The Starting Block
I’ve been tracking our income and spending for the first two weeks of January, and buddy, it’s unreal. It’s amazing how quickly the dollars leave the bank account and how slowly they come in. You’ll see what I mean in a few days when I share that with you. Until then, I want to give you an idea of where we are starting and where we are trying to go.
Wait, before we get started, we’ve got a few disclaimers or what- have-you to go over.
First. I will share with you every dollar we make. However, I am not going to separate mine and Steve’s income. We both bring home the bacon, and we both know how to burn it. If we sell something on EBay or have a yard sale I will identify that income and detail those experiences.
Second. Our cost of living type expenses are going to be lumped into one number. This will include rent, utilities and cell phones. I have my reasons.
So, here we go…
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As of January 1, 2010 we had a total of $2,039.34 in all of our many bank accounts. It looks good on paper, but I promise you that money is already spent. I am impressed that we started the year with that much. There have been years that we’ve had less than $200.00 as our starting point.
Below, I have added a chart of all of our debts. It hurts. It keeps me awake at night. It’s why we don’t own a home, travel the way we dream or buy fancy things. It’s one of the reasons I still work. This is one of our biggest financial challenges.
DEBTS
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With that being said, here are our financial goals and plans for the year of 2010.
1. We are going to track every penny we make and spend in order to learn where our money goes and to gain more control over our spending.
2. We plan to pay off all of our debts except the car and student loans by the end of the year. We know this is ambitious, and that we will run into holes in the road, but this is our plan.
3. We are going to dispute the errors that were found on our credit reports.
4. Everything we eat must be purchased from the grocery store except for one date a month. There will be times when this is not possible because Steve travels for work sometimes and must eat to stay alive.
* One of our other family goals is to eat more organic foods. We have budgeted for slightly higher grocery bills to cover this expense.
5. We will be having a massive yard sale in the spring, selling things on EBay, and doing other things to make extra money.
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Having that big honking chunk of debt staring at me is a little scary. It’s maddening to know that if we didn’t have debt, I could be a stay at home mom if I that was my desire. $1,233.33 a month goes to things of the past. At least half of it goes to college days that are long gone. The other major junk of it goes to a car that is worth less than half of what we paid for it.
The other side to this is that it’s empowering to stare back at that $1,233.33. Putting it all on paper and adding it up let’s us know what were working with. Now that we have a real number, we know what we’re up against and what it’s going to take to win the race.
Prev Post -> Reflections – December 2009
Nice post! I love when people are honest about money. I definitely feel maddened when I look at what we spend on “things of the past”!
Trust me, we all regret some of the purchases we’ve made when the bill comes due. However, although they have to be paid, think of your student loans as a long term investment in your future rather than a debt for something of the past you no longer enjoy or never needed. It’s an asset. If you didn’t have it, the hours you spend at work might only be bringing you minimum wage. You are making more money even if you subtract the student loan payment from your income than you would if you didn’t have that debt. If any part of those credit cards debts are the result of your educational needs, put that in your mental list of assets, too. Real estate is an asset as well. Yes, the bills are still due for both but it might do your spirit good to realize they also belong on the other side of the balance sheet as well.
Do you guys use your tax return to pay down debts? I know most of our $8853 return (try $8000 of it) is going towards paying off credit cards that got run up over the past year. I’m cringing that we’ll only have about $800 to play with, but it’s a necessary evil. They weren’t supposed to get run up in the first place.
I still say you are brave for sharing all of this. Go you!
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I think it’s really great that you’re doing this. Most people DON’T take the time to do this, and I believe that part of the reason for taht is that we don’t teach our children how to manage their finances at all. I know that no one taught me and my husband. We had $40,000+ of credit card debt, got REALLY lucky on a real estate deal and paid it off then ended up two years later with $50,000+ of debt again and filing for bankruptcy. We learned the hard way. Now, we live paycheck to paycheck and have no credit cards, he doesn’t make enough for us to live on and we’re very, very lucky that we can live because we live in our father-in-law’s house that my husband grew up in. If it weren’t for that generosity, I don’t know what we’d be doing. In any case, I just want to say that I think that this is great and that it will give you a great opportunity to teach your kids (when they’re a bit older of course). Also, thank you for putting it out there because it seems like NO ONE is comfortable talking about financial things, and that just perpetuates the problem.
You are a brave women for posting the numbers. Something else you may want to keep track of, as an eye opener, is the interest totals of your credit cards. I was shocked at how much extra we paid in interest by the time our cards were paid off. We are now a credit card free home and plan to stay that way. If the money isn’t in the bank we don’t buy it. We do have one card in case of an emergency but the balance is at zero. Other than the basic loans, house, car and my recent student loan, we only have basic living expenses. And even though we are in a safe zone my husband still stresses over money. I guess that never goes away. He went into panic mode over the realization that my student loan payment would begin at the same time our daughter’s orthodontist payment starts. It would have been an issue if we were still in over our heads.
Thank you so much for taking this on and for sharing it here. I’m in a similar situation. It’s so difficult to be critical of your own spending. Especially when you don’t feel like you’re spending anything. I’m interested to follow your story. I really appreciate the honesty it takes to post such personal information. Good luck!
Our goal is to only eat out twice a month. Eating out is such a cash guzzler. I find that I like my food better anyway or maybe that is what Im telling myself to get through. I hope you reach all your goals this year.
Wow, I just did this same thing for my finances (using your chart as a guide) and I am so glad I did! Also, I took a look at the rates on my credit cards and one is as much as 25%. Now I know which card to prioritize when it comes to paying them off! Thank you for inspiring me to get my finances in order!