The final task for the weekly challenge this week at A Bowl Full of Lemons was to create our debt snowball. As I understand it, a debt snowball is a list of my consumer debts and their balances. I believe they are supposed to be listed in the order I plan on paying them off. Dave Ramsey recommends you pay them off in the order of those with the lowest balances first, regardless of interest rate. I just can't do that. One of my credit cards has a zero percent interest rate. There is no way I'm paying towards that while accumulating interest on my other card. I understand the philosophy behind that thinking, it's just not for me.
When I started getting my money act together at the end of 2010, I created a list of debt balances. A couple weeks ago, I updated that list. I just didn't know it was considered a debt snowball. I updated that list again today. It was depressing when I did it last year. It was depressing when I updated it recently. It was only slightly less depressing today because we should be getting our tax refund soon, which will allow us to pay some of it off.
In addition to being depressed about the bleakness of the situation, I'm very annoyed. You would think (or at least hope) that the total today would be less than the total from 2010. It's not. That's frustrating to me because I feel like I work really hard at being frugal. Not everyone in my house can say the same. (I plan on blogging more on that Monday.)
At this rate, it's going to take a long time to pay it all off. I've looked at our bills and there really isn't much more we can cut. I've got cable & internet reduced, I looked at the phone bill, our cell phones are on my parents' plan, we've canceled our newspapers. After paying our bills there is very little left for paying down our debt.
In order to pay this off, and do lots of things we want to do (like travel and do work on the house) we are going to need to make more money. My husband gets a raise in the fall but we are going to need more than that. I knew I was going to try go back to teaching this fall. Now, I realize I need to cast a wider net and be less choosy when it comes to what jobs I will be interested in than I might have been if we didn't have this debt.
I look at paying off this debt like weight loss. It's easier (and more fun) to put it on than take it off and it takes a lot longer to take it off than put it on. I'm not a very patient person when it comes to things like this. I want to take care of it now and it just isn't that easy.
Showing posts with label money management. Show all posts
Showing posts with label money management. Show all posts
Saturday, March 19, 2011
Thursday, March 17, 2011
Do not follow money management advice from me.
I just found out that the payment I scheduled for the bank to pay my mortgage company went to my old mortgage company. I scheduled the payment for Friday the 11th. (That way we don't go past the 15th which is the date when we are charged a hefty fee. Of course, we are in no position to make the payment by the 1st.)
I was looking for some tax info and logged into my mortgage company. I saw that my payment was late. I checked my bank and the payment was made on the 11th, it was an electronic payment so it should have been there within two business days. I looked a little further and realized it was my old mortgage company.
First, I got a huge pit in my stomach. We don't have enough cash handy to make the payment while the bank researches where the money went. Instead of paying my mortgage company directly, which charges $6 to use the bill pay feature, I used my bank. I was trying to save $6 and now I'm going to have to pay a late fee of around $50.
Plus, I'm soooooo mad at myself. I feel like the biggest moron, idiot, dumb a**. I try to keep everything in order and I have a HUGE failure like this. I am almost 38 years old. How do I not have my act together?
Of course, if we were in a better place financially, I would have just paid the mortgage company directly because at the beginning of the month, bill pay is free. (Yea, they really stick it to the people who have the least. If it's the beginning of the month, it's free. If it's closer to the 15th it's $6 and if it's later it's even higher. I guess I'll be paying that fee as well.)
As always, lesson learned. I should have logged into my mortgage account online and made sure the payment was received. Next time, I will.
As if it's not bad enough being in the money situation we are in. (We are in such a hole that it's going to take a long time to dig out. It's really unnecessary and stupid. I'm embarrassed by it and disappointed in us. It's really rather depressing.) Now this. Grrr.
I was looking for some tax info and logged into my mortgage company. I saw that my payment was late. I checked my bank and the payment was made on the 11th, it was an electronic payment so it should have been there within two business days. I looked a little further and realized it was my old mortgage company.
First, I got a huge pit in my stomach. We don't have enough cash handy to make the payment while the bank researches where the money went. Instead of paying my mortgage company directly, which charges $6 to use the bill pay feature, I used my bank. I was trying to save $6 and now I'm going to have to pay a late fee of around $50.
Plus, I'm soooooo mad at myself. I feel like the biggest moron, idiot, dumb a**. I try to keep everything in order and I have a HUGE failure like this. I am almost 38 years old. How do I not have my act together?
Of course, if we were in a better place financially, I would have just paid the mortgage company directly because at the beginning of the month, bill pay is free. (Yea, they really stick it to the people who have the least. If it's the beginning of the month, it's free. If it's closer to the 15th it's $6 and if it's later it's even higher. I guess I'll be paying that fee as well.)
As always, lesson learned. I should have logged into my mortgage account online and made sure the payment was received. Next time, I will.
As if it's not bad enough being in the money situation we are in. (We are in such a hole that it's going to take a long time to dig out. It's really unnecessary and stupid. I'm embarrassed by it and disappointed in us. It's really rather depressing.) Now this. Grrr.
Tuesday, March 15, 2011
More money management
The task today for the weekly challenge at A Bowl Full of Lemons was to create a budget box. It is basically a file box where you keep your bills to be paid, paid bills, stamps, envelopes, etc. I tried that once. I used one of these:
That didn't work for me. I used to keep my paid bills for a long time and read somewhere that it is unnecessary. For most bills, once they are paid, you can get rid of them. I have too much paper around here, anyway, so I am happy to recycle them immediately. (I have to say, it would be nice to have my mortgage statement from last month. I need to register my son for kindergarten and I can use that as proof of residency. It's not urgent, so I can wait for the next one.) Now, I use this box for insurance papers. We are constantly having to deal with our health insurance company about out of pocket expenses. It's perfect for that.
When my bills come in, I mark the due date in the upper right corner of the envelope and put them in this basket:
(I thought about moving the receipts and the candy cane pen before I took the picture but this is a more accurate picture of what it usually looks like.)
I keep stamps & envelopes in the basket.
I pay my bills every Sunday night. I take out the ones due that week and pay them online.
There are a couple things Toni has in her budget box that I will probably add to my binder. Hopefully, I'll update that before the week is over.
Side note:
You might have noticed the baskets in these pictures (and others) as Longaberger baskets. I bought ALL of them before we had kids. Back when I thought we could afford them. Plus, I did sell them for a while so I got them at a lower price and only used the money I made selling them to buy more. Now, I wish I had saved that extra money instead of spent it on these baskets. Live and learn.
That didn't work for me. I used to keep my paid bills for a long time and read somewhere that it is unnecessary. For most bills, once they are paid, you can get rid of them. I have too much paper around here, anyway, so I am happy to recycle them immediately. (I have to say, it would be nice to have my mortgage statement from last month. I need to register my son for kindergarten and I can use that as proof of residency. It's not urgent, so I can wait for the next one.) Now, I use this box for insurance papers. We are constantly having to deal with our health insurance company about out of pocket expenses. It's perfect for that.
When my bills come in, I mark the due date in the upper right corner of the envelope and put them in this basket:
(I thought about moving the receipts and the candy cane pen before I took the picture but this is a more accurate picture of what it usually looks like.)
I keep stamps & envelopes in the basket.
I pay my bills every Sunday night. I take out the ones due that week and pay them online.
There are a couple things Toni has in her budget box that I will probably add to my binder. Hopefully, I'll update that before the week is over.
Side note:
You might have noticed the baskets in these pictures (and others) as Longaberger baskets. I bought ALL of them before we had kids. Back when I thought we could afford them. Plus, I did sell them for a while so I got them at a lower price and only used the money I made selling them to buy more. Now, I wish I had saved that extra money instead of spent it on these baskets. Live and learn.
Money Management Binder part 2
I was so excited to join the money management organization challenge at A Bowl Full of Lemons. I've already shown my money management binder here. I want to add to that.
The first part of the challenge was to create a budget that dedicated a place for every last dollar of our income. I recently created a budget based mostly on bills. I didn't have a specific place for any extra money to go. (Extra money, ha!) Yesterday, I took a piece of notebook paper and listed our income on the top. I then listed every bill (or category where we spend money) and the amount. Now I know what is left and have a place for it to go. (Not pretty. Ignorance really is bliss.) When I made my original budget I left the amount for credit card payments blank, since they vary. That gave me an inaccurate picture of where we were.
Here are some more parts of my binder that I didn't share in the previous post.
I keep all my usernames and passwords in a little spiral notebook at the front of the binder. I've never heard anyone talk about this but I suspect we are all in the same boat. I can not keep track of all of them. Sometimes a website requires you to use a certain amount of characters. Sometimes it will require you to use letters and numbers. Because of those reasons I have many different usernames and passwords. This little notebook came about because of that.
Here's the notebook in the inside pocket of my binder. I have a pencil bag holding a small calculator.
Here are my categories.
This is my bill checklist form. I made it myself in Excel. Very simple. As always, more practical than pretty. If you want a pretty one, iheartorganizing has a cute one that is free for March.
My budget review sheet. (The one in my binder has the amount budgeted typed in already. I am very open, but not that open.)
My bill paying log.
My spending log.
I'm glad I sat down and redid my budget and included it as part of my binder. I thought I knew what was going on, now I think I have a better idea.
The first part of the challenge was to create a budget that dedicated a place for every last dollar of our income. I recently created a budget based mostly on bills. I didn't have a specific place for any extra money to go. (Extra money, ha!) Yesterday, I took a piece of notebook paper and listed our income on the top. I then listed every bill (or category where we spend money) and the amount. Now I know what is left and have a place for it to go. (Not pretty. Ignorance really is bliss.) When I made my original budget I left the amount for credit card payments blank, since they vary. That gave me an inaccurate picture of where we were.
Here are some more parts of my binder that I didn't share in the previous post.
I keep all my usernames and passwords in a little spiral notebook at the front of the binder. I've never heard anyone talk about this but I suspect we are all in the same boat. I can not keep track of all of them. Sometimes a website requires you to use a certain amount of characters. Sometimes it will require you to use letters and numbers. Because of those reasons I have many different usernames and passwords. This little notebook came about because of that.
Here's the notebook in the inside pocket of my binder. I have a pencil bag holding a small calculator.
Here are my categories.
This is my bill checklist form. I made it myself in Excel. Very simple. As always, more practical than pretty. If you want a pretty one, iheartorganizing has a cute one that is free for March.
My budget review sheet. (The one in my binder has the amount budgeted typed in already. I am very open, but not that open.)
My bill paying log.
My spending log.
I'm glad I sat down and redid my budget and included it as part of my binder. I thought I knew what was going on, now I think I have a better idea.
Sunday, March 13, 2011
Money Management
The weekly challenge this week at A Bowl Full of Lemons is to organize your finances. I am totally in for this one. I want to be organized with our finances. I have tried.
Before we had children, my husband and I were both working as teachers. We made very modest incomes but we both came into the marriage with very little debt. We were terrible with money. Like so many people, we didn't have any idea where our money went. It's not like we bought nice furniture or went on awesome vacations. We just pissed it away. I could just kick myself (and my husband) for how irresponsible we were. We should have saved quite a bit of money. We didn't save a penny. Really, it's embarassing to say that, but it's true.
By the time we had our first child, we had our student loans paid off and had zero credit card debt. The month before she was born we paid off my car, so we had no car payments. We were able to hold there for a few years. We didn't really save, but we didn't go into any more debt either.
Over the last couple years we haven't done as well. For a long time I didn't even really pay much attention to what we spent where. I knew we didn't have much extra money so my plan was to not spend money on anything unnecessary. Somehow, we continued to accumulate debt. A few months ago I actually tracked what we spent where. I was in shock. We had even less money left over after bills than I thought. I thought I had a good idea where our money was going but I was way off.
At that time I set up this binder. It is our money management binder.
(It's not near as cute as my home management binder. This binder is one that I got on clearance at back to school time.)
I have the following sections:
bill checklist
This is a list of what our bills are, in the order they are due. The purpose of this is to make sure every bill is paid each month. There have been a few times a bill has gone unpaid. Not because I chose not to pay it but because I never got the bill.
budget review
This is a list of each category where we spend money. There is a column for the amount budgeted and next to it a column for what we actually spent. The plan with this is that I can look at what was budgeted, compare it to what we really spent and make adjustments, if necessary.
bill paying log
I print out a calendar page for the current month. As a bill comes in, I write the name of the company as well as the amount due in the box of the due date. Then, when I pay the bill I write the date paid next to the amount
spending log
I print out (another) calendar page for the current month. For ever dollar I spend that is not a bill, I make an entry on the date I spent it. This is really to help me track what I am spending when I leave the house. I am trying to curtail my unnecessary spending and this is a way to look at the amount I am spending each month.
credit cards
In this section I have a page for every credit card we have a balance on. I was hoping to keep track of how much we paid each month so I could watch the balance go down. It hasn't been that easy. We have some monthly bills that we use a credit card for (like gas) and that amount gets paid each month, in addition to what we are putting toward the balance. If I wrote down the amount I paid on that card it would look like I was paying down the balance by a larger amount. My husband also often has to put something on our credit card for school and then get reimbursed. (I am never happy about this, it really is a mess and we don't always get reimbursed for everything.) The reimbursement is never fast so that is difficult to track.
I love the idea of this challenge and hope this can help me get my act together a little more.
Today's part of the challenge is to create a budget showing where every penny we bring in goes. That's a little different than how I use my budget page. I am happy to try it this way, obviously what I've done hasn't worked.
Before we had children, my husband and I were both working as teachers. We made very modest incomes but we both came into the marriage with very little debt. We were terrible with money. Like so many people, we didn't have any idea where our money went. It's not like we bought nice furniture or went on awesome vacations. We just pissed it away. I could just kick myself (and my husband) for how irresponsible we were. We should have saved quite a bit of money. We didn't save a penny. Really, it's embarassing to say that, but it's true.
By the time we had our first child, we had our student loans paid off and had zero credit card debt. The month before she was born we paid off my car, so we had no car payments. We were able to hold there for a few years. We didn't really save, but we didn't go into any more debt either.
Over the last couple years we haven't done as well. For a long time I didn't even really pay much attention to what we spent where. I knew we didn't have much extra money so my plan was to not spend money on anything unnecessary. Somehow, we continued to accumulate debt. A few months ago I actually tracked what we spent where. I was in shock. We had even less money left over after bills than I thought. I thought I had a good idea where our money was going but I was way off.
At that time I set up this binder. It is our money management binder.
(It's not near as cute as my home management binder. This binder is one that I got on clearance at back to school time.)
I have the following sections:
bill checklist
This is a list of what our bills are, in the order they are due. The purpose of this is to make sure every bill is paid each month. There have been a few times a bill has gone unpaid. Not because I chose not to pay it but because I never got the bill.
budget review
This is a list of each category where we spend money. There is a column for the amount budgeted and next to it a column for what we actually spent. The plan with this is that I can look at what was budgeted, compare it to what we really spent and make adjustments, if necessary.
bill paying log
I print out a calendar page for the current month. As a bill comes in, I write the name of the company as well as the amount due in the box of the due date. Then, when I pay the bill I write the date paid next to the amount
spending log
I print out (another) calendar page for the current month. For ever dollar I spend that is not a bill, I make an entry on the date I spent it. This is really to help me track what I am spending when I leave the house. I am trying to curtail my unnecessary spending and this is a way to look at the amount I am spending each month.
credit cards
In this section I have a page for every credit card we have a balance on. I was hoping to keep track of how much we paid each month so I could watch the balance go down. It hasn't been that easy. We have some monthly bills that we use a credit card for (like gas) and that amount gets paid each month, in addition to what we are putting toward the balance. If I wrote down the amount I paid on that card it would look like I was paying down the balance by a larger amount. My husband also often has to put something on our credit card for school and then get reimbursed. (I am never happy about this, it really is a mess and we don't always get reimbursed for everything.) The reimbursement is never fast so that is difficult to track.
I love the idea of this challenge and hope this can help me get my act together a little more.
Today's part of the challenge is to create a budget showing where every penny we bring in goes. That's a little different than how I use my budget page. I am happy to try it this way, obviously what I've done hasn't worked.
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