New Address

I am excited to announce that I have moved to www.thegoodlifeonabudget.com! My husband set up the site for me, including the hosting on one of his servers, and I have been working on putting together all the particulars and transferring my posts for a few weeks now. This will be the last post at blogspot, please update any links and feeds. Thanks for reading!

My Husband is out of Credit Card Debt

When I was running the numbers for my update post, I realized something. The two credit cards we have remaining are both in my name only. So technically, on paper, my husband no longer has any credit card debt.

We didn’t really plan for this to happen, and it’s all my doing anyway. He doesn’t deal with the day-to-day finances or payment plan, and I devised it based solely on interest rates. When I opened our 0% Citibank card last fall, I used my name only because it was easier, and the money transferred was from the one card that is in his name only. So now that the Discover card is paid off, he has no more credit card debt.

His interest rates were only a few points higher than mine, and that’s most likely due to his student loans, which are 3 times larger than mine are. That and my obsession with calling my cards and negotiating lower interest rates, which he does not share.

Now my husband has a head start on me in improving his credit score, which is going to come in handy pretty soon…

Where Did Summer Go?

I can’t believe it’s the end of August already. Labor Day is right around the corner. This summer has been crazy, but strangely, for no particular reason. Work has taken over my weekdays completely, and every weekend it seems like there’s somewhere to go (and sleep to catch up on!).

Our credit card debt currently stands at $7880.64, split between 2 cards:

• Mastercard (9.99%) - $4424.64
• Citibank (0.00%) - $3456.00

We are so close to being done with this beast that I can taste it! We’ve been through a lot of ups and downs, but we’ve never been below $10,000 since we began our journey out of the hole. We are in the home stretch now, and we’re going to sprint to the finish. The plan is to be completely credit card debt free by the end of September. It’s going to take a lot of concentration and effort, but we are determined.

We have imposed a spending freeze until we are out of debt, save for our normally budgeted items. All our extra money will be thrown at the cards. The only problem is, I don’t know which card to pay off first. The 0% promotion ends on September 25. I am ashamed to say I don’t know what happens to the remaining balance at that time. Does it just then accrue interest? Or does it back-charge interest for the total amount on the card (which was $5100) for the entire year? That’s not a risk I’m willing to take. I have been splitting our payments equally between the two cards, and when it gets closer to the end date, I’ll pay the Citibank off first. This will also help keep me motivated and aware of our September 30^th deadline.

My Car Insurance Pays Off

A few weeks ago, I was walking out the door to go to work when I saw something that stopped me dead in my tracks.


A thunderstorm had passed in the night and this branch broke off the tree, falling directly onto our car. That's just suuuper. I said a few choice words, then turned around and walked back inside to get my husband.

We assessed the damage and determined that the only thing wrong with the car (besides the huge branch still on it) was that the window was cracked. Not smashed, fortunately, but messed up pretty bad.


Since the crack was on the passenger side, the car could still be driven. We wanted to fix it quickly, though, before it got any worse.

I did a little research online and determined the cost to replace the windshield to be about $200. Then I called our insurance company to report the damage and see if they would cover any of it. I was skeptical, as we have a $500 deductible. Come to find out, in MA insurance companies cover 100% of windshield replacement. I was shocked! The insurance company even arranged for a windshield repairman to come to my office and replace the windshield.

I was impressed. I have never dealt with my auto insurer, as we have never had a claim with them. This experience was almost pleasant. I never had to worry or stress about the damage; as soon as I talked to them, the wheels were turning to fix the problem. Now that is what insurance is all about - peace of mind.

Independence Day Challenge Complete! (Mostly)

One more credit card down!

A few weeks ago, I challenged myself to run a 5K and pay off $5K of debt by the Fourth of July. Unfortunately, I have fallen off the running wagon. Again. My dad hurt his ankle in the week following my original post and, without my running partner, I let the training slide.

But on to better news: yesterday I paid off our Discover card! I have been chipping away at the balance all month, and still had $1907.22 left to go. I planned on using part of my husband's next paycheck, due to arrive on July 3, to sneak in the final payment and wipe it out. However, I was surprised to find that my commissions last week included a bonus that I thought I hadn't qualified for. After some calculations in Quicken, I sent off the last payment. We are now free from this credit card!!

Our newfound financial freedom is particularly gratifying when you consider the original cause of this debt. We opened the account in October 2005 based on a 0% balance transfer offer. All of our other credit cards were maxed out and at that time we didn't have a lot of resources. We decided to take the 0% offer and transfer part of another balance to the new Discover card. Only it didn't end there. Before we knew it, we had charged up to the limit of the Discover card and the original card. So we were worse off than before.

If you think of debt as a hole you're stuck in, the Discover card was a false step in the right direction. We were trying to climb out of the hole, only to find that the floor was falling out beneath us. I am so excited to finally be one step closer to complete debt independence.

Cheap Date #7- Canoeing

I try to find fun, interesting dates to go on with my husband that cost less than $20 for both of us. Not all our dates qualify, but we try to make at least half of our dates cheap dates that don't break the bank.

Around Christmas 2006, my in-laws moved to another house. When they were cleaning out their basement and garage, they came a across a bunch of things they no longer used or needed, including a couch, armchair, a variety of my husband's childhood items and a canoe. My husband rented a U-Haul and brought the whole lot up to our house one weekend.

It was great to get their only slightly used furniture, which I am lounging on right now. The canoe, however, was put into storage. Our garage doesn't have a lot of room in it, so the canoe went into the basement. Until a couple of weeks ago, when we had a stretch of 90 degree days. We decided the time was right to take out the canoe.

It was a little tricky putting it on the car, but we figured it out. My in-laws gave us the foam blocks, but we bought the tie down straps at Job Lot. They cost $7 apiece, which will amortize over each use. One for the front, one for the back.

Our first excursion, it turned cloudy and cold as soon as we hit the water. We paddled around for a bit, saw some turtles, a heron and a pair of beaver dams, then headed back in.

Turns out there's not all that much to do when canoeing. You paddle around and look at the scenery. We got a little bored after a while so the next time we went canoeing, we came prepared with books and snacks.

Then we really enjoyed ourselves! We paddled around for a a little bit, then beached the canoe and read our books for a little while. I think next time we'll even pack a picnic lunch and some drinks and relax for an afternoon. There is a lake about 5 minutes from our house that we can pop over for an hour or so to unwind. This is definitely a cheap date we'll be doing all summer!

Paying Uncle Sam

Last week I got the revised bill from the IRS. Incidentally, I was driving home from work and cursing myself for not calling them yet to inquire about our economic stimulus check. I stopped at the mailbox and there sat the shiny, updated bill. The IRS and I must have some sort of psychic connection. Either that or I procrastinated the perfect amount of time. It's an art.

But I digress. The Grand Total came to $1834.39, which is the previous total of $3030.91, minus the economic stimulus of $1200. There was also some additional interest added in to the tune of $3.48, which makes me wonder if there will be any more residual interest between the time I received that invoice and the time my check is cashed.

I sent the payment in (finally!) last Tuesday and I am waiting not so patiently for it to be processed. I'm so eager to be rid of this once and for all.

Independence Day Challenge

Back in high school, I ran cross country. I was even first team all state my senior year (Thank you, smallest state in the union). Since then, I have kinda fallen off the running wagon. I played rugby in college, which interfered with the cross country season, and then switched the gym (intermittently) after that. For the past few years, I haven't run at all.

My parents recently participated in 12-week fitness program that jump-started a more active lifestyle. Fresh off that, my Dad decided he needed a new goal to work towards and enlisted me to partner with him. So basically, I got roped into running again, as we are planning to run in the town's annual 4th of July 5K.

Yesterday I was planning on going for a training run, and I wasn't really feeling like going. I made myself get up and do it anyway, because I have to be ready for the 4th of July road race. I made a commitment to my Dad and to myself that I would run in that race. It's only a month away. I don't have time to skip training runs.

So as I was running, I was thinking about the road race and how it mirrored other goals of mine, specifically getting out of debt. I realized that the reason I agreed to run in the race was that I knew I could prepare in time. If I just followed a training schedule, I would be in good enough shape to run the 5K. Similarly, if I follow my budget, I will be able to pay back my debts.

I decided to make a short term goal for the debt payoff. Wouldn't it be nice if, on Independence Day, I was independent of debt? Well, that's definitely too much of a stretch, but what about one debt? What if I can kick one credit card to the curb before the 4th of July?

As it turns out, the next debt on my list (after the tax bill, which is already planned for) is my Discover card. The current balance on that card is $5329.33. Just about $5K, huh? So although it won't be easy, I think we can do it. My Independence Day Challenge is to pay off the $5K before I run the 5K. I have 30 days to do it.

I am challenging myself - and everyone out there - to set a short term goal. By the 4th of July, promise yourself that you will be in a better financial position than you are today. Maybe you'll be independent of credit cards by taking them out of your wallet and promising not to use them again. Maybe you'll be independent of worry by setting up an emergency fund. Maybe you'll be independent of one of your debts, like I am trying to do. It doesn't matter what it is - only that we make positive steps towards financial independence. The point of money is the freedom it provides - so why not celebrate Independence Day a little more free?

How will you be more financially free before Independence Day? Leave a comment, write a post, let me know! Let's all have a little more freedom.

The Tax Bill Cometh

All day yesterday I was formulating in my head a post about how we hadn't yet received a bill for our federal taxes, lamenting how poor a job the IRS was doing in sending it out. Which is pretty stupid, actually, since the taxes were due over a month ago. So it was really me who did a lousy job by not preparing for the nearly $4000 we owed for 2007 taxes.

But I digress. It was all spoiled yesterday when I opened our mailbox and pulled out a shiny letter from the IRS, stating that we have an amount due on our income tax. Finally! I have been like a little kid, running to the mailbox every day, hoping upon hope that the bill would be there. (Well, not actually running, more like walking briskly from my car, parked directly outside the post office.) I just couldn't wait to get this bill. I was so upset and irritated that I made the mistakes of not withholding enough, not filing early enough, and not saving enough to pay the taxes on time. Finally I can fix it and make it all go away.

The original tax due in April was $3481. At that time, I sent in a check for $500, which brought the "overdue" amount to $2981. The underpaid tax was then penalized a half percent for each month overdue (April and May), or $29.81. Then 6% interest was charged on the principal for the 41 days overdue, which came to $20.10. Now, I am not a big fan of interest or fees, but compared to some I have seen in the past, these are incredibly reasonable. I was expecting worse.

My husband got paid today and I will be getting my paycheck tomorrow, which together provides us with enough to pay off this bill at the end of the week. Before I got ahead of myself, though, I looked deeper in the mail and saw another letter from the IRS - this one about the economic stimulus package. It stated that we would be receiving $1200 no later than May 23. The letter arrived in my mailbox on May 27. Then, in small print on the back, it mentioned that if outstanding taxes were owed, the economic stimulus would be applied directly to the balance.

I would love if they took the stimulus check and reduced the tax bill by $1200. However, I don't want to pay the tax bill if it's going to be reduced by $1200 in the near future. I called the number on the tax bill to figure this out and got some weird static on the other end, so I will have to call the number on the stimulus check letter. I am just trying to be patient and accept that we will pay it off soon.

How Many Chickens?

Back in the beginning, when we started our debt payoff, I made a Excel spreadsheet that listed all of our debts, from highest interest rate to lowest interest rate. I made our budget and figured out how much money we could allocate towards our debt every month. Then I went online, found this debt calculator, and plugged all the numbers into it. Shazam! We would have our debt paid off by October 2007. I made my goal December 2007 to give myself a little wiggle room, and rejoiced that I would enter 2008 debt-free.

It is now May 2008. I am not debt free.

Sometime in the summer of 2007, I re-did our calculations and determined that we would be out of debt by the end of April 2008. I continued with that assumption and even made it one of my goals for 2008. Now in May, we are in more debt than we were at the beginning of the year.

What happened? Life. Not planning for things. Not seeing the writing on the wall.

I counted our chickens before they hatched. I did the same thing before, back in the day when we accumulated all of this debt. I planned on using future money to pay for things, not thinking that the future money would vary and would be needed for more immediate concerns.

This was illustrated to me all too clearly at the beginning of the month. In November, we decided that, instead of exchanging gifts with my in-laws, we would all take a trip together. We scheduled that trip for the first week of May. I planned on being out of debt by the end of April, so I was psyched about the prospect of having no financial worries and relaxing in Mexico. Of course, that's not how it all turned out. We had to put our continued debt reduction on hold to pay for the trip, and there were quite a few stressful days where we weren't sure if we would have cash spending money to bring along with us. Not the relaxation I was hoping for. In the end, it all worked out, the trip was completely paid for, and we had a great time.

But moving forward, I will not be counting my eggs and making plans until they are chickens. Or at least not very rigid plans.

One Job at Last!

For a year and seven months, I worked two jobs - my "day job" in sales and nights and weekends at a retail store. Forty to fifty hours a week at the day job and an additional 20-25 at the store.

At the end of March, I quit my second job. I finally understand again why people look forward to Fridays.

It was a long time coming. I have wanted to quit for... well, forever. I never really enjoyed relinquishing my precious free time for $8.50/hr. Sure, I made the best of it and had fun when I could, but I was never in it for enjoyment.

The first weekend in April was revolutionary. Friday night I came home from work and had a nice relaxing evening at home with my husband. Saturday we awoke to no alarm and spent the day taking care of errands and cleaning up around the house. That Sunday we went on a fantastic hike. All in all, I got to remember what it is like to have 2 sequential days off.

It was great to have the extra income, and it enabled us to put about $8,000 towards our debt snowball. The time had come, however, when the cons outweighed the pros. I am happy I was able to do it for so long, and happy to no longer have the two jobs!

Taxing

So we finally buckled down and did our taxes. (Last weekend, the post is late, not the filing.) When I say we "did" our taxes, I use the term pretty loosely. Since my husband has his own business, it can get a little complicated, so we have an accountant. The accountant sends us a tax planner, which is a 10 page document with tax-related questions. All we have to do is fill it out, attach any related documents, sign and send it back. Not quite as involved as actually "doing" our taxes ourselves.

Last year when we filed our taxes on April 14, we told the accountant that we would be much better this year. Not wait until the last minute. Send them in early, with plenty of time to spare.

Yeah, right.

I finished our planner on Sunday. April 13. Beat last year's record! Except Sunday is not a business day. Undeterred, I drove the packet to the accountant anyway. At 5:30pm. Not surprisingly, the door was locked and no one came when I knocked and yelled. This was not good. I drove 45 minutes and spent $50 in gas to bring this packet in! I was going to submit it! So I dialed the phone number on the business card and, one by one, punched in the names of each of the 4 partners. And got 3 voice mails. In a movie-esque climatic scene, the fourth and final partner was there, in his office, and came downstairs to accept my packet. No dirty looks or anything! I was shocked.

The next day I got the phone call from our accountant. I was expecting to hear from her as there are always a few things to go over. What I was not expecting was the amount due. Almost $3500. In federal taxes alone. I just about fainted right there in my cube at work.

With complete lack of foresight and the unforgivable ignorance of taxation, I had assumed that our taxes would be about the same as the prior year. It was not. Last year we owed about $1000 total, between state and federal taxes. This year the total between the two was almost $4000. Thinking back, it's obvious that this would happen. Our income almost doubled from 2006 to 2007. That alone accounts for much of the difference. The main issue here, though, is that we failed to plan ahead.

That's right, we didn't have the money to pay the taxes.

When I heard the total from the accountant, I panicked. Last year was the first year I've paid taxes instead of getting a refund, so I'm inexperienced. I was freaked out that if we didn't pay in full by April 15, we would get audited and penalized beyond belief. The accountant reassured me that it's not that bad, and to pay what we could immediately and they will bill us for the rest. So I wrote a check for $500 to the IRS, and another check for the entire state tax and now we wait. Wait for the next round of paychecks and for the bill to show up in my mailbox. Hopefully the two will coincide and I will be able to kick this swiftly.

In the meantime, though, I'm going to change my exemptions. :)

Cheap Date #6 - Stargazing

I try to find fun, interesting dates to go on with my husband that cost less than $20 for both of us. It's been a while, but we are back in the game, trying to go out on cheap dates without breaking the bank.

Many people just pass them by, with an occasional glance towards the heavens to see the twinkly brightness. I know that I have many a time paid them no attention on all but the clearest of nights. So when my husband suggested that we go on a stargazing date, I was a little skeptical, but I agreed.

When my husband was 7 or 8 years old, he got a stargazing book, complete with Planosphere, for Christmas. This was the beginning of our journey. We perused the pages and found what our night sky would hold. Then we packed up the book, a couple of sleeping bags, a flashlight, a pair of binoculars with one side broken (or monoculars, as we called them), hats, mittens, and an adult beverage, and headed to the local park.

Our location wasn't perfect, but we sat overlooking the lake and had a pretty decent view of the sky. We were a little too close to civilization, so the ambient light blocked out stars near the horizon. Quickly we recognized Orien, but then we had to consult the book to find the others: Leo, Hydra, Gemini and many more. It was fantastic to finally put a name to something we've been looking at for years and romantic to snuggle under the sleeping bags while we looked up the different constellations. After about an hour, we were sufficiently cold that we headed home, but I was hooked.

The night sky you can see changes considerably depending on the time of year and even the time of night. The change is gradual, but the stars in March are entirely differnt than those you see in August. We've decided to make this a recurring date, about once every season - maybe skipping the dead of winter! The best part of this date is the thrill of matching the stars in the sky to what you see in the book (or on this website) and the closeness you feel in accomplishing that. Plus it's educational and free! This cheap date is definitely a keeper.

Back from the Dead

I am embarrassed. One blog post in March. ONE! Oh, the shame. Oh, the horror. I apologize to you for being such a lousy blogger.

I'm not a big fan of making excuses, but there are plenty of reasons. Reasons that will help to fuel some future posts. I have been traveling quite a bit for work, I left my second job (finally!) and spending some much-needed time with my family. The good news is that now I have more free time to do things that have been neglected (clean my house), build my career and work on my blog! I have so many ideas for posts and geeky changes I have been dying to make. I'm so excited to finally be able to implement them.

So bear with me... the best is yet to come!

Cheap Date #5 - Cinema Pub

I try to find fun, interesting dates to go on with my husband that cost less than $20 for both of us. It's been a while, but we are back in the game, trying to go out on cheap dates without breaking the bank.

A little while back, I had a comment on a cheap date post that anonymously mentioned a local movie theater that also served drinks. Anyone who knows me would know that I am game for that! Well, it turns out that my "anonymous" commenter was actually my uncle! So he and my aunt knew that this is a place we would love to try. They were so convinced that they gave us a gift certificate to the Cinema Pub for our birthdays in January. Thank you!!

We drove to the theater on a Saturday night to catch the late showing of Atonement (which was a great movie, by the way). Like many less expensive movie theaters, they don't offer the brand new movies, but rather movies that have been out in theaters for a little while. With most movie theater tickets approaching $10 a pop, I can deal with seeing a movie that's a few weeks old.

Each ticket cost $5 and a pitcher of Bass was $14. Even in a bar, you'd be hard-pressed to find Bass for that price! Since we were also using our gift certificate, we went ahead and ordered some buffalo wings to go along with it, while staying well below our $20 budget.

If you live in MA or RI, I highly recommend the Cinema Pub, but if not, try doing a search for a discount movie theater in your area. It's a great night out, especially in the winter when outside dates aren't really an option.

Beauty and the Frugalite: At-Home Haircuts

For years I have cut my husband's hair at home. We have a trimmer with all the attachments that we bought for about $20 and has served us well over time. My husband used to do the simple #1 buzz cut all over, but then switched to a two-length fade. It took a little adjustment, but I figured it out and can do it pretty well now.

Much more risky, however, is cutting my hair. His hair is so short that in a week or so any errors will be erased. My hair is a little more complicated. It's fairly straight, and I like to wear it between chin- and shoulder-length. It sounds simple, but cutting it is definitely more involved than buzzing his melon.

The last time I cut my hair was in May 2007. I try not to spend money on myself very much to keep within our budget and throw more at the debt, and regular haircuts have never been my specialty. Recently, my hair has been bothering me - it was too long and lifeless, and it took forever to blow dry. So I did something adventurous - I asked my husband to cut my hair for me.

He cut my hair once before, and it turned out pretty good. Or at least I thought it did until I went to a salon and they asked me if I had cut it myself. Oops, I didn't think it was that obvious. Regardless, I figured I'd give it another go. The budget has been tighter than normal and I was fed up with my hair. It was time to take a risk.

I won't pretend I wasn't nervous. What if it came out crooked? What if he cut off too much? What if he slipped and poked me in the eye with the scissors? But in the end, I trusted my husband to do a good job. We went for a simple cut, no angles or layers and soon the floor looked like this:


Yipes! That's a lot of hair! He cut off about 4 inches, and I am loving the new 'do. If you want to try this at home, I recommend:

• Sharp hair scissors - no paper shears, they can fray you into split-endsville
• Comb - all we had was a brush and my ears suffered for it
• Towel to wrap around your shoulders
• Trash bag to lay on the floor & catch the cuttings
• Steady hand
• Sharp eyes
• Hand held mirror to check out the back

My coworkers think I'm crazy to let my husband near my hair with scissors. Have you or would you ever try this at home?

*Update* Shanti tried it at home the very same day as I did and posted about it too! Great frugal minds think alike!

Tales of a Cashier - Store Credit Cards

The Tales of a Cashier series relates my experiences at my part time job in a retail store.

At our store last weekend, our manager announced a new initiative: to push the store credit card. We are now supposed to ask every customer who comes through our line if they would like to put their purchase on their store card. If they showed any interest we should then spout off the benefits:

• 20% off today's purchase
• Gift certificate rewards
• Special coupons & events
• Special gifts.

Of course, nowhere in there do we mention any of the pitfalls of opening store cards, the biggest of which is the horrible interest rate: 21.99%! This is fairly common for retail stores. The fees and billing are pretty awful, too - you can't even pay your bill in store or online, and the expedited phone payments to avoid a late fee cost $15.

When I heard we were to start promoting this, I balked. I told the boss that I wasn't going to ask every one of our customers if they would like to go into debt, regardless of the "benefits" of the program. The only way I will even mention it to anybody is if they have a huge overflowing carriage and saving 20% on everything will make a BIG difference ($50+). Other than that, no way. I know that every person should be responsible for their own way, but I don't need to show them the door to debt. If they want it that badly, they can open the door.

SB at Be Thrifty Like Us discussed the many disadvantages of store credit cards recently as well. What do you think about store cards and "helpful" clerks who ask you if you want to open one? Leave a comment and let me know!

Stepping Up

Well the last couple of weeks have been crazy, to say the least. Most of the insanity has revolved around my job. Last week I spent a whirlwind two days in New Jersey for a sales conference. In addition to that, I have started taking on a larger workload.

Back in January, my boss asked me if I would like to be considered for a promotion, so like any normal person, I accepted. Once I was in the running, there was a lot to do. I had to complete online courses and tests, which were required to be done on a tight deadline and during non-working hours. This translated into coming home from work and spending 1-2 hours doing the online courses. The after-work time had formerly been referred to as "blogging time". :)

Fortunately, my efforts paid off and I will take on my new position starting our second quarter in May! It is still a sales position, so I will continue to be paid with a salary + commission structure, except the salary increases and the commission potential is better.

Since the only portion I can absolutely count on is the salary, I crunched the numbers to determine the difference this will make to our budget. My salary base will increase by $5000, which breaks down to $192.30 per paycheck (I get paid bi-weekly). After taxes, my take-home will be approximately $150 more per paycheck. Pretty sweet!

With the promotion, however, I plan to definitively quit my second job. Long time readers will know that I have wanted to quit for quite some time, but there's always a good reason to keep at it. Once I have the increased responsibility, I simply won't have time to do both jobs. So my drop-dead date on the second job is May 1. I am so excited! (Perhaps even more excited about that the the promotion itself!)

At the second job, I take home roughly $600 a month. So in actual hard paycheck figures, I will be taking a pay cut in taking this promotion. The plan, of course, is to make up the difference in commissions and I am confident I will be able to do so. Not to mention my quality of life will increase as well!

How We Got Into Debt

About a month ago, a commenter asked me how we managed to accumulate all this debt. It's not a surprising question, and I've been meaning to discuss it for a while now. I've been procrastinating for a few reasons, the biggest of which is that it's pretty embarrassing. I am ashamed of how we managed to go $38,000 in the red. There was no medical crisis, or house fire or tragedy that we borrowed money to cover. We just made a series of poor decisions. A series of very poor decisions.

We bought our first house in April of 2005. This in itself was not a mistake; however, we made too many assumptions when we purchased the house. We primarily considered the cost of the mortgage and not all the other costs associated with home ownership. Even with that, we would have been just fine.

In May 2005 we got engaged and began planning our wedding. We made a budget for the wedding based on how much money we could put towards it every month until the following summer, when we were to be wed. In June 2005, we bought a new car. Not new-to-us, brand spankin' new. With the car payment, we were still ahead and making more than we spent.

So what pushed us over the edge? In July 2005, I quit my job to work for a small business as their sales and marketing director. It was a commission based position. If I didn't make any sales, I didn't get paid. Unfortunately, I didn't have any sales experience, so I didn't make a lot of money. My income dropped by about 75%. All of a sudden, we didn't make enough money to pay our bills.

That alone wouldn't have been devastating - if we had made adjustments to allow for the lower income. But we continued living our old lifestyle, going out to eat, vacationing, buying needless things. We went away twice in less than a year - both trips piggybacked on business trips, but there were, of course, plenty of expenses incurred. We only sent the minimums to the credit cards and incurred a variety of late fees and over limit charges. The interest rates skyrocketed t 29.99%.

In October 2005, we attempted to minimize the damage by transferring some of the debt to a zero percent card. Within 2 months we were back up to the limit, as well as using the zero percent card. We had bills being automatically paid by the credit cards: cable, internet, gym fees, tolls. Every month was a decision of which bill would be paid late, as we never had enough to pay them all on time.

On top of our every day expenses was the wedding. While we stayed within our original budget, we by no means had any savings to draw upon. We didn't go all out, but there were plenty of places where we could have spent less money. We even took out an additional loan of $10,000 just for the wedding - which later blew up in our face.

When we returned from getting married, I found a new job almost instantly (I had been looking for a few months) and we turned a new leaf. Our rock bottom debt was in October 2006: $38,440. Since then we have paid off $26,000 and wiped out 8 separate debts (and added one). I cannot wait to erase the remaining 3 credit cards from our life!

Looks Like Our Home Value Has Decreased

I received a letter in the mail the other day from the lender of our second mortgage. The second mortgage is technically an interest only HELOC. Arguably not the best method of buying a house, but that's an entirely different post.

Although I call it a house, where we live is technically a townhouse. That is, the building our house is in also holds two other townhouses. Fortunately, we have an end unit, so we only share one wall and have direct access to the garage, which adds to the value of our home. Unfortunately, townhouses and condos are usually the first to drop when the housing market takes a hit.

When we bought our house in 2005, we paid $280,000 (Remember, this is Massachusetts). It was appraised 2 weeks after we closed for $305,000. Sweet! Very exciting. Instant equity. Of course, what something is worth only counts if you're selling it.

The letter from our second mortgage stated that we couldn't further draw on our HELOC because our house's value had dropped so much. I don't know exactly how they calculate the houses' value or how much of the value they will lend up to, so it's difficult to say if our house's value has dropped so much that we are now upside down on our mortgage. It's possible, if it dropped enough. We didn't have any plans to draw further on the HELOC, or take any equity our of house at all, so that part doesn't affect us directly. What I am worried about is when we do want to sell our house.

I checked Zillow.com, and they list our house at $253,000 currently. Their estimates aren't perfectly accurate, but the letter from our mortgage company lends a bit of credibility as well. I want to close my eyes and shut it out, but it appears we now owe more on our house than it is worth. Or at least it's close.

When we bought our house, we intended to live here for 3-5 years. This summer will be 3 years, and we moving isn't even on the horizon right now, for a variety of reasons. We'll be staying put for the foreseeable future, and we may end up staying past what we had originally planned. There is still plenty of room here, even for when we eventually start adding people. I just liked having the option to move if we wanted to, and right now it would be pretty foolish to do so. Even more reason to pay down the debt - eventually we'll get to paying off the mortgage!

The Radio Will Pay Your Bills

Driving around the other day, I heard an ad on the radio for a contest. It went something like this:

Christmas is over, all the decorations have been put away, but there's still one "present" left to open.... your BILLS.

(psycho stabbing music)

AAAAAAAAAAAAAAAAAHHHHHHH!!

Just send in your bill and we'll pay it for you! (Up to $500.)

The premise is simple enough - send in your bill, they call your name and if you call back within 30 minutes, they will pay your bill for you. Sounds great, right? Like a dream come true? Not really.

I think it's an awful idea. Sure, I'd love to have an extra $500 payment to the credit cards. Heck, I'd like to have an extra $100 to the credit cards. I just can't believe that we're live in such a world where this is what is going on.

I can picture it now: "Oh, I can buy shiny new things because the radio station will pay off my credit card!" I can picture it because I can see myself saying something similar a few short years back. And I know exactly what would happen if, at that time, I had won a $500 payment to my credit card. I would then go out and charge another $500 worth of stuff. Nothing important, nothing even significant. I would probably wonder why I was back up at my limit again.

Perhaps this is judgmental, but in my experience, the quick payoff doesn't solve the root problem. Just like after a fad diet, people tend to regain weight, after a quick payoff, people tend to regain debt. I don't think this would really help most people to achieve a better financial position. I am not even entirely convinced that if I were to win it now, I wouldn't "celebrate" by putting less to our debt, and instead would use the won money to treat myself. Maybe not all $500 of it, but at least a little bit.

Debt payoff is not only about throwing your dollars into the money pit that you have created. It is about the change in attitude that ultimately comes with the territory. I have been in debt, and back out of debt before. Until I can use credit wisely, I shouldn't be using it at all. Of course it is easier to buy things now and worry about paying for them later. But that's what got us into the mess in the first place.

I'm not impressed by this radio station's sad attempt to garner high ratings. I hope that some of the winners out there are really helped by the money.

Judgment Days are Gone

I am a judgmental person when it comes to money. I try not to be, but there it is. Judgment. I (usually) keep it to myself, or at least mention it only to my husband. But it is there, in my head. Thinking of how I would do things differently. Only I am judgmental in a backwards way than normal - I judge when people spend too much money (in my opinion).

I work with a guy who spends money like it's going out of style. He buys $250 jeans, designer leashes for his dog and dry cleans every article of clothing he owns. Sometimes I cannot believe the stories he has to tell. And tell them he does. He's putting it out there, just like I write about our finances. So, arguably, his choices might not be the most prudent. But what do I know? He could have no debt, maxed out retirement savings and a million dollars in the bank. Who am I to judge?

Even if I know the ins and outs of someone's finances, why should I think that I know what is better for them than they do? Why does my mind always jump right to what they should be doing differently to be more frugal? It's a lifestyle choice, and for the most part, their decisions don't affect me at all.

I think that somewhere inside I still see material goods and possessions and outward displays of money as valuable. For the most part, in our society, people are not perceived as "rich" unless they drive the fancy cars and live in the big mansions. When I judge others for spending, I am really just a little jealous. That I don't have money to do that and reach my financial goals. So to make myself feel better, I put them down in my head as if they are being frivolous and wasteful.

I am going to stop doing this to myself. Whenever I have a negative, judgmental thought, I will replace it with this: Those is their personal finances. My personal finances are mine. Hopefully, this will result in a happier outlook overall.

The Bare Bones Budget

In the midst of all of our debt repayment, I began to wonder: what would we do now if our income was cut off? In an ideal world, we would have a nice 6 month emergency fund to rely on until the income streams began to flow again. Unfortunately, this is far from Utopia and we don't have a 6 month emergency fund. We don't even have a 1 month emergency fund yet.

If our income decreases, our budget would have to be altered as well. We run a pretty tight & frugal ship, but there are a few more corners that could be cut. We made the decision to be slightly less than gazelle intense in order to keep at the debt repayment for the long haul. For example, we have a gym membership, Netflix, and $100 "fun money" each month, per person. We are frugal, but still manage to enjoy ourselves occasionally. In the event of an income disaster, our priorities would have to shift, again, to a completely bare bones budget. No frills, no extras. Just the necessities.

The first priority would be survival. To survive, we need food and shelter. Our mortgage and grocery bill are the first items in the bare bones budget. (Reminder: we are assuming the income setback is temporary. If it were permanent, we would have to move to a less expensive housing option.) The mortgage is constant, but the grocery bill could be trimmed to eliminate any junk food, expensive meats, even dairy products.

The next line items in the budget support our survival and include electricity, water, gas, car payment and car insurance. Our utilities are almost basic needs, but we could theoretically come up with a payment plan if need be. In Massachusetts, it is illegal to shut off the heat during the winter if you are experiencing financial hardship. We have electric heat, so we would be able to keep our electricity even if the bill wasn't paid. Gas, the car payment and the car insurance are needed to continue working or job searching.

Following that is the internet and phone bills. We combine our internet with our cable, and it would actually cost more money to cut back to just the internet. This is needed to continue working (we both work from home 10-20 hours a week) and job search, if need be. Our cell phones are the only phones we have, and we need to be able to contact work and potential jobs.

The last items in the bare bones budget are our debts. The student loans could be deferred if the situation persisted. We have eliminated much of our credit card debt, but the stubborn beast remains. With a drop in income, we would maintain our minimum payments and any extra, if possible, but wouldn't be able to attack the debt anywhere near as aggressively.

Once I put all of these numbers on paper, it was much easier to see how much money we need to make. Most of our expenses are fixed, so this is a pretty accurate picture. For a temporary solution, we would do everything we could to make enough money to equal our expenses, but, if need be, would borrow funds to stay afloat. I wouldn't be willing to give up our house and life for a one or two month drop in our income. Once we start approaching month 3-4, something would have to change.

I May Have Ruined My Husband's Credit

I made a mistake. This seems to be a theme recently. Back in November, we transferred one of our credit cards to a 0% offer. The old credit card, my husband's Amex, was paid off! Rejoice! Champagne flowed from the heavens. I then deleted it completely from my memory.

Which was a very bad idea.

Two or three times a week, I open up Quicken (aff.), download my transactions from my checking account and pay my bills. I update my credit card balance in Quicken once a week or so, as I'm not using the cards for anything. Or so I thought. Turns out, I forgot about one teensy little detail. The automatic payment for tolls I had set up long ago in the days of yore on the Amex. Back in the days when all payments for all things were set up on credit cards. They slowly migrated over to the bank account, but our toll payments were like a weakly, sick herd member. Irregular. Unreliable. Fell right on through the cracks.

After paying off the Amex in November, I didn't open it, look at it, think of it until last week. We were signed up for paperless statements, so nothing comes in the mail. When I did log in to the account, much to my dismay, there was a balance of $171.97. Consisting of some residual interest (that I forgot about), two toll charges (that I forgot about) and two late fees. The computer demanded $74.04 past due! Pay now! I paid the past due amount last week and the remainder today. And felt like a horrible person pretty much ever since I found my error.

The Amex is the only card that is entirely in my husband's name. I have one in my name only as well, to keep some aspects of our credit histories and scores separate. If this were my credit card, I wouldn't feel quite so bad. At least then my mistake would affect my credit. I have never had a bill this far past due (over 30 days), so I have no idea what this is going to do to his credit. Amex already shot up the interest rate from a so-so 16.99% to an astronomical 29.24%. I will be checking our credit reports in the beginning of February, but I have no baseline to compare to. We'll see if the late and overdue balance is included in his credit history.

The take-home lesson here is: don't forget to check your cards that have been paid off. My new version of Quicken automatically downloads all our account at once, which will prevent this from happening again. That and the fact that I already switched the toll payments to our bank account.

The Timing Was a Little Off

Sometimes I take the money we have for granted. I assume it will always be there, sitting in my account, until I tell it where to go. My husband gets paid the first of the month. I get paid every other Thursday, and the last day of the month. Two months out of the year, I get 3 paychecks. Fantastic. And then there are the months where my second paycheck comes later in the month. Like January.

Our bills are all due by the 23rd of every month. Most of them fall in the first week (mortgage, car insurance, condo fees) and the rest are spread out... until the 23rd. It's usually nice to have a week or so at the end of every month where all our bills are paid and we're just cruising until the next month. We spend our money on regular expenses like gas and groceries, and put the excess onto the credit cards. Feels good to be "done" for the month.

In January, however, all of our bills were due before my second paycheck, which will be deposited tomorrow. This would have been perfectly fine if I had realized this in the beginning of January. I made a large payment to the credit card in the first week of January that could have waited. However, I didn't notice until I was looking at our projected balance in our bank account in Quicken last week. The lowest projected balance was $248.76, which doesn't include groceries or gas. Yikes! That's cutting it a little too close for me.

We talked it over and decided to play it safe. So, for the past week and a half, we have been using the credit card for our regular expenses. We have charged about $150 in that time for food and fuel. Which is in line with our budget. I just hate that we had to rely on the credit to "float" us until the paycheck comes in. It reminds me too much of the old days when we relied on credit for everything. On Friday, once my paycheck is cleared, the first thing I'm going to do is pay off that balance. It's still in the grace period, so no interest will accrue. And in the future, I'll pay a little more attention to our lowest projected balance and plan accordingly.

Birthday Sur-prize

This past Saturday, January 19th, was my birthday. I turned one year older than I was before :). To celebrate, my parents and siblings came to our house and enjoyed a nice night, complete with dinner and some games. They gave me some very nice gifts - a few Tim McGraw CD's, new Garnier hair goo, some work clothes. All in all it was a lovely time.

On a happy coincidence, the Friday before was my company's Christmas party. We somehow bypassed the month of December and instead it was scheduled in January. As part of the party we had a raffle with only one prize. One extremely ginormous prize.

With much fanfare, we all laid out our tickets in front of us on our tables. The manager dramatically reached into the hat full of tickets, selected one, and read its number. All around me people were frantically checking their tickets and saying "not me", "not me", "not me". I looked at my tickets sprawled out on the table, and sure enough, I won! I won! I was in complete and total shock. My jaw dropped onto the floor. What did I win, what glorious, humungo prize was my office giving away?

A forty two inch plasma flat screen HDTV.

That's right. A brand spanking new beautiful, huge TV. We borrowed my parent's van and picked it up on Saturday morning. Later that night we set it up in our living room and it looks fantastic. The picture is amazing. Even without high def, the detail you see is just phenomenal.

We talked about selling it. At first, for a fleeting moment. I know how much it cost ($1100!!), and that amount of money could go pretty far. We didn't need a TV - not by any stretch of the imagination. We had a perfectly good 36" CRT that we weren't planning on replacing anytime soon. But this came along and... we couldn't bear to sell it. We're going to try and sell the old TV, but it was a hand-me-down and we want to offer it back first. If we can sell it on Craigslist, that would be nice for the income.

The other thing we need to consider is our cable. We currently have the most basic plan with only regular network channels. I have heard that the network stations are bound to broadcast their HD channels with the basic cable plan. We (read: my husband) are looking into whether or not we need an HD tuner or receiver. I don't want to subscribe a bigger cable package, so we may forgo the high def for a while. I am just so excited and so overwhelmed to have won this magnificent prize!

My Top 10 Favorite Free Things To Do

The other day, Trent at the Simple Dollar posted about free things to do. It really got me thinking. With all the whining I've done recently, I need to celebrate some of the finer (free) things in life, because, let's face it, it's not so bad. :)

I made a list of all my favorite free things to do and stopped at 56 because that's how many lines were on the piece of paper and I am weird like that. I could probably double that, given the time and another sheet of paper. I could bore you with a nice, long, 112 item list, but I figured I'd whittle it down to the top ten. Since I love countdowns and think they're much much better than countups, I present to you, in ascending order, my ten most favorite free things to do.

10. Taking a walk. Little did I know that, when my parents and I would take walks with our dogs years ago, that it was actually fun and useful. I enjoyed it then and I enjoy it now - a nice little stroll down the road or a walk around the park. Lovely.

9. Sledding. Not tubing, sledding. We live next to a golf course with a nice big hill up to the 6th green. I'm sure it's a bugger to play that hole, but it's fun to slide down the hill!

8. Sunbathing. I know, I know, skin cancer. Bad for you. UV rays. But it feels SO GOOD to lay out in the sunshine and feel the sweet breeze on your skin. Since my husband is fair-skinned, I use sunscreen religiously when planning a day out. I most often sunbathe at the beach (obviously) and love to combine it with...

7. Reading a (borrowed) book. Whether borrowed from the library or my darling sister or mom, I rarely buy books, but read as many as I have time to. I have always been big into reading and I go through them pretty quickly, easily losing myself in the story.

6. Sitting by a fire. In the fireplace or an outdoor campfire, I am drawn to a burning pile of logs like, well, a moth to a flame. Something about the crackling wood and the smoke transcends all seasons and is very relaxing. My husband and I have had many heart to hearts while staring into the fires - it makes for some good conversations and removes the everyday hum of technology that seems to surround us.

5. Sleeping. I remember the days when I begged to stay up later than my bedtime. Now, bedtime is something I look forward to every night. I love my bed and the feeling of complete relaxation when I place my head on the pillow.

4. Playing with my Kitties. My two crazy cats are always coming up with something new. Calypso, the older cat loves to jump for toys - I mean back flips. Tango, the baby, has learned how to play fetch with his toys and keeps bringing them back. They just always bring a smile to my face.

3. Snuggling. I love to curl up on the couch with my husband and kitties and watch a movie or just plain be. It's probably the easiest way to unwind after a long day.

2. Taking Pictures. I have always been a take pictures of things and not people kind of girl. I like to carry the camera around and capture whatever catches my eye. While you could argue that this isn't free because you need a camera, we bought ours years ago and use it often enough that the cost per use is very very low.

1. Playing Board Games. This is my favorite thing to do when we have a group of people together. My preferred game is Pictionary, but I love them all - Trivial Pursuit, Monopoly, Scrabble. We received most of our board games as gifts and my family always shows up to a party with one or another in hand. Case in point - my sister introduced us to Oodles this past weekend and we all had a blast.

I know that some of these items have an initial overhead cost, but at this point in time they are free for us. You can argue, of course, that my cats aren't free because of food, litter, vet bills, etc., but the point is that I don't have to spend any money to do any of these things today. There are plenty of activities I could choose to do that are costly, and I plan to use my list to keep enjoying the simple, free things in life.

A Day Off!

Today, in the US, we celebrate Martin Luther King Jr.'s birthday. Which means, for some people, including myself, a day out of work. It was a little unexpected, as my company isn't known for having a lot of holiday time. We didn't have Columbus Day, Veteran's Day or Patriot's Day off last year. (In MA, almost every company is closed on Patriot's Day. We're the only state to celebrate it - with the Marathon!) Yet they give us MLK Day and President's Day off. Not that I am negating the importance of these holidays, but you have to wonder how they decide which days to have as company holidays and which to have as work days.

In any case, most holidays I have off from my first job find me working at my second job, or traveling to visit family. Today, however, I have completely to myself. No work. No place to go (unless I want to). No errands that need doing. Just time, sweet time, a whole day of time to do as I please.

So today I am here and there, doing this and that. I had breakfast on my mom (Thanks Mom!) this morning, did some laundry, read some emails. My plan is to write a few blog posts to go up throughout the week, visit the library and update to Quicken 2008. I'm just really enjoying having time to do things - the things that get pushed aside when everything else is going on. It's strengthening my argument to quit my second job. Just another straw for the camel.

Moving Down to One Job - Soon?

The other day, I got into a fight argument with my husband, which revolved around my second job. Words were exchanged, things were a little heated, but the gist of it was that the pros no longer outweigh the cons of keeping my second job.

My primary job is picking up, both in my commissions and responsibility and the second job is starting to affect my work there. More importantly, however, is the way it's affecting my sanity and my relationships. I rarely, if ever, see my friends and extended family. I try to see my parents frequently, but I find myself saying "I have to work" all the time. My husband's schedule is difficult to work around, so we don't always align our "off time", and when we do, it's mostly spent doing chores.

On top of all that, I am feeling rather burnt out. I knew it was bound to happen, and quite frankly, I'm surprised I made it this long. I started working two jobs in September 2006. Since then, I have worked almost every Tuesday, Friday, and weekend. I have only made about $11,000 from this job in that time. It was great to throw that right to our debt, but I am just... done.

There is a bump in the road, however. Due to some extenuating circumstances, our February paychecks may not be up to our regular income. This is causing a LOT of stress, and we should find out within the next 10 days or so if we'll be making enough money in February to cover our bills. (I apologize for being so vague - believe me, I am dying to discuss this.) Once I know that we'll be OK, then I plan to quit the second job. I am crossing my fingers that I will be able to enter February with only ONE job!

Procrastination Costs me Money

I am a horrific procrastinator. I always wait until the last possible second to do anything - clean my house before people come over, finish work before a deadline. I even write my posts right before bed. For some reason, I won't do my tasks until there's pressure. Why do today what can be put off until tomorrow?

I have two possible culprits (excuses) for why I procrastinate so much. One, I was an engineering major in college and learned to operate remarkably well under pressure, which somehow translated to only operating when under pressure. Or it could be the second reason - I have so many things to do that only the mos imperative tasks are done each day. Urgency is a pretty good way to get to the top of my list. Unfortunately, more tasks are added to my to-do list every day and there are a few that keep getting pushed until tomorrow... or the next day... or the next day.

Regardless of the reasoning, there are a few issues that crop up due to my penchant for putting things off. I am always under pressure, which,while I thrive under pressure, can be irritating at times. And it costs me money.

I can think of 2 ways in the past week that I spent money because I procrastinated and didn't plan ahead. I went to the grocery store next to my retail job one night because I didn't get enought food for dinner that night. This store just happens to charge about twice as much for their food than my normal store. But the better example is my husband's birthday last week. On his actual birthday, I bought his present, picked out a card and finished making his cake. Not only could I have saved some money by planning ahead and comparison shopping, I could have gotten his card for free using CVS deals and spent more time with him and less time frosting the cake. Between the two of these I could have saved $7-10.

But these are just small examples. In the past, I have paid credit cards late and missed other payments by putting them off. While I haven't done that in quite some time (my one error notwithstanding), I'm still not quite organized or efficient enough to maximize my money. But I'm getting there. The first step is to admit you have a problem. :) Now to go about solving it...

Prioritizing Your Money

Budgeting money is all about prioritizing. Some of it is obvious - pay the mortgage before you pay for cable, buy food before you buy new clothes. I've been in the situation where you have to play bill roulette to determine which bill gets paid this week. Not fun. Fortunately, those times have passed (never to be seen again!) and we have a lot more choices to make with our money.

Once all the bills are covered and all essentials are met, we must make a decision. I come across these decision every day. I am not one of those people who naturally doesn't spend money. I have to stop myself from buying things daily. Whether I'm at the grocery store, at work, or driving by a restaurant, I always want to spend our money. I allow myself a little bit of "fun money" every month to spend on these trivial things, but ultimately the rest of our money goes toward our financial goals.

Even within our goals, we need to prioritize. The credit card debt has always been our highest priority, however, we have a no interest credit card that currently holds just under half our debt. The 0% interest ends in September, so I want to make sure we have it paid off before any interest kicks in. Hopefully we will have the remainder of the credit card debt paid off in March. So what to do with the six months in between?

The mathematically logical thing to do would be to start on our other goals while making minimum payments on the 0% card and then paying off the credit card just before the deadline. The psychological thing to do is to pay off the credit card completely as soon as we can. My plan is somewhere in the middle.

I want to make sure that everything is paid off with time to spare before the interest would kick in. I'm not very good at being on time, and this is very important not to miss. My goal is to pay off the 0% credit card by the end of August. In the time between March and August, I am going to split our non-essential money among three categories:

1. The 0% Credit Card
2. Emergency Fund
3. Retirement.

Opening my 401(k) won't take a huge chunk of my income, but the earlier I do it, the sooner I start making money on my investments. The rest of the money will be split evenly between the credit card and the emergency fund. If all goes well, the credit card will be paid off in August (or before!) by using half of our allocated non-essential monies alone. However, if we need it, come August 31 we can use the money in the emergency fund to pay off the balance before it accrues any interest, without completely depleting our savings.

This way we can work towards more than one goal at a time. I thought about splitting the money between the 0% credit card and the dreaded 2nd mortgage, but that would leave us high and dry if an emergency comes around. Hopefully, all goes smoothly, but we know how likely that is! :)

Financial Goals for 2008

After a fairly successful 2007, I am excited about moving forward in 2008. As this is a personal finance blog, I have a few goals for both our finances and the blog itself.

Financial goals:

1. Wipe out credit card debt. I can't wait to say goodbye to this forever. We have $12486.99 in credit card debt right now. The goal is to have it all paid off in April. This has been a goal for a long long time and to finally achieve it will be momentous.

2. Build our Emergency Fund. Despite all the times I talk about it, our emergency fund remains empty. I just can't bring myself to squirrel away money when I am paying all this interest. I have a million reasons to have a little one for now at least, but I still just... don't. The goal for 2008 is to put away $5000 into an emergency fund.

3. Open a 401(k) with my company. My company has a half match up to 8% of my earnings, fully vested immediately. I know I am throwing away free money by not opening the account. Once the debt is gone, I will open the 401(k) and work my way up to the 8%.

4. Open Roth IRAs for my husband and me. We don't have any retirement accounts currently and we need to get the ball rolling. There will only be so many years (hopefully!) until we hit the income limit to have Roth IRAs, so I really want to capitalize on them while we have the chance. In 2008, the maximum contribution per person is $5,000, so this is a $10,000 goal.

5. Start paying down our second mortgage. The next debt on the list is our interest only (cringe), adjustable rate (double cringe) $42,000 second mortgage. The goal is to pay $8800 of principal from the second mortgage.

These goals are definitely a stretch for us as we paid $23,712 towards our credit card debt in 2007 and the total amount we're working towards in 2008 is about $40,000. I have a shoot-for-the-stars, land-on-the-moon approach. Part of having separate goals is that we can achieve them individually and still be successful in 2008, even if we don't achieve them all.

Commissions Resolved!

All the way back in November, I wrote about my commission problems. In short, my company charged me back about $2500 due to a billing error. Not good.

Although they never asked me to pay them directly, all the money I have earned in commissions has first gone towards the deficit. With no intention to do so, I added to our debts. I haven't received any commissions since October, and I still owe my company about $1900. At least it's at 0%, right?

Recently, however, the billing issue has been resolved and the order reinstated. Meaning, I will re-earn my $2500 in commissions and get paid out on the $600 that I have already put towards the deficit. Finally.

Here is the good news, though. When I originally was paid on the order, it qualified me for a quarterly bonus (based entirely on revenues brought in). Since the order was originally placed in the 2006 fiscal year, and is now reinstated in the 2007 fiscal year, it's possible that I could qualify for another bonus. Technically, the revenue has been brought in again during 2007. I am still waiting to hear about that - I should find out around the middle of January.

In the end, though, I am just happy to have it all evened out and back to normal. Without commissions, my income is cut pretty substantially. The commissions go straight towards our debt, so getting them back will go far towards our debt payoff.

New Year's Eve Bait and Switch

This past weekend, my husband and I drove down to his parent's house to celebrate Christmas, New Year's, and both of our birthdays with them. On New Year's Eve, we drove into Baltimore to go to their Spectacular, complete with live music and fireworks.

We decided to go out to diner before the fireworks, and called the day before to make reservations. When I gave the restaurant my name, they also took a credit card number to hold the table and noted that, should we cancel our reservation, it would be charged $50. This should have been my first hint that trouble was afoot. Naively, I thought they needed to take credit cards because it was a busy night and didn't want to be holding a table for people who weren't going to show up. While I'm sure that was a part of it, there was more to it.

Before we went into Baltimore, I checked out the menu on the restaurant's website. The entrees ranged from $18-$40, which is much more than we usually spend. However, we knew that this was a special occasion and had prepared for it. I picked out a meal before we went for $21, planned to have one drink and then switch to water, and figured I was golden.

When we got to the restaurant, it was an entire different story. We pranced in and were told they were using a special menu for the night. OK, no big deal, I can pick something else to eat. Until I saw the menu. Then I freaked out.

Everything on the menu was a package - appetizer, entree, dessert, soft drink, coffee & champagne toast. There was no option to just pick an entree and call it a night. Worst of all - the cheapest package was $53. Our cost had essentially doubled and there was nothing we could do about it.

We considered leaving, but the $50 hold on the credit card made it pretty pointless to do so - any other place we chose to eat would cost about $50 and, with the credit card hold, we'd be right back at square one. So we stayed and chose to enjoy ourselves instead of getting angry and ruining the night. And you had better believe we got every single thing offered as an option.

The restaurant really handled the situation poorly. First of all, it was way too much food for one person to eat. Generally we split an appetizer or a dessert, never mind each ordering our own of both. I was bursting at the seams after eating everything out of spite. In addition, there was no mention on the website or when I called to make the reservation of the special menu with the higher prices. I really feel like we were duped and tricked into spending more money than we normally would. I'm not sure what the advantage of this is for the restaurant - obviously, the make more money, but we couldn't have been the only ones who felt tricked. It has turned me off to that restaurant and eating out in general - which, I suppose is good for the budget in the long run. I'm sure that won't last too long!

Afterwards, the fireworks were Spectacular!

2007 In Review

Well, the year has come to a close. What a year it was - tons of financial things happening, with the biggest, of course, being debt payoff. We learned the art of Cheap Dating, hit a couple of big milestones, and improved our attitudes towards finances in general. Of course, there were plenty of bumps in the road. But more importantly, the numbers!

• We paid a total of $43,712.93 towards all of our debts (except mortgage). This includes credit cards, student loans, and auto loans.
  

• Of that $43K, $30,099.73 was paid to principal, meaning we paid $13,613.20 in interest.

• The amount paid to credit cards was $23,712.57, with $18,769.32 of that paid to the principal, leaving $4943.25 in interest.

Whoa! That a lot of money. Looking at my income for 2007, just about all the money I made went straight towards our debt. It's both incredible that we were able to do that and horrible that we were in the situation where we had to. I am proud and excited by the progress we made towards our main goal in 2007 and I can't wait to finish up the credit cards in 2008!