Category Archives: by the numbers

What’s Next?

When I blogged about our goal for 2012, we started out by saying we were going through Dave Ramsey’s Financial Peace University.

From that, we learned the 7 baby steps. Getting out of debt (all except for our house) was only step 2. We have a long way to go. 🙂

So what’s next? Naturally, step 3, which is a fully funded emergency fund. Dave recommends is 3-6 months of expenses.

I wanted to lay some ground work for this step.

First, we will be going for an entire 6 months of expenses for our emergency fund. We felt that with the feast or famine nature of a small business, it would be better if we had 6 months.

Secondly, I will not be posting exact dollar amounts when I report on progress for this step. We felt it was a little to personal of financial information to have out there in the world, letting everyone basically know what our monthly income averages. Instead, I will be reporting using percentages, with 100% fully funded being the obvious finish line for this step.

Third (and you might get mad at us for this one), our first progress report on this step is…
We are now at 50% of our goal.

Say what!? Ok, here’s why. Baby step 1 is a $1,000 emergency fund. From the get-go (prior to our even being married) my husband has been a super saver. When, in our second year of marriage, we talked about starting the baby steps, we decided that it was ok to continue to hold the 3 months of emergency fund aside that he already had in savings and to not put it toward debt at that time like Dave says.

A few things influenced this decision.

1. The potential extreme swings of income with a small business. We did not feel at all comfortable with such a small emergency fund.

2. Part of the reason Dave says $1,000 is for motivational purposes. If the emergency fund goal in step 1 is too big, people will become discouraged while saving for that first amount and give up. Since we already had the money, this wasn’t an issue.

3. Dave really wants to put a fire under people. There can be a little bit of panic in the idea that you only have $1,000. He likes people to use that panic to their advantage and start hustling on step 2 so they can finish and get back to saving. We knew ourselves well enough and trusted that we would not have an issue hustling.

4. In situation of overwhelming amounts of debt, taking a large chunk of change out of savings and throwing at debt can be a tremendous leap forward, helping people start the process with great momentum. Before we started in January of 2012, we had an incredible Q4 of 2011. We had a great boost of momentum without raiding the emergency fund. And for our total amount of debt, it would have had only a small impact on the timeline and reduction of interest we paid.

There you go. Our intent was not to be dishonest. And with the last 22 months in the rear-view mirror we know there were a few moments where we really thought even our “Crisis Fund” would be used up and we’d have to dip into the emergency fund. Not blogging about the emergency fund helped me keep it out of sight, out of mind, so that we would continue to hustle.

We are thankful that we gave ourselves some grace, and modified the Baby Steps from the start.

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Major Announcement (AKA October by the Numbers)

Proverbs 22:7 says “The rich rules over the poor,
And the borrower becomes the lender’s slave.” (NASB)

We have a major announcement.

We’re done.

That’s right… 22 months after we started, we are out of debt!

Seriously.  It hasn’t quite sunk in for us either.

DONE!

Feels a little anti climatic, right? 🙂

In Dave Ramsey style….. FREEEEEEEEDOOOOOM!

For a final ‘by the numbers’ here is how the numbers break down:
Extra Debt paid: $5,116

Total Debt paid in October: $5,362

Since 1/1/2012 – Total Debt Paid off: $46,453*

*For the purpose of Baby step 2 we are not factoring in our home mortgage

There you go.

A few more numbers to consider while letting that number, $46,453, sink in.

•22 months
•1 layoff
•6 months on only 1 income
•6 months of steep COBRA medical premiums
•4 months of slow small business income
•1 HVAC system
•3 Student loans
•2 Medical bills
•5 consignment sales
•1 garage renovation
•1 baby born

One item that has been an uncountable blessing, is the support of our family and friends. From gracious understanding on the numerous times we declined going out to eat to the boxes of hand-me-down clothing and piles of gifts for our little boy. We truly could not have done this without the support of loved ones.

Thank you LORD for providing for us.  Thank you for entrusting us with funds and teaching us to be good stewards. Thank you for giving us strength and endurance to do what is right with your money, even when we didn’t feel like it. With the wisdom of Proverbs 22:7 in mind, we choose to not become the lender’s slave.

In closing, while the monthly “by the numbers” posts are done, we will be chronicling our next steps. Dave Ramsey’s baby step 3 is an emergency fund to cover 3-6 months of expenses. Feel free to drop by and see our progress as we move forward, aiming for step 3.

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September by the Numbers

September was terrific!

As I’ve mentioned before, the small business has picked up considerably the last few months. Because the baby was on the way, and we had gone such a long period with the business being slow, we chose to be extremely cautious. Even with understanding the debt snowball was on hold and we were functioning with the ‘crisis fund’ plan, we still decided to limit how much we drew monthly from the business.

All of this to say, we have decided it is now ok to free up additional funds. That’s where our extra money for debt comes from this month.

We are getting so close! It is realistic to believe that we will be Debt Free by the end of the year.

Without further adieu, here are the numbers:

Extra Debt paid: $5,000

Total Debt paid in September: $5,246

Since 1/1/2012 – Total Debt Paid off: $41, 019*

*For the purpose of Baby step 2 we are not factoring in our home mortgage

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August by the Numbers (part 2)

Just a quick update.  The medical numbers did finish coming in and my previous post was correct.  We were able to use the crisis fund we’ve built up since November to pay all 5,714.40. This amount covers both Z & my deductibles and copays.

And then beyond that, we were able to make a lump sum extra payment toward debt of $2,591.

Which means… my student loan is So Close to being under 10K. I thought it would be years before I saw that.

Thank you Lord for providing the funds to do this as well as helping us be disciplined and focus to follow through and be good stewards of what you provide.

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August by the Numbers

Ok… so not ALL of the numbers are in yet and I’m still waiting for a few statements so we can actually write checks and pay off medical bills, but we do have a pretty good idea of how it will play out.

To start with, we have to pay the hospital. The hospital bill that we are paying out of pocket for both Z & myself: 5,714.40.

That’s quite a chunk of change! But… considering it’s the largest medical bill I’ve had in my adult life, where I have not had to say “Hey Hospital, here are my financials, I have no money, please let me work out a payment plan” I’m super PUMPED! We planned well and will be able to pay this entire amount with money we saved up in the “Crisis Fund.”

Next – I went to another consignment sale. Why is this part of the numbers this month? Because when we’ve spent money that was not initially in our budget for the baby, we’ve used Crisis Fund money to do so. What!? Going outside of the budget!? In this case, Yes. We purchased some much needed items like a standard stroller. The stroller we bought would have been at least $200 new. We spent $38. 🙂

In total, we spent $135 at the consignment sale, for items that would have totaled $425 if they were all new. Also, as a side note, I made some extra income through consigning. A whopping $22.

So … we now have a much better understanding of how much extra crisis money we have and can put it toward debt.

Medical Bills paid: $5,714.40

Consignment Money Spent: $135

Extra Income: $22

Extra Debt paid: $2,591

Total Debt paid in August: $2,837

Since 1/1/2012 – Total Debt Paid off: $35, 773*

*For the purpose of Baby step 2 we are not factoring in our home mortgage

 

Consignment savings Running Total numbers:

Running total for used items: $393
Approximate amount if all items were new: $1,119

Savings: $726

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July by the Numbers

Z_Birth So… once again, not a lot to report. However – This is hopefully the last month that the debt snowball is on pause!

While I was laid off in April (and now plan on staying home), the self-employed one in the house has had a tremendous increase in work. Praise the Lord!

Also, baby boy was born mid month! 🙂 He’s so precious. Yep, I’m bias, but he’s a super cutie!

And if you recall from previous “by the numbers” once the hospital bills are finalized, we’ll be able to use the Crisis Fund to Pay All the Medical Bills (creating no new debt!) and throw the rest at my student loan.

I’m guessing that the total number toward debt will be a bit smaller than I would have liked or hoped (mainly due to my not working since mid April), but every little bit helps.

I was looking at my student loan this month, and just paying minimum or a few dollars over minimum since November means we’ve still made a little progress. We are now almost under 13K for the loan. To put this in perspective, this loan was around 35K when I consolidated it into a 20 year loan, in 2008. (We’ve paid off 22K in 6 years. And we plan on having it done in less than 12 months, which is ultimately 13 years ahead of schedule.)

All that to say I can’t wait to report back for “August by the Numbers.”

One thing that was a bummer for July is that we seem to have spent a lot on food. However, this is because my mom was in town and we made trips to Costco and Sams. We purchased extra, and then she made us a bunch of meals – of double or triple proportions. Now we have somewhere between 10-15 meals in the deep freeze for simple cooking. We also have a wonderful community of friends that are providing us with meals a few times a week for the next few weeks. Which means the August food bill will be low and more than make up for the larger food bill in July.

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Filed under baby, budget, by the numbers, debt, family, food, pictures

June by the Numbers

We are only a few weeks away from the birth of our little boy – and yes we are super excited to meet him.

In addition to meeting him, to not being pregnant anymore, to having a new baby at home and getting into a routine – we are REALLY looking forward to getting the debt snowball going again.

As you know, we’ve been on hold, but once the baby is born and medical bills are paid – we will use the rest of the Crisis Fund to throw at debt.

I. Can’t. Wait.

In the middle of this month, we did dip a little into the Crisis fund to purchase the last remaining necessities for the baby (like the car seat).  At the same time, at the end of the month, we had a bit of extra income and gift money that we put toward the Crisis Fund.

That being said, I’m guessing it will be at least August by the Numbers before we have exact figures and know what portion of the Crisis Fund is for medical expenses and what portion is for debt. Mostly, the timing will be based on when we get final bills from the hospital.

I’ll leave you with the following picture, me at 37 weeks. Officially full term.

37_weeks

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