When you want to go shopping, try this instead. . .

It's the day after Christmas, and my inbox is flooded with door buster deals from all my favorite stores: Target, Bath & Body Works, Barnes & Nobles. "Think of all the money I could save by purchasing now?" my spend happy fingers yell at me. 

But wait-- what do I really need? Haven't I just received some really special gifts from my husband and friends? Will I even want to put up Christmas lights next year? Do I really need all the $3.50 Christmas fragrances from Bath & Body works? No, no I don't. In an effort to de-clutter my life and live as simply as possible, going shopping right now just to get the deals is counter-productive.

So instead of going shopping, I have made an aggressive to-do list. It goes like this: 

1. Work ahead on homework for the upcoming semester. 

2. Finish all thank you notes for Baby T. (This is a bit ambitious, but at least I can finish the majority of the notes.) 

3. Drop off clothes I don't wear at Goodwill. 

4. Host a friend for coffee and cookies this afternoon.

5. Start the laundry. 

I know that by taking care of things I should be working on anyways will feel good and help me reach my short-term goals instead of just using my time and money on my materialistic urges. How do you fight off the urge to go shopping when the deals are hot? Do you think it's a good idea to go shopping on these sale days? 

5 Things We Gave up To Get out of Debt

The title of this post really should be "5 Things We Are Giving Up to Get out of Debt" since we're not out of debt yet, but we can see the light at the end of the tunnel. For the past two years, we have been throwing all our extra income at the student debt we have amassed. (I need to get permission with my husband before I share just how much debt we had, but let's just say that the amount could have bought us a house.)

Now, we are so close to being in the four digit debt amount that I can almost taste it, and I'm drooling. But, in the meantime, we are expecting our first child in about 6 weeks. In addition, we have one vehicle that may or may not make it through the winter. Finally, we have moved into a slightly bigger and more expensive apartment. Not to mention we're not exactly sure how to budget for diapers, baby stuff, and all the things that go with growing one's family by a person. Still, we are committed to saving on the luxuries that we formerly enjoyed in order to get out of debt faster. So, in no particular order, here are some things we have given up these past two years to help us achieve our goal of being debt-free in 2016:

1. Scented Candles-- Oh how I love Bath & Body Works scented candles (and just scented candles in general.) I light one of those bad boys up and all is right in the world, or at least in our little corner apartment of the world. But let's be honest, these are a luxury item. They aren't necessary for daily life; they have no return on investment; they had to go.

2. DVD's-- This is something Rob has given up since our Dave Ramsey lifestyle began two years ago. At first it was very difficult for him, and I know that some days it is still a challenge for him. However, he has been so gracious at giving up this small pleasure while we work on paying back Sallie Mae and her gang.

3. Beauty products-- I used to spend a decent amount on make-up, hair products, and hair cuts and colors. I have since gone down to getting my hair cut once every six months or so. I also use up all the shampoo / lotions / eye-liners / facial creams that I have. If I need to buy something, I buy it cheap at Target. No more Sephora beauty products for me. I even bought some eye-liner at the $1 store; I won't recommend it, but I still use it because that's life on a budget. When someone forgot their shampoo at our place, I used it up even though it probably wasn't  the type of shampoo my hair needed.

4. Books-- I used to buy more books because I was living overseas and usually the only way to read a book was to buy it for my kindle or purchase it when I was home for the summer. Reading books is a great stress reliever for me, and I love sharing books with my friends too. However, I have significantly cut back on buying books with the exception of a few devotional books and two pregnancy related books (one which the library did not have.) If I do decide I "need" a book, I buy it used on Amazon, usually at half the price of what it would be normally.

5. Concerts, plays, & shows. Rob and I went to a few concerts when we were dating. It was great fun, and it was during one of those concerts that I knew I was falling in love with Rob. Those concerts are distant memories now, and we have not been to a show or live music event since we started our debt-free journey. I feel slightly jealous when I see people enjoying a Cold Play or Avett Brothers concert, but when every dollar counts, paying anywhere from $30 to $60 for each ticket seems superfluous. I'm sure that we'll have a chance to enjoy live shows again, and we could always take advantage of FREE shows and concerts that are happening around town.

These are some small sacrifices we are making to get out of debt. What are some things you've given up (or thought about giving up) to help you achieve your financial goal?

Home Ownership vs Renting

A lot of our friends are in the house buying mode as of late, and it's safe to say that Rob and I are in the minority.  I'm a bit tired, however, of hearing how buying a house is a good investment for the future, and renting is just throwing money down the toilet. 

Our friends often share proudly how low their mortgage is per month and then ask us how much we pay per month for our apartment. Yeah, we get it. We're paying a lot in rent. You know what else we were paying a lot for? Interest on student loans, in excess of $200 a month! 

Don't get me wrong-- we want to own a home. I would love to have a yard or a garage. Rob dreams of the day he can have a dog. Home ownership is definitely a goal we have for the future. But just because we can't make it happen right now doesn't mean we are being irresponsible. We are going for financial freedom, not more financial bondage. To quote one of my hero's Dave Ramsey "Live like no one else so later you can live like no one else." We know we won't be in debt forever; but that doesn't mean we want to stretch it out as long as we can. 

I also believe that just because you are investing in something (like a home) doesn't always mean you get it back. A close friend of mine bought a house before the market crashed. Just four years later, he had to pay money to sell the house.  Sure, he invested in his home but that doesn't mean that he got anything back from it. Another family I know had to sell their home because they couldn't afford the roof damage caused by a storm.  

Furthermore, when you buy a house, there are a lot of hidden costs that you may not even think of. We would need to buy a washer and dryer, a lawn mower, possibly a fridge and other appliances. All things we don't need to worry about right now. In addition, you also pay a lot more on electricity, city fees, water, recycling, taxes, etc.  If something breaks or need repairs in your home, you're financially responsible to fix it. When you rent, you just report it and someone comes and fixes it at no cost to you. 

There is a time for home ownership, and I can't wait for that season. But for right now, we're in a season of renting (a predictable amount each month) and paying off our loans. Thanks Dave Ramsey! 

Socks or Symphony

Life is an endless tension between the mundane and the glamorous. 

It’s a Saturday evening, and the night sprawls before me like a blank canvas waiting to be painted. For simplicity’s sake, I have limited my choices to two possibilities: going to the Minnesota symphony with my friend at a discounted ticket price or going to the nearest retail store and buying socks. The romantic and adventurous side of me tells me that this is a no-brainer: “You will have an unforgetable night at the symphony with your dear friend” but the practical side of me shouts loudly from the soles of my feet: “Don’t forget about us and how uncomfortable it is when one toe sticks through.”  The Dave Ramsey voice inside my head also reminds me that “you need that symphony money for buying socks.” 

And so on this Saturday night, I chose a compromise of the two:  I convince a dear friend of mine to go sock shopping with me, and together we hit up the local retail store and do some sock shopping. It’s not exactly living it up on a Saturday night. It’s just living. It’s just doing life together. There’s nothing glamorous about buying socks. But life isn’t only composed of the glamorous. Most of the time, in fact, it’s just an accumulation of the ordinary and mundane.  

My friend and I talk, we browse, we compare sock prices and styles, and we limit our purchase to 3 pairs of socks each. This is life; this is the tension between living it up and just trying to make it through the month. We are constantly choosing between the two, and each circumstance may warrant a different choice. But on this evening, I am happy and content with my choice, and I have a hole-free pair of socks all picked out for church tomorrow. 

When you think you need groceries, try this instead. . .

On Thursday night, I was kind of  majorly in panic mode and feeling overwhelmed with all of life's responsibilities. Specifically, I was wondering what the heck I was going to take for lunch to work the next day. I was also missing a few ingredients for the meal I was planning to make that night. I started to jot down a few items on my grocery list and tried to muster up the energy to go to the store: I physically could not do it. I could not be bombarded with the choices and chaos that Cub Foods offers on a weekday night at 5:00.

So instead, I went back to the drawing board for dinner. "I can cook this meal instead and use up a couple of half cans of pasta sauce." I also extremely lowered my expectations for my lunch the next day: "I can just take this overbaked two-day old slice of pizza along with an apple and some cheese sticks for my lunch." And that is what I did. Did it taste great? No, it did not. Did I feel like a slob next to my colleagues who were talking about eating healthy and eating nut bars and four kinds of fruits and vegetables. Yes, yes I did. And I was okay with it. Why? Because I am a little bit in survival mode. And because sometimes a delicious and nutritious lunch will just have to wait until tomorrow.

This morning, I took my very complete list for groceries to the store and picked up everything we need for the entire week including healthy lunch options. More importantly, I didn't feel stressed out because I was mentally prepared, and Target is quite empty on a Saturday morning at 8:00. In addition, because I had not run to the store in a frenzy on Thursday night, I actually had enough money to get all the basics we need for the week. I figure that by putting off the panic run in the middle of the week, we have easily saved $15.

So, my advice to others is that when you think you NEED groceries, you probably can easily go another day or two. It might even help you use up some of those random half-used jars in the fridge.

How do you save money on groceries?

What we do with our extra money... disclaimer: it's pretty exciting!

Rob and I are living on a budget. Basically, we look at our income every month (which varies slightly depending on how many hours I am working at my part-time jobs), and we designate a place for each dollar. Then, we take the left-over money and . . .  TRAVEL THE WORLD!  Ha, I wish. Wouldn't that be the life?

No, we take the extra money (which ends up being about a half of our monthly salary) and we put it directly into paying off student loans. Pretty exciting, huh? It seems very adult-like and boring. But you know what? I don't find it boring at all. I find it liberating.  Each month that we sacrifice some luxuries  to pay off more student debt, we are getting that much closer to financial freedom in the future.

What does financial freedom look like to us?
It looks like saving up to 15% of our income for retirement.
It looks like me working one full-time job and loving it!
It looks like us not having to limit our grocery spending to $50 a week.
It looks like us not sweating bullets every time an unexpected bill pops up.
It looks like us living in a 2 bedroom apartment or even (gasp) a house.
It looks like us opening our home and cooking for people more regularly.
It looks like us not thinking twice about going on that week-end get-away.
It looks likes us being able to give above and beyond our tithe to causes that we feel passionate about.
It looks. . . pretty amazing! And it's within our reach.

How are you working toward financial freedom? Or, if you're on the other side of freedom, what was your experience?

How We Save Money Each Month

This post is directly related to my last post about being under-employed and under-paid. As a result of the limited funds, we have learned how to cut corners where we can. We are by no means experts at this, and there are still areas where we need to trim down, but for the most part, I think we are doing okay: I give us a B+.

1. No movies in the theaters. Let's be honest-- theater prices are insane! A couple could easily spend over $30 for 2-3 hours of entertainment. Compare this to the price of $9 a month for unlimited movies and TV shows on Netflix or a $2 new release from the nearest Redbox. When it comes to date nights at the theater, we use them sparingly. We have gone to the theater maybe 2 times in our nearly 2 years of marriage, and we are okay with it!

2. Cutting costs on special occasion cards. I love looking at the cards at Target; they are so shiny and witty. However, they are way over-priced for a piece of card-stock. When it comes to getting cards, I get them either at the dollar store where they sell slightly older cards 2 / $1, or I buy a package of generic cards and personalize the message myself.

3.  No fancy meats or cheeses. When it comes to buying groceries, I buy two types of protein: chicken and hot-dogs (and brats on special occasions.) Even though we both enjoy red meat, we know it is probably not the healthiest for us, and it hurts our wallets. As for cheeses, we buy Target brand Mozarella, Cheddar, and Parmesan (in a bag.) Fancy cheeses (though delicious) send our food budget over the edge. Let the upper class eat their red meats and fine gourmet cheeses. We'll stick to our steroid-pumped chicken and market pantry cheeses.

4. Saying "no" to Birthday dinners out. I know that we are going to sound incredibly stiff-necked on this one, but we have discovered that anytime our friends celebrate their birthday's by going out to some place swanky, we leave pinching our empty pocket books. We love our friends, and we love celebrating them, but going out to eat pricy restaurants that we would never chose on our own because of the over-priced "delicacies" has left us feeling bitter on more than one occasion.

5. Buying clothes at Goodwill. I am a huge fan of Goodwill. Just today, I went shopping for their 4th of july sale where all clothing items were %50 off, and I found some adorable shirts for $2.50 each. You can not beat these prices (even at Target), and I love that you get a nice variety of styles at Goodwill. Oh yeah, I also bought some adorable winter boots for $2.50. Hey, just because we're broke, doesn't mean I have to look like the queen of frump.

These are the areas where we have learned to cut back. We have some more goals in this department that include dumping our internet and cable bill and building up an emergency fund. But for now, we have figured out how to cut back and even have some fun while doing so.

What do you think of these money saving tips? How do you save money each month? We need all the tips we can get!

Why I Have 3 Jobs

My friends and family know that I am incredibly task-driven and often bite off more than I can chew. This has never been more true in my life than right now.

In August of 2013, I took a job at a small private  charter school working as a kindergarten paraprofessional. The job offer was timely and I needed the security of benefits and employment before Rob and said our "I do's" a few weeks later.

I have been at this full-time job for 2 years now and have learned a ton. I have also discovered that although I can work with younger students, it's not where my natural talents or passions find their home. I miss working with the slightly older, more independent students. Younger students have a lot of needs that they need to tell you about. Each minute of each day was filled with students' needs. After two years of this, I am pretty exhausted.

Furthermore, while the benefits were good, the pay was pretty low--$20,000 a year to be exact. I know that most people with a masters degree would never dream of taking a job for this salary. In fact, I could have this exact same job with only 2 years of post-secondary education; I have 7. So it's been a pretty humbling and tiring two years.

As a result, I have sought out opportunities that are more directly related to my career and can also help supplement my income. For awhile, I was trying to get into the admissions department at a university. To work toward this goal (and also compensate for my dismal salary), I started working in our apartment complex as a leasing agent every other week-end. This job involves a lot of customer service  and administrative skills. I was hoping that this experience would make me more marketable for admissions' jobs. Per hour at this office job, I make about what I made working at Caribou Coffee.

To help me get my fill of teaching and continue working toward my goal of teaching post-secondary students, I took an online teaching job with a non-profit company. When I started with this company, I was their first employee. I had hopes of helping develop the curriculum and teaching standards for this company. That dream was quickly shot down by another founder of the company who did not want to include curriculum in our teaching. I have been teaching now with this company for about 1 year, and I realize that it is a lot of work without really providing any promise of being more than what it is-- passive income for my employers while I am busting my butt every week for an addition $200-$300 a month.

I feel that my friends are often frustrated that I am constantly so busy with my multiple jobs. I understand their frustration, but I also know that they all make incomes that support them. It is easy to judge people and make assumptions; it's much more difficult to try and understand why people might be making the choices they are. Working three jobs, at about 50 hours a week, I am making about $25,000 a year before taxes. I am frustrated. I am tired. I am seeking opportunities to work smarter, not harder, but I am coming up with nothing.

And I know that even though I often feel alone in this frustration, I am not alone. I know that many people are in the same situation: underemployed with talents and gifts that lay dormant. What is your career story?

More Conversations with Dave Ramsey

The other day our financial planner called us to see how we were doing.  I should clarify-- we met with the financial planner one time and then realized we had an enormous amount of debt we had to tackle before we considered investing. So we had been indirect with her until this point, and she had continued to call us for the past year and a half.

I finally broke it down for her:  "We are following Dave Ramsey's baby steps until we are out of debt."
      "Well in that case, it may just not be a good fit for us to work together at this point" (did I sense frustration in her voice?) She went on:"I just want to make sure you're not overpaying on your loan payments."
    "You have no idea" I thought to myself.

I then explained that no where could we be saving at an interest rate that was comparable to our 6 to 7% interest rate on our loans.
    "No, but you can be investing at a rate much higher than that. See, there is a difference between finite and infinite interest which a lot of people aren't educated about." She went on to say that most student loans have a finite amount of interest, but most investments have an infinite amount of return. I tried to wrap my head around it, but the conversation was brief, and I think she sensed we were a lost cause.

After getting off the phone with her, I started second-guessing our plan. "Is it wise to be overpaying on our loans?" I asked Rob.
    "Portia, she was just trying to get into your head so you would start to doubt your plan and follow her plan instead."

Yes, that's likely true--it is her job to find and retain clients after all.  But ever since talking with her, I have been trying to look up everything I can find on finite and infinite interest and have found nothing. So how can I be "educated" on this topic Dave Ramsey? Is it even a thing? Or is it code for financial advisors trying to sell you something you don't understand?  

Conversations I'd Like to Have with Dave Ramsey

Rob and I were first introduced to Dave Ramsey by some of our friends who gave us his book, Total Money Makeover as a wedding present. Our first mistake was that we did not read this book before we were married. Our second mistake was that we read his book after we had financed a (newish) car.

But, we were still able to get back on track after these two set-backs. We have our monthly meetings, and we budget out everything for the month. In the process of managing our money, I have become somewhat of a Dave Ramsey fan fanatic. I regularly listen to his radio show; I receive his email updates, and I often ask myself "What would Dave do?" when trying to make financial decisions. However, I do have some things I would like to discuss with him.  I tried to use the online "submit a question" form, but I never heard back. So in hopes that some of my readers may have some ideas, I thought I would post the conversation topics that I would often like to discuss with Dave Ramsey here:

Question 1: I have a Masters degree in Literature, but I have been unable to get any full-time job related to my degree. (Dear Reader, please DO NOT get a Masters in Literature.)  Do you recommend I go back to school and get a more useful degree or should I continue to look within my area of education.

Question 2: I know that in baby step 2, (you can read all of Dave Ramsey's steps to financial freedom here or hear him explain it himself in the video below) Dave suggests you pay off all debt, minus your mortgage, using the debt snowball. According to Ramsey, the debt snowball is where you make minimum payments on all debts, and then put all your extra monthly income toward the smallest debt. Once you have the smallest debt paid off, you continue to use this method until you have paid off all your debts. However, the debt snowball assumes that you own a house. If you do not own a house, Dave recommends saving for a down payment after you have completed step 3 which is having "3 to 6 months Expenses in Saving." However, I think this is way too conservative. Yes-- buying a house is a big financial commitment. But at this point in the economy, so is living in a 2 bedroom apartment. Surely there can be a happy compromise here Dave. Every month for a 2 bedroom apartment in our city, we would spend in excess of $1000. That would be $12,000 a year that could be going toward a mortgage.

Question 3: This question relates to question 2. The other day on the radio show, a couple called in for their debt free scream. In other words, they had paid off all their debt, including their house & student loan debt, in four years. This couple was only 27, and they had been following Dave's steps for about 4 years. Dave congratulated them profusely and rightly so, but he didn't say anything to the fact that they owned a house while they still had student loan debt. This begs the question--isn't it possible to pay off student loan debt while owning / buying a house?


Question 4: I really admire how Dave Ramsey has helped millions of people get their finances together. But sometimes when I am listening I feel like I have done something wrong with my life, with my finances. When I was 20 something, I wasn't really saving for the future; I was doing non-profit work in China. Does this make me irresponsible or careless with my money? I don't think so. I was frugal and paid attention to my finances; I lived and traveled within my means. However, I certainly did not get ahead financially. Some of my friends who have also returned to China are in similar situations as me. I would love for Dave to give some perspective & advice to this group of people: what can we do now that we have some career and financial gaps in our lives?

From one of your biggest fans,

Portia

Happenings of a Year

It was Rob's 30th Birthday a few days ago. As I wrote out his card that morning, I couldn't help but remember how far we've come this past year.

 Last year, around this time, Rob started to mention that he thought the time was here for him to buy a new car. His 2004 volkswagon was a gas guzzler and required expensive repairs and upkeep. I, in trying to be a supportive wife, said I thought that was a good idea, and suggested we should go car shopping together.

 We found a car that we both loved! It was a 2012 Camry SE, leather interior, and it drove as smooth as melted butter. Of course, it was a couple thousand dollars more than we had planned on paying, but when you fall in love, what can you do? So we financed the car and drove it off the lot on Rob's 29th Birthday! It was a beautiful day! We proudly drove our shiny, new car to Minnehaha Parkway and walked beside the river. We even found $20 on our walk. Finally, we ended the night listening to live music and enjoying a delicious meal at the Icehouse.

About one week after this beautiful week-end, we sat down and looked at our finances. Together, we had a large amount of student loans. I had been unaware of the exact number, and the grand total hit me like a ton of bricks. "All my dreams are shattered." I said, showing my immaturity in its finest form. I started to cry; I played the blame game. It was a horrible memory, and its effects have stayed with me like a nasty cold I can't quite recover from.

That entire month, Rob and I were at each other's necks. Only one month into marriage, and true to status quo, we were fighting over money. But, we started to read Dave Ramsey's book, Total Money Makeover, and it started to give us hope that we could turn the ship around. We created a budget and did our best to stick to it. We started living below our means and started throwing all our extra money from the month toward our smallest debt to begin the debt snowball. In March, we decided the financing payments for the car had to go. We paid cash for Rob's parents 2000 Mazda protege and sold our beautiful new car back to the dealership. We took an initial loss on the value of the the car, but we knew that we would make up for the loss in the long run and have that much extra cash per month to put towards loans.

We are still not there to having our debts paid off, but we are getting closer. We have learned a lot about being content with what we have, where we live, what we drive. We don't spend a lot on traveling, but we were blessed to be able to take a trip to Chicago this summer. Rob has given up buying DVD's. I have given up buying books and Bath and Body Works products (except for extreme sales.) We try to cook more at home; we hardly go out to movies; we still eat out, but we don't go above the budgeted amount for eating out that month.

And our marriage has thrived as a result of being united about money. We still disagree sometimes, but we work through it and compromise. We forgive each other when we mess up. We dream together of financially freer times. We're not competing with the Jones, and we're okay with that.

I love that we are united, not by material things, but by something and someone bigger. I am so thankful for this humble man, full of integrity who I get to do life with! I am honored to be the first one and the last one to greet him everyday! And I can't wait to find out what God is going to show us in this coming year!