was to produce a realistic budget for the month of July and we thought we did.

One of the rules for me was to shut up and give the budget to Felicia. That was hard to do. My hands were actually shaking when I handed her the budget and had to watch her make changes to it. In the middle of our meeting, the part where she looks it over and makes changes, I had to run to the store to get diapers for the kids and when I came back she explained the changes and how she made the changes balance to zero again. Her changes were reasonable and we agreed to the budget. I am pretty sure we both felt good about the budget and were looking forward to putting into effect.

The next morning while I was getting ready for work I realized we forgot to budget for some very important items. We actually both agreed on a budget that did not have any money for diapers and formula. What were we thinking?!

When I realized this, I started to panic a little and did not know what to do. Normally, the thing for me to do is to throw my hands up and say it won't work this month, we will just try again next month. But this time I remembered what Dave said, that we were going to have Emergency Budget Meetings, especially in the beginning. So of course, we had another meeting, but this one took place 20 miles apart. Felicia figured out what we spend each week on both items and we came up with a total of $304.00 a month. The first step was for me to figure out what we need to cut out so we can add $304.00 to the budget and still have a zero based budget. After reducing the transportation, personal, and clothing categories, our budget was back to zero.

The next step was to allocate which paycheck each item was coming from and this was the hardest part. A lot of the things we have are due at the beginning of the month and so the first two paychecks are going to be really tight. It is going to be real important for us to stick to the plan to make it work. When I was done with the revised budget and the Allocated Spending Plan, I had to show it to Felicia, but since I was at work and so was she, I faxed it to her. She looked it over at work and she agreed to the changes. We now have a budget that we think is a realistic budget.

You would think that I would be relaxed, knowing that we have a plan in place, but I am not. I am so worried that we are going to mess up. From now until July 10th, we have no eating out money. This is our biggest problem, we can derail our budget if we give in to temptation. We have to spend every dollar carefully. Friday was Felicia's payday and we went and withdrew all the cash we need for the envelopes and put it in there: Gas, Groceries, Diapers, Formula, and Entertainment. Maybe this nervousness and anxiety I am feeling is the gazelle intensity Dave talks about. Hopefully, I can channel this feeling into the energy we need to get this done. The first test is if we can meet our goal of having the $1000.00 emergency fund done by July 31st.

Wednesday, June 24, 2009

FPU Week 3---Dreaded B-Word

Last Sunday was our 3rd class in Financial Peace University, and we talked about the the dreaded B-word, Budget. Since I read Total Money Makeover months ago, we have been doing the budget and have posted several times about it. Therefore, I am not going to go over every detail of this past Sunday's class, but will discuss some of the issues I have with budgeting so far.

I believe if I keep honestly critiquing us and our money management, it will help us in the long run to win with money. Having a lot of money is not the desired result of this process, the results we are looking for are Financial Peace, retire with dignity, and pursue some of our dreams later in life. Below are just some of the things and habits that gets in our way of achieving our goals.

One of the things that I do that absolutely does not work is create the budget and never look at it again. I work hard to make a zero based budget and making sure every dollar has a name, but never pull out the game plan to make sure that I am following it. Of course, when something is out of sight, it is out of mind. So needless to say, the budget is no good unless you are committed to following it.

The other big No-No for me is instead of using the food budget for all our food, in practice we differentiate between Groceries and Eating Out, but not in the budget. I budget a certain amount for all of our food and spend it at the grocery store and keep spending on Eating Out even though that envelope is empty. I stick strictly to grocery shopping funds, but if I don't want to cook, I grab the debit card to eat out and it throws off the budget. Felicia and I need to stick to it but also allow for some Eating Out. For example, we eat out after Anthony's class on Monday, since we do not get home until late, but we never budget for it. The solution here may be to add another envelope for eating out.

A realistic budget is important. I make this budget and try to make it perfect, but not realistic. For example, I never budget for my energy drinks or Felicia's Starbucks, but we buy them and it throws off the budget. This time around it will be in the budget, and we will see how this works.

Recently, I have been making the budget and Felicia agrees to it. Basically, I make this perfect budget and Felicia looks over it quickly and we agree on it. But since we never looked at it line for line, we approve this budget that does not fit our lifestyle. I think she knows how hard I work on it, and does not want to change or get into an argument over it. So this time around, we will be following Dave's Ramsey budget committee rules. Dave has made rules for the nerd (me) and the free spirit (Felicia) and below are the rules we will be following.

The rules for me at this meeting are:
  1. Write up the budget before the meeting, then bring it to the meeting, have my say, and SHUT UP!!!
  2. To remember this is a meeting, "not a weekend summit."
  3. I have to let Felicia "mess up" my budget
Felicia has some rules to follow also:
  1. She has to come to the meeting
  2. She has to talk in the meeting
  3. She has to change something in the budget
  4. She can never say, "Whatever you want to do, Babe!"
The rules for me seem a little harsh, but I am willing to give it try because our way has not been working.

***A few post back, I wrote about how we kept putting off the budget and we never did it and we tapped into our savings. I just wanted to update that we had $600.00 in our savings before that but as a result of poor money management, we dropped that to $313.00. Thankfully due to getting back on track and a garage sale this past weekend, we are back to $583.00 and on Friday we will be at $683.00.

Tuesday, June 16, 2009

The Most Expensive Water Jug

This past Sunday was our 2nd class in FPU and it was about money and relationships. During the class, I could not help but look back at how Felicia and I have handled money and our relationship. We have always gotten along real well but when it came to money fights, we were seasoned fighters. Looking back, we had a lot of unnecessary fights.

In a nutshell, it was her job to pay the bills and my job to complain about what happened to all the money. Honestly, that is how it was. I let her pay all the bills, then I would ask how much we had left and when I did not like the answer, I would launch an investigation into the matter. Understandably, she would take offense to the Spanish Inquistion and then the gloves would go on and 12 rounds later nothing would be solved. In hindsight, we both played a part in our financial mess. I chose to turn a blind eye to it and not deal with it; and she would deal with the financial stress with Ebay therapy. We have both gotten a lot better. I do my part with the bills now and she does not need an Ebay fix anymore. (I know she is waiting for me to do my part with the laundry.) Even though it is embarrassing, I admit my attitude so people can see how ridiculous I was being by leaving the burden of the bills on Felicia and then have the audacity to question her decisions. Dave said that both spouses need a vote in how the money is handled and now, the way I see it, if you don't vote then you can't complain.

Marital relationships were not the only relationships Dave talked about. He also talked about kids and money. He challenged parents to teach their kids about money before they graduate from high school so that they don't have to defend themselves from the credit card companies. On of one my first days of college, I remember the credit card guys signing up people at the their table full of "prizes." I saw a water jug that I wanted and signed up for a credit card. The plan was to get the water jug and never charge anything to the card. Then, life happened. My dad and his girlfriend broke up and we were living at his girlfriend's house, so we had to find a place to live. My dad found an apartment for us and I used the credit card to buy things for the apartment. Long story short: that had to be the most expensive water jug ever! By the way, the jug broke before the first bill ever came in.

I want to make sure when my children get older that they know how to handle their money. I sure as hell didn't! I would get paid on Friday and be broke by breakfast Saturday. That, right there, is exactly the same habit I brought into our marriage. We would get paid and go out to a fancy dinner on Friday night, Saturday night, and Sunday night. And Monday night would be Fight Night! Saving money at that age was out of the question, Savings was for OLD people! I know every kid is going to make mistakes, but I want to do everything I can to limit my children's mistakes. Some of my mistakes still follow me today. I know they are definitely too little now to learn about my money, but hopefully I can get my money in order, so I can teach by example.

Friday, June 12, 2009

It's the Budget, Stupid!

A budget is not something you put off. When we do our budget, it helps us stay on track. In the past, I have written about getting off track but even during those times a budget kept us from going overboard. This time around we kept putting it off and putting it off and just kept spending without a plan. This laziness has hurt us and it pushes us further away from our goals. When we got paid on the15th, we did pretty good and had some extra cash in our envelopes at the end of the two weeks. This paycheck, I know we have spent more than we brought in and had to go tap into savings for non-emergencies. When this happens, it feels like I have let my family down.

I am the one who is going to set the example for my children and their money. I could always just spin it and tell them that this is an example of what not to do. I know the habits that we are supposed to have that will make this work. It starts with making the budget. Duh! It needs to be done in order to make the money behave. When I write down $100.00 a week for food, it doesn't mean $100.00 if I go grocery shopping and just use the debit card for restaurants and fast food until I get a chance to go. After the budget is done, we need to go and withdraw the cash for our envelopes and spend that money accordingly. Grocery shopping needs to be done early too, because I can't tell you how many times we are at home and say there is nothing here, let's go get something.

Felicia and I were talking about grocery shopping the other day. We used to go to the Farmer's Market early in the morning on the weekends and then go grocery shopping later in the day and eat at home during the week. Not sure how it happened, but we stopped going to the Farmer's Market and started just going to the grocery store. The fruits and vegetables from the Farmer's Market were our snacks during the day, especially on the weekends. And when we stopped going, we started making quick runs to the store to get a snack and you know when you go to the store it is never a quick or cheap snack trip. This past paycheck with no Farmer's Market and no grocery shopping, All Hell Broke Loose!!!

I am glad that I keep track of what happens here, because it allows me to see what I did wrong and how to fix it. Not only that, but it gives me a reality check. It lets me know who or what the problem is...I am learning it is not the economy, the government, or my job. It is me!!! I have control of my financial future and if I want it to be a bright one for me and my family then I need to take control of it.

Wednesday, June 10, 2009

Financial Peace University Week 1

Yesterday, Felicia and I started our first class of Financial Peace University. FPU is a 13 week course made up of a hour of Video Tutorial by Dave Ramsey and an hour of discussion in small groups. We have been looking for months for a class to fit our schedule and due to my work schedule the best time was Sunday evenings.

Originally, we found a small church that had 3 participants in the class in Cedar Hill. We were going to join that class but we felt we wanted to be part of a class that was little bigger. Yesterday, the class was at a Duncanville church and had at least 75 participants in the class and during the discussion period, the class had to be broken into at least 5 small groups. We both enjoyed our first class and our looking forward to the rest of them.

This first class was about saving money and accomplishing Step 1. Step 1 is saving $1,000 for an emergency fund. I know it is not a huge emergency fund but it is a good starting point. The idea is to set small goals and accomplish them so you stay encouraged to keep going. Dave does a good job of explaining why we need an emergency fund and where to keep it so we can get to it if we need it...and only if we need it. After Step 1, you attack your debt and when that is gone, you work on a fully funded emergency fund. We have achieved Step 1 before and now we are needing to do it again.

Dave also covered compound interest, and paying cash for things that you want. Great examples were given on how you can make compound interest work for you. Dave showed what a $1000.00 can turn into in a six percent interest account for 40 years. The example he gave was 25 year old putting in $1,000.00 and taking it out at age 65 and it turned into $10,957.14.

One reason Dave gave for the importance of saving was retiring with dignity. This resonated with me because I see some loved ones that are close to me that are a little closer to retirement age than I am and I worry about how they are going to make it if something happens to them. What if they get hurt and can't work? Or what if they get fired? Or forced into early retirement? Are they going to have to keep working forever or retire and live from one pension check to the other? I worry for them and I do not want to be facing the same questions when I am their age. How wonderful would it be to know that Felicia and I can retire and not have to change our lifestyle one bit! It would be great to know that we can work on Felicia's dream business and not have to worry about turning a profit right away, or travel, or just sit on our porch and watch the sunset and not have any worries about money?

On the way home from class, Felicia and I were talking about how we want to win with money. We talked about how nice it would be if one of us could quit our job and stay home if we wanted to. We are trying to make a commitment to the process but to be honest it is hard. It is easier to do what makes us feel good now. I look at all the figures and say we can do this and that, but turning it into action is hard. Hopefully, we can make progress by going through the classes and being held accountable through our discussion group.

Tuesday, May 26, 2009

Just Don't Understand

There are a lot of foreclosures in the Dallas area now and everyone is saying this is the best time for us to buy a home, but I am hesitant to do so. Listening to Dave Ramsey, I know it is the best time to buy if you have the money and I do not have the money right now. Felicia and I want to make sure our house is a blessing and not a burden.

Currently, my job is to help people who are 5 to 6 months behind on their mortgage. Right now, the modifications are being pushed to lower interest rates and/or reduce principle balances so homeowners can get lower payments. I always try to be sympathetic to everyone's situation but for a lot of people I cannot put myself in their shoes. I understand having hardships because loss of income, medical bills, divorces, deaths in family, and things like this. But what gets me is when you start to go over their budgets, you start to see misplaced priorities. I tried to understand and help every client by putting myself in their shoes, I understand paying for food and utilities first and then your mortgage. To me that make sense, you need money for these basic needs. However, more often than not, I get clients who have $700-800 mortgages and car payments for two cars that are $1000.00. They pay more for their cars then their mortgage. When you question them about it, the answer is always the same: I need a car to get to work. Two separate clients are the reason for this post, one client that I could help and the other that I wanted to help.

The first client started our conversation by telling me that he was having to decide between feeding his family and paying his mortgage. I prepared myself for this conversation; in these times that is a choice a lot of families are having to make. One of the first things that I always try to find out is the reason for the hardship and if there was a decrease in their income from when the loan was originated to now. In this case, the answer was no and in fact, after probing the income slightly increased. Secondly, I go over the income and expenses over the phone and to determine the debt to income ratio. Also, this info allows for me to numerically see the hardship the client is going through. I took all this info over the phone with him and started to review the account and noticed that his 1st and 2nd mortgage payment equaled $800 and his gross income was around $2,100. In calculating assistance, this difference was slightly high (but still affordable) and warranted assistance according to modification guidelines. After reviewing the rest of the expenses, I noticed he also had a $700.00 car payment for one car. I questioned him about it and he told me the payment was for his 2007 Denali. When I pressed him on the seemingly high car payment for his income, he admitted that this was when he started to have trouble making his mortgage payment. To me, it makes no sense to get yourself in a car payment that high on that income. What is wrong with waiting to buy the car you want when you can afford it?! Let's be honest, he was choosing between driving a nice car and feeding his family.

Why would you look at your finances and see that when you bought the car you started having money problems and blame the mortgage payment? I am not perfect in anyway and I have my own personal finance problems, but I am not paying my car note before paying my mortgage. But of course, he qualified and I had to submit for a modification that is probably going to include at least a 25% principle reduction.

The second client was a man who lost his job six months ago and has been trying desperately to find another. He had been working odd jobs for friends and neighbors as a handy man to make money to pay the utilities and buy food. A real case where the choice between food and mortgage was made, and not once during the entire conversation did he seek pity. In fact, he was optimistic about getting back on his feet and just needing a little help to get by. Unfortunately, in his case he did not have verifiable income. The money he was making to feed his family did not come with a pay stub that he could fax in and it was not stable enough for me to count as income. This guy really need the help and he did not qualify and when I told him that he did not qualify, he thanked me for helping him and he said he would call me back when he got a job. This is the frustrating part of my job, turning down people who could use the help and approving people who have their priorities wrong.

I wish there was a way I could help the people who need help all the time.

Saturday, May 23, 2009

Dark Clouds Coming!!!

It has been a tough week for us and I don't think we are out of the woods yet. We spent every day this week except for Tuesday at the hospital with my daughter and I have been out of work the whole time as result. Finally we are home and she seems to be doing better but we are still waiting for some test results. We are praying that she is better and that the test will come back negative. We are also thankful for all the thoughts, prayers, and encouraging words our family and friends sent our way.

As a result of being out of work for the whole week, I will not be getting paid for it. Unfortunately, I do not have any more sick time to use at work and we will have to be careful with every penny from now on. We pray this will be a small setback that we can recover from quickly. Knowing a storm is coming and not being fully prepared is a little scary. It has made us realize how important it is to get our finances in order as fast as we can. If we had a fully funded emergency fund, money would not be a worry of ours right now. The situation is what is and we just have fight through it and make it right.

Right now, we are trying to come up with a game plan and I think it should be similar to the one we followed when we found out we were pregnant with Maya. We will have to drastically cutback on our expenses and only pay the important bills, first. It is easier said then done, but we can go without satellite and fast food. Before this happened we had planned to have a garage sale during the first weekend in June and we believe it is a good idea to go ahead with that. More than likely, the yard sale will be at our house with a couple of families joining us. We are trying to come up with other ways to get generate funds and Felicia is trying by getting her online business going. I am still trying to figure out how I can generate extra income as well.

We see the dark money clouds coming and we are trying to get a big umbrella to help us through it. I am a little relieved that we still have some money left over in savings to help and happy that I only had to miss one week of work. I know we are not out of the woods yet, but I pray it is only a money problem and my daughter never has to go through something like this again.

Friday, May 15, 2009

State of Affairs

We are still trying to get back on track with our money plan, and I am trying to remind myself what motivated me in the first place. Last June, we found out we were having our second child and that made me stop and evaluate where we were financially. Honestly, I did not like it. This is what I saw: no savings, renting a small house that would not be big enough for all four of us, knowing that Felicia would not get paid on maternity leave, and $20,000 worth of debt.

Stressing out about our current financial status lead me to a billboard I kept seeing on my way home. This billboard had a picture of a bald guy on it and the words “Act your Wage”. I started to realize that we were not acting our wage and digging ourselves deeper into trouble. I changed the radio station to hear what this bald guy had to say and immediately realized this guy made a lot of sense, especially for people in our situation. I began to research the bald guy online, and found out that his name was Dave Ramsey, and then I decided to buy his book. I bought the book, read it, and talked to Felicia about it. She saw the same things I saw with our current situation.

Felicia and I talked about this and began to prioritize which issue to tackle first. Knowing the baby was on the way, we decided to save as much as we could. I also recognized that I needed to increase my salary, and in November, I was given an opportunity to do so. I applied and accepted a position at work that increased my pay by 10%. From August through January, we saved $3200.00 and that worked out to be an average of $533.33 a month. Looking back, it felt good to see the savings account grow every payday. The first thing we did on payday was pay ourselves and it grew and grew and our stress level decreased. Maya was born and Felicia was out of work for 12 weeks and we did not even spend all of the money we saved up.

At first when Felicia went back to work, we felt that we deserved a little break from our tight spending control and relaxed a little too much. When she went back to work, we had $845.00 in savings and with not keeping up with what we spent we had to tap into it needlessly. For this reason, I am trying to get motivated again and taking stock of our current state of affairs. Now, we have $600.00 in savings, renting a house that is too small for all of us, and $20,000 in debt. What do we tackle first? Thanks to Dave Ramsey, we know where we are supposed to start. We need to add another $400.00 to our savings to complete Step 1 again. After that, we need to tackle our debt with the same gazelle intensity we had before.

***Side Note*** After talking to our financial partners, Louie and Kim, we have decided to go to Financial Peace University. There is a class that starts on May 31st in Cedar Hill, and we are going to attend the preview class on May 17th. Hopefully, this can help us with our battle with spending.

Saturday, May 9, 2009

Starting To Turn It Around

I have not posted anything in awhile and so I am going to try and catch up on everything that has gone on.
Starting To Turn It Around

I feel like we are starting to turn our downward spiral around. The week before our son's birthday party we spent way too much money and still had to pay for a party. Initially, we had planned a low budget party and we kept to that game plan. I thought it came out nice and Anthony had a good time.

I think Felicia has the gazelle intensity now because she got after me the other day. On my late day for work, I thought I did not have time to make my lunch so I decided to buy lunch and when Felicia found out she nearly hit the roof. She looked at me and reminded me of the sacrifices we need to make now to get where we want to be. At first I was offended, who is she to be getting after me for buying lunch? Later in the day, she looked at the bank account online and discovered that I also bought breakfast instead of making it because I thought I did not have enough time. As soon as I answered the phone, she made it known that she was mad at me. Again, I was offended and ready to list all the times she messed up with money, but then I sat and thought about it. She has the gazelle intensity that I have been waiting her to have and now I was a wounded gazelle.

So I am trying to follow her lead and rev it back up. We made the budget and agreed on it and for the most part we have stuck to it. We are talking about it more to each other and reminding each other about our agreement when one of us starts to stray.

Dave Ramsey Live
Felicia, two of my cousins, and I went to see Dave Ramsey Live on March 28th. He was awesome and funny. He pretty mucg goes over everything in the book but in a little more detail. I like how he separates spouses in two categories: the nerds and the free spirit. I think I am the nerd, most of the time, and Felicia is the free spirit. The nerd gets all the spreadsheets together and talks about all the details in the budget and the free spirit is bored to tears. Dave's advice was for the nerd to make the budget and handed to free spirit and then shut up. After that the free spirit has to look it over and make a couple of changes to it. The last budget we did that is what happened.

The coolest part was when he walked over to our section and asked for the engaged couples that have set a date for the wedding to stand up. My two cousins, Louie (my cousin) and Kim (his fiancee), stood and told Dave the date they set and he gave them and 7 other couples free admission to his Financial Peace University Class. He made everyone make two promises: they will go to the class and when they succeed they will pay for someone else to go through it.

FPU
Tomorrow night, we are supposed to be having dinner with Louie and Kim to discuss FPU. They had their first class on Wednesday and Felicia and I have not found a convenient time and a place to start our classes so they are going to tell us how it went. I can't wait to find out what happened. Spoke to Louie earlier and he said that they go into more details about the Baby Steps and everyone in the class seems comfortable because they are all at the same starting point. Tomorrow, he will go into more detail.

Stupid Tax

A week after Maya was born I paid a stupid tax. I am really embarrassed to admit it but I have to be honest and admit to it. A couple of months ago, I switched our Energy Provider and normally Felicia paid the electric bill. Since I was the one that switched companies, I agreed to be responsible for paying it. Well, since I was not use to paying the electric bill I forgot about it. Of course the company cut off the lights while Felicia and the kids were here and I was at work. I had to call to find out how to get it on. According to their procedures, I had to send certified funds (which makes sense), and then I had to fax the receipt requesting for the lights to be turned back on. Let me tell you, I did not want to go home, and I even asked a co-worker if I could hide at their house. As a result, we had to spend a night at my in-laws and pay $20 to send a bank wire. Talk about stupid. Side note, my mom said I take after my father when I told her what happened, but that is a story for another day.

Saturday, March 7, 2009

Have not Blogged in Awhile

I have not written an entry in a long time, because it has been hard to find time since Maya was born. She was born 02/02 and weighed 7 lbs 7 oz. She is the prettiest little girl you have ever seen with thick black hair.

We have been doing pretty good with our money, we only dipped into savings once and that was when we came home from the hospital. We may need to dip into a little bit in a couple of days with the health insurance being due but that is what it is there for. Felicia and I are looking into attending one of the local Financial Peace University Classes in our area. I am really excited about the thought of it. Following Dave Ramsey since July has allowed us to enjoy every moment with our daughter without having to worry about money to much and we wanted to see what else can happen when continue with the rest of the plan. We still have a small problem of eating out, but we are getting better each month.

Got to get back to the kids!

Sunday, January 25, 2009

Finally

I wrote yesterday about how we have been messing up and we need to get back on track. We finally went grocery shopping and I think we did a good job. We budgeted 150.00 for the trip and only spent 133.00. Not too bad. Like I said yesterday, we will work hard to get back on track.

Friday, January 23, 2009

Tightening the Ropes...again

So far it has been a horrible start to the New Year as far as budgeting goes. I am not trying to make excuses, but we need to find out why we are doing so bad. I think I know...we are getting anxious about the birth of our daughter. Felicia has been feeling bad the last couple of weeks and this week she has been having irregular contractions. We keeping coming up with excuses not to cook or to buy something we really don't need. Deep down we know we are just trying relieve stress or make ourselves feel better at that moment.

Now is the time to stop and tighten the ropes a little bit. Felicia has stopped working two weeks before we planned, but the good news is that we did so good in savings that we have enough in an emergency fund to survive. Thanks for the advice on that one, Dave Ramsey! We stockpiled some cash and now we need to be careful in how we spend it. It would be a shame to do so well and then manage those funds poorly.

Even though we have done poorly this month, we still have not tapped into our savings.

Right now, the hardest part is cooking every night. We were doing really well for a couple of months, but now we come up with excuses not to. I don't want to make empty promises, but I would like to get back on track. We saved more money than we have ever saved before since July. So much stress has been lifted since we started this journey, and a conversation about money does not end up in an argument. As far as a goal and how we want to handle money, we are together. Now when we a credit card offer comes in the mail we look at each other and laugh and then point out the ridiculous interest rates it has.

We need to settle down and get our focus back. We really want to teach Anthony and Maya the proper way to handle finances.

I do have to say one last thing, I am not sure if this has anything to do with it, but it seems since we slowed down in blogging, we started messing up. Maybe it's because when we blog it is in the front of our mind. Who knows?

Thursday, January 8, 2009

BAM!!! We messed up.

We did the budget and the breakdown by pay dates and thought we were all set. And BAM!!! We messed up. We did the budget put it away did not look at again to make sure we were spending the way we agreed. It's crazy we take 2 steps forward and one step back. I budgeted 150.00 for eating out for the whole month and in the first week we spent 183.00 by going to Olive Garden, P F Changs, Mickey D's, Bakery, and Donut Shop. We are not starting the year very good but hopefully we can get it turned around very quickly.

On a happier note, we are counting down until our baby girl is born. She is supposed to be here Feb 2nd, I can't wait.