While we certainly are responsible for a good share of our own debt, we have had plenty of bad luck which has contributed as well.
When we got married, we were each homeowners living in different states. We got married with $32000 credit card debt between us. That was all our own faults. I moved in with him. I was unable to find work teaching there, though I had plenty of interviews. My house didn't sell for over a year. We were paying two mortgages on basically one salary. I did have a part time teaching job, later added aftercare, and for a while had two additional part time jobs. I eventually burnt out and dropped the other two jobs. We were very very poor. I was pretty miserable, and it did not make for a good start to our marriage. There were many times I almost just came home. I guess ultimately, that is what I did. After another school year started, and I still hadn't gotten a job, I started looking at jobs back home. I applied for one, and within the hour the principal had called me to come for an interview. I booked a flight home and went in for the interview. I had a whole portfolio of student work, etc, which I had been promoting with all my might in umpteen interviews in the last two years. The principal opened the portfolio, and the first page was my teaching certificate from the state. He said "That's all I needed to see," closed the portfolio, and offered me the job on the spot.
I moved home with my parents - of course my house had just sold (I basically broke even, not incluing all the empty mortgage and utility payments). Within a couple months, my husband had found a job here and we moved him down. Throughout this time, we had managed to pay off both our cars, his student loan, and a nice chunk of the credit cards. We went house shopping and found our beautiful house. But we had the problem of his townhome. As we had lived there, we had watched the units around us foreclose and sit empty. We knew there was no way we would be able to sell it. We knew we couldn't carry it. After a lot of considering, we ultimately decided to sell to homevestors. I still believe this was the best option available to us, and am glad we did it. However, it left us with a >$40000 mortgage. I still had $10,000 left over from the sale of my house minus the downpayment on the new house and we put that toward the townhouse mortgage. My dad covered the rest, and that is the personal loan that I pay $560 to every month. It is still at least half what we would pay if we still had the town home, not including the headache.
The summer after we bought our house, our a/c blew in the midst of 115 deg weather. That was about $1000
A couple of years ago we refinanced our mortgage. We did have two loans (which was making me crazy) on 6.5 and 7.5 % I think. We were able to get an interest only loan with our interest at around 1.5. Our payments are only around 500-700 but we still pay the same $2000 a month. My dad put us onto this, I think he wanted us to pay the minimum and pay off our debts but that terrifies me, because eventually the market is going to come back, our interest rate will go up, and we will have to refi again, and we have to be able to afford that payment. However, we are able to pay off much more of our principal each month doing this. We have paid off $20,000 so far in that time. They gave us more money than the original two loans. We used that money to pay off credit cards (yes, I know now that was dumb but it felt good at the time). I fully intended to keep the cards paid off at the time, but we started to run into another bout of bad luck.
First, my car needed new shocks or struts or something which cost $1000. Then, a few months later BOTH our cars needed transmission work. Mine needed a whole new transmission aroun $2500 and my husband's needed a part - about $800. This all went on the credit card. Then we began a two year tour of Animal Emergency Rooms. First, my cat. She had feline leukemia. I was told she wouldn't make it to adulthood. She lived over 5 years without ever being sick for a day. Then she started having seizures. We had several trips to emergency rooms for this, and she was on phenobarbital. Then she started losing alarming amounts of weight, even though she still ate just fine. We managed to keep her relatively stable, until we lost her in April.
In January, my dog was diagnosed with diabetes. We had several emergency room visits for that, plus bi-monthly visits to the vet for glucose testing. He was on insulin and some other medications. When by April he still wasn't stabilizing, we had to go through further diagnostics, which revealed a tumor on his adrenal gland. If they had told me they could operate, I would have, but they basically told me he would not be with us much longer. This was the same day we later lost my cat. It was a horrible day. After that, he only had one more emergency visit for a sugar low, which they kept him for a whole weekend. He died in November. I don't want to add up all the vet bills over the last couple of years, but I am sure it would be close to $10000.
The night before I started my new job, my car was robbed in my own driveway. From what I can tell, they only took my phone, charger and Ipod, (and a lot of loose change) but they really could have gotten a lot more. (They even went through my new bag of work clothes, but I guess they didn't like any of it.) We did replace the phone and the charger, but not the Ipod. I asked for it for the holidays, but did not get it. I have some Amazon gift cards that I may use toward a new one, I haven't decided yet. I haven't felt the same about our supposedly very safe area, though.
So, we have a bit of credit card debt again. I do also want to mention that I have never been a minimum payment person. We were paying $2500 to our credit cards alone until I switched jobs and we couldn't afford to anymore, and now I have budgeted us a little differently. As I said, I am not taking advantage of my interest only mortgage. I always made payments to the student loans, even when in deferment. I have never had a creditor call. It is all just spending more than I am paying, and living beyond my means, along with a bit of bad luck.
Showing posts with label history. Show all posts
Showing posts with label history. Show all posts
Sunday, December 20, 2009
Why now?
Before I start getting into the nitty gritty of the spending and the budgets, I want to give some backstory into why I am motivated, how we got here, and the sacrifices that I have resolved to make this year.
First and foremost, I need to mention that I have an anxiety disorder and I am prone to panic attacks. This is important because it was ultimately a panic attack that got my butt in gear. I am not on medication or seeking therapy at this time. This is a battle I have fought my whole life, and my first memory of money involves what I realize now was a panic attack. I was probably around 8 years old at the time, so I am not kidding when I say that this is a lifelong battle. It also illustrates my unhealthy relationship with money. I was going to spend the night with a family friend's daughter, and I was excited about it. We were going to go to Toys R Us, and this was right after they had opened the first Toys R Us here, so it was a really big deal to go. I knew we were going, but for whatever reason I did not feel like I could ask my mother for money for shopping. I do not know or remember now why that was. I had a bag of coins, mostly pennies, in my room ( I never got an allowance - My mom usually just got us what we needed or gave us money when we were going out, which is what makes this story so strange, but I have always had a problem asking for money, and also accepting it, which has led to some bigger problems lately, but that is another story). I took this bag with me to Toys R Us and picked out some items there, mostly stickers as I remember. I was so stressed out the whole time because I couldn't just get what I wanted, I wasn't sure exactly how much I had, and I was embarrassed to have a bag of pennies. When I got to the checkout, I had to count out every penny and I was holding up the line. I hadn't known to expect the sales tax, and so I did not have the money to pay for the things I had picked out. I had to put some things back and count it all out all over again.
That night I couldn't sleep. I had a bad feeling towards the things I had gotten and had no enjoyment in using them. I was sick over using all my money. I was embarrassed by the experience. I didn't know when I would ever have any money again (keep in mind, this was maybe $5 in change we are talking about, but to an 8 year old....). I got myself worked up into such a state that the mother came up and I couldn't verbalize to her what was wrong. I think ultimately my mother had to come get me late at night.
I don't think I have ever told that story before. And I didn't really intend to now. But there it is.
Our circumstances have changed recently. I used to be a teacher. I reached a point where, for a lot of reasons I won't go into now, I needed to change careers. I told myself I would teach one more year, but in that year I need to find some other plan. I spent a lot of time soul searching, and suddenly decided to enroll in community college for an accounting program. I kinda feel like I pulled that out of the air, but it really has been the best thing so far. I, as I am finding so many do, assumed my whole life that accounting = taxes. It doesn't. MY JOB HAS NOTHING TO DO WITH TAXES. (I am getting kinda tired of people asking me if I am going to get real busy in January.) I became aware of this as our school bookkeeper suddenly got moved out of the reception office of our school, got her own office, and I started to pay attention to what she did, since I had always just assumed she enrolled and withdrew students, answered phones, and other secretarial duties. I also had to work with her on my program budgets and fundraising and so forth. For some reason, that simple act of her getting an office made her job seem so much more important and interesting.
When I started my accounting program, I knew relatively nothing about accounting. I had a pretty strong math foundation, and had originally been a computer science major in college (but dropped that). I stepped out on faith for probably the first time in my life, and so far it has worked out great. I found I really enjoyed the sort of anal, obsessive aspect of it. After teaching for nearly ten years and all the chaos that brought, I was ready for a quiet, controlled profession. I was the top of my class throughout my program, have a 4.0 GPA there, and finish next week. To do this, I had to sacrifice a lot of my time. I was going on maybe 5 hours of sleep throughout the school year. I left the house at 6:30 am and didn't return til 10 pm. I also took out what now feels like a really large student loan, however I told the school to return any excess (I need to check that they did) and I have been paying toward both my school loans the whole time.
I knew the economy was bad and that this was a huge risk. My last teaching paycheck came in September. I was terrified I wouldn't find another job, and even if I did, I knew it wouldn't pay anywhere near as well as teaching had. I was saving aggressively throughout that time, but when the market tanked and I lost most of the money in my Roth IRA, I dumped all of my savings into my Roth, hoping that it would pay off when the market came back. That's why I only have $2000 in savings now. I started looking for jobs in July and was so blessed because I ultimately got offered two jobs (one after I had already accepted the other). I started the job in October. (And I love it so far, but that's a whole different subject :)
Sometime after that, I started getting hooked on Suze Orman somehow. I am not sure why I happened to start watching her, but she has become my late-night Saturday laundry folding show. I don't always agree with everything she says, but she makes a lot of sense. I started to feel a sense of dread because she recommends an emergency savings of 8 months expenses. We don;t have even one, I think. I also knew our income was going way down because of the job change, and that we were going to have to address our spending at some point. What I finally realized in the midst of the panic attack I had at work the other day - where I came home and told my husband we both had to get weekend jobs and he refused and suggested I go back on medication - was that I have the tools now to look at our finances objectively. I know what an income statement is. I know what a budget is. I know how to balance things. This is what I do for my job now. Why can't I do it for my home? It is harder - because it is personal and it is really hard to look at what you have been spending and what you have been spending it on. When things have to be cut, it leads to squabbles. What I was shocked to find - as I will document here later - is that in October, we spent twice what we made, and I was able to come up with a (rather tight) budget that balances.
First and foremost, I need to mention that I have an anxiety disorder and I am prone to panic attacks. This is important because it was ultimately a panic attack that got my butt in gear. I am not on medication or seeking therapy at this time. This is a battle I have fought my whole life, and my first memory of money involves what I realize now was a panic attack. I was probably around 8 years old at the time, so I am not kidding when I say that this is a lifelong battle. It also illustrates my unhealthy relationship with money. I was going to spend the night with a family friend's daughter, and I was excited about it. We were going to go to Toys R Us, and this was right after they had opened the first Toys R Us here, so it was a really big deal to go. I knew we were going, but for whatever reason I did not feel like I could ask my mother for money for shopping. I do not know or remember now why that was. I had a bag of coins, mostly pennies, in my room ( I never got an allowance - My mom usually just got us what we needed or gave us money when we were going out, which is what makes this story so strange, but I have always had a problem asking for money, and also accepting it, which has led to some bigger problems lately, but that is another story). I took this bag with me to Toys R Us and picked out some items there, mostly stickers as I remember. I was so stressed out the whole time because I couldn't just get what I wanted, I wasn't sure exactly how much I had, and I was embarrassed to have a bag of pennies. When I got to the checkout, I had to count out every penny and I was holding up the line. I hadn't known to expect the sales tax, and so I did not have the money to pay for the things I had picked out. I had to put some things back and count it all out all over again.
That night I couldn't sleep. I had a bad feeling towards the things I had gotten and had no enjoyment in using them. I was sick over using all my money. I was embarrassed by the experience. I didn't know when I would ever have any money again (keep in mind, this was maybe $5 in change we are talking about, but to an 8 year old....). I got myself worked up into such a state that the mother came up and I couldn't verbalize to her what was wrong. I think ultimately my mother had to come get me late at night.
I don't think I have ever told that story before. And I didn't really intend to now. But there it is.
Our circumstances have changed recently. I used to be a teacher. I reached a point where, for a lot of reasons I won't go into now, I needed to change careers. I told myself I would teach one more year, but in that year I need to find some other plan. I spent a lot of time soul searching, and suddenly decided to enroll in community college for an accounting program. I kinda feel like I pulled that out of the air, but it really has been the best thing so far. I, as I am finding so many do, assumed my whole life that accounting = taxes. It doesn't. MY JOB HAS NOTHING TO DO WITH TAXES. (I am getting kinda tired of people asking me if I am going to get real busy in January.) I became aware of this as our school bookkeeper suddenly got moved out of the reception office of our school, got her own office, and I started to pay attention to what she did, since I had always just assumed she enrolled and withdrew students, answered phones, and other secretarial duties. I also had to work with her on my program budgets and fundraising and so forth. For some reason, that simple act of her getting an office made her job seem so much more important and interesting.
When I started my accounting program, I knew relatively nothing about accounting. I had a pretty strong math foundation, and had originally been a computer science major in college (but dropped that). I stepped out on faith for probably the first time in my life, and so far it has worked out great. I found I really enjoyed the sort of anal, obsessive aspect of it. After teaching for nearly ten years and all the chaos that brought, I was ready for a quiet, controlled profession. I was the top of my class throughout my program, have a 4.0 GPA there, and finish next week. To do this, I had to sacrifice a lot of my time. I was going on maybe 5 hours of sleep throughout the school year. I left the house at 6:30 am and didn't return til 10 pm. I also took out what now feels like a really large student loan, however I told the school to return any excess (I need to check that they did) and I have been paying toward both my school loans the whole time.
I knew the economy was bad and that this was a huge risk. My last teaching paycheck came in September. I was terrified I wouldn't find another job, and even if I did, I knew it wouldn't pay anywhere near as well as teaching had. I was saving aggressively throughout that time, but when the market tanked and I lost most of the money in my Roth IRA, I dumped all of my savings into my Roth, hoping that it would pay off when the market came back. That's why I only have $2000 in savings now. I started looking for jobs in July and was so blessed because I ultimately got offered two jobs (one after I had already accepted the other). I started the job in October. (And I love it so far, but that's a whole different subject :)
Sometime after that, I started getting hooked on Suze Orman somehow. I am not sure why I happened to start watching her, but she has become my late-night Saturday laundry folding show. I don't always agree with everything she says, but she makes a lot of sense. I started to feel a sense of dread because she recommends an emergency savings of 8 months expenses. We don;t have even one, I think. I also knew our income was going way down because of the job change, and that we were going to have to address our spending at some point. What I finally realized in the midst of the panic attack I had at work the other day - where I came home and told my husband we both had to get weekend jobs and he refused and suggested I go back on medication - was that I have the tools now to look at our finances objectively. I know what an income statement is. I know what a budget is. I know how to balance things. This is what I do for my job now. Why can't I do it for my home? It is harder - because it is personal and it is really hard to look at what you have been spending and what you have been spending it on. When things have to be cut, it leads to squabbles. What I was shocked to find - as I will document here later - is that in October, we spent twice what we made, and I was able to come up with a (rather tight) budget that balances.
Saturday, December 19, 2009
Why am I starting this blog?
Total transparency. That is what they tell addicts and adulterers, isn't it? I am embarking on a journey to eliminate our debt and build our savings in the next year. The thing is, I know me. I have to be kept motivated and accountable, or this will be a forgotten resolution in two months time. Like the snuck cookie, I will buy things I don't need and not tell. Sometimes I spend money without even realizing it until the bill comes and I have to face what I bought. I have struggled with finances my whole life, my husband and I are both bad about managing our money and are instant gratification buyers. A lot of our debt is from unfortunate circumstances. A lot of it is our own fault. I will go into more detail in following posts.
I have started watching Suze Orman. I bought some of her books (on half.com for .75 cents+ shipping). I also watch the following program called "til Debt do us part". I have tried to make budgets in the past - I didn't know what I was doing, I have tried to pay down debt in the past, and there have been times when I have just told myself to "close my eyes and hand over the credit card". I have been very very poor, and I have been quite well off. I realized that now I have the tools to take an honest look at our money and our goals and develop plans and turn things around. It's the sticking to them that will be hard.
I plan to document our successes and failures here. I am going to lay it all out - how much we make, how much we spend, and how much we owe. I hope to celebrate the milestones and come here with my tail between my legs when I mess up, and resolve to get back on track. My mother would have a heart attack if she knew what I was planing to put out here in the cybernets for anyone to read. But, in doing research to convince myself to keep this blog, I have found that all kinds of people are doing the same thing. Some tell more details than others, and most owe a lot more than I do. Will anyone else read this than me? I don't know, and I don't really care. Maybe I will inspire someone. Maybe someone will inspire or encourage me. Ultimately, this is by me for me and I hope in a year I will read this and celebrate being on a new path.
I have started watching Suze Orman. I bought some of her books (on half.com for .75 cents+ shipping). I also watch the following program called "til Debt do us part". I have tried to make budgets in the past - I didn't know what I was doing, I have tried to pay down debt in the past, and there have been times when I have just told myself to "close my eyes and hand over the credit card". I have been very very poor, and I have been quite well off. I realized that now I have the tools to take an honest look at our money and our goals and develop plans and turn things around. It's the sticking to them that will be hard.
I plan to document our successes and failures here. I am going to lay it all out - how much we make, how much we spend, and how much we owe. I hope to celebrate the milestones and come here with my tail between my legs when I mess up, and resolve to get back on track. My mother would have a heart attack if she knew what I was planing to put out here in the cybernets for anyone to read. But, in doing research to convince myself to keep this blog, I have found that all kinds of people are doing the same thing. Some tell more details than others, and most owe a lot more than I do. Will anyone else read this than me? I don't know, and I don't really care. Maybe I will inspire someone. Maybe someone will inspire or encourage me. Ultimately, this is by me for me and I hope in a year I will read this and celebrate being on a new path.
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