I’ve Paid For This Twice Already…

Archive for the ‘numbers’ Category

I am starting to think I should start a blog dedicated solely to chronicling the real costs of owning a home, including all the things you have to fix that you never even thought about existing. Sure, when we bought this house, we knew we’d have to update a few appliances, and hopefully redo some of the finishes in the house, but there are many more things to a house than I’d ever truly thought about. Oh, the joys of being a hopelessly naive first-time homeowner.

Two nights ago we tried to run our a/c for the first time this year. I say tried, because once we turned it on, the a/c, the blower in the furnace, and the garage door opener all stopped working. Resetting that circuit on our circuit breaker fixed the problem, as long as you didn’t run the a/c. My spouse tried running it again last night (because he can’t leave well enough alone) and we couldn’t even get the circuit to reset once it shut itself off. We had called and set up an appointment with the people who installed the furnace for this morning, to make sure that it wasn’t something to do with the new furnace installation.

Well, they’ve been and gone, and he said that it has to do with the circuit board. I am not an electrician, so I can only pretend to repeat what he said, but in essence, the board is old, the “tabs” are loose, whatever that means, and that lets the circuit that keeps not working draw too much power (or something, I guess, I seriously didn’t really understand at all) because it is loose. He tightened the tabs and it works, for now, but for now is the operative word. According to his work order, he “tightened tabs on back of breaker so it would make better connection on the buss bar” whatever that means. He really did try to explain things to me but I had no idea what he was talking about, and I was upset, so I didn’t take most of it in. I’m sure everything I just said makes zero sense to an actual electrician.

Just once, I would like someone to come here and say “Oh, this is simple to fix, it is just this and ta da, all better” instead of “Oh this whole thing needs to be upgraded/replaced/etc”.

My spouse is calling electricians this afternoon to discuss what potentially this is going to cost and get some estimates, but I am certain it will be expensive. Honestly, with this, my wisdom teeth coming out on Friday, and the colonoscopy in a few weeks, I just don’t think we are going to be able to travel to the taekwondo World Championships this year. It is one thing to put debt reduction temporarily on hold to follow a dream, but it is another thing entirely to go into more debt to do so. We’ll have to see what happens with the electrical, I guess.

So, on to May’s financial wrapup, since we’re at the start of June already. We actually had a pretty good month in May as far as income coming in, since it was a three paycheck month from my spouse, and I did pretty well with taekwondo as far as recruitment bonuses. Add to that the economic stimulus check, and we had an incredible month as far as money coming in. However, we also spent an incredible amount of money, since we put in a new furnace. All in all, after figuring the amount we need to carry over to next month from this month for irregular expenses, we have a surplus of approximately $1132.12. Which I am sticking into our emergency savings account. Normally I would split it half and put half each to debt reduction and savings, but I need to pay ~$155 for the wisdom teeth removal Friday, and then also need to wait and see about the electrical problems. So the entire surplus will sit in savings until I figure out what needs to happen. As far as upgrading the electrical board in our house, I can gather together about $2500 within a week or so to go towards the electrical problems without having to turn to any kind of credit, past that, I’m not sure. We’ll see. I have absolutely no idea what these sorts of things generally cost. Hopefully my spouse will have insight into that by this evening.

If it is not one thing it is another. Apparently we’re not destined to be out of debt any time soon. All this is just underscoring to me the importance of being out of debt and being able to prepare for the inevitable problems of home ownership and, in effect, life. And here I was just yesterday dreaming about tankless hot water heaters…

I had my CT scan a month and a bit ago, which was completely unremarkable and showed nothing amiss. If I get a similar result from the colonoscopy next month I assume we’ll just wait and see if my symptoms return and to what level of severity (I have been symptom free for a few weeks now). But that doesn’t mean the fun is over, for I had the bills from the CT scan to pay. This past week I paid both the hospital bill (~$1000) and the radiologist’s bill (~$50). I also have a bill for labwork from my doctor for about $12 that I haven’t received yet (nice that once the deductible is met my bills become so small). But, basically, I’ve paid the bills for the CT scan, so we can start to move forward. My emergency fund is back to $1000, and we’re continuing the half debt/half savings plan until the colonoscopy is paid for as well.

So our debt repayment amounts are the same as last week, and we have paid off about 40% of our original debt (as of last June). This past week I received some payments from surveys, as well as some advertising revenue and my paycheck from taekwondo. All in all, I have about $650, of which $325 will go to the student loan payoff fund and the other $325 will go to our savings account. I don’t know how much the colonoscopy will be out of pocket, but I do know I won’t be paying that until at least July. We may decide to go to taekwondo world championships at the end of June, and by our estimates in gas and lodging that would cost about $600-$800. All in all, the next two months look to be expensive. But based on the amount I’ve been working, both for taekwondo and tutoring, it should end up being doable.

Oh, and a week from Friday I get my wisdom teeth out. Can’t forget that one. I already have the $155 we will owe for that procedure put aside for that. Thank goodness my dental insurance company
decided to cover it.

On to next week – since I can only pay the student loan once a month, I don’t see anything big happening on the debt reduction front, but you never know. And I get paid by taekwondo again Friday so that should boost my savings numbers a bit.

Apparently the radiology department is faster at sending out their bills than the labor and delivery department was, because last night I got the bill from the hospital for my CT scan. I then submitted it last night via the web for reimbursement from our Flexible Spending Account, which will completely wipe that account out. Which is okay, that is what it is there for, to reimburse medical expenses. Once I get that check for about $250 (I usually receive it a few days after I request it), I will be paying the $1014 hospital bill. I just paid the $49 radiologist bill as well, and that should be it for this chapter of my health adventure. On to the colonoscopy… at least I’ve already met my yearly deductible.

What I find interesting about all these bills is that the hospital originally billed my insurance company about $4500. Of which, my insurance company basically told them no, we’ll pay $1250. Interesting how insurance works. It is mind-boggling to me that my insurance can get that much of a discount and the hospital just accepts it.

So, this week was pretty light on the snowflakes. Any snowflakes that came in were diverted to paying for the hospital bill, and I will be bringing my emergency fund back down to $1000 to pay for the rest of it. Which is fine, that was what I was saving the extra money for. I have no idea what a colonoscopy might cost, I only hope it will be less expensive for me out of pocket because I’ve already paid my deductible. Be that as it may, I am going to keep the half debt-repayment/half savings snowflakes going and build my emergency fund back up to $2000. Healthcare is one of the only things I can think of where you do things without having any idea what they’ll cost you. Once we’re past the colonoscopy, depending on the results of that, we’ll make a decision as to where we’ll keep the emergency fund at right now.

I did make the monthly minimum payments to the car loan and my student loan this past week, so there was a little downward movement of the total debt. Compared to the progress on my spouse’s student loan, they feel like they are shrinking at a snail’s pace, especially my student loan where half my payment each month goes to interest, but I know that will change in the future. Patience, patience… not my strongest virtue. Here are those new debt numbers:

Current total as of 05/19/08: $21,612.70

Principal paid to date $14,839.01

Broken down into:

• Credit Card: PAID OFF 2/7/08

• Student loan (at 7%): $11,411.24 (made $144.50 minimum payment)

• Spouse student loan (at 9%): $7940.54

• Car loan (at 4%): $2260.92 (made $228.32 minimum payment)

% of debt paid off from NCN Network Chart: 40.71% (last week 39.95)

Yay for over 40% of the original debt (as of last June) paid off! At this rate the idea of being out of debt by the end of 2009 may actually come to pass. I am hoping that next month we can knock the spouse student loan down to about $7000. The car loan is 2 months away from being under $2000 as well. My student loan… well, I think by the time it goes down to 4 digits, we’ll have the spouse’s student loan completely paid off. But then we’ll be able to knock it down pretty quick. Getting the entire debt under $20000 feels right around the corner (although it is probably another 2-3 months away at least).

Here’s to colonoscopies being cheap…

I will first off clearly state and admit that I like numbers. I may be what people refer to as a “numbers person”. Be that as it may, the idea of tracking every penny that came into and went out of our household was an intimidating one, to say the least. But what began out of desperation to make some sense of why we could never catch up has become an exercise in learning about how to treat money wisely, all because of a simple concept. Tracking our money makes the abstract concrete.

How many times have you made a rough estimate in your head of what you’ve spent that day, or that week, or that month, on a certain type of spending, and been completely wrong? Maybe it’s gasoline, maybe it’s food, maybe spending on clothes or items for the kids. If you are like me, you’ve done it hundreds of times – you think you’ve only spent a little, but in actuality, you’ve spent a lot more than you thought. I used to not even keep track of how much I spent on gas – I figured it was unavoidable so I didn’t pay attention to how much I spent. Which makes no sense to me now, but at the time I just did it. It’s a wonder I never bounced a check.

In the past, right after my spouse got paid, and I paid the bills that I had allocated to that paycheck, I would feel one of two things. Either scared, because we had no money to speak of for the next two weeks, or elated, because we had more money than I thought we would. And if I was in the elated category, it somehow gave my brain a license to spend. I never thought I spent a lot, just a little here and a little there, saying yes to going out to eat once in a while or taking a trip to Target to check out the clearance buys, but it did add up, and I’d check our bank balance and go back to feeling like we wouldn’t make it to the next paycheck.

Enter budgeting and tracking our money down to the penny. Doing this, I made a discovery that frankly shocked me but won’t surprise anyone else – I spent a lot more on small miscellaneous purchases than I ever would have imagined. All those $10 here and $15 there added up to $100 or more each month. No wonder I never felt like we could get ahead at all. Tracking our spending has helped me make actual choices based on our priorities about how we spend our money instead of just spending now and thinking later.

On the flip side of that, tracking our spending has also shown me exactly how much we pay towards debt over time, and how much more we need to pay to be out of all non-mortgage debt. If someone had told me 11 months ago that I would spend $15,000 on something, in cash, by the following May, I would have laughed. But in actuality, that’s exactly what we’ve done. We’ve paid about $15,000 to debt since last June. I would never have thought we’d have $15,000 to spend on anything. That is a whole lot of money in my world. And yet, we’ve done it – and the scary part is, we still have over $20,000 to go until we’ve paid off all our non-mortgage debt! Yikes. That is a whole lot of debt and a huge amount of money. Keeping track of this has really made the abstract concrete and also shown me that once we are done paying off this debt, we really do have the means and ability to make our financial dreams a reality. I am really looking forward to being able to put that $15,000 (or more) a year to work for our future instead of our past.

Our finances used to be this abstract concept to me and all I knew was that we had very little to speak of. Through keeping track of our money, it has become a concrete thing that we can and actually are improving bit by bit, every day.

A few weeks ago, I made the decision to, for a short time, change our financial focus from primarily debt reduction to a mix of debt reduction and saving. Until our emergency fund is at $2000, all my snowflakes will be split evenly between our emergency fund account and our student loan payoff fund.  This was the first month I have put that into action (since everything last month went towards the purchase and installation of the new furnace), so yesterday I snowflaked $446.33 to my spouse’s student loan, and put the same amount in our emergency fund.  The emergency fund now stands at $1446.41.  Gotta love the $0.08 in interest I earned last month.    Added to the debt snowball minimum of $437.59 I pay to that student loan every month, my total payment was $883.92.

When I went to redo my numbers, and recalculate the percentage of debt we have paid off, I saw that we are now at 39.95% of the original debt (as of June 2007) paid off.  It made me wish a little that we were more flexible in our payment ability for these loans, because I wanted to go pay another $19 and throw us over the 40% mark.  But I found when I did the payment from my Revolution Money Exchange bonuses last month, that for the Sallie Mae loan online, my payment has to be assigned to a “payment group” which is a minimum monthly payment – so if I make more than one payment in a month, I advance my payment due date by a month each time I make at least a full monthly payment.  I don’t want to do that, so I will only be making payments to the student loan once a month.

With that, here are the numbers:

Debt at start of blog (6/19/07) : $36,451.71

Current total as of 05/12/08: $21,888.57

Principal paid to date $14,563.14

Broken down into:

• Credit Card: PAID OFF 2/7/08

• Student loan (at 7%): $11,467.76

• Spouse student loan (at 9%): $7940.54 (made payment of $883.92)

• Car loan (at 4%): $2480.27

NCN Network Chart %:  39.95% (last week 37.65%)

When I think about the fact that we have paid over $14,000 to the principal amount of our debt in the past 11 months…  well, that is great but it is also depressing.  That is a LOT of money we could have done a lot with.  Yikes.  But hey, the spouse’s student loan is now under $8000!  And only about $22,000 let to pay before we are free of non-mortgage debt…

Someone asked me earlier if I thought we’d get to the debt halfway point by the blog’s first anniversary.  Then I was slightly hopeful, but now after the furnace, I think it will be a bit later than that.  We’d have to pay about $3700 to debt in the next month… hey – just about exactly what the furnace cost… heh.  But soon!  I have some survey income I just received that will go towards debt for the next month, and I’ll have some blog-related income and another check from taekwondo before next week.  We will definitely be over 40% paid off next week – just by paying the minimum payments on the car and my student loan!