Celebrating Milestones

The other day someone told me my hair looked nice. I immediately replied, “Oh no, it’s so gross I haven’t gotten it cut in like a year.” Same thing happened again when someone thanked me for turning around some numbers really fast, “I mean that’s my job, isn’t it?” Why do we do that? Why do we try to diminish a compliment or praise instead of just saying thank you or you’re welcome?

With that in mind, I avoided starting the blog posts I had in mind where I was going to scrutinize some of my recent spending and continue some more lofty goal setting and instead decided I should take a moment to celebrate some serious wins we have had this year.

Student Loan:
Our primary focus continues to be conquering this loan. A year ago our balance was $145K and today we are sitting at $116K. This feels GREAT. We lost some momentum over the summer when we were incurring a lot of moving expenses, but now that we are settled and have much lower housing costs we are picking up steam. Which leads me to…

Spending Trends:
The below chart shows the breakdown of our spending from September to November since we moved into this new house. What I’m OBSESSED with is that 28% of our spending is going to our student loan and that only 13% is our housing cost. Technically this is us repaying a personal loan that we took out to renovate the family home, but we treat this as our “rent.” Outside of debt repayment our biggest spending has been on childcare which is something that’s pretty hard to trim down. I’m really proud of us that we are living into the plan that was set up to get aggressive with our loan while we have low housing costs. I can’t wait to see how much more we can do with this in the new year since all that spending that happened on our move will be done. I should also call out that we are tracking our expenses in YNAB and it’s been a total game changer to be so intimately aware of every financial transaction we make and to have a budget that I’m constantly tweaking to reflect day to day reality.

Household Spending

Income Increases:
My husband and I both got solid pay increases over the summer which is also helping us more confidently attack debt. We are also using that extra income to build up a bigger emergency fund since ours is pretty small and it just doesn’t feel comfortable for us now that we have a child. We were following the Dave Ramsey rule of $1,000 basic emergency fund, but now we are trying to build it up to $5,000 for more peace of mind.

I know there is still much work ahead, but it feels great to have some of these milestones under our belt. Looking forward to seeing what 2019 has in store.

Re-beginning.

I’m not naturally a writer. To come back to this blog after 9 months of dormancy, feels hard. It’s like catching up with a friend you haven’t seen in 5 years – honestly, where to even begin?

The past 9 months have felt consuming to me, in a way I didn’t anticipate. I would say overall, my life is in order. My finances are in order. We are progressing against our big goal of paying off a ton of student loan debt. We have greatly lowered our housing expenses. I’m doing well at work. My daughter is transitioning well to a new home and school and I still like my husband.

But I don’t feel the joy of momentum. I just feel really worn down.

My mind is a jumble of logistics and tasks and caring for others’ emotions running through my brain non-stop “Ok, husband is out of town, how am I juggling school drop offs this week? Did I get groceries? Dammit, that has nuts in it, no nuts at school. Don’t forget brother’s birthday. Did I call friend to talk about that hard thing that happened last week? I should text so and so make sure she’s ok. We need blinds for the windows, everyone can see us. Need to book flights back home. Hmm, daughter’s shoes are too small, need to put in small clothes storage. Do we have any groceries? I should tell colleague I can cover that work assignment. Huh, no laundry again? Am I the only one who does laundry? Ugh, so and so at work is such a nightmare. Does husband know friend is staying with us next weekend? I feel like that conversation with family member didn’t go well…I should re-visit. Oh it’s end of month, bills are due. Gah, we still need blinds.”

I know this is not unique to me. I know this is the universal experience of overworked women and mothers all over. But I do think different personality types react differently. Some people can ruthlessly cut out the non-essential. Others avoid it all. And I am most definitely the type that will find and make the time to address everything at the sacrifice of my own well-being and even it isn’t truly that important. I don’t feel compelled to be a martyr. I don’t get some sort of twisted pleasure at telling people “oh I’m sooooo busy.” I just feel painfully obligated to do, do, do.

And even as I write this, I feel guilty that I’m portraying saying yes as anything but a pleasure, because I do genuinely want to be there for my family, friends, colleagues and community. But I’m completely wearing myself out. My emotions feel thin. Inefficiency in others irritates me disproportionately. “Self-care” feels like an indulgence in myself that I’d rather not sacrifice the time if I could use it to spend quality time with my spouse or daughter.

So what does that have to do with money? Nothing? Maybe everything? For me, it feels like I am so caught up in the doing and the getting things done that I haven’t had time to reflect on my financial goals which I felt so in sync with a year ago. I don’t feel like I’m spending mindfully. My glorious YNAB budget is giving me less of a thrill. Yet, there have been some wins:

  • Last August our loan balance was at $165K and today it stands at $123K
  • We moved to my father-in-law’s house and lowered our monthly housing costs by 50%
  • We moved closer to family which means we are driving a whole lot less and our commute to work got cheaper
  • My husband and I have both increased our income in the past 6 months through raises and/or more commission

There have also been some setbacks:

  • Moving to a new home has been riddled with expenses. There was, of course, packing materials and movers, but there have also been a series of bigger and smaller improvements (shelving, toddler-proofing, lighting) and unexpected costs (broken oven, BED BUGS – BLECH, rug cleaning, painting)
  • Our childcare is more expensive
  • We haven’t been able to make a lot of extra loan payments the past several months given all the home expenses

So as I (we) look to re-commit to writing and look to re-commit to focusing on financial goals, I’m hoping I can find a way to re-commit to myself in even the smallest of ways to clear out some of the mental clutter. It feels SO cluttered. A few goals to hold myself accountable:

  • Every month put extra on student loan
  • Fully budget for Christmas gifts ahead of time
  • Use commuting time as “me time” to read or reflect – no working or tasking in service of someone else! – so that I can re-connect to the goals I felt so in sync with just 12 months ago.

And that’s it. Start small, one day at a time, it’s a journey, etc. – insert the maxim of choice. I’m ready to re-begin.

Staying Motivated in the New Year

I feel like 2018 crashed into me.

Not only did the new year begin, but January came and went. I can already feel February slipping away.

I’m someone who adores New Year’s resolutions. They bring me great satisfaction as do lists and goals and other “gold star sticker” related activities. I’m sure if I ever shed my Midwest “we don’t talk about it” roots and embraced therapy there would be many sessions dedicated to why I need performance based validation, but that’s for another day. What’s notable is that I did not set New Year’s goals this year. In fact, I didn’t even go out for NYE for the first time in my entire adult life (and maybe my entire teenage life…?) which feels indicative of the type of year it’s going to be.

No more short-term gratification. No more “today I announce how I will optimize my life!” No more marking a specific day to hold specific meaning. Rather, I’m taking the long view and the slow burn. Every day is a day to work toward our goals and every day is a day to make special and to embrace with gratitude.

Since the Lola Retreat in August my husband and I have gotten our student loan debt down from $165K to $140K. I have high hopes for where we can get it by the end of the year. And while I want this debt to be gone, gone, gone – I’m finding I am feeling less panicky about it. I’m trusting in myself, in my husband and the process. We have put a lot in motion to lower our expenses, we are both actively working to increase our salaries and we are staying in tune with the flow of our money.

Oh. And I’m consuming an endless amount of personal finance content.

What’s weird is I don’t know that I’m necessarily learning a ton of technical stuff with all this finance consumption. I understand investing basics, I don’t “leave money on the table” with my 401k, and the concept of spending less than what I make is not revolutionary. But I love the stories. I love hearing people’s journeys to where ever they are trying to get. I feel tremendous comfort (and maybe some horror) in the solidarity of our country’s collective mess of personal finances. Here’s what’s been keepin me inspired:

Dave Ramsey – I know, I know. He’s super polarizing. But I think there is really something to his baby steps approach and focusing on one thing at a time with intensity. I also LOVE the debt free screams. I passively stream his show at all sorts of hours of the day listening to the radio call-ins. I also started branching out to some of the other “Dave Ramsey Personalities” like Chris Hogan.

Debts to Riches – I read a lot of blogs, but something about the tone of this one has really stuck with me. She’s working toward paying off her debt, yet you can feel so much more evolution of her perspective on life happening as well. Digging in about what matters, the joy that is stolen from comparison and staying intensely focused. I can relate to her story a lot.

Bitches Get Riches – Funny and informative, I love all their posts. This is one of the blogs where I feel like I am actually learning stuff I don’t know or haven’t considered before.

So Money – Just started listening to this more. She interviews a lot of the usual suspects, but also has a wealth of knowledge.

Frugalwoods – This was my gateway drug into all of this (I mean, minus that Suze Orman book I read obsessively in my early 20s). I still have a deep respect for them (and want to read her book!), but now that they’ve met their goal I find it’s not meeting me in my same mind space right now. But I will always be loyal. I also like that they have kids! So few of the FIRE people have kids…

Our Next Life – Same as Frugalwoods. Now that they are retired, I am interested, but it’s a passive read.

Cait Flanders – Really love her Year of Slow series.

#debtfreecommunity – I didn’t know you could follow hashtags on Instagram. I guess it’s a thing and I love it. My feed is flooded with all sorts of random people documenting their debt free journey. It’s a good burst of motivation to break up the pics of babies and dogs.

That’s where I am right now. I’m looking forward to the April Lola Retreat to check in with others and feel good about my commitment to the long game of financial happiness.

 

 

 

Debt payoff report: November 2017

The holidays have been kicking my butt from a “share of mind” perspective, but we did well with our debt payoff in November. I maybe left our checking account a bit slim at the end of the month which I didn’t love, so I need to re-evaluate what feels like a comfortable cushion. A trip to the emergency room for our daughter a few weeks back reminded me that having extra money on hand when you have children is probably a good idea…

The most exciting aspect of November was that we dipped below the $150K mark! It felt really good to cross that threshold.

Without further ado, here’s what we’re looking at:

  • Starting balance: $150,363
  • Regular November payments (includes interest): $1,909
  • November extra payments: $3,365
  • New balance: $145,433

December will be tough on the budget with holiday gifting and some other end of year expenses, but I’m hopeful we can keep the momentum. As we settle into this accelerated payment schedule we’ve set a goal of paying $1K over the minimum every month. If we can maintain this minimum extra payment we will be done with our loans in May 2022 which is 3 years ahead of schedule. Of course, we have aspirations to accelerate even faster – but that feels exciting nonetheless!

Dear Daughter

Dear Daughter,

Your aunts and I challenged ourselves to write about a common money topic this week and we decided on kids and money. This topic feels daunting. Hard to think about what I should teach you about money when I’m pretty sure I haven’t completed my own education. Nonetheless, I know a little so here’s what I hope you will learn about money:

Don’t attach emotion to money. If there is one wish I have for you above all is that you don’t get caught up in the emotional weight money holds for so many of us. I don’t want you to be scared of money. I don’t want you to resent it. I don’t want you to obsess over it. I don’t want it to control you. I want you to see it for what it is – a tool. Money is not your goal, but a tool to get you to your goals.

How exactly you will accomplish this feat of emotionless money, I’m not sure, but I have a suspicion it starts with your dad and me. Even if we haven’t learned how to detach emotion from money, we can model to you what it should look like. We won’t fight about money in front of you. We won’t say we can’t afford something you want if we really mean we don’t think you need it. We will give you the chance to practice saving, spending, investing and giving even if it’s just with $10. We won’t shroud money in mystery. We won’t raise you under the assumption that money is something you are magically supposed to understand once you become an adult without lessons and practice along the way.

Understand the value of money and the trade-offs that exist. Maybe this is too simple? Maybe it’s too complicated? Probably both. But I think it’s important for you to understand how goods and services come to have value. There is no intrinsic value for so many of the things we buy in life. People (the market) place value on goods and you need to decide how that lines up with your own values. You need to understand why some things cost more than other things. Ingredients, scarcity, brand. And you need to understand if you care about those things. Why does mom buy milk from Safeway and not Whole Foods? Yes, it’s cheaper to buy milk at Safeway, but that’s not the only reason. In addition to it being cheaper at Safeway, I also find it tastes the same to me from both stores. I don’t value the premium aspects of milk that Whole Foods sells. I don’t necessarily question the Whole Foods milk price (well maybe I do a little), but I don’t value it enough to pay that premium. Do you see what I mean?

Let’s do a bigger example. Say you could go to a great in-state college or a great out of state college. The in-state college will put you $10,000 in debt and the out of state college will put you $50,000 in debt. Maybe you think the out of state college is better – it’s more elite, it’s further from home. But then if I show you what your monthly debt repayment looks like for each and what that means a) for the type of job you need to land out of college or b) for the constrained lifestyle you might need to live for all of your 20s maybe then you’ll re-assess. Maybe you won’t. But at least you’ll understand the trade-offs that come with determining value.

Know what things cost. When I was a kid I was really bad at The Price is Right. I would guess a box of cereal was $10. A new car $3000. I never won any of the games. And that’s because I had no idea what anything cost because I didn’t ever buy anything. But you know what? When I was in college I was still was really bad at The Price is Right. I bought groceries and paid rent, but I didn’t really pay attention to prices. I didn’t do any research. I didn’t compare anything. I just took prices at face value.

And you might think “Big deal? So you can’t guess your bill at Safeway – how out of hand could it get?” But if we play that out it starts to creep into all sorts of facets of life. How much should I pay your babysitter? How much should I pay for a couch? How much should a house cost? Not knowing what things cost puts you at a disadvantage. You’re at the whim of others determining what you value (see above).

Ask me why I do what I do. I’m a flawed person. I make a lot of mistakes. But I don’t want my flaws (money and otherwise) to be absorbed by you without questioning. Internalized as your own future flaws. If you don’t understand why I’m doing something I’m doing with money – ask me. Chances are I’m acting out of decades of habit. Unconscious routine. And chances are if it doesn’t make sense to you it might not really make sense to me. I’ll value your perspective to keep me honest.

You’re only 18 months old. I don’t know when and how to do this, but I’m happy to have written my intentions.

 

Debt payoff report: September & October 2017

Woops, forgot to post in September, so this is a combined report. September and October definitely weren’t as thrilling as August since we didn’t have a big chunk of money to throw down, but it felt good to keep moving forward with extra payments. I started my side hustle which is both fun and a direct line of income going straight to debt. My husband and I have started to eye what steady state extra payments should look like going forward and I think we can definitely out do what we did in September and October.

But anyway, here we are:

  • Starting balance: $154,470
  • Regular September & October monthly payments: $3,818
  • September & October extra payments: $990
  • New balance: $150,363 

Really looking forward to crossing the $150k mark by the end of this month! It’s also worth noting that when we re-financed our loans 2 years ago our starting balance was $200k, so hitting a $50k milestone is pretty great. It feels daunting that we have 75% more to go, but also encouraging that we have momentum and motivation on our side now. Onward!

Mine. Yours. Ours?

My husband and I are back in the Midwest this week to visit my family and to attend our five year business school reunion. Five years. There are so many things that have happened in my life over the past five years that I’m thrilled about – namely an incredible husband, a great career and a beautiful daughter. I live in a breathtaking part of the country, I married into an awesome family that I get to live near and I have my health.

But damn, I did not think I would be $150K in debt 5 years out of business school.

When we graduated I had about $40K in student loans to pay back and my husband (then boyfriend) had – gosh I don’t know – north of $200K I think (he got two masters degrees)? Anyhow, once we each started working we dutifully began our respective monthly payments and planned to each be done in 10 years. It didn’t really cross either of our minds to accelerate our payments (um and we went to business school – eeks. Embarrassing).

What was killing us though was the interest rate. Student loans coming out in 2012 were at horrible rates – ranging from 6% to 8%. We each re-financed and got better rates a year later and thought we were good. We probably would have continued on that way paying tens of thousands of dollars in interest over 10 years, just accepting that as our fate. But then my husband found an even better student loan consolidation where the fixed rate on a 10 year loan would be 2.75%. The catch – we would have to consolidate our loans together to qualify and the loan would be through a private bank.

My first thought was hell yes to 2.75% fixed! But then it sunk in that I was tying myself to significantly more debt and that by moving to a private loan we would no longer have the security of government loans that let you take hardship periods of time if you end up unexpectedly unemployed. I was nervous, but we both knew the savings on interest was absolutely the right thing to do (phew, some business school education setting in). So in the fall of 2015 we consolidated and re-started the clock on our 10 year loans once again.

I’d love to say that at that moment I nobly decided to split our loan payments with my husband 50/50 because of love! Commitment! A shared future! But I’d be lying. We pro-rated our payments relative to each of our debt because that felt “fair” at the time. But a couple of months later my husband unexpectedly got laid off and started at a new job that paid a lot less. Like – a LOT less. We both knew the job had great potential – a sales job with uncapped commission – but it would take time to build up his client base. We began lumping all our expenses together and just each contributed as much as we could. I think we probably split everything 50/50 generally, but there were likely months that I paid more than half.

And it wasn’t until we went through this experience that it dawned on me that we had to stop thinking about debt and income as mine vs. his. We had taken vows a year earlier in front of friends and family to join our lives – what’s mine is yours, what’s yours is mine. We had shared dreams for our future – why exactly did I think I didn’t have to share in the work to get to those dreams? And so when my husband’s income stabilized, we just kept moving forward with money in one pot and left the pro-rating in the past. It felt great to save so much on interest with our consolidated loans and we definitely felt more like a team financially by the time we welcomed our daughter into the world.

Yet this was STILL not when it occurred to us to pay off our loans faster. We were sittin’ pretty on stable incomes, a great interest rate on our student loans – and hey, we don’t have that ‘bad’ credit card debt, so we’re good, right? Everyone takes at least 10 years to pay back student loans…right…?

Fast forward to this past August to me attending the Lola Retreat with my two sisters-in-law. I was inspired to attend because Mrs. Frugalwoods was speaking and I had been a long-time fan. I also loved the idea of women getting together to talk finance. I thought it would be energizing, inspiring and I would learn some practical saving and investing skills. But what I hadn’t anticipated was meeting a bunch of regular-hey-they-are-just-like-me women talking about achieving financial independence in their 30s. Paying off massive grad school debt in a mere 3 years. Retiring early and living off investments. Talking about their “FI Number.” Say what? You mean that stuff isn’t just for the people who blog about it? What do you mean you paid off your student loans EARLY? Suffice to say I left inspired, but I also left with a fire under my ass and a bit sheepish. We weren’t doing enough.

And THAT is how we got to where we are now. Shared debt. Shared income. Shared goals. Shared vision. We aren’t a finely tuned machine yet, but we are much more motivated than we have been before. I’m impatient and want it all done now, but my husband keeps me in check reminding me it’s still a massive task ahead of us. But we don’t have to be complacent or just accept our student loan fate as “that’s just the way it is.” Let’s hope at our 10 year reunion we’ve got a different debt story to tell.