Tax Refund!

Gracious thanks goes out to Uncle Sam and my amazing tax guy.  Our refund this year was $7900.  When my tax guy told me how much we were getting back I wept.  I was hoping for $4000.  That would give us a good start on knocking out some of this debt.  But $7900?!

So this is how it broke down:

$704.53 Pay off Credit Card #1

$960.30- Pay off Credit Card #2 (The computer)

$5266.02 Pay off Credit Card # 3

$500 to Emergency Fund

$169.84 pay toward Loan #1

$100 Hubby's Sanity Money

$50 My Sanity Money

$50 to my girl's Savings Account

$100 groceries


Hubby got $100 because he never spends money.  Ever.  I would have gotten $100 as well, but I felt that I've bought a few things the past couple months, so I technically already spend half. 

It still hasn't hit me that we paid off 3 credit cards.  Now we can aggressively pay of that fourth card, who's balance is now at $7907.04

Where I Have Been

My grandmother passed away a couple weeks ago, Hubby and my little girls were sick and I seemed to stop everything for a little while.  I also realized that I was terribly unorganized.  My house was a mess, and my work space is a disaster.  I have spent the past few days deep cleaning my house.  My next task is to organize my workspace. 

This is what it looks like now.  See all those papers on top of the white drawers?  Most of them are important.  And that brown box- It is full of stuff.  I've forgotten what most of it is. 

I look forward to getting this all organized!

Emergency Fund

For 28 years of my life I had no clue what Emergency Fund meant.  I remember sitting down with a friend who worked for Primerica.  He explained the importance of setting up an IRA account as well as an emergency fund.  He told me "Ideally, you will want to have about 6 months worth of income save up in the event of an emergency."  What an incredible idea!  Who ever thought of that is a genius.  However, 6 months worth of salary is a big number- it can be overwhelming especially when you are trying to get out of debt.

Enter Dave Ramsey.  I was recently introduced to his 7 Baby Steps.  Step number one is to put $1000 into an emergency fund.  This is logic that I can follow:  While you are trying to get out of debt, something will inevitably happen.  The car will break down, medical expenses, ect.  When those things happen, you need a reserve in which to pull.  Otherwise you will end up putting the bill back on a credit card you have worked so hard to pay down.  Not only will you pay interest on the bill, you will also be frustrated with the debt.  I know in my case, it is so discouraging and it mentally sets me back.  When this has happened to me in the past I think "Screw it, I am always going to be in debt.  I'm going shopping."  Bad thinking!!

So I've decided to build my emergency fund of $1,000.  I am lucky, because I am going to put part of our tax return into the fund. 

I am so excited to see my financial life shaping up.  I can see a light at the end of the tunnel.  It is far away, but it is there.  I just need to keep my eye on it and keep trudging forward!

Interest Makes Me Sick

Today I received an email from trusty Mint.com.  They were informing me of my monthly intrest charge from one of my credit cards.  $92.58 for one month.  That is a lot of money!  Do you know what I could do with $92.58?  The possibilities are endless.  Well, maybe not endless but you get the idea.  The sickening thing is that I really didn't know it was that bad.  I knew we paid interest, but I was so overwhelmed with making the minimal payment, that I couldn't think about the extra money I was paying. 

Now that I am taking control of my finances, I am ready to look at these numbers.  My other 2 credit cards charge me $61 and $10- so the interest I am paying per month on all 3 of my credit cards is $163. My Student Loans charge me around $50 a month in interest. 

I hate that I am just throwing all that money away.  And it gives me that much more energy and desire to pay off this debt as soon as possible!

Being Sick Kills the Budget

Our house has been hit with sickness the past couple of weeks.  Everyone has been to the Dr at least once.  My little 3 year old has been three times and I'm taking my 1 year old in for a second time today.  I chipped a tooth that will need a crown and found out I will need 3 fillings.  I knew I didn't have the money to get the crown or fillings so the Dentist just smoothed out my tooth and put some sort of cement on it.  Hopefully this will last until I can afford to get all the work done.

I just started a real budget, so I don't have a savings or budgeted amount for doctor visits and medicine.  Luckily the girls have Medicaid in addition to our insurance, so I don't have to pay for the co-pay or prescriptions.  But I do have to pay for Hubby and myself along with our prescriptions and OTC medicine.  That ended up being $222 ($60 for 3 co pays,  $60 for 2 strep tests and 1 blood work, $50 for dentist visit and $52 for prescription and OTC cough syrup) My girls would have costs around $150.   Thank you medicaid.

Luckily for us, the tax refund money should be here any day. So this was a very good lesson.  Now I have a monthly budgeted amount that goes toward the "Dr" fund. Looking on the bright side, I am so glad I learned the lesson now when I have tax money to bail me out. 

Mint.com

I love Mint.com.  I stumbled across the website about a week ago.  After a few days of reading reviews and asking different friends about their experiences with Mint, I decided to give it a try.  And the result?  I Love it!  It tracks ALL my accounts.  I tell you what, it is very sobering to see all my debt tallied on one page, and to see my net worth as -$54,655.08. 

The good news is that it showed me that I was off on my original debt estimate.  Instead of 55k, I am actually $57,577.74 in debt.  Not that being an additional 2K in debt is good news- knowing about it is.  I feel more in control of my finances now that I know exactly where I stand.

I also have the ability to set a budget, and Mint will track all my spending and inform me when I go over budget.  This also is very liberating.  Over the weekend I read a wonderful article about budgeting from No Debt Plan   And it was like a light-bulb went off when I read this:

             "A budget doesn’t tell you where your money went. Your money
              shouldn’t be going anywhere without you knowing about it. It does
              show you were you told it to go"

Again, I feel more in control.  So I set up a budget for the extra $168 I have a month (after all my bills are paid)  March will be the first full month that I follow this budget.  I will post about it soon and let you know how I am doing.

Until then, if you have a minute to check out Mint head on over.  It works for me!

Control

I have issues with Control.  I can't stand to have anyone control me.  Just ask my parents.   If they told me to do something I would usually do the opposite just to prove "you can't control my life."  It's ironic that I am in so much debt who's interest is so controlling.  So when I came across this article from No Debt Plan, I was thrilled. I especially loved this part

 "Look at your current financial situation. You’re in your current situation because of decisions you made in the past.  Like the weather you can’t control where you are now. You can’t control being thousands of dollars in debt now."  

Which is true.  I can spend hours brooding over the fact that I was so dumb, and that we are in so much debt, yada yada yada. But that doesn't do me any good.  I have to move forward and control my expenses, my income and my mind set.   Most important I can control what I am doing now to change my current financial situation!

Link to article:
http://www.nodebtplan.net/2011/02/09/control-what-you-can-control/