Our Journey - Here ya go Russ (VERY LONG)

[TheRootedNomad]

Quote:
Originally Posted by TheRootedNomad
3 years ago this past July we had:

~ no EF
~ over $11,000 in non-morgage debt
~ one functionung vehicle
~ still owed aprox 23 years (no extra being paid) on a 30 year morg.
~ 6% going into DH's 401


Now:
~ very comfortable 4 month EF if we both lose our jobs (8 months if something happens to one of them)
~ NO non-mortgage debt
~ two reliable vehicles
~ a fully paid for 400+ sq ft addition
~ refinacnced to a 15 year mortgage and have been plugging extra away. We currently have 9 years left of payments instead of the 20 we would have originally had. Pushing to get that to 3 years.
~ 16% going in my 403B. Will up another 2% sometime in the next month or two
~ 10% going in DH's 401K. Will up anothe 3 or 4% around Oct.

Our net worth has gone from a literally just barely positive (like $3,000) to about 90% of our total "take home" for the past three years. It's not a number to retire on because most of it is mortgage and self done home improvement equity but the retirement accounts are climbing as well. Of coarse this money and the health savings account money come out pre "bring home" so counting it towards the 90% is probably not the way I should look at it but I sure do like the jump we've made.

"This post is AMAZING to me. You should be very proud of yourselves. " Qoute rcannon

Thank-you Russ---

Russ’s post has made me decide it is time to share our, mine and my husbands, financial journey to this point. I am going to start back further than the last three years though. I am also going to post it in segments, one after the other, as it is LONG. I’m a little leary of putting the actual numbers out there, as well as some of our obvious MISTAKES but I’m going to take a deep breath and leap. I’d like to show how we got to this point in its entirety. The first several years can be viewed both as successes in that we have eventually overcome them and know where our mistakes were and as financial hardships and failures in that we didn’t play the bad cards we were dealt the way we should have. I’ll be as brief as I can while still trying to convey what it was like for us. I won’t hit everything and there are some decisions that I’m not proud of. I am however, proud of the end result of the last 3 years.

[TheRootedNomad]

1993 – We were both working. DH was hanging gutters at a per foot price. This was very inconsistent income. I worked full time at a job I loved but paid poorly. We got engaged. We saved for our wedding by cutting back on everything we could and increasing our income by going to the plasma center. We planned our wedding frugally and……

1994 - ….in early 1994 we had a beautiful wedding. The gift money paid us back what we had spent on the wedding and a little extra. We saved some more knowing we wanted to buy a house. We had no debt.

1995 – We bought a house using our savings as the down payment. The price is in a reasonable bracket for us. It is an older home that needs some work but it sits on 3 acres backing up to a forest and I feel the long time dream of having my own horse coming much closer. We do all the right things as far as inspections. We move in and are blissfully happy for a couple of months. I get pregnant. My family comes in for Easter from NY and I talk about wanting to pull the paneling down in the master bedroom and make the closet bigger. We pull the paneling…..and all the problems start.

[TheRootedNomad]

To give a very brief overview of the problems we found over the next several months…
~ The master bedroom and garage had been added by attaching the frame to the outside of the old house and sitting the floor beams directly in the mud. It was sinking and termite infested.
~ The ENTIRE house turns out to be termite infested to the point where in late spring they were swarming from several areas inside the house. (Yes, we had a complete termite inspection and the house was cleared as free of termites)
~ Some of “the new” plumbing that was under the house turned out to be garden hoses.
~ There was a cellar (the door was hidden under a porch) that stayed full to the top with water on an almost constant basis.
~ Part of the main beam under the house was propped up with odd pieces of stuff and was sinking.
~ One of the outside walls had almost a two inch gap between it and the floor that ran for about 3 feet that the carpet had been laid to cover.

Within months of being there we filed a civil suit against EVERYONE. The termite company, the sellers, the real estate agents, ect. A lawsuit is a long term thing though, and we had everything invested. I had my oldest son in August. At the beginning of winter the finances spiraled down. My husbands broken down work truck (not ours the company’s) got hit by a fully loaded concrete truck while he was inside it. They had to cut him out with the Jaws of Life. He was out of work and as a “seasonal” worker was having a hard time getting compensation. Also due to the structural nature of the house our propane bill was hitting over $700 a month to keep us warm. This was more than our mortgage!!!! I made about $8.00 and hour! Enter credit cards as we fought the lawsuit hoping to keep our good name in tack.

As the months went on I became horribly depressed. DH found another job because his old one wouldn’t work him with his injury and they wouldn’t pay him. After lots of tears and talking with the lawyer we did a deed in lou of foreclosure and walked out of the house. We rented an apartment. We had over $25,000 debt built while living intensely frugally.

A few months later we settled at mediation. We settled with everyone’s insurance companies. The reality was we could take everyone we sued to court and win on criminal charges but then the insurance companies would no longer be responsible and we wouldn’t see a dime. We settled with them. We pushed them as hard as we could and ended up with enough to pay the lawyer and clear 95% of the debt we accumulated.

[TheRootedNomad]

1997/1998 A clean slate. We kept the belt buckle tight on our spending. Paid off the last 5% and saved a few bucks, but not much. As soon as our lease was up we went house shopping again. Much wiser, but not wise enough. We should have waited and saved a down payment.

1998 – I am pregnant with my second son and we purchased a sound home with no down payment. Our interest rate is still pretty decent as we had all the paperwork needed to make the mortgage brokers forgive us walking on the last house.

1999 – Money’s tight even with both of us working but we’re doing ok. No debt.

2000 to 2004 – This time period is a blur. We had multiple things happen. My 14-year-old sister came to live with us. She was with us for 2 years. My mom was with us a year and my father was with us 8 months. The bills all got higher. At some point in this time frame my DH injured his knee twice at work. This should not be a problem as the new company he works for is great. It becomes a problem because between injury one and injury two they switched workman compensation insurance carriers. Company 1 says company 2 is responsible and vice versa. DH needs knee surgery and can’t work. Let’s get it done fast is our theory. We can hold the fort a little. He goes for surgery and eventually finds out he has a clotting condition. A quick knee surgery my 85-year-old grandmother was over in 2 weeks ended up being a year out of work and 3 knee surgieries due to the clotting issue for DH…..with no pay at the time. We eventually had to sue the insurance companies so that the judge could make a call on who should pay us. Hence a year with 5 adults and two toddlers on my salary of about $22,000 gross at the time and medical bills to boot. We racked up debt. Just a few thousand, but it was stuff that should have been covered. Once they finally paid us though we also had to pay the lawyer so we ended up with leftover debt. Frustrated, tired, and just plain done. We filed bankruptcy on the bills we didn’t feel responsible for. I still don’t regret that. Part of me says I should but I don’t. It wasn’t mindless spending. It was medical bills that should have been covered had we not had to give the lawyer a cut.
End of 2004 the very beginning of 2005 – Both of us our working. Everyone else is gone. WE are tired of living on an absolutes shoestring. It’s been years. We splurge some on Christmas and go buy a real USED car not a $300 junker. I rack up some medical bills and still have some that have carried over from the old time period. We start to heal some from the constant crisis.

Early to mid 2005 – It’s time to take our life back financially and put us back on the track where we started way back in 1993.The mindset starts to take hold as we come back to some sort of stability.

[TheRootedNomad]

HERE YA GO RUSS-----Now we get to the meat of it.

I wish I would have documented better records and kept them. We’ll have to go on my memory though. This is how it went as best as I can recall.

I started cutting back some in areas we had been splurging. I put away the few credit cards. I make a list of our debts. I start attempting to pay extra and play with the numbers. I start making some small form of progress.

May 2005 - LIGHTBULB for DH ….DH hears Dave Ramsey on the radio. He’s ready to get on board with me. I had never heard of DR and had started getting us on track without him but I was going to learn about him if it was someone DH would listen to as well. I listen for a week or so on the radio before I get to the point of “ I think I’m going to vomit if I hear “better than I deserve” one more time!!!!!” So I go take out the books. The majority of his plan makes sense to me and I had already put some of it in place on my own without ever having heard of him. What I gain though is insight into the psychology of it instead of the math….AND… the motivation of the success stories.

June 2005 – Our incomes have gone up some. We both recently moved up at work. Our current take home was about $2700.00. Our debt was just over $11,000.00

These are the rounded figures to the best of my memory.
$6,800.00 on a car that needed all the maintenance work but was otherwise in good condition
$ 500.00 Target
$ 500.00 MBNA
$ 800.00 Sams
$2,700.00 Medical bills

Our budget looked close to this

$760 morg
$ 40 water
$ 20 garb
$ 20 OPC
$160 car ins
$175 gas & elec
$ 80 phone
$ 70 cable …..(we just got this back)
$250 groc
$200 gas
$120 cigarettes
$200 car
$ 20 Tar
$ 20 Sams
$ 20 MBNA

This put us at $2155.00 before any payments on medical bills or frivolous spending. This was doable when in black and white. That was $545 a month free.

[TheRootedNomad]

The rest of 2005
~ I stopped paying on the medical bills.
~ Tightened up everywhere even skimming grocery and gas money
~ Sold the extra VERY dead two cars we had for scrap. (One was 20 years old that we had literally pulled out of some bushes at one point from a friend of a friends yard. It gave us a few months)
~ Yardsaled
~ Both of us took any overtime we could get our hands on
~ searched for lost money….and actually found a couple hundred on the website

Then we threw everything we were getting on our steps one at a time in the beginning.
~ Built a $500 EF
~ Did the maintenance on the car so it was reliable. (Breaks tires ect)
~ Fixed another clunker we had lying around for an absolute emergency
~ Started snowballing at the debt.
~ Once we had Sams, Target and MBNA off we….
*****This is not recommended but it is what we did*****
~ Transferred the car loan from the loan to a very low interest credit card and was able to drop the full coverage car insurance freeing up more money and pushing us even harder to get the car paid off.
~ We also started upping every couple of months the % we contributed to our 401k/403b plans.





Somewhere in the beginning of 2006
We realized we could get our mortgage payment lowered I if we could drop the PMI. We had not paid off anywhere near 20% but as we watched the housing market thought we cold probably get it appraised at a higher price than it was. We paid the fee and were blessed with an appraisal that just crossed the line. We dropped the PMI insurance lowering our mortgage payment by about $60 a month.

Somewhere around this same time I started really researching the 15 year mortgages. If we refinanced to a 15 year at the lower interest rate we could get at that time AND with the dropping of PMI we could get one for less than $20 more a month than our original payment. …. We refinanced.

~ Before summer hit we had the car paid off as well and had started paying the medical bills. Some we just paid. On others we played let’s make a deal.

~ Then the insurance companies from DH’s work injuries called. Someone was forcing them to compensate the rest of the damages. (The ones we filed bankruptcy on.) We contacted the lawyer we had used. He told us there was no way of reversing the bankruptcy and that the damage to our credit had been done. We got the couple of thousand and squirreled it while we plotted.

[TheRootedNomad]

Fall/Winter 2006
~Dh always makes more in the summer. It’s the nature of his work. We got the medical bills paid off and started plugging away on our EF.

~ and WE FINALLY LOOSENED THE PURSE REIGHNS A FEW NOTCHES

~ At this point we decided that the extension we had been planning on putting on since we bought was never going to get done if we didn’t have a hunk of change for the shell. We took the few thousand, my father’s time and knowledge of the line, and lots of dinners for friends as we put up the 400+ sq foot shell for about $6000.00. (This included a new roof for our whole house.)

~ We plugged away at our EF as we built from the other money. Along the way our incomes also grew some.

2007 – July 2008
~ After we had hit the three-month mark of expenses we quit and started dividing money between the extension and extra on the mortgage.

~ In the beginning of 2007 we had to find DH an actual vehicle. We shopped around and found a beat up but well running tiny pickup with reasonable miles for $1500.00. This is not a vehicle I would want to drive across country but is great as a work car. We’ve had no problems.

~ The amount of interest money we saved each month keeps me/us motivated on making the extra payments on the mortgage most of the time.

~ With the way the economy has been we refocused some on the EF and built it to 4 months the beginning of this year

[TheRootedNomad]

In June of 2005 we had about $13,000.00 in retirement funds. About $7000.00 paid off of the mortgage of but only about $2000 of that was appraised value as we had financed closing costs as well, and over $11,000.00 in non-mortgage debt. Putting us at about $3000.00 in the positive.
In July $2008
$130,000.00 our house could probably (with the extension) be sold as is at (quickly)
$ 52,000.00 retirement funds (We went aggressive and my company back matched some)
$ 4,000.00 HAS
$ 10,000.00 EF
$ 2,000.00 House fund

That puts us at
$198,000.00
Minus
$..52,000.00 we owe on the house

That’s $146,000.00 positive

This year it looks like we will bring home about $43,000.00 between us.
Last year it was about $39,000.00 and the year before about $35,000. for the three years we brought home about $118,000.00 over the three-year period.

This means my original post that I just jotted off was wrong. We have went positive well OVER 100% of what we brought home over the last 3 years. To be realistic though I shouldn’t have counted the retirement money, the HAS money, or the entirety of the new appraisal price since most of that had nothing to do with our “bring home”. If I do look at it from a gross pay standpoint it looks different but still pleasing.

We both make pretty close to the same amount and we’ve averaged for the two of us together about $64,000.00 a year gross for the this time frame. That would be $192,000.00. Which means, that the $146,000.00 is still roughly 75%.

I know there are more mathematically sound ways to look at this, however, that is how I jotted the numbers off in the original post in another thread…….AND, any way we look at it we are excited and proud by/of the results of the last 3 years.

There are several things I’m sure I missed but this is the just of it.

Please feel free to comment or question. We are constantly growing and changing and I hope to improve where I'm from here on out as well, on the financial front, as well as on others.

Thanks for reading if you've followed all the way through.

[Greebo]

So, Nomad - how are you today? Better than you deserve?

[knotme]

A long journey, you seem quite happy with the results and that is the best. Congrats and thank you for sharing your journey with us.

[TheRootedNomad]

So, Nomad - how are you today? Better than you deserve?

I don't think so. I think I busted my butt to get here. . ....Dave did too from what I can gather so I think he needs a new line.

[VanVivCam]

Very interesting, thanks for posting!

DH and I listen to Dave on the radio. I don't like hearing the "we're debt free" screams....I am happy for them, but for some reason it annoys me to hear this scream.

[Greebo]

I don't think so. I think I busted my butt to get here. . ....Dave did too from what I can gather so I think he needs a new line.

Well, I've heard him explain it to mean he knows he doesn't deserve what he has because he's a sinner.

Me, I like telling people that I'm "doing so good, someone outta stop me!"

[Russ]

Thanks for posting. I must say I give you boat loads of credit. How you and your husband never gave up and just threw in the towel, I'll never know.
Very inspiring to come so far so fast and you certainly show with determination anything can be accomplished. I wish you luck in the future years to come.

[beks37]

Wow, that's all I can say. You've done a great job getting to this point.