Thoughts as we come to the end of the year...

Heh. The first one is, I made it! I haven't used the credit card for over a year. And, until maybe this month, I haven't even been tempted. Living on a budget works.... if you stick to it. We have come a long way. I am proud of what we have accomplished, though at the same time, I feel beaten up. It is hard, now especially, to stick to the budget, and I have been overspending lately.

We found out we are having a boy. Even though I wanted a girl, just knowing this suddenly made the pregnancy so much more real. I also started feeling him move in the last few weeks, and have started really showing in the last week or so (though I really just look really fat, I think). I am wanting to buy stuff for the baby and worrying about big ticket items. I have been going over budget and my account is suffering for it. BUT I drew the line at the credit card. I did spend some money that was sitting in my account for car repairs, though. And it isn't like I went crazy... I bought some clearance clothes at Target and some cloth diapers and I am making the nursery linens, so I bought fabric (which I still don't have enough of). But when you are on a tight budget, and when I really have myself focused on being able to pay a lot off this summer, it is hard to carve out even a little bit.

We have also gotten hit at work - Neither one of us got bonuses or raises. Although, my husband's job has "promised" retoractive raises and bonuses in June. He thinks this means layoffs are coming, though it is unlikely he will be laid off. In addition, our insurance premiums are skyrocketing. They are going up $150 in January and another $150 when the baby comes, so we are essentially taking a big paycut. I don't know what is up with my job. They refuse to admit we are hurting, but it is a huge deal that we got screwed in both raises and bonuses and we saw several large rounds of layoffs this year. I also feel I am terribly underpaid for what I do for them, and feel I deserve an additional raise to balance that out. I was surprised I didn't get it, and am debating at what point I need to ask for it. I just feel I am not in a bargaining position right now. That may change next fall. I really think I will be looking for another job by then, not just because of money but also because I spend 2-3 hours commuting everyday. I am having a hard time justifying that knowing I will have a baby this time next year. I keep playing with the stay at home scenario budget, but I just can't do it. Not only do I not really want to be a stay at home mom, we would be cut to nothing. I don't think it is worth it. It is worth it to find a better paying and/or closer to home job though, even though I ultimately love my job and am very comfortable there.

Making things worse, my laptop finally gave up the ghost this weekend. My husband keeps talking about getting me a new one, but I hate spending that money. All I can think about are all the other expenses we have coming up.

Looking back, I said there were three things, I think, that I wouldn't be able to do and still pay off debt:

1. Buy dolls: Well, I did. I am not entirely sure, but I think I bought three dolls this year, and minimal doll accessories. While this is certainly more than zero, it is a whole lot less than the several hundred dollars a month I was spending before. There have been many things I have had to pass on and watch retire, even though I really wanted it. There's always ebay? It did get easier once I got pregnant, though. It is a lot harder to justify these sorts of purchases knowing I need things like cribs and bottles.

2. Get a dog: Well, I did. Barely made it a few months on that one. He was expensive initially, and has been lately because I am taking him to training classes before the baby comes. But, overall, he has not been an overwhelming financial impact. I think after having such an old, sick, expensive dog for so long, I forget that the younger ones aren't generally as expensive. We have also built up a good savings fund for pet expenses. With everyone's shots coming due in the next few months, I am much more calm about handling that than I was this time last year.

3. No 5th anniversary in Hawaii: Yeah. We had to let this one go. There was no way. We did spend a nice week at my parent's beach house using money we saved for that purpose. I spent a lot of time on the beach, reading books, and getting pregnant. :) Maybe for our 10th we can do Hawaii?

4. No baby: Well, I did. Well.... I will. My arrangement with myself was that we would start trying once the credit cards were paid off, which is what we did. It took a few months to get pregnant, which allowed me to also pay off one of the loans. It did not take anywhere near as much time as I thought it would though. I thought we would be seeking medical treatments at this point, but I guess we were very lucky that it did not come to that. It does, however, throw off my 14 month to debt freedom plan, and I have had a hard time dealing with the realities of that. I hate stretching the money stuff out so much longer, and baby expenses, daycare, and maternity leave are all going to make it even longer.

So. I guess the lesson here is that even though you get on a budget, and by definition you have to sacrifice, you do not have to pass on the important things. I was still able to get some fun things - not as much as I wanted to or would have a year ago, but didn't have to give it up entirely. And the important things, like animals and babies, can still be worked in and worked around. You just have to be flexible and plan.

I think back to the first few months, when we were really getting by on nothing. When buying my book club book was my entire "fun money" allotment. When a month with five weeks cropped up and we ran out of gas and grocery money. When I had to pay vet bills with no pet fund cushion. When a leaking roof was the end of the world. When a hotel and plane for my cousin's wedding was a huge deal. I am griping about how low our sinking fund is now that we used it for it's purpose: Christmas gifts. But I am still entering January with around $300 in it, which is $300 more than I had last January! We have been through a lot, and we have come a long way, and we have been able to increase things, like gas and fun money, as things have been paid off or income increased (fat chance).

This has gotten long, so I suppose I will post my looking ahead thoughts separately.

February income statement

February income statement

Revenue

I got an extra week's pay in one of my paychecks. My husband deposited some birthday money. I believe some of the bank balance is for our March mortgage, but I am not quite sure. It just seems high to me.

Fixed

Power was super high. Just look at that. Ugh. We had some snow and some very cold days. We are finally seeing the lowered cable price, though that does include a partial refund for the month, so future cable should be around $80. I still think that is super high for the basic stuff. We had our termite bill for the quarter.

Debt repayment

Just when I thought #2 was paid, it hit me with a $5 interest charge from the previous month. I now have that paid off again. I own my carpet (#3). We paid off most of cc#4 which is my main card. I was going to pay the whole thing, but then the fiasco with the roof, and I opted to save some money for that instead. That was a very hard decision to make. Minimums to all else.

Variable

Most of these are discussed in the cash jar post. Some highlights: Pet. Is very high, because we adopted our dog, and purchased items for him. This figure includes the money we also still set aside for the pet jar. The only thing I can say for myself, is I did that all with cash. Mostly money from my extra paycheck that month. We bought our convention tickets for this summer, so that is set. Bank fees are finance charges. Other than the dog, we really stuck to (or below) our budget for this month.

Savings

We added $120 to the sinking fund from the cash jars for the month. We saved $500 towards our roof repair, instead of paying off a credit card.

Looking back, I am not sure I calculated the bank balances properly, and we way overspent on the pet category (and power!) but we came out positive and did really well overall, I think.

A little history

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.