Month One Re-cap

We have completed our first month on our journey to being debt free. It was a long month, but we made it. We made it completely on cash and we made it with cash left over. Some of our expenses ended up costing less than we had planned and we were left with a surplus this month. hooray!

ALL of our credit cards are at a zero balance and our emergency fund is in place and making interest. Baby Step 2 is in full swing.

Bobby did a great job taking his van-pool to work as much as possible. He deserves a huge pat on the back. Because of his hard work, we spent $100 less in gas than we had budgeted.

We spent more time together as a family this month. I have been planning our meals and grocery shopping accordingly. This means family time at the dinner table - eating home cooked meals. Friday night is always pizza night. Bobby has been making our pizzas instead of ordering them. They taste better, and it costs less. We have been freezing left overs and really utilizing what we have in the pantry. We've been going to the library and playing at the park and we are not spending money we don't have.
As crazy as it sounds, we really have wanted for nothing... because really there is nothing extra that we need. We entertained guests for dinner, celebrated 2 birthdays and paid a hefty medical bill - all on cash. And because we have been living within our means, we were able to pay over 5 times the minimum payment on our HELOC this month. Next month we will be able to pay twice as much as this month.

April's expenses are all planned and we are looking forward to month two of our journey. We will be having a garage sale in April, and all profits will go to debt.

This week's Groceries

Total: 94.78
After Bonus Club and Coupons: 45.13

Giant had 4 dollar doubler in the ad this week. This meant FREE stuff!
Marcal napkins were 2/4. I had a coupon for $1 off and I doubled it for free napkins. I matched the others with Juicy juice (2/$5) Olive oil and fig newtons. Also free after coupons were 4 boxes of band aids, and 6 packs of Stride gum. It doesn't look like a lot this week, but I bought some pricey items: 51oz Olive oil, Vanilla extract, a pot roast and some chicken quarters. The solo cups were clearanced to 1.29 with a .55 on package coupon that doubled.

I came in $5 under our budget this week. We do need diapers, but I couldn't work them into this trip since Giant doesn't carry the size/brand I wanted. (ie had a coupon for).

Bobby will be away next week and we had to have our monthly budget meeting today instead of early next week.

Stay tuned for my next post, where I will re-cap our first month on our way to being debt free!

Super Saving Saturday

Giant had 6 triplers in their ad this week. I had to make a trip for milk on Tuesday, but had not yet perfected my list, so I waited until Saturday to make my big trip. I did pretty good...
At Giant my total was: 82.20
After coupons and bonus card: 44.89
At Wegmans I spent $14.99 for bananas, apples, 2 bags of salad, tomatoes, cucumbers and a whole roasting chicken.

Freebies this week: 4 packs of dental floss. Other cheepies: minute rice .39, Betty Crocker frosting .09, Cheerios snack mix .69, frosted mini wheats 1.50, veggies for .19 and a 10 lb (!!!) pork shoulder for 7 bucks!

I ended up with $4 left over in this week's food budget. We have $55 left for next week.


At CVS this week I got everything you see for 2.51 and I earned over $15 in Extra Bucks.

Ways to cut your electric bill

I thought I'd share a few ways we have adopted to try to keep our electric costs down.

I have trained Robert to turn the lights/tv off when he leaves a room. He still needs some reminding, but he is doing a good job. Bobby, however needs more reminding than Robert.

We have dual thermostats and we have replaced the ones that came with house with timed units. We turn the downstairs heat off at night and the upstairs heat off during the day. This works out well. We have gas as our source of heat, so this helps keep the gas bill at a decent cost as well.

I use only cold water in the washing machine. But I refuse to give up my scalding hot showers!

We have stopped using the heated dry and hot wash start on the dishwasher. Instead, I open the dishwasher when it's finished washing and let the dishes air dry.

I saw a woman on Oprah a few weeks ago who had cut her electric bill by over half by unplugging her electronics when she was not using them. (this wasn't the only thing she did - she was pretty extreme) We forget that if something is plugged into the wall, it is still using electricity - even when it's not turned on. This prompted me to go around the house and unplug things we don't use often. We are hardly ever in our living room and dining room so I unplugged the lights in that room and also in our guest bed room.

By being mindful of our electricity over the past 6 weeks, I have managed to cut the electric costs. We just got our statement and it went from $119 last month to $89!

Now that daylight savings time is here, I am hopeful that we can get our costs even lower.

Over the hump and on our way to being debt free!

Today was the day there was money in the bank again! Bobby got paid and I was able to replenish our envelopes. We are on day 12 and we're over the hump. Last month's bills are all paid and so are all the charge cards. We are on our way to being debt free - at last!

I hit the bank first thing and made a withdraw. I felt like I won the lottery - all that cash between my fingers. REAL money! I brought my envelopes with me and filled them right there in parking lot - well, in my car, in the parking lot.
Surprisingly, some of them still had cash in them. (actually this was not a surprise since we now know where all of our money is going) My initial draw of $225 on the first of the month, was all we had 'to get by' until today. We made it to day 12 with $120 left! I am amazed at our restraint. Really, I am! We only spent money on gas and groceries and Bobby had a work function that required $50. I sold one of our cribs on craigslist and got 50 bucks. That was 50 less bucks I need to withdraw today.

After the bank,we headed to BJs. I put gas in my mini-van - used a single twenty dollar bill and filled my tank 3/4 of the way.
I had planned my BJs trip carefully. I only buy items there if I have a coupon. I got my BJs coupon booklet in the mail a few days ago and clipped what I needed. Diapers, wipes, Orange Juice, chicken nuggets, Bread, oatmeal, apple juice, eggs and cheese. (LandoLakes American cheese is $3.49 at our BJs. It's 6.99 at Giant. Sometimes I even have a coupon and I can get it for 2.49!) My bill was $93.03. I had $18 in store coupons. I added my items up before I got to the register and knew that I needed $75.03. My BJs envelope had $75 in it and I happened to have 3 pennies in my wallet. Easy Come, Easy go.... but - success. I was pleased.

Later, I went to Giant. I had been busy planning this trip all week. I had a coupon for every item except for 4. (I need to make a dessert for a party this weekend and needed $4 worth of ingedients.) I wish there were coupons for lunchmeat!
I had only taken $60 cash with me, so I had to stick to my list. When I ordered my ham at the deli counter, the deli guy said "is it okay that I went a little over?" To which I replied "no. well, how much does it come out to be?" It was only a few cents more than what I had planned, so I took it. He aplogized, and I told him I'm on a strict budget. Take that, deli man!

My bill came to 105.39.
After coupons and bonuscard savings I paid 57.42. I got 4 candy bars and a can of fruit for free, a bag of veggies for .34 and some dishwasher tablets for .84. It was a good trip.

So, our envelopes are full again (except for BJs, which was short lived) We even have an envelope for 'fun' This is our 'blow money.' ya know in case we decide we want to go out for ice cream or buy a magazine.

We're already looking ahead to next month where there will be new expenses... lawn care, swim lessons, and oil changes. It's fun to have a plan and even more fun when the plan comes together.

A few setbacks...

Robert lost his first tooth over the weekend. I didn't exactly budget for the tooth fairy to visit, and luckily at nearly 4 years old, he doesn't quite appreciate money like he would at 5 or 6, when his tooth was supposed to fall out. I have heard of some kids getting upwards of 25 bucks for losing a tooth. For real. That's just absurd.
I pulled a dollar from the grocery envelope and Robert was happy as a clam - "a WHOLE dollar" he said and he was really excited. The Tooth Fairy also left Chutes and Ladders since it was her first visit.
Ironically, on the very same day that Robert's tooth fell out, within hours actually, one of Bobby's molars 'broke' while he was eating a tootsie roll. Sheer irony. Like father, like son.
We both cringed at the thought of what it was going to cost to get it fixed. Our dental insurance only covers cleanings and check-ups and and we anticipated this was going to be a pricey fix.

Our emergency fund is still not completely established. I am waiting on payment for some work I have been doing, and the check has been delayed. That check IS our emergency fund.

Fortunately, we are getting a nice tax return. Initially, the plan was to put the entire amount to debt, but we will be refinancing in the next month or so and need some money for closing costs. And now we will need to take a nice chunk to pay for Bobby's root canal.

Today I got a letter in the mail that our escrow account with our mortgage company will have a shortage by May. I am disgusted by this, as our mortgage guy assured us last time this happened that it would never happen again. Regardless, we'll need to replenish that account by May 1st - and that means another chunk of tax return will fill that void.
**Came back to edit this part - Bobby informed me of my own ignorance. Our taxes went up, so of course our escrow will need more funds. I didn't anticipate this, but we have decided that we will be adding some extra escrow to our monthly payments from now on so that we aren't hit with this again next year.**

Bobby just took out a million dollar life insurance policy- something we have talked about for years. We need to pay this quarterly and it's not cheap. Thank you again, tax return.

As expected, LIFE goes on around us, and we've been thrown a few curve balls. Funds get moved around, and we can still pay for things that need to be paid for. This just means less debt paydown then we anticipated. bummer.

The important thing is, we are not accumulating more debt. The envelope system is working well so far. I am anxious for Thursday when there will be money in our bank account and I can replenish the envelopes and do some shopping. I have been busy planning our shopping trips all week and will account for each and every dollar and make sure I am getting the best deals out there.

I made a trip to Walmart this week to do some price checking. I took a notebook and wrote down the prices of many of the items that we buy regularly. I am currently working on a spreadsheet to compare Walmart's prices with those at my local grocery stores to ensure that I am not ever paying more than necessary - for anything.
Interestingly, Luvs diapers are over $2 cheaper at our grocery store than at Walmart. Can you believe that?

We have really had to 'do without' over the past 2 weeks. By that I mean 'do without' certain things that used to be luxuries for us. We really are needing nothing and it feels good to be living simply.

living simply is humbling

This first week on cash has been eye opening.

I needed to return a few things before we closed out our visa card. I packed up the kids and ventured to the mall on Wednesday - with no cash in my wallet, and no credit cards. I had a card from Victoria's Secret for free panties. I actually came home with something and didn't spend any money.
BUT... if I had my credit card, I know I could have done some major damage. Really, we don't need anything. And I had to remind myself of that. Still, it was nice to get out and have a change of scenery.

On Thursday, I needed to go to the store for a few items for dinner. I took just enough cash for exactly what we needed. "Do not pass go, do not collect (or should I say "spend") 200 dollars." I used a few coupons and 8 bucks later, we had dinner for 2 nights.

Alex had a follow up for the tubes in his ears this week. I intended to pay the co-pay in cash, but he needed new ear plugs which were an additional 10 bucks. I didn't have enough cash on me. The receptionist said she'd bill us - which is great because we have a Health Savings account and we'll be reimbursed before I have to pay the bill.

I feel like a poor person on cash. I feel like we are struggling. And we are - for now. We're trying to pay last months bills on this month's budget, some of which used to be paid on our credit cards.

It's humbling... this cash thing. And I kind of like it.

Our Total Money Makeover

Let me preface this by saying I am not one to share my financial situation with anyone. I don't (usually) think that it is anyone's business and I don't give financial advice.

That said:

Hello World! We are in debt.

Here is our story.

Once upon a time, (5 years ago) we had it all. We had a nice townhouse, one car payment and my student loans as our only debt. We both worked and I was able to make double payments on my loans. We had one credit card and we paid it off every month. We had a budget and stuck to it.

Then LIFE happened. We had a baby. We built a bigger house. Then we had twins. We needed to trade in a car for a mini-van and we bought more 'stuff' - more stuff than we needed. Then came preschool tuition, twice the diapers, swim lessons, swing sets, Christmas and double the bills in our new, bigger house.

We have managed to rack up some pretty heavy credit card bills over the past 2 years. More than once, when couldn't pay the balance, we opened a 0% interest card where we let the balance sit, making minimum payments wih no real plan to get rid of it. We even took out a Home Equity Line with the intention of making home improvements. That has only become a place to 'store' our debt.

Enter: The Total Money Makeover. I have been reading about and listening to Dave Ramsey for a few months. His debt reduction plan made sense to me. After hearing that a few friends were on his plan, and it was working for them, I decided that this is what we needed to do.

I went to the library to check out The Total Money Makeover, and was disappointed to hear that they did not have it in circulation. They were going to locate it for me from another library. In the meantime, my mom (also a Ramsey fan) bought me the book. I started it on a Saturday and finished it by Sunday. It was an easy read. The concepts were not foreign to me and its a plan we can live with.

As of March 1st, We have started the The Total Money Makeover and we plan to completely eliminate our debt over the next 2 years. That means NO more student loan payments, NO car payments and NO credit card bills. We will be debt free (except for our mortgage.) We'll have an emergency fund in place as well as college funds for our kids (even though I am fairly certain they will all get scholarships to great schools!) :)

Ramsey's plan includes 7 baby steps to becoming debt free.
Step one is to establish an emergency fund. This fund is a minimum $1000. For us, this was an easy step and we were able to dive headfirst into Baby Step 2: The Debt Snowball.
This step will take much longer to accomplish. It entails strict budgeting and planning - and a cash only budget. We tried the cash thing for a few months about a year ago, except that time I left my credit cards in my wallet to 'fall back on.' This time, the credit cards are gone. We have both emptied them from our wallets and sealed them in an envelope - until I think of a creative way to dispose of them. We have implemented a cash envelope system.

Each month the envelopes (labeled Grocery, Gas, Dining Out, Medical, Haircuts, Wholesale Club, Dry Cleaning, Entertainment, Gifts, Clothing, Misc.) are filled with an allotted amount of cash. Depending on the month, the amount in each envelope will vary. Planning is key. For example, we know we have two family weddings this summer. We already know that those months will require extra cash. We must plan accordingly, which may even mean that we contribute less to our debt that month.
If we want to make a purchase, we'll need to save each month. No more spending money we don't have. No more impulse buying. Every purchase is planned.

I was able to use Microsoft Money's Cashflow forecaster (a tool I have used to help keep track of our expenses since 2005) to help predict approximately how much we will be able to contribute to our debt each month. These first few months will be the hardest as we make the complete transition to cash. Once our cash habits are established, the debt snowball will begin. By the end of May we should have $500 to put to debt and by early July we'll have and additional $1200.00 to snowball.
All 'found money' will go directly to debt. This includes our garage sale profits, bonuses and tax returns.

You're invited to watch as we crawl out from under our debt - so we can live a life of no payments, no money stress. This journey for us is so much more that just getting out of debt. My hope is that as a family we can learn to live only with what we really need and appreciate what we already have. That we can simplify and have less 'stuff.'
After All, "Having the best things is no substitute for having the Best Life."

I heard that quote on Oprah yesterday. It hit home for me.