End of Year Wrap Up and 2012 Goals

Hello, and Happy Holidays, folks!


Whew! It's been quite a year; I have a total of four jobs (one full time, three part time) and am beginning to make a dent in my student loan debt. By the end of this year, I will have increased my income by over 70% (compared to my one full time job). My goal at the beginning of this year was to double my income, and while that didn't happen, I am pleased with what I've managed to achieve.

As a reminder, my goals for 2011 were:

• Attempt to double my income (from roughly $40,000 from the day job to $80,000 including all of my part time and full time income. With all four of my current jobs, I'll only make around $65,000 in 2011 so I need to add about $15,000 in additional income to get there);
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds;
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012;
• Continue paying at least the interest on my student loans.

Here's how I did:

• Attempt to double my income: I will gross around $73,000 this year, so I almost made it!
  
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds: I picked up an online teaching gig that should hopefully continue into 2012 - I will continue looking for realistic opportunities to increase my work in this area.
  
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012: I changed my tactic on this - instead, I am focusing on my student loan debt.
  
• Continue paying at least the interest on my student loans: See above. I have paid off over $10,000 of the principle balance on my student loans in 2011, bringing the total debt to (finally) less than $50,000!! It hasn't been this low since before I finished graduate school in 1998!

Now, going forward, what are my goals for 2012?

• Reach a gross income of at least $80,000 by the end of 2012;
• Continue to apply for online teaching positions that will help me meet the above goal;
• Continue to throw as much extra money as possible at my student loans, with a very ambitious goal of paying it down to $25,000 by the end of 2012 (I currently owe just under $50K);
• Associated with the above goal, make sure that I have a handle on my discretionary spending - in 2011, I made more money, but I also SPENT more money. In other words, i need to keep my eyes on the prize!

So that's it! I am a numbers nerd, so I am having fun with my various spreadsheets, tracking (primarily) my income levels and sources, as well as my debt payments. I see 2012 as a challenge, but one that I'm looking forward to, as it will move me closer to my goal of getting rid of my debt!

I hope you all enjoyed a wonderful holiday and that 2012 brings you much happiness, prosperity, and wisdom!

Infrequent update. . . .

If you're wondering where I've been in the last six months, I picked up another job, which has just about stretched me to the limit. I'm working a LOT but am also making a nice dent in my student loan debt, though I've still got quite a ways to go. Here's where I was the last time I checked in with you all:

Debt Reduction Progress
Second Mortgage Debt: $31,400::::$26,257 84%
Student Loan Debt: $61,762::::$56,387 91%
Primary Mortgage Debt: $167,500::::$158,016 94%

And here's where I'm at now (focusing primarily on student loan debt):
Second Mortgage Debt: $31,400::::$25,888 82%
Student Loan Debt: $61,762::::$51,881 84%
Primary Mortgage Debt: $167,500::::$156,757 94%

Little by little, I'm getting there; and since I picked up a new job in late spring/early summer, hopefully my student loan debt will decrease even quicker over the next year. About 20% of my payments are going to service interest only right now, so that's a bit frustrating, but that number will also decrease as my balance goes down.

I have no idea when I'll have a chance to update again, but will try at least every couple of months. . . .

I hope you're all continuing to survive the recession (that supposedly ended two years ago)!

Pseudo-advice. . .

I am naturally drawn to those '10 best. . .' or '20 best. . .' of whatever, whether it be '10 best places to retire' or '5 best cities to find a job', or what-have-you. I'm not sure why I love them so much but they catch my eye and my mouse click at the same time.

Here, though, is the most idiotic 'best of' list I think I've ever seen: 100 Best Money Moves.

The vast majority of these "money moves" involve some form of consumerism, whether it's purchasing the 'best' video camera, obtaining the 'best' rewards credit card, or buying a $350 thermostat to 'save' money on heating and cooling. It's absolutely maddening that marketers are basically advertising to us by pretending to give us money advice!

Here's some advice, and it's free: Save more money. Pay down debt. Avoid ridiculous consumerist 'best of' lists.

Look to the right. . . .

and you'll see my handy dandy Debt Reduction Progress bar, which I update every month or so. Since I can't figure out how to put the bar into an actual post (why the HTML works in the sidebar but not in my post is a mystery to me. . . .) I wanted to include the current numbers and percentages in this posting so I can look back later and see how far I've come. It seems that each month the percentage of repaid debt falls by just 1%, though my math-muddled mind seems to believe that this will increase more quickly as the debt amounts fall?

So, with that, here are the current numbers:

Second Mortgage Debt: $31,400::::$26,257 (84%)

Student Loan Debt: $61,762::::$56,387 (91%)

Primary Mortgage Debt: $167,500::::$158,016 (94%)

The first number is the original debt amount, the second number is the amount I currently owe. The percentage reflects the percentage of the original debt I still owe. The reason I like the percentages is that when I get demotivated and depressed and discouraged (as happens periodically) I can look back and see that I am actually making some progress, slow though it may be.

A Day Late . . . .

And a dollar short. . .

Where was THIS guy during the housing boom?

Sorry for the silence, readers! I had (minor) surgery in March and boy did it throw me for a loop!

The Tax Man taxeth. . . .

And then he giveth back! I was pleasantly surprised by both my federal and state tax returns this year. For whatever reason, although I earned just about the same amount this year as I did last year, I received a larger refund - by about $400. Part of this is due to the fact that one of my employers is finally taking out state taxes, which helped. I have no idea what led to the federal refund, although I changed my withholdings several times last year (my human resource office must hate me) so maybe I had more taken out than I thought I did.

Anyway! Both refunds have now been deposited in my bank account, which resulted in a nice hefty payment to the student loan services. Yay! I've still got some of the state refund in my account and can't decide whether to use it to pay down my credit card (still somewhat high from the car and cat fiascos) or put it in savings or put it towards my second mortgage or student loan.

Sometimes it's nice to have more money than one knows what to do with, eh? That doesn't happen often so I'm going to revel in it for awhile before waving goodbye to those extra dollars (which, after all, were mine to begin with anyway, right?)

How to get a pair of designer jeans for $6. . . .

Awhile back (early December, in fact), I took a bunch of clothing to two local consignment stores. Last weekend, I finally had a chance to visit one of the stores to see if anything had sold. As it turns out, I had $90 in sales! I could either choose 40% in cash or 60% in store credit. I was leaning toward the cash until I found a pair of designer jeans that *almost* fit me - luckily they're a brand (Joe's) that stretch and stretch and stretch, based on past experience.

So I bought 'em and only had to hand over $6. Granted, I 'spent' an additional $54 of store credit but that was based on the sale of clothing I hadn't worn in years. So I consider this to be a good deal, especially since the length of these jeans is perfect and being rather petite (5'4") that's a definite plus! And, after two days of wear, they've already stretched out to such a degree that I don't feel like they're too tight in the waist or hips. Begone, muffin top!

I still have to make a visit to the other consignment store; perhaps I'll that next weekend and see what's on the books for me there. . . .

Frugal fail. . .

Back in November, I wrote about my new commitment to use cash for many purchases. It's been working well for me - I rarely go over my budget and it's been a great way to keep a handle on my 'miscellaneous' purchases. In addition, I know how much I've spent because I can monitor how much is left in my envelope as the end of the month nears.

This month I was reminded of what a great system the cash envelope system really is because I actually failed to get my cash budget at the beginning of February. I went to Target as usual (they have an ATM from which I can get cash without a fee) and stood for five minutes in front of the ATM before asking a nearby employee whether the machine was broken. She confirmed that it was (WHY she didn't mention this to me during the five minutes I was waiting for my money or actually put a sign on the machine is beyond me).

Frustrated, rather than find another no-fee ATM in the area, I used my debit card for my Target purchases and bought my groceries with my debit card as well. Why I didn't get cash back from either of those transactions is a complete mystery to me. I have continued to use my debit card for all of my purchases this month.

Which, unfortunately, means that I have overspent in the 'miscellaneous' category on items that I wanted but didn't necessarily need (wireless mouse for my laptop? Check. New flashdrive for my teaching resources? Check).

The rather expensive lesson here is that I need to keep up with my cash envelope system until such a time that my financial goals are met. That means keeping a list of no-fee ATM's in my purse so if my go-to ATM is broken again I can easily find another source of cash.

Best laid plans. . .

The month of February was shaping up to be a relatively good one, financially. Meaning that I was going to send more of my hard-earned dollars to pay down my student loan and/or my second mortgage.

Then on Friday, I ended up spending over $500 at the vet with a sick cat. After tests and more tests, they still don't know why she was power-vomiting last week. However, after purchasing some really, really expensive food, I think my allergic cat is finally on the mend. Unfortunately, my credit card bill has now expanded to match the frustration I was feeling last week as I cleaned up the floor multiple times.

Sigh.

I know that I did the right thing since my cat is like family. Where's the limit, though? If she were still throwing up (and I don't know yet if we're really out of the woods), I'm sure the veterinarian would have suggested even more expensive tests (an ultrasound was next on the list). I love my cat, but I'm just not sure I'm ready to spend thousands of dollars on tests and treatments that may or may not be helpful.

I've been feeling sorry for myself for several reasons lately, and this last weekend just about sent me over the edge. Then this morning I listened to an incredibly upbeat woman on the Max (yes, I eavesdrop regularly) talking to an acquaintance about how she's been 'clean' (i.e. off drugs) for six months, she has a job, she has a house, she's taking care of a family member, and she's trying to get her child back. And it hit me that even though I'm feeling overworked and underpaid and like I just don't have enough time for fun, my life is fairly cushy. I have four jobs. I can pay all of my bills and then some. I'm healthy. I can afford to pay $500 at the veterinarian because I still have an emergency fund.

Time to stop whining.

Frugal tax filing. . . .

For the first year EVER in my adult life, I haven't yet submitted my tax returns. I'm usually the person who sends in an electronic return on January 31st at midnight (after all of my W2's and associated documentation has arrived in the mail or in my email inbox). I can't WAIT to get my hands on my refund each year!

There was a time in the not-so-distant past that my refund would have been spent on shoes, or clothes, or trinkets, or, yes, more shoes. For the past couple of years, my refund has gone straight to debt repayment. And that's exactly where this year's refund will go, just as soon as I'm able to file!

Although I'm finding nothing about this on the H & R Block website or even anything recent on the IRS website (the last press release was dated January 7), I remember reading that I needed to wait to file, since the tax changes late last year are not yet reflected on certain forms (Schedule A) that I need to complete. So wait I will. While twiddling my thumbs and wondering how much ole Uncle Sam will give back to me this year. Hopefully enough to make a smallish dent in my student loan debt, since I was only able to send $950 in that direction last month.

One day I'll be able to count my tax refund as a nice little gift, to be used for travel or other fun experiences. For now, that money is needed to pay down the 'stupid tax' that I owe to the U.S. Department of Education. . . .

Frugal wardrobe. . .

As I continue to cast a critical eye over my belongings (how did I get so much STUFF?), I keep coming across these projects that are designed to remind us how little we actually need!

First, I read about the Six Items or Less project, in which participants pledge to choose SIX items of clothing (not including undergarments, outerwear and accessories, of course) from their closets and wear only those items for an entire month. The idea is to emphasize how much we already own versus how much we really need. I'm embarrassed to admit that there are clothes and shoes in each of my three bedroom closets, and I STILL feel as if I don't have anything to wear! I considered joining Six Items or Less, but I really don't feel that I could create a work-appropriate wardrobe out of six items.

Then I saw this: Project 333. In this project, you choose 33 items to be worn over a period of three months. This is more like it! I already use about 20% of what is in my closet, and a project like this could help me to cull the items that are simply taking up space. I did take some clothing to consignment shops in December (ack! It's time to find out if they sold anything!) so I'm making a dent, but I want to try to create a more minimalist wardrobe with quality items that I actually like and will wear.

I'm not sure when I would have the time to go through my closets and find 33 items; I'm thinking in the spring, because I am almost positive that I will try to work less than I am now, even if it slows down my debt repayment. I'll keep you posted!

Finally back. . .

Sheesh! Being sick just about knocked me flat! And, unfortunately, sapped some of the motivation and joie de vivre from my life. I don't know if it's because I'm coming off of an exhausting cold and am not yet feeling 100% again, or if I need to readjust my work life (and debt repayment plans), but I feel as if my debt payments are just a drop in the bucket.

When will I start to see a real difference in my student loan debt? Granted, it's a huge balance (in my own mind, anyway) and it IS going to take awhile, maybe longer than I originally planned. At the beginning of January, my balance was $59,689. After sending about $1,000 to the U.S. government last month, the balance is now just above $59,000. All that interest is killing me!!

Of course, at least I'm making payments, right? I'm not just ignoring the fact that the interest is accruing and digging me deeper in debt, as I did for the ten years after I graduated. You have to start somewhere, I suppose, but perhaps my 'plan' is a little bit too optimistic, given that I need some time to relax, socialize, sleep, and importantly, exercise.

I am hoping to have my gung-ho motivation back by the end of February, if not sooner. Until then, I'm going to keep plugging away and start thinking about how I can rearrange my work schedule(s) so I'm not overwhelmed. . . .

Ugh.

Sorry for the blog silence, folks! I'm sick - for the second time in less than three months. Hmmm. Could it be that I'm working too hard? It's definitely a reasonable assumption, given the fact that I'm generally an incredibly healthy person, and I'm now working between 60 - 70 hours per week.

I'm teetering between working as much as possible for a short period of time (year to year and a half) to pay off a LOT of my debt, and taking it a little easier so I don't burn out (and ruin my health).

Like many people, I want the best of both worlds, of course!

I hope to be past the worst of this flu/cold/strep/whatever-it-is by the weekend! I hope you are enjoying your week!

5 frugal grocery shopping habits. . . .

People are often amazed (my own family included) that I can subsist on a grocery budget of $100 or less each month. While this seems rather anemic to some (my dad can't seem to stay under $600 - and it's just he and my mom), I do eat well and I can generally manage to avoid most pre-packaged foods (I'm thinking of frozen dinners, here).

Here are my five top tips for bringing a frugal mindset to the grocery store:

1. Make a list. Let me repeat that: MAKE A LIST! Doing this implies that you've put some thought into what you're going to eat for the week or the the month (see tip number two, below). It also reduces the odds that you will throw things in the grocery cart that you don't need, have no intention of using, or are simply spur-of-the moment whim items (see tip #3 for more on this);

2. Plan your menu, at least through the week. If you know that you're going to be home for dinner five nights out of seven, and that you want to bring your lunch to work every day of the week, spend some time cruising the recipe websites to find recipes that you know you'll use. Focus on those that can be made ahead, and avoid those that use expensive, hard-to-find items;

3. Don't go to the grocery store hungry (and for the ladies: try to avoid going when that ole PMS rears her insatiable head. In my world, shopping during this period - no pun intended - is a sure bet that I'll be coming home with chocolate covered cookies, buttery croissants, or red wine. Or all three);

4. Don't be afraid of store brands. If you don't at least TRY the can of store-brand diced tomatoes, you'll never learn whether it tastes sufficiently delicious to merit purchasing over the higher priced brand you usually buy. Some store brand items I avoid, while others work just fine for me;

5. Comparison shop. A couple of years ago, I took the time to note prices of items I often buy at several area stores. That way, I had a list of the store that frequently beat the others (for me, this is Winco) in terms of price. I NEVER shop at Safeway or Albertson's unless I'm desperate or have an outstanding coupon deal.

You may have your own methods for saving money at the grocery store; please feel free to share them with us in the comments!

Sigh.

I'm pretty sure I've mentioned my 15 (almost 16) year old 'beater' car, which I'm trying to keep running until I'm debt-free. Since I take public transportation, I put about 2,500 miles a year on it, if that. As far as maintenance, I get regular oil changes and that's about it.

For the last few months, I've noticed some 'sputtering' in the engine when I put my foot on the gas after changing gears. I knew I needed to get it into the shop, but I've been putting it off because I didn't want to spend the money. Well, now I have no choice!

While on my way to the grocery store yesterday it did its little number, but much, much worse than it ever has been. I was a few blocks from a dealership, and in my panic I drove in there and just left it in the service bay (but not before the salesmen tried to sell me a new car). I normally wouldn't go near a dealership for car service, because I just feel they charge more than the neighborhood mechanic (who really isn't in my neighborhood, but came well-recommended).

Anyway, I've just gotten the estimate, which will be about $500 for things that would have been fixed during the tuneups I never get (the last one was four years ago). And that's just to keep the car running! An additional $500 would fix the oil leak and a tear in the "CV joint" (whatever that is). Serious issues, but not in my budget, unfortunately.

I know I'll put this on my credit card (and immediately pay it off, of course), though I'm hemming and hawing about whether to take it out of my fairly healthy emergency fund (is it really an emergency if I could have prevented it by simply taking the car to MY mechanic weeks or months ago?) or whether to use the money from my extra jobs, thereby NOT sending that money to my debt.

Every time something like this happens (which, let's be honest, isn't all that often - the car is pretty reliable usually) I start to fantasize about buying a used Toyota and just dealing with the $150 a month payments. Bad, bad, bad.

NOTE: just had a thought. My emergency fund earns 1.10% interest. My debt 'earns' between 8.25% and 8.9% interest, depending on which on we're talking about. Seems intelligent to pay off the debt and take the $500 out of savings, no?

And then there's this. . . .

For pete's sake, can we get some good news over here?????

Frugal housing. . . .

Last week, I was dithering about whether to pay down my second mortgage early, or start working on my student loan. I was questioning whether, with the sad state of the real estate market, throwing money at my second mortgage was really the intelligent thing to do, since I don't know whether I'll ever get that money back (I'm thinking not).

I got some really good (and thought provoking) comments on that blog post. One of my commenters mentioned that she thinks that the market in her area (another part of Oregon, I believe) has finally hit bottom. I'm hoping that's the case for Portland, though I'm still not convinced.

That comment made me think about all of the news articles written by supposed 'experts' who predicted that we had (or would) hit bottom in 2008, or 2009, or 2010, or even 2011! It seems that those of us in the trenches (like my commenter) may have more insight than the experts! Here's a sampling of the articles I've read over the years about this very subject (I'm a little obsessed with home values these days, as are many of us):

2008: The well-known Kiplinger's predicted that the housing market would bottom out in 2008, as did the equally well-regarded Bloomberg (though, in its defense, Bloomberg was really just parroting the predictions of a bunch of bankers).

2009: My very own Oregonian forecasted that in fact 2009 would be the magic number for a bottoming-out of Portland housing prices, while Moody's (via the Wall Street Journal) predicted that 'some' markets would bottom out in 2009.

2010: Reuters reported that 'Home Prices May Bottom Out in 2010' (I love how they start to qualify their predictions with the words 'may', 'could', 'some', 'possibly', etc, meaning that they don't want to commit to anything but they know we're going to read their article anyway because we're all desperate for good news. Way to protect your backside, economic experts!) Meanwhile, Standard & Poor's indicated that 2010 would be the year housing values stopped their downward slide, though they were nice enough to tell us that we might not see values at 2006 levels until 2020! Also, there is this rather interesting graphic that shows various predictions by the 'big players' in the world of real estate values (click on it for a larger version):


And now, we come to 2011: It's early yet, so there aren't many economists making predictions in writing, but I did find this one from Interest.com indicating that 'most' experts expect home prices to bottom out this year.

What does this all mean? Well, call me crazy but it seems as if all of those 'experts' have no freaking idea when the housing market will bottom out, and never did. They're guesstimating an end to the housing crisis based on, I'm sure, years of expensive education at Ivy League schools and various economic indicators. None of which has amounted to a hill of beans, apparently.

Meanwhile, I just tortured myself by checking zillow.com and learned that my home has dropped an additional $4,000 in value in the past few weeks.

Frugal decisions. . . .

One of the more interesting topics in the U.S. economic news is this tax cut that will (hopefully) leave an additional $50 to $85 dollars in our paychecks next year. This, apparently, is due to the fact that individuals won't be paying into Social Security in 2011 (which, honestly, seems rather inadvisable given the sorry state of our Social Security system, but I'm not making the decisions in D.C., folks!)

In any case, I came across an article with suggestions for how to use this windfall. This may be especially useful for those of us who - whether currently or in our spendthrift past - may be likely to fritter that money away as soon as it shows up in our paychecks.

• The first suggestion is a great one (because I've already put it into practice with my first January paycheck!) Basically, the idea is to avoid a post-Christmas financial hangover by putting those extra dollars away in a special holiday savings account, thereby gaining a nice cushion when the gift buying season raises its expensive head once again;
• Second, how about starting a fund just for the car maintenance costs? I have actually mentioned wanting to do this, since I drive an old car and am constantly anxious about spending money on new brakes, new tires, tune-ups, etc. Unfortunately for me, I'm not sure I have room in the budget, but it's a great idea all the same;
• How about some extra education (such as a certificate or associates degree) that will put you in the running for a new, more meaningful (or better compensated) job? I'm currently working four jobs and two of them came as a result of the degree I recently completed;
  
• Medical costs can add up over the year, so this extra cash could be used to create a medical fund to pay for prescriptions and copays. Although the article doesn't mention it, I think this extra money could enhance your health by paying for a gym membership - as long as you actually use it;
• Finally, how about having some well-earned fun? During the Great Recession, many of us have felt overworked and underfunded and as a result we've replaced vacations with 'staycations'. If you feel the need to add some (inexpensive) fun to your life once again, an extra $50 to $80 a month might be just the ticket!

I'm not sure when this new moolah will show up in my check(s), and to be honest I'm not exactly wondering what to do with it - mine will probably go towards more debt repayment, since that seems like the focus of my life at the moment. I do know it might take a couple of months for human resources departments to get all the details down so we may not see it until February or March. You can bet I'll be keeping an eye on my bank account to ensure that the funds are given the appropriate home (i.e. debt!) before my spendthrift side can get its grubby paws on it. . .

Frugal doubt. . . .

I sort of knew this was coming. Inevitably at some point after I've made a decision I start to question myself. In this case, I'm questioning whether I should pay off my second mortgage first, or wait on that and pay towards my student loan instead.

I keep thinking that I may be throwing good money after bad by paying down my second mortgage. After all, if (and this is a big IF) the housing market ever recovers (or just stops resulting in decreasing value) then I may be able to sell my house without creating equity by paying off my second mortgage debt. Right? Here's what I read in a recent US News article about who will continue to struggle in 2011:

Homeowners. Americans have lost about $9 trillion worth of household wealth since 2007, largely because of falling home values. The rout isn't over, unfortunately. Most forecasters think home values will decline another 5 to 10 percent in 2011, as high unemployment causes more foreclosures and a glut of homes pushes prices down. The good news, if there is any, is that the housing market may finally hit bottom in 2011, with home values stabilizing after five years of declines. That doesn't mean home prices will shoot up any time soon. But once buyers believe that prices have stopped falling, they'll be more inclined to buy, the first step back toward a healthy housing market. Stabilizing home values will also help owners do better financial planning, since they'll have a firm idea what their home is worth.

Sigh.

Meanwhile, I could be working on that student loan, almost half of which may be paid off by the generous gift of a family member. Meaning that I could, potentially, have my student loan paid off by mid-2012. At which time I may be able to sell my house and just break even. Right?

Or is this just a case of 'six of one, half-dozen of the other'?

Happy New Year!

Welcome to 2011! Little did I know when I started this blog in January of 2008 that I would learn so much and come so far in my struggle to overcome my debt and control my spending. Over the past three years I've heard from so many of you who are in the same situation, either just beginning your journey or close to the end. It helps so much to know that I'm not alone in this battle!

I've also heard from many of you who "walk the talk" so to speak; people who have always, it seems, lived frugally. Those who are living within (or beneath) their means, who espouse the ideals of simple living without feeling as if they're missing out on anything. I am hoping to join the ranks of this latter group within the next two years. Until then, I'm continuing to ramp up my extra income while attempting to control the negative financial effects of my 'shopping gene' (I think I'm generally pretty successful at this, although this past Christmas I fell off the proverbial wagon).

With that said, here are my goals for 2011:

• Attempt to double my income (from roughly $40,000 from the day job to $80,000 including all of my part time and full time income. With all four of my current jobs, I'll only make around $65,000 in 2011 so I need to add about $15,000 in additional income to get there);
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds;
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012;
• Continue paying at least the interest on my student loans.

So there you have it! We'll see how things go; I'm definitely committed to following through with my goals, although they seem rather daunting at this stage. I hope you'll continue to join me in this journey!