The Scarlet “D”

Commitment made to be Debt Free – CHECK

Debt Freedom Plan – CHECK

Family on Board with Plan – CHECK

Workable Budget – CHECK

Bad Habits with Money Changed – CHECK

Preparation for Unexpected Expenses – CHECK

Patience for the time it takes to Pay off the Debt – FAIL

I see the light!  And I want to run towards it, out of this debt tunnel.  But for now, it’s just a waiting game.

The debt that seemed overwhelming in the beginning, has now progressed to an annoyance .  It’s the stain of our past poor financial choices.  The scarlet-letter “D” that sits there as we wait for the paycheck to put another chunk towards paying it down.  We get the paycheck, we pay the bills and then we wait, and wait, for the next paycheck to roll around.  And the cycle continues…

In the meantime we continue to do the right things, we stick to the budget and we forgo impulse buys.   What else is there to do when you’re saddled with debt?

Perhaps I’m being a tad overconfident but we just had a month where: one of our animals required a vet visit, there were three family birthdays (gifts), one christening (gift) and the TV Broke.   We made it through without resorting to credit card use, because we were prepared.

I feel invincible and impatient.  That scarlet “D” is still hanging around as a reminder of the past, but it is no longer representative of how we handle our money.

Our “reasons” for being in debt seem so pitiful now that I hesitate to even write them.  I can see, only in retrospect, they were the root of all our debt:

1)  We really didn’t care.

2)  We took the easy (irresponsible) way out of everything.

It was that simple. All of the excuses that go along with those “reasons” are just that, excuses.  So the “D“,  while annoying is rightfully deserved.

I take being debt free very seriously, but it is hard to keep solemnly caring about it.  We made financial mistakes, we rectified them, we are making slow and steady progress.  Wake me up when we get there.

Our dreams, like travel (paid for with cash), seem attainable.  I look forward to that time, while I begrudgingly wait patiently for that day to arrive.

To those just starting to get out of your money mess, it does get easier, in fact in gets downright BORING.  (But in a totally good way.)

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Yakezie Link Love for my 5 Year Anniversary

It was 5 years ago today we were married in Iceland.

The ceremony was short and sweet.  The “reception” was unplanned and nontraditional, but we wouldn’t have done it any other way.

Maybe not the most beautiful setting but it got the job done.

They said some stuff in Icelandic and we said "I Do"

We had a few drinks at the ICEBAR...

Me and this guy sang you our "wedding song", "Nothing Else Matters" by Metallica

Happy Anniversary. I Love You.

In honor of my anniversary I’m sharing the love.

Here are some of my favorite YAKEZIE posts of the week:

Little House in the Valley shows you the Mathematical Method – “Borrow and Payback” that we used to teach our children but no longer do.  Other countries do though!  Could this help explain why the United States is so behind in MATH and in DEBT? You may never look at simple subtraction the same way again.

151 Days Off asks “Is Travelling Worth your Money?” I guess you can see from above how I feel about travel.  I’ll use any excuse to travel.  My divorce is planned for Bora Bora. (kidding)

Want to show off how smart you are and feed the hungry at the same time for free?  It’s simple, painless, no registration required.  Check out Cool to be Frugal – Expand Your Knowledge and Feed the Hungry.

Simple in France wants to know “What do Gain by Living Simply?”. She also details some of the sacrifices she needed to make to gain the “simple” life.  Is it worth it in the end?

Your kick in the butt for the week: “Hope WILL NOT get you out of Debt” by Deliver Away Debt. If you’ve been crossing your fingers that it will all work out for you, you better read this post.

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What it’s like to live in 1 of America’s 25 Richest Counties…

If  you saw the recent Forbes list of  the Top 25 Richest counties in America, and you don’t live in one of them, you might be tempted to assume those who do all drive Porches, eat caviar like it’s pretzels or live 10000 square foot mansions.

We live in number 24 on the list of richest counties but we are as middle class as it’s gets.   I wonder how living here, surrounded by immense amounts of highly concentrated wealthy families effects the way we approach money, at least psychologically?

Everybody has heard of the “Keeping up with the Joneses” phenomenon.   Originally proposed by James Duesenberry as the, “Relative Income Hypothesis” stating that, an individual’s attitude to consumption and saving is guided more by his income in relation to others than by an abstract standard of living.

So living amongst rich people MAY provide a more powerful motivator to consume and save than our own internal reality of how we approach wealth.

I’m really not sure how much outside influences have on how my family saves and spends.  I like to think it has ZERO influence.   But c’mon, no man is an island and all that.  It has to effect us in some way.

How much does environment play into our perception of wealth and how does that effect our pursuit of wealth?

I can only speak anecdotally, but I do wince a little inside when my daughter’s new friend invites her over to play and her garage is bigger than our house.   Our kids will attend the same blue-ribbon public school so we also benefit tremendously in spite of any inferiority I may feel.

I think as long as you don’t fall prey to “conspicuous consumption” the benefits of living surrounded by wealth outweigh any downsides.    At this point of our “financial enlightenment” we don’t feel the need to buy stuff to prove anything.  And we never really did “just buy stuff”, we were sloppy with our money and let it control us instead of vise versa.  We are now  focused on our own financial house.  What may have been feelings of envy towards the 20 BMW’s in the preschool parking lot  have been replaced with motivation.   The motivation is not for us to “be rich” but for us to live for ourselves, and never mind the masses.

The wince of inferiority I feel in the face of all the wealth I see on a daily basis WILL SOON be replaced with the pride of having control of the money and the future we do have.  And all the while our family will live simply and take advantage of the amazing schools, the safety of the community and it’s beautiful parks.   Thanks richy-riches!

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Where is the Personal Finance Blogger who FAILS?

I have a confession to make:

Sometimes I feel VERY jealous when I read or hear somebody’s “I PAID OFF ALL MY DEBT AND YOU CAN TOO” story.

I make comments like, “Way to go!” or “That is AWESOME!”.   Deep down though, I’m a little resentful.  I want it to be me.  I can’t help it but I read their story and pick apart the ways it was so much easier for them and how it is so much harder for me.

“OOOH, I see they don’t have kids.  No wonder they could put so much towards their debt.  They don’t have 5 mouths to feed.”

“Yep.  Just as I thought, they make double a year what we make.   Of course they could pay off their debt so quickly.”

I wish the stories were inspirational but at times I am a little stuck in the “whining phase” as opposed to “accepting personal responsibility phase”.   Most days I can visualize the finish line, when all the debt is paid off, those are the days I search out the “I Paid off my Debt” posts.   But some days, it feels like it will never happen and that is when I whine.  Or maybe it is better to say, “I get discouraged.”

I’ve never heard those who got themselves out debt say it was easy, but I can never get a good handle on how hard it was for them either.

Their story always ends the same.  They write the “final post”.  They are out of debt.

Where is the “Personal Finance” blogger who starts the journey, makes the commitment, posts everyday about how they are saving money on this or that, shows how their debt is going down with graphs and spreadsheets and fails in the end, never gets to write the final post?  Does that happen?   Will it happen to me?

(OK, now I got Stuart Smalley going in my head.   “You’re good enough, you’re smart enough and gosh darn it, people like you.”)

So I get discouraged.   This is not a good enough reason to quit.  We push on.  So right now we pay 24.5% interest on our credit card while others are making double mortgage payments.

They all started somewhere too…

I’ve stopped playing the world’s smallest violin for myself.

And when my time comes for “THE POST”, I’ll try to remember I was once like this.

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Getting a BIG Tax Refund was keeping us in debt

The “great debate” that centers around whether it makes financial sense to get a tax refund or not usually entails one of two perspectives:

The “No Refund” crowd loathes the fact that you are loaning the government your money for free.  Your monthly overpayment in federal taxes could be put in a high-yield savings account and earn you interest throughout the year.

The “Pro-Refund” people usually argue that getting the big refund allows them a forced way to save money that they wouldn’t otherwise save.  The refund can be used to pay down debt or put away for a rainy day.

I’m a reformed “Pro-Refund”.  We used to get the big refund and pay down the credit card.  The same credit card that we were forced to use throughout the year for necessities.  There was no end in sight, the credit cards would never get paid-off because the take-home pay was not enough to cover our lifestyle. What a crazy cycle, we were giving our own money away(letting the government hold it), and then we would have to use credit cards (at about 18% interest over the year) to borrow our own money, pay off the credit card with the refund and start it all over again!

Last week I asked my husband to bring an updated W4 to HR so we can avoid a refund.  Not so we can put this extra money per paycheck in a savings account or use it to pay off debt.  We will use it to avoid using credit cards. We are a paycheck-to-paycheck family.  We are fed up with that lifestyle.  For us, not getting a refund will result in an extra $200-$250 a month.

The majority of our credit card purchases were made because there was not enough wiggle-room in the budget to pay for our monthly expenses.  Even with our cost cutting measures, we were still one small hiccup away from using a credit card to get us through. Maybe down the road, when we have better control of our finances, this money can be used for a “Vacation Fund” or the like.  For now, I’m looking forward to NOT putting groceries or gas on a credit card.

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