September: How we did financially

Our family goal right now is to pay off all our debt so we can have financial freedom! I’m 28, and specifically, we want to be debt free by the time we’re 30. We wandered into debt but like Dave Ramsey says (we’re huge fans) you cannot wander out – you have to have a plan!

Our plan includes working a ton and cutting our expenses back as much as possible. We have an emergency fund of $1000 so we do not have to go into anymore debt to cover unexpected crises. Then we budget every month using www.everydollar.com (and if you haven’t tried it you should!) And, after paring down our budget to just necessity, everything else is supposed to go to debt.

Here’s our income:

Me paycheck 1: 1535
Me paycheck 2: 1535
Me paycheck 3: 1728
Handsome paycheck 1: 1533
Handsome paycheck 2: 1377
Handsome overtime: 400
Handsome extra job 1: 1100
Handsome extra job 2: 685
Handsome extra weekend job 1: 175
Handsome extra weekend job 2: 315
Handsome extra weekend job 3: 110
Sale of car: 1200
Sale of motorcycle: 2100
Refund of insurance: 124
TOTAL INCOME: $13917. Definitely the best month we’ve ever had! 

Giving: 974 (yikes! This should have been 1390! We’ll make up the tithe in October. I forgot to update our tithe when the last few extra paychecks came in.)

Saving: 1250 (Every month we save for insurance, Christmas, an anniversary trip, taxes and more)

Housing: 950 (This is only this low because we accidentally overpaid our water bill last month and there’s a special for our phones so they’re extra low. This could only be lowered if we got rid of Netflix (7.99) and Dollar Shave Club ($3)

Transportation: 950. (Usually, this is just gas. This month we had to pay lots of costs associated with getting a new used car – taxes, tags, brakes. I hate that we had to change cars.)

Food: 870. (Yikes this is high. 500 for groceries [100 each week] plus dog food, eating out and handsome husband’s food budget for work since he works 12+ hour days. I know we’re not supposed to eat out but we have never been able to go a single month without eating out. We stink!)

Family life: 100 (This is date night and 20 bucks each spending money.)

Debt: 4958 (1300 of this is minimums. But still very good knowing this is the best debt snowball month we’ve ever had!!! We paid off Sallie Mae, the smallest Fed Loan and are starting to make progress on our smallest loan from another servicer “My Great Lakes”)

Kids: 1240 (This is daycare, pre-k, diapers, and upcoming birth cost savings)

Misc: 2615. (I should probably break this out a little better – there are health things in here, kids stuff in here, birthday stuff, insurance stuff, etc. I really hate looking at this category in aggregate, it just seems too much money was spent on random stuff.)

So overall a good month. It would have been great if we didn’t have birthdays and family visiting three times!!!! But that’s life and the people we love are in it. We need to put at least 3800 per month to debt if we want to get out of this mess in two-three years. The more traction we can get now the better – things are only going to get more expensive with three kids.

How was your September financially? Have you heard of the debt snowball? I love your comments so feel free to share!

 

 

House v. Renting Breakdown

So, funny story. This July, we were living in an apartment that suited me just fine. It was a two bed,  1 +1/2 bath that we rented for $750 plus utilities. It was ultra close to work and in a good part of town, so I was happy to live there. The place was crazy ugly but it was almost the cheapest we could afford. (The cheapest unfortunately had a reputation for housing meth cooks, so we weren’t interested in “the cheapest” place.) I tried to not let the ugliness bother me. I painted the trim and put other lipstick on that pig but still Handsome Hubby felt cramped and as though he was putting his kids in a place they didn’t deserve. I kept thinking, they deserve a place where one day we can send them to college! But I kept that to myself. Getting a nicer place for $100 a month – plus all of the application fees and deposits – was going to run us an extra least $1500 in a year so I was dragging my feet on moving to a bigger/nicer apartment.

So I was determined to show Handsome what a nice place our little cramped apartment could be – it was so strange. The full bath connected to the master AND the half bath, which also connected to the hallway. You and a friend could both be doing your business and keep up a face to face conversation!

In that determination to keep the budget as small as possible, I started looking at kitchens to see how we could decorate ours to make it a little more Hubby-friendly. Well, I work in a part of real estate so I see listings all the time. One listing had a great kitchen in it, so I sent it to Handsome to inspire him.

Less than an hour later we had a realtor “We have a realtor?!” and less than a month later we were homeowners. Consider me as shocked as you are. We bought this 1015 square foot house, built in the 60s, for $86,000.

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The appraisal values it at $92,500, and we put 4 grand down. So “instant equity” of $11,500. People make such a huge deal of that – maybe I’ll change my tune.   It doesn’t feel like money in my pocket yo!

And there’s also the common conversation that owning is cheaper than renting – not always true. In fact, I bet in most cases it is not true. We got a dirt cheap house after renting the second dirt cheapest place we could find, and it still costs us more to own when you factor in all the costs required of home leaser-ship. We don’t own it yet anyway the bank does. 😉

In April, we paid $907.17 for all of our housing costs:
-$750.00 Rent
-$111.17 for Utilities
-$36.00 for Internet/phone (darn bundle 😉
-$10 for House Misc – our little cash fund for lightbulbs, cleaning supplies, maintenance stuff, ya know.

Contrast that with what we pay now – 970.37 for our housing costs!
-$701.98 Mortgage (15 year fixed)
-$47.61 for Internet/phone (long story but it did end up going up for us)
-$76.94 for Water (previously included in Rent)
-$133.84 for Utilities (no central heat or air at the moment. So maybe our space heaters are costing us? It’s also a bigger space to heat/cool.)
-$10 for House Misc as per usual

Wow! Only $63.20 to get on the path to homeownership compared to renting?!

Not so:
-We shelled out $3500 to have a dangerous tree that had already destroyed the neighbor’s house removed
-We had to get a new garbage disposal (~$100 I think)
-We had to go out and buy said space heaters (~$100 again I think)
-A yard needs a lawn mower despite my best efforts! We bought a reel mower in an attempt to save dough and an electric mower later when Handsome had had enough of that. Cue the angels singing: Ughhhhhh. (More than I want to admit.)
-We have terrible insurance due to the fact that we don’t have central heat and air. So just get it installed, right? Our first quote came in at $6500.

Ouch.

So sure, for us it’s only mildly more costly to be mortgaged than to be renting. But we have to pay for every cent of maintenance, of course, and you never know when that will happen. Good thing we had the savings for the tree!!!! Thank God!!!