Quick Start Guide

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I’ve been wanting to write this post for a while; a very basic, down and dirty, step by step guide on how to get started on being debt free. This is what WE did, and more or less how I usually respond when people say “I want to take over my finances but how do I start?!”

  1. Get Mad. Write down all of your debts on a piece of paper. Everything. Every personal loan, every credit card medical bill, car loan, student loan (you can add the student loans together for each person in the household to save room on the page), the mortgage, everything. Make it look nice because its going to be on display.  Add all of those numbers together and write your total on the very bottom of the page. Woah huh? Now post that up someplace where you’ll have to look at it every day. One of those places in your house where the floor cleaner people call a “high traffic area.” Now leave it there for a few days and just marinate on that figure.

    This can also be the time when you dream about what you would do with your life if you didn’t have debt payments. For me it was to be a stay at home mom of a big family. If we didn’t have car payments, credit cards, student loan payments, we wouldn’t need as much income, I wouldn’t have to go to work and we wouldn’t have to count on baby sitters or after school programs or family members to take care of the kids.

  2. Educate Yourself. Now you know how deep of a mess you’re in, you’ve marinated on it until the point where you’re mad. But don’t be mad where you’re just flopping around like a fish out of water with no real direction. Educate yourself about debt reduction and financial fitness. If you knew how to manage your finances effectively, you wouldn’t be in this mess right? So ask an expert.

    fullsizerender-1-2Read Dave Ramsey’s book Total Money Makeover. Sign up and attend Financial Peace University. A lot of people like the book Barefoot Investor, but personally I haven’t read it yet. I also really was inspired by Ruth Soukup’s book Living Well, Spending Less. Find some expert plan that inspires you and create your game plan.

3. Make your Budget. You HAVE. To have. A Budget. Your budget is your new great uncle that died and left you all kinds of money. Never have we ever “found” more money than since we started a strict budget. Last month I wrote a post about how to make a budget that fits your income. You can read it here. I worked really hard on it and made sure to include tips on how to cut expenses and add income, so I hope that you find it helpful.

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4. Track your Progress. Motivation is key. Personally, I know I can only deprive myself
of pizza delivery and Dunkin’s coffee for so long without seeing some type of payoff. I like these debt free charts and I used them a lot for my student loans. But they just weren’t doing it for me now that we’re tackling Jeff’s loans because he has like 17 of them. So I switched over to this style with the boxes. Find some type of way to show what you’ve accomplished, and then post it up in the same high traffic area you have your debts listed.

5. Tweak and Adjust. Don’t get discouraged if you’re not debt free in the first month, or if you fall short of some of your goals. Reflect on what you’ve learned so far and adjust your plan for the next month. Change your goals to be more realistic, or change your methodology to accomplish your goals no matter what. Cut out expenses, sell something, add more income through a side job or overtime. Like anything else this is a journey, and its not without stumbling blocks or a learning curve. But no matter where you are on the journey, you’re always better off than before you started.

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How to Make a Budget

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The most important thing we did when deciding to get out of debt and take over our finances was to make a budget. Right after making a list of all of our debts and posting it up in a central location, looking at it every day and marinating on it for a while. Now that we’ve had an updated, working budget, I have no idea how we were functioning (or trying to) without one.

If you want to get out of debt and have savings goals, you. Need. A. Budget. No lie. No way around it.

But when we were first starting out, actually MAKING one was the hardest part. This isn’t a skill taught in school anymore, and judging by, not only my personal experience, but the recent report from the Federal Reserve that states that Americans now carry more credit card debt than ever, even before the Recession of 2009, people are not seeing responsible financial behavior modeled in their homes or other relationships. What do you actually do? Pen to paper, what do I need?

  1. Gather your bills, receipts and pay stubs for 3-4 months. As with anything, you have to start with a good foundation. Income and bills can fluctuate, especially utilities and grocery spending, or income if you’re an hourly employee like myself. The rest of your budget is based on what you observe yourself bringing in and spending, so those numbers need to be accurate, and one month’s worth of info isn’t going to cut it. Grab 3-4 months worth to start.
  2. Figure out your monthly take-home pay. Whether you get paid monthly, weekly or bi-weekly, total up all of your paychecks for each of 3 months and get your total income for each month. Then add them all together and divide by 3 (or 4 if you’re using 4 months of data). This gives you your average monthly income. If you are self employed or have an otherwise irregular income, read Dave Ramsey’s guide here, on how to make a budget with irregular income. (This is the fun part where you say “Yay! Look at the money I make!”)
  3. Figure out your monthly expenses. This part takes some work, especially in regards to the time you put into it. To track your spending monthly, get all your bills together for one month. This is just going to help you create categories for your budget, and you’ll be surprised at how many there are when they’re all out there on the table. Don’t forget to track things like groceries and housewares. There is a worksheet here from consumer.gov for a visual aide.
    Then, get the bills from the other two or three months you’re using for your baseline data to make your budget, add the number for each category and divide by how many months. Example, for category Electric Bill, go back and find your electric bills from May, June and July (if those are the months you’re referencing), add them together and divide by 3 to give you your average expected electric bill.

    Tip: For utilities that fluctuate throughout the year, such as oil in the winter or electric in the summer when AC’s are running, use the months where these numbers are highest to create your budget to avoid running over your budget for an entire season. You might not spend all of the money allowed for your oil budget in August, but you’ll be thankful for the cushion come February. If you are running a tighter budget and aggressively paying off debts and not keeping a big cushion in your utilities account, redo your budget every few months using current or more relevant data and make your adjustments accordingly.

    The most important expense to include in your list here are your savings goals. These can include your starter emergency fund of $1,000 if you’re doing the Baby Steps, Christmas gifts, or medical bills that are upcoming. As Dave Ramsey says, “Pay yourself first.” After all, a budget is how you tell your money where to go to avoid wondering where it went (another Dave-ism), and every singe dollar of your income needs a purpose.

  4. Figure out the difference between the two. Very easy step but a very difficult one. Total up all of your monthly expenses (including your savings goals that we described earlier as a necessary expense). Then subtract that number from your total monthly income.
    Take a deep breath.
    Is that number positive? Then woo hoo!! Nice job, you make more money than you spend. You have met all your monthly expense requirements and savings goals and have money left over to service your debts.
    Is it negative? You then are in the majority of people who spend more money than they make. Proceed to step number 5.
  5. Make adjustments. If you spend more than you make, you will need to make adjustments to your budget. You can’t keep on running deeper and deeper into the red every month. You’re not Congress after all.
    Look back over each category of your monthly expenses. What surprised you? Were there a few things that cost a lot more than what you had been telling yourself there do in your mind? What we did when we were in this very same position a few years ago was to rank our expenses from most to least important, and then lop off a few at the bottom of the “important” list. This is called prioritization. It is absolutely essential. If you can’t meet your monthly expenses with your income, some things have to go.
    So what can you cut or reduce? This will be a mindset that will carry you through. Every month I’m thinking “what can I cut? What can I reduce?” Check out my post about What Do You NEED Really? for inspiration. For starters, the first things to go for us were:

    1. The cell phone bill. This saved us hundreds of dollars and was a huge motivator. This seems like a big shake up, and some people might stop right here and abandon this whole budget mindset because as a society were are addicted to our phones and cannot even remember how we survived just a few years ago without them. But sometimes a big shake up is exactly what you need. We have honestly not suffered at all without our phones. Jeff has a work phone that his company pays for, and I use my phone just like I used to except only when wifi is available. In the great scheme of priorities, the latest and greatest phone out there with the fastest internet were not even close to the top.
    2. Subscription box. I used to subscribe to Citrus Lane, a subscription box of kids stuff I used to get for $20 a month. I liked getting it, but it was an easy thing to cut. There are so many more subscription services on the market now than when we started; it seems like the industry has kind of exploded, whether its dog treats or kids stuff or new clothes and accessories or makeup or whatever. What seemed like a trifle to me then might be very relatable to people now. None of these are necessary for sustaining your existence.
    3. Weight Watchers app and Gym Memberships. The WW app was another $20 a month, and I don’t even remember what our gym memberships were. I like the WW app, but I had successfully done the program using pen and paper for free before. Cutting the account and going back to this low tech method was a pain in the butt, but I felt like it was worth it. There was a time we had gone to the gym regularly, but that was long ago. Both of us working and having kids at home, it was easier for us to work out at home, and the monthly gym payments had to go.
    4. Reduce grocery spending. When we first started out we were spending over $1,000/month on groceries and eating out. This is obviously outrageous and unsustainable. Since then, keeping food costs down has been my constant hobby. Read all of my thoughts on Surviving the Grocery Stores and Meal Planning, Even When You Hate It. And check out my Week of Budget Dinners.
    5. Reduce heating and electric. Even up until this week I’m still working this. A budget isn’t an iron clad soul surrender that guarantees everything is going to go perfectly. You continuously will have to recommit to your goal. Look at my post Little Things for ideas on how to cut utilities. Turn down the heat, turn up the AC’s or turn them off. Line dry clothes, shorten showers and go to cold water washing. Wring every penny out of your budget to work closer and closer to your goals.
    6. Increase income. Another thing that you can do to get things moving aside from cutting expenses is to add some income. I have a crochet goods side business. I have a friend that drives for Uber. Pick up a few shifts at a second job. One of my favorite things to do for more income is to sell stuff we don’t like/want/need/use anymore. Check out my post 7 Things You Can Do to Save Money This Week! for more information and ideas.

Thats it really. Finances are just numbers, and not even hard math, just addition and subtraction. Ok and division when you figure out the average in the very beginning.

Frequently revisit your budget to make sure that it continues to work for you. Adjust your expected monthly expenses and savings goals. A budget isn’t useful if its not accurate.

And a budget will change your life. You will feel more in control. You will see the change not only in your finances, but over time, in your outlook on spending, saving and what your goals are.

Just try it for six months and see where it takes you.

Mid Year Update

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So somehow 2017 is half over. Lets look back on the goals we set on New Years and see if we’re on track so far.

  1. Don’t Take on Any New Debts: Check! So far we’ve only reduced our debt and not taken any new debts on, even despite an unforeseen $800 medical bill.
  2. Recommit to Mint: Meh. This one is about 50:50 so far. I definitely started out the year with more excitement about Mint, and its kind of tapered off since then. Taking this mid year review to reinvigorate!
  3. IMG_3089Pay Off the Van: Check! And a big Wooooooo!!!!!!! We now have NO car payments and both of our cars are totally paid for. I’m not sure if we’ve ever done this as a couple, and it feels so good. Now that $191/ month is going back into the home renovation account that we dipped into to make this happen since there have been huge delays in getting our boiler replaced. After that, it’ll go into the debt snowball towards my remaining student loans.
  4. IMG_3088Student Loans: At the beginning of the year my goal was to get my total student debt under $10,000, which I’ve done so check!! I hate my student loans so much; I have such a bitterness towards them. Especially after I looked back over my transaction history and saw that when I initially started paying them off in 2010, almost my entire payment was going to just interest. Seriously like $113 of a $140 payment. Just interest. Just for the sole privilege of having a loan. If you follow me on Instagram you know that I’ve paid off Mohela completely and my total student debt is now at $7,915.
  5. Remodel the Bathroom: Nope. I can’t. Believe. How long its taking to get this boiler replaced. We seriously started this process in the fall. Almost zero progress has been made so far. We needed to pour a concrete slab in the basement to put the thing on, then we have to have someone upgrade the electrical panel, and then the guy will come out and do it. Not to mention the weather had to be above 50* for a certain number of days so the concrete will cure. The slab is now poured and set, which is something, but we’re still waiting for an electrician. So I guess we’ll sit on this one for a while. Which makes me crazy because the plumber didn’t even give us a rough estimate, so we don’t have a good idea how much money we need to keep on hand to pay for this. We had budgeted and saved $10,000, but when we told him that he laughed and said “no way, not that much.” So now I feel like we have some extra money hanging around that we could be using for something else. So the whole bathroom project is probably going to be pushed to next year, since literally nothing can happen until the old heating system is out and the old chimney is removed.  Sigh.

 

So I feel confident about where we’re at for the halfway point this year. The only thing we’re stalling out in is the bathroom project, and that has a lot of moving parts that aren’t just financial. I can’t wait to see where the next 6 months takes us.

Spring at the Bailey’s

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Spring is in full swing here at the Bailey’s! There is so much going on here I haven’t had a lot of time here to post much at all, and I’ve been mostly using Instagram, but I’m trying to get better with that.

IMG_3353Preschool and kindergarten are winding down and we’re getting dates for move up ceremonies and back packs full of completed workbooks and projects. Abby will be in pre-kindergarten next year (basically the same thing as preschool) because of her December birthday, and I can’t believe it but Sam will be in first grade. When he started preschool I was a “My Baby is Growing Up” mess. Kindergarten I was ok. Now he’s a “grader” and I’m a mess again.

The weather here has been on and off hot and sunny followed by cold and rainy. We’ve been having so much fun doing outside things on the hot days. The other day I bought an 8 foot kiddie pool (not a budget friendly purchase but one that will definitely get lots of use). We’ve also done mini golf, IMG_3335lunches at the lake since there’s no charge for admittance for another few weeks, and visited the playground near our house that no one is ever at.

The rainy days have been for spring decluttering and working my side hobbies like crochet and Poshmark. Poshmark has been pretty dead this month but crochet actually picked up a bit so that’s nice. As far as decluttering, I’ve tackled our bedroom closet and the kid’s playroom (again). Jeff is working on a beautiful shelving unit for the playroom complete with reading bench that I can’t wait to install.

IMG_3422We’ve been participating in a No Spend May challenge with intermittent success. We have a couple of events that call for gift giving this month. Especially Mother’s Day and my sister’s High School Graduation, and of course some (not really) mandatory summer purchases like a float vest for Ben for when my mom opens her pool, summer shoes for all three kids after striking out at the consignment shop, the kiddie pool, and a dress for myself for the grad parties we have this month, which I actually got on sale for $9.99.

We’ve faltered a few times with our spending ban, but earlier this month I was still ableimg_3428.jpg to pay off my Mohela student loans and making some awesome progress with my next debt, a different student loan through Navient. At the beginning of the month it was at $3,220 and 7.25% interest, which is 2% higher than my next highest student loan. As we sit it’s at $2,800, and Jeff got some travel reimbursement through work, and all of that $245 is going right towards this loan. I’m really hoping to be able to pay this off by the end of the summer, and then I’ll be down to ONE student loan! I can’t believe it.

Last but definitely not least, the most exciting news for the season is that we’ve decided to have a family vacation next year! I’ve written about a previous family vacation before here. Other than over nights and day trips, we’ve never had a family vacation. If you follow me on Instagram, you know that growing up, I was used to week long camping trips and trips to the beach every summer. We had a camper and then bought a bigger one, went to amusement parks, ate out and did whatever we wanted. My parents were also drowning in credit card debt that they remortgaged the house three times to cover, became upside down on their mortgage, eventually divorced and last I checked, there are foreclosure proceedings beginning for my childhood home (my dad still lives there and we haven’t spoken since 2011 due to his alcoholism and other poor choices that I won’t go into).

IMG_3321Anyway, we were sitting looking at adorable lake cabins on the computer the other night, talking about how great it would be to take a real family vacation. We’d have our own place to stay and not worry about noisy neighbors or finding an affordable place to eat. A nice calm lake with no waves and a private beach is perfect for someone like me that is constantly worried about big waves knocking little people over and who’s running in which direction. We could cook our own food and grill out and take the kids out in a canoe. Then we looked at each other and said, you know what? Let’s do it! We’re thinking my loans will be paid off by then, leaving only Jeff’s student loans and the mortgage for debts, and the kids are only little for so long, its time to make some memories! We created a separate savings account, created a ballpark budget and figured out how much per month we would need to save up over 12 months to make it, adjusted our current budget and away we go!

I’m working on a Mid-Year Report type post based on the goals we set on New Year’s, so stay tuned for that! Happy spring!

Weight Loss on a Budget

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My weight is something I’ve struggled with my entire life. Over the past 3 years, I’ve gained and lost over 100lbs (not at the same time).  I wrote another post at the beginning of this particular effort here and here.

I can’t even really blame my pregnancies if I’m being honest. With Sam, I had daily and continuous vomiting and when I got home from the hospital after having him, I was 30lbs lighter than my pre pregnancy weight.

Sam wasn’t nursed, but Abigail and Ben both were. Everyone says breastfeeding helps you lose the baby weight because you use so many calories. But the exact opposite happened for me. It made me hungry. I was ravenously hungry. All. The. Time. And at the time, with other kids running around and a house in remodel-mode, it was just easier and faster for me to open a cabinet and jam four cookies in my mouth than to plan and sit down for a real meal.

And the weight just piled on.

After Abby I gained and lost 60lbs. After Ben I gained about 50. But I had lost it all after Abby and I’m determined to do it again. We know we want more children, and I can’t be packing on 50lbs after every one and not losing it.

On 11/28 of last year, I recommitted to reaching a healthy weight and so far I’ve lost almost 40lbs.

In my pre-budget life I’ve had gym memberships, bought DVD’s, special health pills and shakes and branded foods and bars. I even had a Weight Watchers membership that I paid $20 for monthly and didn’t cancel even after I had lost the weight I wanted. Ugh if I could get a check back for all that laziness.

So here’s how I lose weight now.

IMG_3065Old Trusty, Weight Watchers. A long time ago (we’re talking maybe 10 years) I worked nights at a gas station in town. Actually, I worked pretty much continuously and even when I logged 60 hours a week I’d bring home like $250 and think I was rich. Anyways, my manager (and friend) told me about Weight Watchers and gave me her old paper slider, quick start book and food guide that she had gotten at a meeting years before that.  And its really been such a blessing because even though they’re missing some pages, I still use them to this day. You can still find them on eBay if you search “Weight Watchers Turn Around slider,” or “Weight Watchers Quick Start Guide,” usually for under $20.

Eating regular old food. I never buy into those diet gimmicks anymore. You know the ones. The shakes, drinks, teas, bars, pills, supplements, frozen meal boxes. I’ve tried all that stuff in the past, and you know what? Those things might help you lose weight, and do it fast, but what are you going to do after to maintain? You have to learn how to eat actual food to maintain a healthy weight. Plus they’re so expensive it gives me palpitations.

IMG_3046Hit up some yard sales. The fitness industry in America is a multibillion dollar one. They don’t even have to take our money. If someone with muscles tells us they use something, we’ll open our pockets and dump all our money out for them. Don’t believe me? Watch a few infomercials, they’re on at 3am (usually when you’re up with a sick kid). That in mind, we’re also one of the most obese nations (#8 in the world). So obviously people aren’t using this stuff. And where do they get rid of it for the lowest prices? Yard sales. At every yard sale I’ve been to (Hint: its a lot), theres always a ton of fitness stuff. I suggest getting a couple different weights, maybe some resistance bands and some work out DVDs. I have 3 and 5lb weights and a couple of DVD workouts that I rotate so I don’t get bored.

Use what you’ve got. Right now what I’ve got are two (heavy) kids home during the day, a 2 ton double stroller, and a nice quiet neighborhood with a slight incline. Abby is four, so she doesn’t need to be in a stroller, but I stick her and Ben in it as many times per week as the sun is out now and use it like a resistance cardio. Theres a mile route that I usually walk, and yesterday we went even a little further (though my step counter didn’t log it because I had it in the cup holder of the stroller instead of my pocket. Ugh). I also have a yard that needs a ton of work, a 13 step staircase (free Stair Master in the privacy of your own home) and sometimes a few feet of snow outside that needs shoveling.

My Splurge: I know I know, a splurge?? Yup, after we paid off the van, we splurged on a Beach Body subscription to get more workouts and more difficult ones. Jeff tells me its $41 every 3 months. It’s not an expense that I really like, but I do think its worth it. There are so many different types of workouts I can do something different every night, and they keep me motivated and out of the gym.

I plan on posting more here about getting and staying healthy, but that’s where I’m at right now. I actually have my 1 year postpartum follow up appointment (three months late) early next week, so I’ll really be pulling out all the stops to try and get as close to ideal weight as possible.

There are Sacrifices to be Made

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When we got married and started out on our own we were young, 21 and 22, but we didn’t care.

I had just graduated nursing school and passed the boards four months earlier, and Jeff was in the Marine Corps and working an entry level tech job.

So we had nothing. We bought a couch and a love seat for our tiny 650sqft apartment and everything else we had was a hand me down.

Eventually I replaced our black folding card table dinner set for a family antique after an elderly aunt and uncle went into a nursing home. I loved it. It has big claw feet and was old and wasn’t foldable. And that’s what we’ve been using for about 6 years.

Honestly, the love affair is over. The top wobbles and the veneer is starting to peel back again. And it’s just not my style.

I decided that since this year for Easter I’m having over all of my siblings, step siblings, spouses etc, that this would be a great time to replace the old table with something brand new to us. I picked out a really nice one after weeks of looking and comparing. I picked up extra shifts at the hospital and finally got all of the money together to buy my new table and a 3 person upholstered bench. That’s it up there in the photo from the Wayfair site.

Except I can’t do it. I can’t bring myself to spend the money knowing that we still have debts and things coming up that need paying for.

So I’ve sacrificed my new table for now. I took $360 of the 900 I’d saved up and used it to pay off a small student loan, and that helped ease the pain. I guess ole’ claw feet can survive another family gathering.

Maybe I’ll just get a nice tablecloth?

Time Management

I really need to learn how to manage my time better.

There are so many things I want to do with my days, but I just seem to get clutter of the brain and I don’t get to do as much as I plan.

I have books I want to start or finish, including the Seamless Bible study, I want to keep my personal resolution to keep my house clean enough for drop in guests, I want to work on this blog more (I have so many ideas!), I have my crochet side business that has kept me pretty busy lately, and then of course this whole wife/ mother thing 😉

I’m thinking maybe writing a schedule out for my week could be helpful. Like Monday could be a crochet day, Tuesday for reading, Wednesday a blog day etc etc…

I also have an update to write on my baby weight loss plan; as of yesterday I’m down 25 lbs! I’m officially wearing my first pair of ‘goal jeans’ around and out of the house and they’re comfortable.

As far as writing goes, because I always get a flood of ideas whenever I start typing, here’s a list of things I’m dying to write about:

  • Baby weight update obv.
  • Books I plan to read
  • Seamless post on the first few chapters
  • Ben’s First Birthday!! And how to stay on budget with a child’s birthday party
  • I also want to start writing “New Home Ec,” a guide to how to do things. Things I think SHOULD have been taught in high school home ec but weren’t, like how to do laundry, how to clean your house, how to plan meals and budget for groceries etc etc… Just real basic basics that I didn’t know when we got married and was suddenly responsible for a household.

No time like the present I guess, today can be a cleaning day (since the house needs it) and tomorrow I guess I’ll do some reading?