I’ve Paid For This Twice Already…

Archive for the ‘goals’ Category

The deed is done. The car is fixed, it is currently sitting in our garage, and a extremely large portion of what we had available in cash funds only a few days ago has been electronically zapped over to our local Saturn dealer.

We paid the dealer $2781.94. We put $800.00 on the 90 days same as cash credit offer from the dealership. Saturn Corporation has declined to accept any responsibility for the poor craftsmanship of their vehicle, so they paid nothing.

On the one hand, I’m fine. More than fine. We did it! We managed a crisis in a responsible manner and we will be more than okay. It feels accomplished. We had an emergency fund, and it did what it was supposed to do.

On the other hand, I’m overwhelmed. We just spent more than I could imagine spending on anything, in cash, on this car repair, and took on more debt besides. In a way, it feels like we just wiped out our progress. I know that we did not - we have made much more progress than this in the past year - but this is still sending shockwaves through me. I’ll adjust eventually. Maybe tomorrow.

We used to have a safety net, and we do still, but it is very very small. Since the car wasn’t ready until my spouse got paid after all, I left $300 in our emergency savings account and took that amount out of my spouse’s paycheck instead to get to $2781.94 paid. If all goes well for the next two weeks, we should be okay with that, but we still have that $300 if we need it, because I am cutting that *extremely* close to the wire. This avoids us having to pay a low balance fee on our savings account this month unless we end up using it. I wouldn’t have been comfortable sending that last $300 from the paycheck to Saturn anyhow, because if *anything* unexpected happened, and I mean anything, even a sick visit for a kid to the doctor or gas prices going up $0.10 a gallon, we’d be in trouble for the next two weeks, and with no emergency fund, we can’t afford trouble. This way, we have a little bit of wiggle room, it is just working for us a wee bit instead of sitting in our checking account, and hopefully ends up the seed money for our new emergency fund.

As for emergency funds - I have a lot of thoughts about that, but they are still forming in my brain. Until we’re back to $1000, there isn’t pressure to formally decide if we’ll save more than $1000 at this time, so I have some space to think about it. But it is percolating.

Out priorities? Leave the $300 in the emergency fund. Pay off the $800 that remains of the repair bill. Pay the last $175.17 of the credit card. Get the emergency fund back to $1000. Then consider possible next steps, and move forward. On to debt freedom.

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Something I’ve learned over the course of the last year is that you can’t always predict triumphs, and you can’t predict setbacks. Since I started this blog, we’ve had several minor setbacks and a few major ones, and in each case, I’ve (eventually) looked toward the future and felt that we’d be able to get back on track for the long term, even if the short term wasn’t looking quite so good. However, when we had some small or not-so-small triumphs in the form of unexpected income that could be applied to debt, I immediately started thinking about readjusting our goals and speeding up our debt reduction plan.

Which, in reality, is setting myself up to not be able to meet my goals. Just as we have had unexpected things happen monetarily in a positive direction, we’ve also had things happen in a negative direction we couldn’t have predicted. And if I shift up my goals in response to every positive occurrence, I’ll have to shift them back downward every time something negative happens. And I really do not like to shift things backwards. Goals aren’t effective when they are constantly moving targets.

This is not to say that I don’t want to get out of debt ahead of our original December 2010 goal. I would be more than thrilled if we do manage to get out of debt in 2009, and I am still hopeful that we can make that happen. I will continue my focus on snowflaking and generating new sources of alternative income and dedicating every penny we have to debt reduction. But reasonable long-term goals help keep things in perspective. Just because December 2010 is my goal doesn’t mean I can’t come in ahead of it. But I don’t necessarily need to constantly adjust my long-term goals to reflect that.

A commenter named Jane said this as part of her comment on one of my recent posts about the car repairs:

This doesn’t put you behind, just less ahead than you’d hoped.

And it really resonated with me. Keeping my eye on the long-term goal of being out of debt in 2010, this recent setback is just a (somewhat large) blip on the screen of my entire financial horizon. December 2010 is still firmly in reach. And I can’t forget that.

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The dust has settled, we’ve (kind of) wrapped our heads around our new reality, and we’re ready to take the next step forward to get back to where we were a week ago. Which will probably take months, but what is progress without a setback or two? Once we get back to where we were, we’ll discuss how to get further than there. I’ve still got my eye firmly on the no credit card debt plan. It will just take a few more months than I thought.

We’ve decided to repair the car, and repair it at the Saturn dealer it is at. My spouse called just about every single repair shop in the phonebook, large and small, and the prices ranged anywhere from $3600 to $8800. Yes, $8800. Not going there. The price the Saturn dealer quoted my spouse did not include tax (which he knew but forgot to tell me, heh), so it originally was in total around $3900 (we have 6% sales tax). So my spouse, at my suggestion, used the $3600 quote from another place (which did include tax) as leverage, and asked for a 10% discount. The service rep discussed it with his manager and called my spouse back almost immediately agreeing to the 10% discount. Yay for my spouse!  He saved us $370 just by being assertive and I am very proud of him.  So our final total with tax is around $3600. Plus $45 for the tow to the shop in the first place. The final deal includes a 12 month warranty on the parts and labor, which gives me a little bit of peace of mind. In 12 months the car will be two payments away from being paid off, instead of 14 payments away.

We thought about selling the car in the condition it is in (or using it as a trade in) and buying a new to us car. We did do some preliminary research on availability and prices, and for us right now it just didn’t make sense. If I am going to get a different car I’d want to feel reasonably sure it was more reliable than the one I’ve got, and that comes with a price. Still owing $3300 on this car that would have to be rolled into the next loan just didn’t make sense for us long term. I know that there will be disagreement on this point, but we all do the best we can with what we have.

So, repairing the car. We don’t have to pay for it for another week (which is how long it is going to take to fix) so we can still ponder exactly how we want to do that. But my spouse got approved for the 90 days same as cash yesterday to give us that option. I’ve transferred $700 of our $1000 emergency fund into checking (I can transfer the last $300 with a few mouse clicks and will when we get to that point, but I pay a monthly fee when my balance is under $300 so I am putting it off) and initiated the transfers from our ING accounts of the $150 long term savings and $150 playstation fund. That puts around $1700 in our checking account by sometime next week minus whatever we spend on gasoline and groceries between now and then. I’ve also initiated the transfer to empty out the blog account and will transfer the remaining $300 from the emergency fund when we are going to pay the car bill.

My current plan is to pay $2500 directly on the car bill (by the time it is fixed next Friday, my spouse will have been paid again, so we will be able to use some of that too) and put the remaining $1100 on the 90 days same as cash plan.  And add it to my debt total… sigh. I may come up with some more money between now and then, we’ll see, I’m still thinking through things and seeing if I can come up with any other ideas. My goal is for the 90 days amount to be the absolute minimum possible that still lets me sleep at night. I just can’t take money out of the kids college accounts. Yes, the majority of the money in them is “our” money we chose to deposit (some of it was cash gifts to the kids from relatives) but for now, I can’t make myself touch it.

I may change my mind by the end of the 90 days period if I haven’t managed to knock out the entire balance. But I think that $1100 is doable in 90 days, or less, and then on to rebuilding the savings accounts. We’ll see. A bridge I will think about crossing in a little while.

Progress not perfection. I sincerely hope this car does not become more of a money pit. I had great plans to pay for the next car in cash… but that necessitated this car lasting a few more years. We’ll see.

In positive news my background check to begin tutoring is finally complete and my first tutoring hours are tomorrow. That additional income will definitely help with knocking out this debt. One door closes and another door opens.

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Happy New Year! I hope everyone had a joyous celebration with friends and family and are refocused and eager to move forward in a positive manner into 2008. Or, at least, I hope I am somewhat focused.

Being the first Tell All Tuesday of 2008, I thought I would do a mini-review of what financially happened in 2007. I only started tracking anything in earnest starting in June, so this is really a recap of the last 7 months of 2007.

• I paid off a total of $9267.07 of the principal amount of my debt.
• In total, I paid $10504.54 to debt in those 7 months. So I paid a total of $1237.47 in interest.
• My “debt snowball” amount (my minimum budgeted amount to debt each month) is $810.41, or $5672.87 for these 7 months. I paid $4831.67 above that in snowflakes to my credit card debt directly. In total I paid $6231.67 to credit card debt and have $175.17 left to pay off in 2008.
• In the last 7 months of 2008, I paid off 25.43% of our total debt.

A lot of things happened to make this possible. We had some setbacks, but we also had a number of fortuitous things happen in regards to money in the past few months. My spouse had a small windfall. We got a property tax refund. I received some Christmas money. But even with those huge snowflakes, the amount of debt paid off would not have been nearly as high without all the little snowflakes I’ve collected every month. Maximizing every dollar and looking for places to earn more or spend less has really turned our lives around. And I couldn’t have done any of this without you, the reader. This blog has helped me sort out my thoughts, kept me on track, and provided a new source of revenue for our family to attack debt with that I never even imagined existed. Thank you all for reading and supporting our journey.

I don’t know how replicable our progress will be in 2008, but that isn’t going to stop us from trying as hard as we can. In the next two weeks, our credit card debt will be completely paid off. I’ll be examining the best way for our family to tackle the student loan debts in the coming weeks, and then my sights will be firmly set on eliminating my spouse’s (which is at 9%, our highest interest debt left).

Our debt snowball of $810.41 over 12 months amounts to $9724.92. My hope is to pay ~$18,000 to debt this year (so almost double our snowball) and completely eliminate my spouse’s student loan. $18,000 would be about 50% of our starting total debt (as of June 2007) and since I paid off 25% in 7 months, why not shoot for another 50% in the next 12 months?  And then our debt would definately be paid off by 2009 instead of 2010.  A girl can dream…  My actual reasonable goal, however, is not quite that ambitious. Pay $1100 to debt every month, or $13,200 total over the course of the year. This wouldn’t be all to principal since there is a lot of interest being charged to our student loans, but it would be enough to knock the student loan to about $5000 or maybe a little less.

After the dust has settled from our holiday trip (and the car is actually completely fixed) I am going to reevaluate my 2008 goals, since when I wrote them, some of our windfall money hadn’t happened, and see where we might stand. Paying off the entire student loan might not be completely out of reach in 2008. But I do know, if we come as close to paying that off in 2008 as we came to paying off the credit card in 2007, I’ll be a very happy camper.

Happy New Year! Thanks so much for being a part of our snowflake revolution.

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Last month, I got a notice that our mortgage payment was going up because our property taxes last year were higher than expected. Well, when we got home from our vacation, sitting in our mailbox was a check from the county auditor for several hundred dollars in property tax refunds. Apparently our state passed a property tax relief act in December and refunded a portion of the taxes we paid this year.

That isn’t going to affect our new higher mortgage payment for the coming year, but it does give us ammunition for a snowflake to the credit card. I also received some significant Christmas money from relatives I wasn’t expecting, and my parents always put some scratch-off lottery tickets in our stockings for fun. This year I won $25 and my spouse won $5. So that is going to the credit card as well. All in all, I’ve gathered up about $1000 in the past week through the magic of Christmas and the property tax refund check (as well as a few survey checks waiting for me when we got back), and before the end of 2007, I will make a payment to my credit card to knock the balance to somewhere in the $200 range.

Just have to wait until my spouse gets home and then off to the bank with my checks I go. He has my car with the carseats because it needed new taillights today, so I can’t go out with the kids until he gets home. Nice to find out your taillights aren’t working on mile 780 of a 800 mile trip by the local law enforcement… I’ll save that story for the trip wrapup post I am working on. Luckily the hazard lights worked and we got home safe and sound. And now my car is fixed.

It is tempting to pay the entire credit card off today and be done with credit card debt in 2007, but that would probably put us in a huge bind for the next few weeks unless I pulled it out the emergency fund. I can wait. I don’t want to wait, but I can. Patience is a virtue, after all. I’ll have the new total tomorrow in a abbreviated Tell All Tuesday post as well as on my current numbers page when I make the deposit and then tally up and make the payment.

My credit card debt is an endangered species.

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