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.