New Year, New Post

Well, its been a long time since my last post. For the most part, this is due to the fact that our lives were pretty much turned upside-down with our move. Then, to really complicate matters, we found out that we are going to have a baby in May. This is very exciting news, but it does help to throw one's financial plan into a tailspin.

Anyway, with all of that being said, here is our current status.

As of our next paychecks, we will have paid off a total of 3 credit cards. We had paid off a fourth, but then we decided to buy a new recliner and mattress and this opened the door up to using the card for other things as well. I know, this is terrible and totally counter-productive. Well, we have stopped using the card...again...and I should have it re-paid off by February.

This will leave us with three credit cards. Two of them are our biggest ones, and the other has about $2,500 on it. A while ago, when things were pretty tough, I put this card on a slow-pay plan through a debt management company. This promised a lower interest rate and so on, so it was a good idea at the time. Well, I think we've reached the point now that I am going to take that card back and it should be paid off before the baby arrives.

I do want to add that paying off the cards with the smallest balances first (i.e. the debt snowball) is the method that is working for us. I realize that it may not be the most cost-effective, but we are making progress.

We have paid off my car, which is nice. Now if it will only keep running for a while so I can enjoy it.

Also, the mortgage on our first house is now covered. One of our former neighbors (a realtor) got us in contact with a company that gets homes for families that can't qualify for loans because of the economy. Their monthly payment covers all of our expenses and they are responsible for any repairs to the property. After a certain period of time, the company gets them a mortgage based on their payment history. Not bad. We won't make any money, but we also won't have the headache of landlord-ship either. Hopefully, it will all go smoothly.

The biggest development since my last post is that my wife's student loans are now in repayment status...most of them anyway. She has loans through Sallie Mae and Wells Fargo as well as some other miscellaneous loans that will start repayment next year. We have already signed up for graduated repayment (meaning we pay pretty much just interest in the beginning and then more at the end), and the Wells Fargo payment alone is exactly as much as our now-covered mortgage payment.

It has been nice (really nice) having two paychecks, especially since one them is for a pharmacist. It was nice to sit down and reevaluate our finances for 2009 and see how much we accomplished in a relatively short amount of time.

Debt Freedom is still a far away dream, but we are getting closer.

It's Been A While

Change of jobs + change of location + change of just about everything = Very few posts.

I must admit that I started this blog while I was working at a call center which had many slow periods, thus allowing me to post when work was down. I enjoy posting as it helps me put my ideas into words, so I am going to try to keep it up despite the fact that I'll have to do it on my own time.

As I mentioned before, a lot has changed. I still work for the same organization, but I live in Arkansas now and perform a completely different job. It gave me about a $4,000 a year pay increase and I'll get another pay increase in January and then a promotion in August. Not bad at all.

My wife is also an official pharmacist now. This of course has helped us dramatically. She got her first full paycheck a couple of weeks ago and we are looking forward to more. There are some indications that by this time next month, she'll be a pharmacy manager which will also include a nice pay raise and bigger bonuses.

And now an update on our finances...

We bought a new house (obviously) and we are very happy with it. During its construction, the builder had to declare bankruptcy, so the bank took it over. They finished it and owned it since March 2007. So, you may imagine, they were anxious to unload it. The asking price was $189,900, so our initial offer was $169,900. We also asked for a fence for our dogs as well as gutters. They countered with their initial asking price and the fence and the gutters, but they said they would give us a mortgage at 5.25%. I did the math and over 30 years, we would save a pretty decent amount of money than if they accepted our asking price and we got a mortgage even one percentage point higher. The closing went very smoothly, and now we own two houses.

The first house will hopefully be rented soon. We still have to tie up some loose ends on it, and the two hour drive it takes to get there is making it difficult. We can stand to pay the mortgage for a couple of months, but not once my wife's student loans enter repayment.

Also, we've paid off the first of our credit cards. It was the smallest of them, and the rate was not terribly high, but it feels good to get started.

My car loan is finally below $1,000, and should be paid off in 5 months.

That's about all I can think of for now. Hopefully, the next post won't take as long as this one did. If you read this, please post a comment. I'd like to think that this is reaching someone.

Dave Ramsey Marathon and My Credit Card Woes

I know I haven’t really posted in a while. I guess its because I don’t have very much to report.

On the 4th of July, my wife and I stayed over at her parents’ house. The plan was to go boating and watch fireworks in the evening. Well, the morning was pretty laid back, and I am always an early riser so I watched some TV while everyone else was sleeping. My in-laws get the Fox Business Channel (which I don’t think is available through my provider) and they were playing a Dave Ramsey marathon. I know Dave is a great financial counselor, but I have yet to really watch or listen to him live, so I was pretty excited about it. There isn’t much to his show, at least not the reruns they were playing. About half of the callers are in debt and are asking for help. The other half call in to report that they are “DEBT-FREE!” Dave asks them some questions about how much they paid off, what they did to pay it off, and so on. Then, he has them yell over the phone “I’M DEBT FREE!” It’s a little cheesy, but that is coming from someone who is not debt free. I think when I get everything paid off, I might just want to yell a bit too. It was funny though…a couple of times people said how they paid off $17,000 of debt and I just thought how much I wish I only owed $17,000. I have two credit cards that total more than that. Oh well. Someday, I’ll be the idiot yelling on the phone, until then, I criticize what I envy.

In other news, I spent the early part of my morning going over some of my credit cards. Here’s the back-story…in January, my main bank erroneously reported that I had been late paying my bill a year and a half earlier. As a result, they raised my rate and so did my Discover card(which also has the most debt). I called them both right away to get it fixed, but they told me to wait it out and call back in six months.

Well, it’s been about six months and I decided to try again. My credit report has been fixed so I was ready to go. I called my main bank first. It seemed a little silly because my rate is currently 10.9% (Prime + 5.9%), but if they hadn’t raised it in the first place, it would be 7.9%. Anyway, I asked and they looked into it, but said they couldn’t do it right now, but to call back in October. The dance continues…

This morning I call the Discover and asked the same question. My rate was 14.99% with them and they lowered it to 12.99% without very much effort. I have done this in the past with them, and I learned not to accept their first offer.

When I first signed up for Discover, I was a naive college freshman in 1996. For years, I lived with a 21% interest rate, not realizing that you could ask them to lower it. It almost ruined me several times. In 2004, I found out about the possibility of getting a lower rate by asking, so I did. At first, they offered me 15%, but I said I wanted it lower than that. She did a little more “figuring” and offered me 12%. I said that I had a card that was offering me a lower rate (a complete lie) and if they couldn’t go lower, I would just switch. She finally gave me 0% for six months and 10% thereafter. It saved me a boatload of money.

Even with that knowledge, I didn’t really push too hard for a lower rate. I figured that the 12.99% is okay for now and I can try again later when I have a little more leverage.

I also found that we were paying for Credit Protection on one of our smaller cards. It wasn’t much (about $6 a month), but we never asked for it and it wasn’t necessary. So, my wife cancelled it. I really hate it when credit cards do that.

Anyway, that’s my news.

Debt-Depressed

I haven't posted in a while and its not really because I haven't had anything to say. Admittedly, what I do have to say is probably a little boring, but the main reason is that I am debt-depressed. I knew when I started this blog that our situation would get worse before it gets better, but I am really getting tired of debt (even if it is currently necessary). Over the last month and a half, we not only didn't pay off any debt, we wound up over $3,000 more in debt. Much of this is because of my decision to pay off debts that we can't "re-use", but it just feels like no matter how hard I try, it doesn't get any better.

For instance, I got a new 0% intro APR credit card to help pay off one of my big credit cards. I transferred $2,900 to the new card and planned to attack the old one. However, shortly after the payment, they raised my credit limit by almost $2,000. With our home needing renovations before we can rent it, we decided to use the old card to pay for it, and now we have just over $600 left on a $10,000 card. It is pretty depressing.

On the bright side, I paid off my personal loan this morning which is a big thing. I do wonder if I should have kept putting the extra money towards credit debt. Times are tight right now though, and I have little doubt we would have found a way to use it.

I mentioned in an earlier post how we sold our SUV to save some money. Well, we used some of it for new tires, and the rest is going to be used to build a trailer to transport our black labs. Well, I bought one last night at Harbor Freight. It is a 4' x 8' trailer and it cost $250 (which is $50 cheaper than it usually is). The weird thing is that it comes disassembled. So I will try to put it together myself and build a suitable dog box for it. I'll probably post pictures so you all can laugh at me.

So, that's why I haven't really posted all that much. If you read this blog, please send me some encouragement.

Frugal or Cheap?

All I can say is "Wow". I have been trying to be frugal since I have decided to get out of debt. My wife thinks I am a cheapskate and that I am keeping her from some of the "finer things" of life.

I'll admit, I try things to save money that can be a little ridiculous, but I think most of them work, and I am not oppressive about it...more of a nag really. But this blogger is SERIOUS about getting out of debt. So much so that his family had a revolt against him...

We Need To Be Debt Free

I hope my desire never turns into this. My wife wouldn't have lasted as long as his family did.

The Tires Cost How Much ?!?

Sometimes I feel like a Whack-a-Mole. Every time I think I have everything figured out and we are on the right path, a big rubber mallet hits me in the head and knocks me back down. This time the rubber mallet was the tires for our car. Let me explain...

A few months ago, we bought a used Camry. It only had 22,000 miles on it, and it didn't even occur to us to check the tires. I hate to admit it, but we got swept up in the excitement of car-buying. Anyway, the tires were pretty well shot and we knew we were going to need new ones in the near future.

Leaving that part of the story and moving to another simultaneously occurring storyline...

When we bought the Camry, we already had two cars. One SUV that we have had paid off for a while, and another car which will be paid off in the next couple of months. It seemed gluttonous to keep all three, but we use the SUV to transport our dogs who have pretty much destroyed the back of it. So, we kept all three and were paying insurance on them all.

Well, this bothered me. I asked around and found out that it is legal to transport dogs in a trailer (I know how weird that sounds, but desperate times call for desperate measures). So, I decided to sell the SUV and use the money to pay for a small trailer and new tires for the Camry. This way, we save money on insurance every month and get a couple of big expenses paid for as a trade-off.

So, I put the SUV on craigslist and within the first 24 hours it was sold for $1,300. This couldn't have come at a better time because the day before, one of the tires on the Camry had blown out.

With our $1,300 in hand, we went to Sam's Club to get new tires that very night. The tire department was closed for the day so that was a little deflating (pun intended). We started looking for tires anyway, and could only find one match and it was $180 per tire! Apparently, that year of Camry has some very rare tires. After shopping around, we found someone who had off-name tires for about $600 total. Everyone else was around $800 by the time the tires were mounted and so on. It bugs me that we are going to have to go through this a couple more times when the car gets older, but it is the only way.

Meanwhile, trailers are expensive, especially enclosed ones. I did find a little utility trailer from Home Depot for $500, but it doesn't have any kind of a box for the dogs to be in. I may end up buying it and making a box for them, but my wife thinks that will be pretty ghetto...and she is probably right.

Oh well,

"Sometimes you gotta take what life gives you, cause life is like a mop. And sometimes life gets full of dirt and crud and hairballs and things and you gotta clean it out. You gotta stick it in here and rinse it off and start all over again. And sometimes life sticks to the floor so much that a mop, a mop, it's not good enough. You gotta get down there with like a toothbrush, you know, and you gotta really scrub 'cause you gotta get it off! But if that doesn't work, you can't give up! You gotta stand right up! You gotta run to a window and say, "HEY! These floors are dirty as hell, and I'm not gonna take it any more!"

Stanley Spadowski (Michael Richards) - UHF

I Think I'm Pretty Handy-ish

Well, the rush is over. We have had all of the guests that we are going to have and it is time to buckle down and move out of our house. Here's the back story...

When we bought our current house, I considered myself a handyman. The simple projects around the house like drywall, trim, and basic carpentry, were well within my skills. I watched DIY Network and HGTV, so that makes me an expert. Well, I am pretty good at it, but I also have ADD and I don't do very well when it comes to finishing things. So, we have several rooms in our house that are about 75% done.

Well, with my wife's graduation, we were set to have visitors. So, we started making to-do lists and I found myself getting overwhelmed. One day, she started naming all of the things that needed to get done and I kind of blew up at her. I decided to just go ahead and hire a contractor to finish everything. We didn't really have the money, but it seemed the way to go. We went to Lowe's and asked for some names of reputable people, and they recommended one guy very highly. So I called him and explained the situation. I said that I was in over my head and I was looking for help. He said "Well, some of us are meant to work on houses, and some of us aren't."

So, basically he lost the job. I may not be the best handyman, but I think I am pretty respectable.

Anyway, I have found that I always work better with a time constraint and I think that is true for my wife as well. We decided to work really hard every night after work and on the weekends (basically the times we should have been working on the house anyway), and we got it pretty well completed. There are still a few loose ends, but the house is almost done. We actually had a cookout last night and everyone made the obligatory "What a nice house you have!" comments.

Next step is to find a renter and we will be one step closer to moving.

I put this post in my blog because I am sure it saved us a bunch of money doing it ourselves, and it made us feel really good about what we had accomplished.