Skara Brae's Money Makeover

[Skara Brae]

So, based on peanut's encouragement in her own thread, I'm going to start my own Money Makeover thread to chronicle DH and I's progress through financial transformation and, hopefully, evolution.

The background: when we first moved in together, we had low-cost lifestyles. One of us would work full time while the other worked part time or not at all for awhile. This was enough to maintain our lifestyle for a few years, until we decided that we Really Wanted To Go To University.

So we went to university for a year, and found out it was bloody expensive. Thankfully, we found out that not only would the government give us money to go, but so would the banks! What nice people... So we each got ourselves a nice fat govt loan. We each got a nice student line of credit from the bank -- which we promptly spent on acquiring a car. (We had previously relied on the bus, walking, and biking.) We each had our one credit card from days of yore, and off we went.

It turns out school was even more expensive than that. We got married in the meantime (no debt on that, at least), and of course our lifestyle expectations went up. We redecorated the apartment. We ate organic. When we realized we didn't have the money for those things, we cut them out...but still we could not make ends meet. We spent four excruciating months living with my parents (as hard on poor Mom and Dad as they were on us), and four more looooooong months living with my mother-in-law after we moved out of my parents'. In August my mom introduced us to Dave Ramsey, whose FPU CDs I "accidentally" let play while DH was around....well, that set us very quickly on the path to realizing that we had been sold a lie.

I'm going to digress here a bit to rant about this. Whenever the topic of education comes up, younger people are always told "go for it!" It's "good debt", you'll repay it with vastly increased earning potential after school, the loans are even interest free while in school and you don't have to pay them back until after you graduate. Of course, you can always get scholarships, or work part time through school too.

This is a pack of big fat lies. When you are trying to go to sleep at night, knowing that the thousands of dollars of debt is due to textbooks instead of leather couches is not any comfort. Many things can happen in between when you enter school and graduate -- if you graduate at all. I switched majors twice, my husband did so FOUR TIMES. School requires a lot of time to get good grades in, which you will need if you want to qualify for many scholarships or get into professional or graduate programs. This can cut significantly into not only your free time, but the amount of time you can work at a job to pay your four walls and tuition. Not all locations have jobs that pay enough per hour for a student to afford to work and go to school at the same time. Some degrees really do not increase your earning potential all that much. Scholarships have course load requirements, which are not friendly to stress-prone people. Student loans is pretty stringent about how much money they'll give you and what you have to do to avoid repaying it, too. And of course, you do eventually have to pay all that debt back. If you declare bankruptcy within ten years of graduating in Canada, all your debts disappear -- EXCEPT your student loans.

So, long story short, financing our education with OPM (Other People's Money) was recognized to be a BS cockamamie story for us. We decided to put school on hold, as painful a decision as that was, and get to work paying down our...drumroll, please....$60,000 worth of debt. We accumulated all of it in 2 years, by the way.

Well, we found Dave Ramsey. DR motivated my husband about finances in a way nothing else ever had. While we do not follow his opinions on non-personal finance related matters, and even not in the nitty gritty of some finance stuff (we're Canadian, he's American), he has been invaluable to me in getting my husband on board with money stuff. DH actually sat down and did up a budget because of DR. I will not say we've been gazelle intense the whole time. The first month was a bit of a struggle with the "I deserve"s with him -- he decided he wanted to pick up a couple hobbies that he dropped while we were in school. A couple of very expensive hobbies, as anyone who's had a collectible card geek in their household knows! The first month and half has seen us through by pointing out that we do not have a buffer of one month's expenses yet.

And while we've gone through the budget, manically making slashes to spending, we've also realized that we need to increase our income. While we've always held jobs at a certain wage point that is above minimum, that wage point hasn't increased at all in 5 years. We need to remedy that. To that end, we've touched up our resumes and are looking for better jobs. This is complicated by the fact that DH actually likes the job where he is now, and doesn't want to give it up unless he has to. For now, I'm encouraging him to keep working there and to find a job he will like before he quits. Me, I'm working in a job that pays my bills and not much more. It's not a bad job, but I don't have the time required to rise through the ranks at that organization. My job hunt will proceed a little more aggressively.

To round off this post, I'll provide a list of money-saving actions I've undertaken today, seeing as it was payday:

• zero-budgeted the paycheck. If all goes according to plan, we'll be putting 73% of this check towards our buffer.
• looked at the supplemental cat food we were giving our cat and realized he didn't need it. Vet had recommended it a year or two ago. Well, we switched regular cat food recently and I compared the ingredients and nutritional info on the two foods. It turns out the second, supplementary food is wholly unnecessary for Bailey. (The unnecessary food is also the expensive kind you can only get at the vet for $35+ for a 2kg bag...The better food is found in, of all places, a local health food store, and sells for nearly one third the price. Because this food is more nutritionally satisfying, he eats less too.)
• Resolved to fill the car up with gas at the end of each week (we get paid then) if gas is at a reasonable price, instead of filling it up whenever it runs out. This lets us take advantage of gas being at $.95/L. When it eventually rebounds back up to its usual insane $1.35/L, we will have at least one tank full of cheap gas before we have to readjust the budget -- kind of a mini-buffer for the car.

Non-money saving things I'm doing? I'm taking DH out to McDonald's tonight, because someone had it at work and I'm craving it now. I would berate myself over this, except I very rarely eat out (don't like the taste and nutrition, cost is exhorbitant) and I am willing to spend part of my blow money to do so. DH and I work nearly opposite shifts and do not see each other for a good 12-16 hours/day, so I look at this as a date or "night out" as much as I do "wasting money on fast food"...

I am currently debating whether or not I want to spend most of the rest of my blow money on some family history research. It's a hobby I've just picked up. There are some birth, marriage, and death records of ancestors I would like to purchase copies of, but I have not -- in nearly a month of internal deliberation -- yet decided whether it's worth spending the money right now.

[peanut]

Skara Brae: Glad to see you've started your own thread! Congratulations on setting the goal of getting a buffer in place. Glad I could motivate you this way. Look forward to reading about your progress...

[Marie78]

Hi and I enjoyed reading your thread, it sounds like you are both working hard towards your goals. Keep up the good work .

[Greebo]

I look forward to reading about your adventures in financial fitness!

[Skara Brae]

Thanks for the well-wishes! Today I did quite a few financially-oriented things:

First, I bought an expensive ream of high quality inkjet paper...with a gift card I got from an office store's rewards program. So it ended up being free. I also laughed at them selling 2gb flash drives for $60. (You can get 4gb for $30 by shopping right -- at the same store, even!)

While at the office store, I noticed lint removers are $1 cheaper than the groc store or Walmart. This is something to keep in mind as kitty sheds a LOT and my clothes, being "girl clothes" attract cat hair like crazy.

I found out the LB is hiring for Christmas now. Resolved to print off resume and drop off Monday morning. They pay double my husband's current hourly wage. The only problem is that it's probably part time...but for $18/hr, I can find a second part time job to work around it. (If they hire me for only 20 hr/wk, I'm only netting $200 less a month than I am working full time at my call centre job...This can be made up by one 7 hr shift/wk at a minimum wage job within 2 blocks of where I live.) Needless to say, DH wants to apply there too.

Went to the LB to get wine for supper (cooking with it). Hubby had the presence of mind to ask employee if they have smaller bottles (we only need half of one). They did, but it turned out to only be .79 cheaper. I was set to go with it, but hubby changed his mind and figured for less than a buck more, we could each have some wine with dinner. I argued that I don't like to drink red wine, which is true. (What I didn't say is that I'm also concerned about his gout coming back, especially with a heavy wine + red meat combo.) Somehow I won this argument and we end up with a 500 mL thing of wine, 375mL of which is aimed at cooking the recipe. Me, being a geek, measured out how much a proper glass of wine is in our glasses (they're small), and I can give us each a scant glass of wine by skimping just a tad on the liquid in the recipe. Frugal victory? Unknown yet, will report back tomorrow after we've had dinner!

When I got home, I decided to slow cook supper (braised lamb shanks) instead of cook it on the stove. This decision is one part frugality (saves power), one part laziness, and one part that I like the apartment to smell yummy all afternoon.

Then I put money in the buffer! Because of my careful padding of the budget, I was able to put in $35 more than I'd planned. (Hey, those little bits add up...same thing with the interest. Yeah, it's only $2/month, but it's $2/month I didn't have to pull out of somewhere else.)

But then I accidentally overfilled the dryer again. This resulted in spending another $1.50 to dry clothes. I must remember to set the timer a little under 60 minutes so I can check before it goes and just add a quarter or two, instead of spending a whole 'nother $1.50 to burninate my clothes.

I also took the plunge and spent some of my blow money on family history records. It was a very satisfying purchase, even though entering the information from them took about as long as the online purchase process. I'm going to try to hook up with my dad sometime in the next week or so and share what I've found and brainstorm ideas for further research. I'm just getting started in this hobby and he's had a good twenty years or so at it. (Plus we're both history majors, lol.)

Lately when I do the finances for the week I've been printing out the current YNAB budget, savings ticker, and expenses-to-come and income-to-come. I print on both sides of the paper to save paper (see: expensive ream of inkjet paper, above). However, I've also decided to keep old snapshots as record of where we've been financially so I can track our progress. My next step is to hunt down an extra hanging file folder and stick this in with my household files. Then I can pull these babies out at the end of the month and show my husband how awesome we're doing.

[peanut]

Great deal on the paper! We're still working off of stuff I inherited over a year ago.

Good luck with the LB job applications.

Have you thought of replacing alcohol in cooking with something else? Seems to me cooking sherry is the same thing??? But I could be wrong. It might be worth posting on the kitchen forums to ask if there's a good substitute.

I'm using YNAB right now too...or trying to. I'm having problems getting the budget to register our paychecks. Right now I'm in the red by two paychecks a month. Maybe that's because I don't have a buffer? Is that what it does? Thanks.

[peanut]

So it's been a week...are we getting an update on your frugal activities? Pretty please...with a on top?

[McD]

I'm looking forward to following this thread.

[Skara Brae]

So it's been a week...are we getting an update on your frugal activities? Pretty please...with a on top?

Ehm, we've had a whole lot of Murphy trying to elbow his way in insistantly through the front door...or use a crowbar to pry his way in through the window...he seems pretty determined to mess with us (although, oddly, it hasn't really cost us any real money yet -- just a whole lot of sanity). So we've been kinda busy. I haven't done anything frugal this week, except take my own blank forms to the library and copy down genealogical information instead of paying $.50/page to photocopy it! (I have to hoard that remaining $15 blow money and make it last til the end of the month...)

Wait, no, we did also do up a bunch of cooking and freeze it for work lunches. DH is finally getting on board with this "taking leftovers/actual meals to work" business *HALLELUJAH*. I am not going to push him abut frugality any further this week given everything else that he's been going through.

Oh, and we topped up the tank because gas fell in price.

[happydog]

Great thread! Thanks for sharing your journey.