Debt Triage – First Stop the Bleeding

Debt Triage PINTEREST

In an emergency room, patients are treated based upon the urgency of their need for care.

If you are reading this and you are living pay-check to paycheck, and/or you have past due bills, or are just trying to stay on top of all the debt you have accumulated, you have a debt emergency.

The very first step for anyone in your circumstances will be to “triage your debt”. What do I mean by “triaging” your debt? It is this – Before you can dive in and begin working a system of overall debt repayment and savings, you have to first start with vital matters.

Are you behind on your rent/mortgage? Utilities? Your car payment? These are your necessities. Take a look at them first. Make a list and address each one of the following in order:

Food and Shelter

Your primary needs are food and shelter, then critical utilities (cable and internet are not critical- unless you work from home and cannot work without internet). Before you can even begin to start paying down your debt, you must get these items current. If you lose your shelter and cannot provide sustenance for you or your family, the least of your worries will be making sure your AMEX credit card gets paid. Talk to your landlord, will they forgive late fees, will they let you pay your rent a week late so you can get caught up on your utilities. Will they break the rent into two payments so that you have more to go around for each paycheck? Be honest with them – be creative. As my grandma used to say, “closed mouths, don’t get fed!”  You won’t know, unless you ask.

House-hacking.  One idea is to “house-hack.”  Can you temporarily rent out a room in your home.  Or can you rent a room/rooms in someone else’s home. Housing costs are most often our biggest expense and if you are able to change this one thing, it may be enough to give you the relief you need to get all the other areas under control. It may be humbling. It may be inconvenient. You maybe sacrificing your privacy.  Remember this is temporary and sometimes, we must do the hard things.

Utilities

After food and shelter, are utilities. If you are behind, call each one of them and work out a schedule of repayment AND STICK TO IT. Often, the dread of calling can be debilitating – I totally understand.  But, I promise, you will feel better once you have a plan.  I also know (from experience) that in the vast majority of instances, if you simply explain your situation – a lot of the time they will be able to help you. Besides, you also don’t want to find yourself in a situation where they get turned off and you have to pay reconnection fees.  This will only compound the problem.

Transportation

Next is transportation. Can you negotiate with your lender to perhaps postpone a month’s payment so that you reflect as current and then possibly use the freed-up expense to get caught up on your shelter needs? Will they forgive late fees? What else can you do? Perhaps you temporarily use public transportation or some other means of transportation and forego a vehicle all together? Be creative here.

Perhaps you need to sell your car and purchase one outright to get rid of your car payment?  Maybe you car share.  Remember, this is an emergency and you need to do what you can to stop the bleeding.

All Other Debt

The last priority is to bring current all debt.

But, before you begin focusing on your debt there are other steps that you will need to take, including assessing your income vs. outgo, total over-all debt situation and creating a budget. For now, focus only on triage – assessing in order of urgency and treating the most critical of issues before moving on. This is not to say that your overall debt situation is not important or that it is not an emergency. It is – debt freedom is an emergency. However, as with the emergency room, for now it can wait until critical needs are stabilized.

In an emergency room, the doctors and nurses work quickly, they work with purpose, they assess, treat and move on to the next patient. You will do the same with each necessary expense that is past due. Doctors and nurses also do not pretend that a situation is not as bad as it seems – to do so would cost lives. You have to triage your debt with an open and honest heart. Truly determine where you are with your necessary expenses. “Treat” each debt emergency as if your life depended on it, because in reality – it does. How can you be the parent – wife – husband – employee – friend – you are meant to be if you are consumed with worry about where you will live or how will be get your next meal – you simply can’t. And I am here to help you do that.  I care about your well-being and I want to see you succeed financially.

In the next several series of posts, we will be addressing the financial fundamentals so that you can achieve financial independence and begin saving.  But for now, first things first. Be brave.  You can do this!

Love and Prosperity,

Your GirlFIday

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Don’t Be An Ostrich – You Can’t Hide From Your Debt

Don't be an ostrich PINTEREST

The first step in getting out of debt is to assess your situation. Over the years, working with hundreds of bankruptcy clients, I have seen over and over what I call the “Ostrich Syndrome”.  The enormity a clients debt situation is so hard to face they instead ignore it.  And I will be perfectly candid here, when I say “they” I include my husband and I in this category.  As we struggled over the years, we put our heads in the sand several times.  What we can both tell you is that ignoring your circumstances does not make this situation any better.  You too might be an Ostrich if:

  • Instead of opening your bills each month you stuff them in a drawer telling yourself you will get to them later.
  • You fail to answer all calls because you fear it is a bill collector
  • You do not check your bank account balance – afraid it is a negative balance
  • You do not balance your checkbook
  • You do not know how much you are in debt because you have not looked at your credit balances
  • You have not checked your credit report
  • You do not answer your door because you are afraid you are being served for a lawsuit

Does any of the above sound familiar to you?  Do not be ashamed or afraid.  Face the truth head on.  Much like an alcoholic or any other addict must do, you must admit where you are and how you got to where you are so that you can begin the process of healing.  You cannot skip this step because interest does not stop accruing, balances do not go down, bill collectors do not magically disappear, lawsuits do not get dismissed, negative balances do not turn into positive ones.  You cannot get financially healthy until you first know how bad things really are.

Adulting is hard.  But it does get easier.  Especially when you have help and know that you are not alone.

Let’s get started…

Assessing where you are:

  1.  I suggest getting out a pen and paper, or if you are a spreadsheet-type person, like me, start a spreadsheet.  More accurately, you may need to create more than one. At a minimum, create a list of every single monthly expense you have.
  2. You need to know the present balance, the regular monthly payment, past due amounts, if any, and due dates.
  3. Do the same thing for each debt you have.  ALL OF THEM.  Credit cards, loans, loans from mom. Collection accounts.  Everything.

You can combine the two lists, or keep them separate, whatever helps you feel organized and presents to you a clear picture of what you currently owe and what you owe going forward.

Determine what you have:

  1. What is your net monthly income coming in?
  2. When does it come in?
  3. If you have irregular incomes, go back to the past 3-6 months and chart each month’s average – or see if you can determine a baseline of the minimum you know you will receive. Anything extra will be extra.
  4. Do you have any savings?
  5. Do you have any items that you can sell?
  6. How much extra cash can you come up with to kick-start things?
  7. Can you hold a garage sale?
  8. Can you work overtime?
  9. Uber? Lyft? Amazon Flex?
  10. Do you have a side business you can supplement your income?

It’s time to really get creative.  If your child was sick and you had to pay for a medical procedure in cash (without committing a crime people!) how much money could you come up with?  Think of things in these terms and see what you can do!

Now that you know what you owe…OUCH, I know that hurt…and know what you have, the next step will be to create your plan.  Your Budget.  Get amped up.  Get excited.  You no longer have your head in the sand.  Be proud.  That was hard and you are still here.  You are about to kick some #ss and take names!  It’s time to attack.

Next week we will discuss your strategy for getting out of debt, stay tuned.

Love and Prosperity, 

Your GirlFIday 

 

 

 

 

 

 

Hidden Debt – Shining a Light on Debt Shame

Debt Shame PINTEREST

I try to be a pretty open book.  I do not find it difficult to share the mistakes we have made financially.  So, the thought that debt, and the magnitude of others debt, would be something that many simply keep secret was surprising to me.  This came to light during a discussion with a colleague.  I was sharing my passion about helping others get out of debt and how I would love to share it on a larger scale.  She looked at me in surprise and said, “do you really think people will talk about it?”  The more I thought about her question – the more I recognized the magnitude of the issue and the shame that surrounds it.

We live in America.  This is the “Land of the Free”.  This is where dreams come true and anyone can make it.  Others risk their lives to live here in pursuit of their dream.  So, what does that mean for those of us who have or who ARE struggling?  Who are burdened by our debt?  In our minds, right or wrong, we are failures.  We have fallen short.  There is something in us that is deficient.  And all of that brings us shame.  Failure – shame.  OUCH.

Shame is powerful.  Shame can lead to paralysis.  It can lead to secrets.  It can prevent us from seeking the help we need.  Shame at its root is fear.  Fear of being judged.  Fear of rejection.  Fear of losing something or someone.  Since the beginning of time fear and shame have been with us.  In the Garden of Eden, it was shame and fear that led Adam and Eve to hide themselves from God.  Today, we suffer the same fear and shame when we make poor choices.  Often, like little children, our first reaction is to hide what we have done.  What we must realize; however, is that healing, success, and growth will not happen until we can expose these missteps, bring our failures into the light and seek to make right our poor choices.

I can tell you more times than not, when my husband and I have shared our past failures, what has happened is someone later comes to us and asks for help or they share that they, too, had similar circumstances with debt and how they turned it around. Not once have I had someone shame me or judge me (at least not to my face).  Does it mean that you have to shout your debt situation from the street corner or stand up in front of a room and proclaim you are a failure with debt?  Of course not.  But you do need to come out of hiding.  Seek out others.  Talk about it.  For now, maybe that may simply mean you have found this site and you comment or message me how to get started, or you have picked up a book or joined a Facebook group full of virtual friends. Whatever route you have chosen and you feel most comfortable with – just get out there so that you can finally break free of your debt and move towards a life of financial freedom.  You will be glad you did and I am certain you will discover that the rewards of facing your shame are far greater than the fear that kept you shackled to it.

My hope is that I can be a resource to you.  There is nothing that you have done that will surprise or shock me.   I’ve made some doozy mistakes in my lifetime and we have turned things around.  Chances are we have been exactly where you are.  But most importantly, there is no shame here.  Lift your head, be brave and breath in….and then exhale and get to work. How can I help?

Love and Prosperity,

Your GirlFIday

How to Save 38 Percent of Your Income

How to Save 38% of Your Income

When we began this Financial Independence journey back in May of 2017 – our savings rate was abysmal.  It was so abysmal that I really had no idea what a “savings rate” was.

I first heard the term years ago when I stumbled across my very first Financial Independence blog trying to find a way to quit my job and live a “laptop lifestyle.”  On one site in particular it was discussing people who were saving 40% and 50% of their incomes.  Which, frankly, I thought was insane. But at that time, I wasn’t looking at increasing our savings rate so it didn’t register what it meant.  I dismissed it as something unattainable for us.  I was still stuck in the Dave Ramsey train of thought that I couldn’t save because I still had debt.  It is one area where I have come to disagree with Dave. There are certain circumstances, late savers and extremely high debt balances – like ours, that I now believe it is OK  to do both.  If we didn’t make this adjustment in thinking we would be in our fifties before we could start saving and early retirement would not be an option.  Now we can pay off our debt AND take advantage of pre-tax savings AND benefit from compound interest while doing it.

In March of last year I found the FIRE community (Financial Independence/Retire Early) community and I went down a rabbit hole, never to return.  It triggered a change in my thinking.  If these people could save that much on ordinary incomes, certainly, my husband and I could find a way to do it to on our incomes.  And if we could figure this savings thing out – we could possible retire early and have the dream life we wanted.  Now that was  motivating!

First, I had to figure out how to calculate our savings rate.  The calculator that several people in the Financial Independence community kept referring others to was put together by Big Ern….I had no idea  who a “Big Ern” was.  Originally, I thought he was just some big guy named Ern.

Well, I was totally wrong about that and it actually stood for a blog, EarlyRetirementNow.  (You can find the calculator using the link below.) Clever, right?  Using the calculator, I found that we were at an 8% savings rate and that was only because my husband works in public schools and the state mandates it.  With our newfound excitement to retire early, we made a goal to get to 20% savings rate. We were still in a ton of debt and we felt that after we reduced a big chunk of our discretionary expenses 20% was GREAT and it would still give us enough income to pay down our debt with a fury.

Fast forward to today.  We are ten months in.  We have increased our net worth by $86,000.00.  Paid off a bunch of stuff! And have increased the contributions in our retirement accounts.  Initially, we were a bit worried that we were being too aggressive and that once we put in the amounts we decided upon, that there would not be enough left over to pay all of our bills and still pay extra on our debt.  We were wrong.  As it turns out, when you decrease the amount of your taxable income, you pay less in taxes.  And so, our paychecks were not decreased dollar for dollar.  There was still enough left in our net paychecks to go around.

If you would like to increase your savings rate, I suggest you follow the steps below:

  • First determine your current rate of savings using the calculator listed below.  (There are other calculators out there – you can use any one you choose.)
  • Then look at your overall spending. If needed, track your last three months of expenses to see where you can make DRASTIC cuts.  I have several suggestions.   Reducing your expenses will free up income you can then put into retirement.
  • Then set a goal of how much you want to save. What is your overall goal for your savings?
    • Do you want to retire early?
    • Do you want to want to have extra in your retirement account to pad what your current retirement and /or social security is expected to provide?
    • Do you have a large purchase you are trying to save up for?
      • Remember when putting savings into a retirement account you cannot draw upon these funds without a penalty before 59 ½ (unless you are doing a ROTH IRA), so make sure you are setting up accounts that are appropriate for your goals. Not sure what investment accounts to use, I have found this post very helpful.
    • Do you simply want options for your future?
      • Perhaps you have always wanted to work in a particular field that does not pay as much as you need. Would reaching Financial Independence alleviate your concerns about doing so?
    • Once you have your goal in mind, then figure out what vehicle to place the funds in.
      • Does your employer offer a 401K and you simply need to fill out paperwork to have the funds deducted from your paycheck?
      • Do you need to open up a retirement account from an investment provider?
        • As a self-employed individual, I decided to open an individual 401k via Vanguard. If you want to know why we opted for Vanguard and Index Funds, then I would hop on over jlcollinsnh.com and work your way through his stock series.  Or buy his book Simple Path to Wealth on Amazon.  Game changer for us.
        • Maybe an IRA (Individual Retirement Account) is right for you.
      • If all of the above just totally freaks you out, then start small.
        • Start with just $100.00 a month. Surely, you can find $100.00 that you have wasted in a month?  (And remember, when doing it via a pre-tax retirement account, it is not a dollar for dollar reduction.) Then, keep increasing that amount by $100.00 , or whatever amount you feel comfortable, until you get to an amount that will get you to your goals.

My husband and I have been diligently saving since the late last year.  I cannot begin to describe the satisfaction it has brought to see our balances increase every single month.  After consulting with our tax professional, we followed each of the above steps and opened an individual 401k for me, since I am self-employed, through Vanguard.  (These vehicles are AWESOME because they have higher limits for what you can contribute each year.) We chose Vanguard because their fees are typically much lower than the traditional brokerage firms and lower fees mean we get to keep more of our money.  Second, we contacted my husband’s  employer and filled out paperwork to max out my husband’s 403(b) and his 457 plan.  (These are both vehicles to save for retirement, similar to a 401(k), typically for non-profits and public service entities.) Both of these processes are pretty much automatic, which makes it extremely simple for us to save.

After following these steps and comparing our contributions from when we started to present, we are now saving 38% of our income!  We blew our 20% goal out of the water! That’s a 30% increase in less than a year.  Crazy-ridiculous, right?

We will likely remain here for a while.  Our next focus, now that we are saving at a phenomenal rate, is to continue attacking our debt.

Our student loan balances are a heavy burden and I would like to pay them off before we reach Financial Independence, which if we continue at this rate, should be in about eight years – at age 55.

Doesn’t that sound amazing!

Love and Prosperity,

Your GirlFIday

*** Nothing in this article is to be construed as financial advice.  I am not a financial planner, nor do I pretend to be.  You should always consult your own professional when seeking advice.

Links to Articles of Interest:

https://earlyretirementnow.com/2017/04/05/savings-rate/

How we Increased Our Net-Worth by $86,000.00

Six Ways to Save $1200.00 this Month

2017 A Year In Review

http://jlcollinsnh.com/stock-series/

What Type of Retirement Account Should You Choose

How to Increase Your Net-Worth by $86,000.00 in 10 months

How We Increased

How We Increased Our Net Worth by $86,000.00 in Ten Months

Quarter 1 of 2018 Update – Day 2763…….264 days in.

No.  That is not a typo…that’s the number.  $86,000.00.  I was in disbelief myself when I did the calculations.  I believe I actually said, out loud, Holy Smokes Batman!!!

Now before I get into the meat of how we accomplished this almost supernatural feat….Let me say this, it is NOT lost on me, read that gain…it is NOT lost on me, that that number is more than a huge chunk of Americans (the world really) makes in a year.  I absolutely do not take for granted that my husband and I are very fortunate to have incomes that put us pretty high up there on the income scale.  I also recognize that, even before we factor in our incomes, we start out in a place of privilege and opportunity.  I do not, however, feel guilty about what we earn.  We have both worked our butts off to get here.  Both of us come from very simple beginnings and what we have accomplished in our careers was accomplished through our own blood, sweat and tears (Not so much blood, but some sweat, and a LOT of tears).

I also, STILL, believe in the American Dream (but that’s a soapbox for another day).

….You’re still here?  I haven’t lost you yet?  Good, because I firmly believe the lessons we have learned on this journey to Financial Independence are for EVERYONE, irrespective of incomes.  It’s more about YOUR income, the percentage of YOUR income that goes to debt service and the percentage of YOUR income that goes towards savings for retirement.

When I first found the FIRE (Financial Independence/Retire Early) community last March we were drowning in debt, mostly due to our student loans.  Ironically, we had been Dave Ramsey fans for years.  I even led Financial Peace for many of those years.  The problem was our student loans were so large (think several hundred thousand dollars large) and it was taking so long to make any significant gains – that over the years we lost motivation and the life-style creep came back.  We also had not saved anything because if we were following the “Baby Steps” we could not move on to savings until we paid off our debt.  We became discouraged.  The older we got with NO retirement, the more anxiety we both had about what our future was going to look like.  Finding the FIRE community gave us hope when we had none.  Whereas before, we were resigned to die with our student loans, we now had HOPE that we could not only pay them off, but save for retirement at the same time. HOPE. Hope and a PLAN work magically together.

What was different?  Dave Ramsey’s principles are sound – but as I have discussed before, they are also not perfect, nor do his principles translate to every situation.  Ours included.  We were middle-aged with no retirement and debt in the six digits, several times over. What finally clicked for me was that, given our situation, it was OK to save AND pay down debt at the same time.  It was also possible to increase our percentage of savings significantly – far more than most Americans – and still live happy fulfilled lives.

Hearing from others who had a savings rate of 30%, 40%, 50% and some even more than that, not only intrigued me, but it inspired me.

Now that we were inspired and FIRE-ed up, we began drafting a plan.

We started by evaluating where we were, then focused on areas we could cut expenses DRAMATICALLY, then looked at how we could increase our savings, and, finally, discussed ways we could increase our incomes.

If you want to change your circumstances as well, look to these three areas: expenses, savings and income.

  1. Expenses

One of the best ways to immediately create more cash flow is to see where you can trim your discretionary spending.  The following are some common areas you can find savings.

  • Food budget
  • Eating out
  • This includes COFFEE! I grind my own beans daily and its AMAZE-BALLS!
  • Transportation expenses
  • Insurance (can you get your rates lowered, do you need to shop around?)
  • Cutting cable
  • Bottled water/water delivery service
  • Cell phone plans
  • Kids extra-curricular activities (The buggers will live.  Put them in something that doesn’t costa a small fortune. Remember, it’s temporary.)
  • Gym memberships
  • Make-up
  • Personal services (hair, nails etcs..)
  • Reducing housing/utility expenses

With some of this savings, you should be fiercely paying off your consumer debt as quickly as possible. Once paid off, the amount you were previously spending on debt service can now be allocated to savings.

With the reduction in many of the above expenses for our household, as well as paying off several lines of credit and one of our cars, in ten months we were able to reduce our monthly expenses by $3,300.00.

This reduction in spending allowed us to not only make significant progress in paying down our debt, but also, increase our savings significantly.

From May of 2017 to the end of March, 2018, we reduced our total debt by, $25, 351.89.

  1. Savings

One of the pitfalls of living paycheck to paycheck and spending everything you earn, is that when someone tells you that you need to save money, your brain says, “I can’t afford it.” And when you believe you cannot afford it – you remain stuck.

Believe it when I tell you this is a false mind-set.  You CAN afford to save money.  In fact, putting money into retirement is the FIRST thing you need to do, before you spend what you earn.

After cutting our expenses significantly.  Curtis and I decided to test the above principle to see if we could still afford to pay our bills if we maxed out our retirement.  Can you guess what we found out?  We absolutely COULD afford it.  We still had enough money to pay our mortgage, feed our family of 8 AND put extra towards debt.  It was almost like magic.  I am still not entirely sure how the math worked, but it did.

The best way to put money into retirement is to make it automatic.  Either,  set it up to take it out of your paycheck or set up automatic withdrawals with the investment provider you have chosen.  That way, it is done and you don’t even need to think about it.

What Curt and I decided was, and it helped calm some of our fears, that in the worst-case scenario, if we could not make the budget work AND max out our retirement accounts, we would reevaluate how much we were saving and reduce it, if absolutely necessary.  We have not had to do that.

Following all the above principles, we have increased our retirement accounts by $22,994.57 in just 10 months!

  1. Income

Sometimes, you cut all that you can cut and it’s just not enough to get your savings or debt repayment where you need or want it to be.  If that is the case, you have an income problem that must be addressed.

First evaluate – is there any way you can increase your income?

  • Overtime
  • Extra-shifts
  • A side-hustle
  • Second job
  • Are you due a raise?’
  • Can you negotiate a raise?
  • Career change
  • Position change

Your income is your greatest asset.  It can also be a hindrance if it is not sufficient to cover your needs or prepare you for your future.

In this instance, we took my husband’s annual raise and put it into savings – we did not spend it.  We intend to do this for every raise from here on out.  He also began lunch duty coverage – the school district pays him an extra couple hundred dollars a month and it does not add any hours to his work-day.  Also, I began a side-hustle (that will hopefully become a full-time gig) in real estate.  The commissions I earn from my real estate business will be used to pay off our debt at a faster pace.

These increases have helped us achieve some of the above numbers, but we have also taken some time to put some of our money into projects that have increased the value of our home.

We do NOT view our home as an investment, but it does factor into our net worth.  Could our home value change depending on what the housing market does in our area? Absolutely.  Which is another reason why we are very thoughtful about what repairs and improvements we make to our home.

We were very fortunate to have found our home when there was still a slight depression in the San Diego housing market.  We also were able to buy a fixer-upper in a really great neighborhood, which was also pretty lucky.  (or Divine providence – whichever floats your boat.)

With every repair or upgrade we make to our home, our guiding thought is, “will this increase our home’s value?”  Second, we try to do as much of the work as our skill and middle-aged bodies will allow.  Finally, we have gotten pretty good at finding really good deals and never paying full price for any of the materials or appliances we have put into the house. Negotiating with contractors has saved us thousands.  My mother-in-law used to say, “closed mouths don’t get fed.”  If you think a contractor’s bid is too high, ask them to reduce it.  Worst they can say is no.  But if you don’t ask, you will always miss out on savings.

Since purchasing the home in 2016, a conservative estimate of its current value puts us at about $140,000.00 in equity. (Crazy, right?) If you have the patience to buy a fixer-upper, the sweat equity you put in can reap amazing rewards especially in a seller’s market.

We are mindful of market fluctuations and that we are not guaranteed any of the equity we currently expect to get out of our home, unless and until we sell it (and the market doesn’t crash). But still pretty exciting, nonetheless!!!

The increase in our home’s value since October of last year, makes up the remaining  $38,000.00 of our increase in net worth since starting this journey ten months ago.

So, there you have it.  That’s how we achieved an increase in our net worth of $86,000.00 (Well, it’s really a reduction in our negative net-worth, but who cares….we are $86,000.00 better off than we were last May and that’s pretty spectacular!).  

If you need help budgeting, or want to bounce ideas of how you can increase your net worth, shoot me a message!  I am always down to chat finances.

Love and Prosperity, 

Your Girl.FI.day

Flipped @ Forty – Turning Our Finances Around at Forty…Again.

Flipped @ Forty Finances PINTERESTPhoto by Ian Espinosa on Unsplash

I sometimes feel our history with our finances mirror the story of an addict.  You hit rock bottom, you sober up.  You work really, really hard towards getting your act together.  Sometimes there are set-backs.  Other times, you fall completely off the wagon and are in full crises mode once again.  But eventually…hopefully…there is recovery.  Long lasting recovery.  You will always be an addict. You will always be faced with the temptations that could lead to a relapse.  You will always have a tiny bit of fear of the “what if”…But if super dedicated and committed to recovery – you can enjoy the life you have always wanted.

Financial recovery.  That’s where we are.  At 47.  Recovery from several years of financial relapse.

They say, (whoever “they” are) that your attitude about money begins in childhood.  What you were taught, what you saw, how money or lack thereof, affected you.  And I would say this is true.  Both the Hubbs (HB) and I grew up without a lot of money or guidance about money and debt.

For most of HB’s childhood, after his parents divorced, he was raised by a single mom. His mom worked really hard and long hours to take care of herself and her kids.  They were not poor – but it was hard.  Money had to be stretched.  Conversations about money were limited to how they needed to make more of it.

I watched my parents work their way out of poverty.  On my dad’s side of the family, I saw first-hand what poverty looked like.  It was a source of pride that my dad had gone to college and had “made it”.  My mom’s parents, on the other hand, still shopped at dented can stores, stockpiled canned goods, and brought us over government cheese and peanut butter.  At the time, I did not quite understand the significance of that.  I do now.

But there were never any conversations about money in our house, except when the request to buy something was met with “we can’t afford it.”

When we married at age 25, while still in college and expecting our first child, neither HB or I understood the importance of savings.  We also did not understand that it meant more than just working to draw retirement or until you could make it 62 ½ to collect social security.

For a long time, I believed college was an impossibility because we didn’t have the money.  That was one area HB had some advantage; he received a football scholarship from the University of Nevada, Reno.  I had all but given up on college until, through coworkers, I learned about student loans.  And so, began the cycle of taking out as much as I could get in student loans each semester, without really understanding the consequences of how much I was taking out, or the importance of only taking out what I needed.  I can’t tell you how much of that money was blown on non-essentials…the thought of it makes my stomach turn.

Besides.  I was going to be a lawyer and earn A LOT money.  Imagine my shock when I learned my starting salary at my first job as an attorney only paid $42,000.00 a year.  Far from the six figures I had been banking on and clearly not enough to pay back the balances that were now well over six-figures.

Long before this time, HB had also lost his scholarship due to an injury and began working to support our small family.  At nights, he attended private universities to get his teaching credentials and master’s degree.  Again, we borrowed as much as they would give us and he quickly racked up six-figures as well.

Then life kind of took over, and we began pursuing what we thought was the American Dream.  Who knew that it was bought on credit.  We bought our first house, almost entirely mortgaged.  That’s what you were supposed to do right?  Graduate and then buy a house. This was followed by two cars – both financed.  We “needed” them.  We were both professionals now and our family was growing.  I couldn’t drive my two-door Honda Civic anymore. I was a lawyer now.

And then we needed to get “things” for the house.  Houses require things.  Financed furniture. You can’t put old furniture in a new house! A pool…in ground, with custom waterfalls and mosaic turtles swimming on the bottom!  Of course…This was Phoenix.  You can’t live in Phoenix, without a pool.  People die there without them.

Yes.  It was a slippery slope.  Totally our making. No one else was responsible but us. But it soon became too much and we were barely treading water in our fancy-schmancy pepple-tec pool.

But there was a solution.  Bankruptcy!  I jest. It was not a solution.  It was a Band-Aid.  It relieved some of the pressure – but it didn’t solve the underlying issues of spending and of not saving for our future.  After the bankruptcy, we quickly charged up our credit cards, AGAIN. There were more things that needed buying.  Repairs that couldn’t wait.  This went on for several years and then crises hit.  We were “victims” of the real estate bubble.   Suddenly we had two houses that both were valued at half of what they were mortgaged for.  We were over extended.  Ultimately, we lost both our primary house and the investment property.  (Which it never really was – because it never made us any money.)

Shortly after the market crash, we were very fortunate to discover Dave Ramsey and Financial Peace University through our church.  His books and classes were exactly what we needed, at that time in our lives. He helped us learn what a budget was.  Helped us understand the importance of an emergency fund and of living within our means. We did everything he told us to do.  We followed his baby-steps.  We made significant progress for several years.  But we never made it out of Baby Step 2.  For YEARS that’s where we remained. It was discouraging and eventually, the momentum gave and, though we didn’t increase our debt by much, we didn’t make any progress either.

There were some relapses.  Not anything like what we experienced during the market crash.  But there was some life-style creep too.

We had purchased another home.  Relocated to a new city.  Added to our family.  We were both making really good incomes.  But there was no real hope of ever getting ahead.  The balances on our student loans were SO BIG.  And they just seemed to get bigger due.  We were resigned that this was going to be our lives.  Paying off debt and never being able to save for retirement.  The debt was going to follow us to our graves.  We wanted more for our lives – but we had no belief of how that was even possible.

Then, over the course of a few years of searching for a way to get out of this rut, I discovered this crazy-weird-almost cult-like FIRE community . (Financial Independence/Retire Early) It was almost like a religious experience.  My eyes opened wide and I began devouring every article, blog and podcast I could find.  I have discussed that more extensively in a previous post.

I think most addicts will tell you they remember a moment that changed everything for them.  It was almost like that.  Finally, there was hope.  There was a way to achieve what we wanted.  A mind-shift.  We began to see things from the perspective of what we COULD do to change our circumstances and not limit our thinking to what obstacles were in our way.  That was the key.  Not just having the knowledge of how to achieve what we wanted – but the BELIEF that we could.

Since then…(It has been almost exactly a year), we have made incredible-unbelievable gains.  I have seen the numbers, and I can’t barely believe them myself.  If there were any doubt left in me before that we couldn’t do this…they are gone.  We CAN do this. We ARE doing this.  Next week, I will explain how we have increased our net worth (reduced our negative net worth – more correctly) by $86,000.00 in ten months.  Come back and see me – I hope will come into the light as well.

Love and Prosperity,

Your GirlFIday

 

 

 

 

 

Flipped @ Forty – Family

Flipped @ forty family PINTERIST

Photo by mohamed taher 

Anyone want a 3-year old? The one I have is part Tasmanian devil, apparently. That or channeling Linda Blair (Millennials and younger, look that up.). So far this morning (before 8:30) there have been 3 time outs, screaming hysterically because we are going upstairs to play. The torture! Throwing a tantrum in his room because I shut the door until he can calm down then screaming and kicking “I WANT IT OPEN!” He peeks out after being quiet for, literally, ONE SECOND. After which, I tell him to wait a little bit until I come get him. He immediately screeches, you know the one – the glass shattering high pitched shrill one, then attempts to slam the door, unsuccessfully, as it slowly swings back open. Promptly followed by screaming and kicking, “I DONT WANT IT OPEN!!!!”
Fun times at the Mays house. Day drinking is “a thing” right? I may have to try to like wine.

Looking back, the four older kids were SO EASY. The two Littlest Littles, I tell you….I’m noticing more and more grey in my hair. They are all named Ezra and Isaiah. Who thought it would be a good idea to start over at forty?  Me, you say? Well, then.  Some of you need to check your “friend cards” for not warning us at least.

This time around it was supposed to be so much easier.  (Bwahahahaha! The joke’s on us.)

It ain’t easier and it sure ain’t prettier.

So, don’t you dare believe all these moms and dads who post pics of their perfect children and lives…this is the real stuff. The nitty gritty – Calgon take me away – crying in the closet – I need another Xanax – stuff.

Starting over at 42, having already gotten my two oldest children almost to the finish line, I don’t know what I thought it would be like.  We never had the traditional get married, buy a house, have babies timeline. When I was a new mom at 25, I was still in college and working.  We were broke and struggling.  Though I would have loved to have showed up and helped out in my daughter’s class, and gone on field trips and finger-painted in the middle of the day, if Momma didn’t work she didn’t earn any money.  She couldn’t ditch school either.

Those were some lean times.  I feel guilty sometimes that my now 22-year-old got the shaft.  I joke, she grew up with us.  But it’s the truth really.  We had NO IDEA what we were doing and we were doing it alone, without parents nearby. We were flying by the seat of our pants.  Those were the years that if we didn’t donate plasma, we didn’t have gas in the car to get to work to buy the food or pay the rent.  Plasma donations are what made our budget, if you could call it that, work. We would not have made it without it.  But we learned to do a lot with a little.  I could make $20.00 feed us for a week.  Not the most nutritious meals – but it was sustenance and that’s all we needed. We look back to those times and know we could survive just about anything.

And I know that about my daughter too.  I like to think that having grown up with us and struggle with us, has contributed to the vibrant and independent woman she is.  Of course, I still worry about her and I still carry some of that guilt. And because of that, I tend to say “no” far less than I probably should. But that’s normal, right?

My now 16-year old son was born during the time when my husband and I were just starting our careers.  He got to see us achieving, what we perceived as, the American Dream.  The new mortgaged house, in suburbia, two financed cars, we finally got a dog – she was free at least.  His life was much less chaotic.  There was no moving every year or two for cheaper rent.  He is my calmer child.  And that makes sense.  Life was calm then.  For a time.

Then there are the Littles.  We were both 42 when we became parents all over again.  First with Jake and then Aydyn, Ezra and Isaiah – all at the same time.  We had four little ones age three and under.  Three of them in diapers.  We had cribs everywhere. Toys everywhere.  And laundry.  Always laundry.

I like to say it was managed chaos.  It’s still managed chaos.  Some days, it’s much less managed and mostly just chaos.  Even with all the chaos – being a mom all over again in my, now, mid-forties, as opposed to my mid-to-late twenties -it’s quite a different experience.  Certainly, our external circumstances are different.  But I am also different.  WE are different, both as individual parents and as a parental unit.

Our focus has shifted. We are much more “present”.  More confident in who we are as parents.  We do not have the undercurrent of worry anymore. We are more intentional about taking the time to enjoy being parents, a luxury we did not have the first time around.  The benefit of perspective and life experience is pure gold.

That’s not to say we have got it all together.  It’s just different.  I am still awkward.  I’ve never felt I was part of the “super-mom, mommy and me, PTA” crowd.  When I pick up my boys and see all the fit 20-something mom’s in the coordinated active wear, delivered monthly, and messy buns, I feel out of place.  When I am in the check-out line at the grocery store with my boys, I am thankful when they call me “mommy” – ensuring I am not mistaken for  “Grandma.”

My bones and muscles get sore much more quickly.  And It seems really, really unfair to have age-spots appearing and greying hair while my youngest is still in pull-ups.  It should be a rule that can’t happen.  Those things should only happen when your children reach a certain age – no matter how old YOU are.

And then there are the days like today, where all HELL has broken-loose.  (Not H-E-double hockey sticks – but HELL, all caps HELL.) These are the days where I question what business I have being a 47-year old mom of preschoolers.  A day when in the midst of questioning my abilities as a Momma, I’m met with parenting suggestions from someone who does not have children – and it almost sends me over the edge.  She meant well and is a fabulous woman – but it’s comments like hers that underscore my own insecurities as a parent.  Days when I am doing it all wrong.  That something must be wrong with ME, that my kids aren’t the Angels that everyone else’s kids appear to be.

Where there is the slightest fear that I might be raising little serial killers.  It certainly appears that way when the second I am taking a business phone call and have to step out of the room, the two Littlest Littles proceed post-haste to actually attempt to murder each other with their bare hands.

(That’s sarcasm folks.  Don’t get your panties in a bunch. My kids are fabulous and well loved.)

And then….divinely inspired kind words float through the time and space of the Interwebs and my mom-tribe encourages me….  “You are not alone.” “Been there.”  “It will pass.” It’s like fresh air.  Calming my trembling spirit.  I am truly not alone. And we are certainly not the only ones who feel as if they are failing at this parenting gig most days.

Age has given such perspective in so many areas of my life.  In my career, in relationships.  I am so much more forgiving.   Willing to freely share what I know with others.  A desire to reach back and grab as many people as I can on the journey.  So why is it so hard to be that confident as a parent?

We are certainly not perfect.  Not by a long shot.  But there are perfect moments.  When my four-year old climbs up into my bed to give me a hug and squeezes me as hard as he can.  When my seven-year old excitedly shares with me a book he wants to get at the book fair, remembering that I told him it was one of my favorites as a child.  Sitting down for dinner and looking across the table and seeing all of my children together enjoying just being together.  It’s the moments that make all the difference. Oh, how I would love to freeze each and every one of them so I don’t forget them. Forgetfulness….another side-effect of aging (sigh).

And all the other times, in between “the moments”, I am grateful that I have my own tribe of “super-mom’s” on stand-by to reach back and carry me forward.  It almost makes me forget about my age-spots and grey hair.

Love and Prosperity 

Your Girl.FI.day