taking control over money

       We started to prioritize our money goals and to organize our finances in or around the end of July.  At that time, I made a list of our debts, overall, as well as how much we spend monthly on them and how much interest they cost.  Since then, we have replaced an old car with a new one, increasing car debt but reducing our insurance (we also got rid of a third car altogether).  Since reducing debt was our priority, we added $200.00 to the minimum payment of one debt and have succeeded in paying off one debt entirely and will have paid off a second one this month.  That payment will be added to the next debt we are eliminating and, if all goes exactly right, we will have that one paid off within one year from now (51 weeks if we pay it weekly, which is our plan).  At that point, however, we will have freed up about 375.00 to add to another debt, and we should start to see a huge jump in how quickly the next debt will be paid off.  In the meantime, I have continued to pay the minimums as they existed in July on my other debts; thus, although I may not be working on a particular debt, I am reducing all my debts to a large degree.  And, perhaps more importantly; in the last three months, we have not pulled out regular credit cards (except a U-Promise Rewards Card that I pay off monthly and one $250.00 charge on a card that still annoys me).  

With all this work, I wanted to see if progress was made.  So, today, I made the first calculation of how we are doing with paying down our debt.  While I do not wish to give actual numbers, I am happy to report that we have gotten rid of 1% of our entire debt putting us on track to eliminate all debt from our lives in 18 years (not so great, but it works out for our retirement plans).  That is all of our debt including our mortgage, which is our biggest debt, but reduced by a smidgen every month, our car payments and our parent loans for our son's college.  As I discussed in the article, "What is Your Bad Debt Load," such debt is not necessarily as troublesome as other debts.

I am pleased to report that when I do not account for the not-so-bad debt, my family's debt has decreased by 4% of the bad debt, making us on track for eliminating that debt within 6 years or less.  Although we have worked very hard both to stay on top of our finances, and to avoid wasteful spending, the results are very encouraging.  In three months, we reduced 1% of our overall debt and 4% of our bad debt.  If we can keep going, without any major snafus, we can really lose debt at the rate of 4% overall per year and 16% of our bad debt.  I am thrilled that we are on track and hope to continue to progress in our debt reduction arena.

In other financial areas, we are also moving forward with many of our plans to ensure that we take control over all of our money.  As I recommended to my readers, we figured out how much to put into our flex plan accounts,  (see, "How to Take Advantage of Your Flex Spending Plan), and, we have made the necessary changes.  I also used a portion of my raise this September to start my 403(b) plan at school and have been putting in what I felt I could this first year.  If I increase by the same amount every year (which is a bit less than my raises should be), I will have fully funded that account within 4 years -- meaning, I will be maximizing my retirement savings.  Unfortunately, my husband's plan does not allow him to fully fund but we are trying to increase his by a little bit per year.   So, our retirement grows, and, we hope, our tax burden will decrease accordingly.  We have also taken control over our retirement savings in other ways by reallocating our current plans' to the recommended levels and moving little accounts into one place:  Vanguard.  We began the process about a month ago, and some of our account holders are none too pleased to part with our money, so it is taking a while to accomplish this task.  However, we are moving forward, and looking forward to having the money in one place making it easier to manage and more cost effective.

I am much more on top of the finances:  I look at the mail every day, shred the unwanted stuff daily, and place the stuff that I need to deal with in a particular spot for that purpose.  No more mountains of paperwork (except for some old mountains that have yet to be conquered).  I would like to get a bit more consistent in terms of ensuring that everything goes onto Quicken, and I still have work to do in getting a budget created and keeping track of our cash spending.  However, we are staying with one trip to the ATM a week, where we take out a set amount, and, if we run out of money before the week ends, we just can't spend any more.   Sometimes, however, things come up; so, it is far from 100%.

Another area in which I was not so succesful was in my plan to use the extra check months to create emergency savings, fun money and an extra debt payment.  We had a massive expense in the beginning of this month:  the first "extra check" month, and, therefore, essentially, the money got absorbed.  The next time is January (and, I think, we both have extra checks that month and I get my insurance buyout.  So, hopefully, all bills will be current and accounted for when that event happens and I will do what I had hoped to start this month.  I hope that once we do that, we will have a significant amount put aside for "emergencies," by the end of 2007.

Given my work schedule, I have not had a chance to write many new articles in the past month; however, that is a temporary issue:  I have continued to stay on top of issues relating to money and when I find something worthy of an article, I will write a new one.  I hope that you are enjoying the web site, and finding things of value to your own family.   I am happy that I created this site:  it was a difficult task, I am not really making any money; however, it has done exactly what I wished:  forced me to keep up with the difficult task of facing up to and dealing with the family finances.  In that respect, it has been a huge success.