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Archive for February, 2013

Last charge card payment!!

February 24th, 2013 at 05:37 am

On payday Friday I paid off our last VISA payment!!! $1,050! Hubby had made me wait until payday to pay it off. I am so happy as I have been dealing with VISA payments for years. Although we would pay off the card each month, I would have wildly extravagant balances each month to the extent that I was sometimes even afraid to look at them. We moved a year ago and have rental houses so it was not uncommon for us to have monthly VISA bills of $8-$10,000! A few times even more!

It was just terrifying as I was wildly spending money and not really paying attention to our finances. Hubby and I had quite a bit of money coming in and if I wanted something I just bought it. I am embarrased to admit the above as many of you are SO conscious of expenses.

Since February 1, I am proud to say that I have been one of you!! I am so grateful to all of you as reading your blogs encourages me to have a spending plan and write down everything I spend. I have been doing this and am amazed at really how little money it takes us to get by each month. With the spending plan we established hubby and I each have catagories for entertainment and personal expenditures, but we are saving a great deal of money. We are also now using the debit card exclusively so I am really watching what we spend.

We really need to follow this plan this year especially as we still need to save about $82,000 over the next 12 months. Hubby and I have an agressive plan to turn our IRA which contains rental houses into a ROTH IRA. This will mean that after paying $160K on taxes on the account this year, for the rest of our lives all the income in the account will be tax free. My goal is to create 100K in tax free income in retirement.

This will be a frugal year for us but we believe it will pay off for many years to come. Also, when we are able to do this it will have taught me to change my free-spending ways...one day at a time.





It's Working!

February 18th, 2013 at 11:01 am

It's crazy how well just writing down our spending and having a spending plan has worked! So far this month we are 18 days in and have spent just $2,686 of our $8K monthly budget! I am so happy! The 8K is what I bring home each month. We are saving hubby's entire salary and the 8K even includes $2,500 from my salary going to savings.

Hubby and I are both in our 50s in our high earning years, about 10 years away from retirement. Unlike some of our friends who used increasing income to increase their lifestyles to exhorbitant levels, we are trying to realize the blessing of our higher income, live reasonably and save and invest toward retirement. We call this our "10 year plan."

This year is especially important as our goal is to save another $45K toward paying our tax bill to convert our real estate IRA into a ROTH IRA. If we do this, in retirement we won't have to pay any taxes on the rental income generated from the ROTH IRA account.

It's funny, but even though I have designated $150 fun money in the monthly spending plan for each of as an allowance and $200 a month each on clothes, knowing we have such a major savings goals makes me want to save everything I can toward it.

I really have plenty of clothes and except for a couple of pairs of summer sandals I can probably just live with what I have.

Since we started living with the spending plan, I have started feeling such a sense of control and peace about our finances. This is such a contrast to even a few months ago when I shopped on Ebay with a vengence and tried to ignore the monthly VISA bills as well as the many packages which came in each day. I get paid this Friday and will pay off the final $1,100 VISA BILL. HURRAY!!!!!!!

For me, spending can be quite addictive. I always need to remember to write down all my "numbers", not use credit and to take it one day at a time. I have had good, solvent periods before which ended. This time I truly want to change my lifestyle once and for all.

Thank you for your help in this effort God. I couldn't do it without you! Thank you also to all of you out there in internet land. Being accountable to you people I don't even know is helpful.

Wedding Planning Book

February 14th, 2013 at 09:26 am

I am keeping this journal often so I can see my spending patterns. I continue to write all expenditures down and am saving MUCH money (like hundreds or thousands each month) by not frittering it away mindlessly.

I did purchase a book on Amazon this morning, though, for my son and his fiance who are getting married. It was $10.02 including tax and I had enough in the gift budget for it. I know she will be delighted when she receives it as it is supposedly a great book on planning a frugal but elegant wedding.

Last night hubby and I went out to Jason's Deli and spent $21.70 for sandwiches. We had not gone out in two weeks so this was a nice splurge for us.

We have also decided that after about 4 months of eating vegan we will be adding back in some meat and/or dairy. Hubby is concerned his gums are receeding and believes it could be the vegan diet. So last night he had a chicken salad sandwich. I am adding back in cheese and dairy products so I will return to being a vegetarian as I have have been for the past 4 years.

The vegan diet was getting so BORING as we ate lots of beans and rice. We were both tired of it!!

It is interesting that as I have stopped spending LOTS of money on myself (clothing, jewelry, etc), I find that I want to spend money on others. While this is a good thing and less selfish than spending on myself, I need to watch to make sure I don't start overspending on gifts.

I tend to have addictive type issues and this is something I need to be aware of.

To celebrate Valentines Day, we are taking a two-hour road trip this evening to see a concert with a friend. The trip will entail eating a few meals out and also extra gas. I will take along snacks so we don't blow money on snacks. I could take the money out of our travel budget, but I think I will take it out of our normal gas and restaurant budgets.

I feel a great sense of peace lately not using the VISA. I can hardly wait to pay off the last bill ($1,100) next month! Then I will be totally free of the VISA demon. To me, a charge card is much like the devil. It is so enticing at first promising you wondrous, beautiful things you don't feel you are paying for but it ends up slowly almost imperceptively eating away at the good things in your life until all you have left is fear, anxiety and credit card bills. Good riddance VISA Devil!!

Sister's Birthday Today

February 13th, 2013 at 08:19 am

I own a business with my sister and today is her Birthday. Here at work whenever we have a birthday we hold an office birthday lunch and buy the celebrant a birthday card and $25 giftcard to the restaurant of their choice. Usually, my sister and I don't buy each other anything additional, just the usual office birthday stuff.

Well, this morning I was reading one of my budget books and it asked me to list various sets of goals for various time periods. One of my goals was to develop a better relationship with my sister as working together over the years we have had some problems. The book urged the reader to set longer term goals and then short term goals which lead to the accomplishment of the longer term goals. With regard to my sister/relationship goal, I realized that what I could do this week was buy her a small additional gift. Therefore at lunch today I am buying her a tube of my favorite mascara. It will only cost about $8 but this is a way to show her I value her and our relationship. Even though this does entail spending money, it is in my spending plan and it is a small investment in our relationship.

Here is what the book asked the reader to list:

100 Things I Really Want to Do
100 Things I really Want to Have
20 year goals
10 year goals
5 year goals
1 year goals
1 month goals
1 week goals
1 day goals

Starting to make the lists reminds you to 1) think about the things you want to do and accomplish in your life and 2) reminds you that one day at a time we are creating our future outcomes. Not to plan for this is to leave the outcome to chance. And really waste your life.

Quick Musings

February 12th, 2013 at 02:33 pm

I have decided to try to just write a little something each day to stay on track. Hubby and I continue to track our spending, however, I am a bit worried I am going too much to the frugal side. I need to make sure to stay balanced so that this does not turn out to be another brief savings phase (I have been trying to control my spending on and off for the past two years).

Today I received a $75 refund from my hubby's doctor as we overpaid. Deposited that in the checking account along with hubby's paycheck. He actually got a paper check in the mail this time as we were switching his ACH deposit from Emigrant Direct to Ally Bank so we got a paper check this time. Emigrant's great online rate had decreased to .05% where Ally's is .09%. Every little bit helps.

For the last few days been working based on a new philosophy. YOU SUCCEED WHEN YOU TAKE THE ACTION, NOT IF THE RESULTS TURN OUT AS YOU HOPE.

For instance, at work I sometimes wouldn't call a prospect because I worried they wouldn't want what I was selling. Now, I don't worry about the outcome. In just picking up the phone and calling I have already succeeded. This has resulted in my being much more productive at work.

Two Weeks In & Doing Fine

February 11th, 2013 at 02:16 pm

Hubby and I started our spending plan officially on February 1. I am 11 days into it and I can't believe the difference it is making. In addition to writing down everything we spend hubby is also tracking everything in Mint.

We stopped using the VISA and are now using a debit card only. I have to pay off the last VISA statement balance of $1,100 which I will do on its due date and I am DONE with the charge card! I am excited about this. Dave Ramsey says using credit causes you to spend about 20% more. For me, I probably spent 50% more! Having that card and knowing I didn't have to pay it off for a month was a license to spend like crazy on many things we didn't even need.

I am amazed that we have only spent $499 since the first of the month! In the past I could easily spend literally thousands each month so this is truly amazing. Most of our regular monthly bills are still to come but I am very pleased to have spent so little. Our monthly budget is about $5,500 each month. That is my salary which we are living on and we are saving his.

We hope to save a lot of money this year to convert our real estate rental house IRA into a Roth. That will mean that after we retire, all the income from the rentals will be tax free forever. To make the conversion we have to save a great deal of money this year to pay the taxes, but having figured out all of our numbers, we can do it if we are careful.

When I think of the thousands of dollars I have blown due to being a spend thrift it almost makes me sick to my stomach. Oh well. I guess I can only start from where I am right now. I really think I have a spending addiction, but one day at a time, and following our spending plan, it is being arrested.

It is odd but I was kind of grouchy over the weekend and didn't know why. I figured it out this morning. I really think in the past I used excessive spending to numb out. Now that I am not using addictive spending as a "drug" I don't always feel the best but I know I will get used to this in time.

I am so pleased to finally be on the right course in saving money and being careful with our resources. Better late than never.

I also really like the idea of trying to figure out what we REALLY like to do and making sure we have the money for that without blowing lots on things or experiences we really don't care about. I think being frugal is just spending your resources wisely on the things you really like to do.

Some Financial Peace

February 4th, 2013 at 01:39 pm

In mid-January I started in earnest down the road to financial sanity. Hubby and I have already made some progress and I feel markedly better. Here is where we are right now:

1) I have not even been on Ebay for about a month and have not been spending compulsively at all.
2) Hubby and created a spending plan.
3) I have been writing down all expenditures.
4) We have totally stopped using the VISA and instead are using the debit card! Yea!!
We pay our monthly VISA bills in full each month so I just paid a very painful monthly bill of $4400 a few days ago and only have one more bill of $1100 to pay next month.
5) I did the taxes over the weekend. Since we have rental properties it was AWFUL, but I did it very carefully and I am glad it's behind me. It took me about 14 hours and we even have an accountant!

Things hubby and I will do this weekend:
1) Finish our 2013 financial goals
2) Get my 401K money invested...ouch!!!

I can't tell you how good it feels to have a spending plan and be watching my spending for a change. As a couple we had so much "disposable" income that I was just disposing of it willy-nilly all the time. If I wanted something, just about anything, I bought it!

My challenge in all of this will be to keep following this path consistently during 2013. At this point I am looking forward to getting through February on the plan. Even baby steps are progress for me.

It was hard to stop using the VISA as it was a frequent flyer card. I read that Dave Ramsey said that when people charge they spend 15-20% more! I know that was the case for me. Even though, not using the card, I won't get free flights, I know we will spend less overall.

It's progress not perfection, but so far so good.