Twenty Years? That's Just Not Good Enough

So as the things settle in with Jonny's new job, and we clean up the things we've had to let slide (car repairs, house essentials, etc) we've started looking at the UGLY reality of our student loan payoff. What we've discovered is this: by paying only the minimum due of just over $800 a month for all of our student loans, it would take us until February 2032 to pay the darn things off. TWENTY YEARS!!! I'll be 51! That's ridiculous. I've said this a million times in this blog: If you are a high school or college student who is reading this DON'T TAKE OUT STUDENT LOANS. Please! You can (and must) find a way to pay for school without them. Don't let the darn things follow you for the rest of your life. Please read my previous post which has some suggestions on things you can do to avoid taking out student loans while still attending college.

Luckily, we don't intend to only pay the minimum. In a few months when we get things cleaned up we will be able to pay $1200 a month towards the student loans, versus the $800. That extra 50% drops my timeline almost in half: The new payoff date would be July 2022.

But...that's still just not good enough. I really REALLY want to throw at least $2000 a month at this monster. Why? Because I want it GONE. It's not fun watching my money come in and money go out, and as Dave says, only the names are changed to protect the innocent. With a $2000 a month payment, our new payoff date would be... wait for it... September 2017. That's just over 5 years from now, and that's shortly before what will be our 10 year wedding anniversary. Debt freedom for a 10 year anniversary gift? Yes please.

So the question now is... what can we do to get another $800 a month? Well, realistically, we probably need another $1000 a month to account for taxes and tithing. I really need to get serious about applying to be an online professor...I'm just intimidated by the process and I haven't quite found all the tools I need in order to make sure I have the proper credentials to do so.

So anyway... I'm not sure what we're going to do to bring in that extra $1000 per month...but we know this is what is necessary if we want to meet out goal of having everything paid off in 5 years. I really wish I could deliver pizzas again, but it would be detrimental to my healthy eating lifestyle I'm trying to follow. Ugh. Hopefully I'll have an answer to this problem before too long.

Peace...

It's finally happened. After 3 1/2 long years, Jonny has been offered a full time, salaried, with benefits job. A REAL job - not like that title pawn crap place that treated him wrong back in January when he wouldn't compromise his integrity to do something they asked that was wrong. He's going to be working as an accountant for a law firm. YEAH! This is perfect. Thank you, Jesus. He starts the new job on Monday, May 7th. Funny thing, when I graduated 5 years ago, I started my new job at the Credit Union on Monday May 7th. Crazy coincidence :)

I am THANKFUL that we have been forced to cut our lifestyle down to bare basics. We've cut it down just about as far as we could go. We cut cable. We cut cell phone costs. We are mindful of our electricity and water usage. We've cut our food budget by stretching our meat and frozen veggies, and we buy organic milk, which even though it's more expensive, it lasts longer and doesn't sour as quickly as traditional milk. Therefore, we're not buying as much, so the money we spend is actually lasting us a longer period of time. Not only that, I don't seem to be lactose intolerant with it, which I thought I was with regular milk. We joined a local food-co-op. Paid approximately $15 a week to get a weeks worth of fresh, locally grown vegetables. It was an upfront expense, so that's $15 a week that we don't have to pay in the mean time. There are several other things on our budget that if things had gotten much worse, we probably could have cut them too. One example is the $17 per month trash service... we could have started taking the garbage to the dump ourselves, but that $17 convenience fee sure is worth it.

At any rate, we cut and cut and cut our budget some more, so that now that he has this new job, it's a HUGE blessing to make progress on things that we've "needed" to do, but have had to let slide recently. I posted on FB recently that I was going to be coming after the student loans with a vengeance as soon as I cleaned some stuff up. I'm not quite sure when that is actually going to happen, though. In the short term, we've got to rebuild our emergency fund, and sinking fund accounts, which takes care of our yearly or semi annual bills, such as car tags, life insurance and stuff like that. We also have some trees that need to be cut down in our back yard. We haven't been able to do that yet. The quote is only $750.... but that's $750 we haven't had. Hopefully we'll be able to get those monsters taken down by the end of May now :D I also have some medical bills to take care of too. We also want to save up some money for some things we want to do this summer.... go to a Nascar race, maybe a concert, etc. Our 5 year anniversary is this October, and we'll be going to the beach with our church family as we do every year. It just happens to fall on that weekend. I think we're planning on going down a couple of days early to make a vacation out of it.

So yeah, now that this has happened, we can dream again. Not go crazy, but we can actually budget a little more entertainment money than we had been so that we don't go absolutely stir crazy. I'm actually excited that we're going to be giving a larger tithe to the church! Tithing is something that's been especially important to me.

I worked on a generic budget with our new income, and I'm at a point now where we have a surplus amount that I'm not quite sure what to do with it yet. Part of me thinks "Throw it at the student loans!" since that's the ultimate goal anyway - get those suckers knocked out. But another part of me thinks I need to set a little more aside in our emergency fund and sinking funds account, to create a little bigger of a cushion. Technically, per Dave Ramsey's baby steps, we are still on Baby Step 2 - Pay off all debt. Baby Step 3 is a fully funded emergency fund. However, in his teachings, he does also give you the wiggle room to bump up your emergency a little bit if you are going to be in Baby Step 2 for a long time... which we are. It's been 3 years, and we still have a mountain of student loans. Even with his income, I anticipate we're going to be here at least for 4-5 more years, if not longer. I'm hoping we can do it in 5 years, with anticipated increases in salaries, yard sales, and maybe even a part time income on the side for me. I'm currently trying to find an online teaching position that I can use my MBA for.

Well... and the truth of the matter is, while writing this, I just remembered that we desperately need to start a "Car Replacement" sinking fund... badly. My car is 9 years old. It has 150K miles on it. It's still running well, though it needs a little more TLC these days. It's due for a major service, which we were not able to afford when I had the oil changed yesterday. I need Jonny to bring in a few paychecks before we can do that service. It's got a few quirks about it, and hopefully we'll be pregnant before too much longer. When that happens, I'm going to be in the market for an SUV. I will NOT be able to fit into my car once I get pregnant. Those of you who don't know, I have a 2003 Toyota Celica. It's a small little sports car, and it sits so low to the ground that my mom jokes about dragging her butt on the ground whenever she rides in the car with me. So yeah.... when I get pregnant, it's not going to be easy to get in and out of. Worst case scenario, Jonny and I will be able to switch cars (he has a Corolla, which is a 4 door, and sits higher off the ground than mine does) until we're able to afford another car. But the fact still remains, it's time to get another car, and we REFUSE to make payments. NEVER EVER AGAIN will I pay payments just to have a metal box with wheels. No thank you. So yeah... I think I just answered my own question. Those surplus funds will become the car replacement fund. When we're able to save up about 3-4K, we'll be able to trade my car for probably only 2-3K, and get a decent running early 2000 model SUV. We'll continue to save and upgrade again within a year, just like Dave's Free Cars for Life video illustrates.

Man.... it's good to be able to dream again!!! We cut our expenses so much, that this blessing gives us wiggle room to take care of things, without increasing our lifestyle. Our goal is not to go out an party, and eat out, and buy expensive new phones, or go on vacations every month with the extra money we're going to have. Our goal is to be responsible.... save up to replace the cars so we don't have to get a loan on a new one, throw a little extra money at the student loans when we get the emergency fund where we need it to keep Murphy away, clean up some medical bills, gets some trees removed, do some inexpensive work to the house that we've had to put off.... etc etc.

Thank you Jesus, for these blessings. THANK YOU for allowing us how to struggle, so that with this blessing we can be responsible with it.

The Month-Ahead Plan

I am sick of my cash flow problem. The money is budgetted appropriately each month, but the fact of the matter is that with only 1 steady income, the money is not there as quickly as we need it to get through the month. As a result of this, during the first half of the month, I am ashamed to say that we have "borrowed" from the emergency fund, to have cash for expenses such as food and gas, and then paid back that which we borrowed when the paycheck for the second half of the month comes in.

This is dangerous, and I'm sick of having to do it. What is going to happen if we do have a Major Murphy visit after rent has been paid, but before Paycheck #2 comes in for the month? DISASTER!

I've been reading on the MTMMO forums that many people operate under the "Month-Ahead Plan." Basically the idea is that you build up one month's worth of income and you have that money sitting in your account, and then, on the first of the month, you already have every bit of money you need to pay your entire expenses for the upcoming month. You could essentially pay your entire month bills on the first, and pull out the cash you need for the month on the first. By doing this method, it wont matter when your paychecks for the current month come in, because you'll be paying THIS month's bills with LAST month's income.

So for example, if my usual monthly income is $4000, then I need to build up a reserve of $4000 in my account before the first paycheck of the month even comes in. Then on the 1st of the month, I can pay all my bills for the upcoming month, and withdraw cash for my cash envelopes - gas, food, and blow money. For safety's sake, I would probably actually only pull out enough cash for each envelope to get me through 1 week at a time, so that I wouldnt accidentally spend my entire month's grocery budget in the first week, etc.

It's going to be very very hard to look at my checking account and see a large available balance of $4000 or so from month to month, and not throw it to my debt snowball, but I think that this is the best way to take control over the cash flow issue. I need to start paying THIS month's bills with last month's income, rather than struggling to make this month's income work for this month's bills.

The plan to put this into place is to back off the debt snowball for a month or two and resort to paying only the minimum balance due on my consolidation loan, and car loan. I have some money, approximately $2000, coming in from the Post 9/11 GIBill within the next several weeks, and Jonny is still bringing in some money from his job at the tax office. If I have calculated everything correctly, I should be able to be on the month ahead plan starting June 1st, which is only 11 weeks away.

There are many more plus sides to getting a month ahead. I can stop relying on each bi-weekly paycheck and I can set up more allotments through work, to where certain funds go into particular savings accounts already, rather than into my checking account and manually transferring the money when it's time to put it in. My $300 a month Sinking Funds could become a $150 per paycheck allotment that would automatically go into my sinking funds account. Instead of having to wait until the second half of the month to pay the church my monthly tithe, I could pay the entire tithe at the beginning of the month. I could even FINALLY set all my regular bills up on AUTOPAY, rather than insisting that I pay them on a specific day of each month, because I know it's a day that the money is available. <--I'm a little iffy on that one, I'm afraid I would become sloppy, and not double check the bills to make sure they are right and that I'm not being overcharged.

At any rate....I've been digging my heels in about this one, but as I tried to come up wth my cash flow plan for April and May, I was thoroughly depressed to learn that, once again, I would be forced to borrow from the emergency fund in order to have the basics covered: food and gas. Bummer. I guess it's time to put my big girl panties on and just DO IT.

Why I Tithe...

So, one of my good friends yesterday sent me a message yesterday asking me some questions, and it inspired this particular post because I wanted to explain why I tithe, in case there are more people out there with the same kind of questions.


I feel like tithing is not an option, but rather, a necessity. The bible gives us instruction to tithe to the church. A Tithe is a 10th of your income. Anything more or less is an offering, a gift. So don't call it a tithe if it's not.

When Jonny and I first started attending St. Mark, for the first few months, prior to starting FPU, and even into the first month or two, we gave what we "could." We knew it was important to give, but 10% of our single income while he was not working was enough money that if we kept it for ourselves, it would make things easier...

That's not entirely true. In our experience, tithing is like an emergency fund; it's Murphy Repellant, as Dave calls it. When you have an emergency fund in place, your emergencies are less severe, and less frequent. Prior to having an emergency fund, a flat tire, or medical bill, or other kinds of unforeseen expenses would have been put on a credit card, because that was the only way we were able to handle it. Since creating the emergency fund, emergencies don't appear to happen as often - and when they do, it's only a minor inconvenience, rather than a catastrophe.

Like I said, in our experience, tithing kind of feels like an emergency fund to us. When we started tithing - rather than giving a small offering, our finances seemed to fall into better shape. We "found" money we didn't know we had, and we learned to better manage the money we DID have, so that it stretched further, and wasn't such a tight squeeze to make ends meet. Over the summer, Jonny had a temporary job which helped kick start some of our debt. Sure, it wasn’t permanent, but by that point, we had been living on one income for over 6 months, and the budget we had worked, so we continued living on that budget, and his extra income from that temporary job went only to debt (and, the tithe that was required from it).

I've listened to Dr David Jeremiah on the radio at night in regards to what it means to tithe, and why it's important. Dave says some similar things. Basically, what they've said is that our money is not ours. EVERYTHING we have is because of God. Yeah yeah, I know some of you out there are rolling your eyes about the freakish religious aspect of this post by now and how I must be a brainwashed Christian. Um, no. Just because someone is a Christian doesn't mean they are a brainwashed psycho. I'm not trying to change your mind, just letting you know why I feel it's important to tithe.

My church has been wonderful for me, and our transition in Columbus. I swore after I left the military, I'd NEVER leave home again. Well, I did - sort of. Yeah, it's only 2 hours, so it doesn’t really count, but 2 hours is still far enough away from my friends and family, that I get a little homesick from time to time. I've gotten really involved in the church, and it's helped make Columbus feel more like home. So in one sense, I feel like I owe it back to the church, for helping me. Here's an analogy that my sorority sisters will love: The same way that a sorority is fun and games, but needs money to operate on - a church has a responsibility to the community. Guess what? The church needs money to fulfill that responsibility.

I have friends who say "I can’t afford to tithe." Really? 10% is enough to make or break you for the month? If that's the case, you really should look at where your money is going and cut some unnecessary expenses. You don't NEED a cell phone at $150 a month, catch my drift? If you can’t afford to tithe, then Christ "can't afford" to reward you for being good managers of the money He gave you. We've all heard the story of the master with 3 servants, who gave the first servant 5 talents, the second 2 talents, and the last one 1 talent. The first 2 used their talents and made them grow, and I think, if I remember correctly, they at least doubled their money at the end of 1 year. The 3rd guy buried his talent in a hole for fear of losing it, and the master was displeased with him because he hadn’t used it to do anything with.

Basically, it's like this. If you can’t afford to live on 90% of your income, you can’t afford to live on 100%. If you can't show God that you are smart with your money, He has no reason to reward you with more. People say they can't afford to tithe, but I say; how can you afford NOT to? Yep, my 10% a month is a big chunk of change that could certainly go towards my debt snowball. But as luck would have it, if I didn’t give that 10% per month to the church, my financial luck would diminish. I'd have broken down cars, and medical expenses, other unexpected costs that my poor little baby emergency fund couldn’t not Murphy Repel for me, and then I‘d need that 10% - OR MORE - to cover those catastrophes. I am not willing to take any chances. God blessed us when we started obeying. Why would I start disobeying now?

http://www.daveramsey.com/article/daves-advice-on-tithing-and-giving/lifeandmoney_church/