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I've shared bits and pieces of my frugal journey on several threads at FV.  However, I've never really shared all the nitty gritty...basically, the numbers.  Tonight, I just completed a financial analysis of my situation.  Throughout my life, I've been an inconsistent financial manager.  I've always been wise with my money in finding "good deals".  I've saved, spent wisely, and have always worked two jobs.  My weakness has been crunching the numbers.  No, it's not that I don't like math, nothing like that.  It just seemed like I was always busy, and being a procrastinator, just never took the time to look at the bottom line.  Tonight, I found the bottom line.  Why did I finally do it?  Well, my financial situation is changing beginning January 1st. 

My husband's job is ending effective December 31st.  The owner of the company has decided to close down its base in our area.  It's not due to the economy, there is plenty of business out there.  I've been wanting my husband to leave this company for a LONG time.  He has been underpaid for years.  On the positive side, he's had a fairly consistent paycheck this year.  So, he is left with several options.  He can move(not an option for us right now) and work in another location, look for a new job, or start his own business.  He's opted for starting his own business.  He has plenty of contacts, and he could have a successful business on his own.  He would have to invest in equipment which isn't cheap.  I fully support his decision to do this.  It is something he really wants to do.  If it doesn't work out, he can always get a job.  However, going from two incomes down to one income is a little scary.  Even if he gets a bunch of business, companies can take 30-90 days to pay for services rendered. 

We're both aware of the positive and negative sides to being in business for yourself.  We both were once in sales, and our pay was full commission.  Some months, our pay was great; other months, it was terrible. 

The good news is I have a very stable job.  I also make a respectable income.  Unfortunately, I've been very generous with my money, and prior to a year or so ago, didn't really stick to a budget.  So, I have made great strides in tightening up my spending and giving.  I have excellent health insurance.  I have no out-of-pocket expenses this year except for the occasional co-pays.  My husband has been on my health insurance plan for the past 3 years.  There is no extra cost to me to have him on my insurance. 

I've also picked up a couple hours extra a week at work for extra income.  Next year, this may end up being only once a week, but I figure even an extra $20 will help.  I contribute to a 403B and a Roth IRA monthly.  This fall, I've had a substantial amount of money being invested.  Beginning in January, I'm going to have to drastically reduce the amount of money being invested.  I figure that if my dh starts doing really well, and we have a good EF, then I can start investing again.  I also have a bunch of things to sell on ebay.  I figure that every penny I make on ebay, will all go towards credit card debt.  Oh yes, I have a ridiculous amount of credit card debt.  I was in shock for days this summer when I added up all my unsecured debt.  This debt is under control right now.  I've paid a lot of it off, moved some of the debt to lower interest rate cards or 0% cards.  One of my goals is to increase my FICO score.  I pay my bills on time, but my balances are way too high. 

I was really making a dent into our debt.  Now, with our financial life changing, just paying all our monthly bills will be a huge relief.  So now the monthly goal will be to pay all bills on time, have an EF to cover at least one month of bills, and anything extra brought in will go towards credit card debt. 

I added up all the numbers, and I figure that if my husband makes absolutely no income in the next 8 months, I'll be able to handle paying all the bills.  He should be able to handle paying his car insurance, $400 for the next 6 months is due in February, and he believes that he can pay off the balance on his student loans.  He has a credit card with a balance, and I really don't know why?  He believes he can pay that off too.  He has two paychecks left and on his last paycheck, he should be compensated for his unused vacation time.  It is still up in the air if he'll qualify for a couple months of unemployment.

So, it looks as if we can get by if we continue to lead a frugal life.  I'd like to do a whole lot more than just maintain our standard of living. I would love to whittle away all the credit card debt.  Nonetheless, I feel blessed that even though we are transitioning to a one income family, we can thankfully pay all our bills if we budget our money. 

Right now, there is just the two of us.  However, we would very much like to have kids.  I've already had two miscarriages...this happened a couple years ago.  Since then, I haven't had a pregnancy.  There's a very good chance that I'll be undergoing IVF.  In my state, insurance doesn't cover this expense.  There's a possibility that I could qualify to become part of a study, and if this happened, the procedure would only cost $5,000.  Gee, what a deal!  The timing for everything is all wrong, but everything doesn't always work out as planned; at least for me it doesn't.  So, that is an additional expense, and no, that cost isn't figured into the budget...yet.  I'll be 36 next month so I decided that I'm not going to wait any longer. 

Cars...

My dh and I both own our cars.  They have high miles and right now are still running, thank goodness.  I'm considering buying my sister's car, it's a 1999,with only 67,000 miles and she is willing to sell it for under the book value for $3500.  So, I've been number crunching seeing if it might work. I don't want to sell my car since I probably wouldn't get much for it anyway.  So, this is a purchase I'm considering.  I'm probably looking at a different car within a year anyway,my car has 157,000 miles on it.

We bought a house a little under 2 years ago.  So, yes, we have a mortgage.  It's affordable though, when I bought the house, I based it on my income so the house is totally affordable.  My house payment with property taxes and insurance is $1215.12 a month.

So, here is where my money goes:

$45.00 cell phone monthly charge

$82.10 Student Loan #1

$50.00 Student Loan #2

$51.63 Life Insurance premium for both of us

$65.00 Furniture payment(financed over 3 years, 1/2 paid off, 0% interest)

$70 my car insurance monthly premium

$75 High-speed Internet and Cable

$28 Vonage Phone, includes local, long distance, etc...

$150 for electric and gas, the next couple months, this will probably be more, but I just estimated an average, and it sure would be nice to pay no more than $150 a month!

$325 Credit Card payment ($12,749.00 balance)

$75 Credit Card payment ($2,342.30 balance)

$382.50 Investment loan

$25 Extra phone line, this is a gift to my father

$300 budget for food and gasoline, entertainment

I've been doing a lot of stockpiling so I think I can keep under the $240 food budget.

Total, I figure is close to $3000 a month.  The amount will decrease as my debt decreases.

There are a couple monthly payments I could eliminate:  cell phone, basic cable, and high-speed Internet.  This would save me $116 a month.  To me, this is a very small part of the budget.  I share my phone plan with my bil and sister, dad, and soon my dh will have his phone on the same plan.  I live in an urban area and I feel much better having a cell phone with me.  I will never go back to dial-up again.  My time is more valuable than the money spent.  I use the Internet all the time, especially to list items on ebay.  Cable, well, it's cheap entertainment, and I prefer cable news.  Other than that, the rest of my expenses are fixed.

I'm working monthly on lowering our utility expenses.  I have an inefficient dryer so I basically hang 95% of my laundry to dry in the basement.  I have 3 vornado space heaters,so I use them as needed and I keep the heat turned down low while I'm at work, and when we sleep.  Other times, it is set between 65 and 68 degrees when I'm home during the winter.  I dress in layers.  I have flannel sheets on my bed, a down comforter, and plenty of blankets,and I have cute fleece pjs. 

I'll be updating my siggy with my debt totals, and I'll update the totals monthly to show the debt decreasing.  So, my goal for the new year is as follows:

1.  Pay all monthly expenses on time.

2.  Increase my FICO score so I can qualify for the best interest rates so I can get out of debt faster

3.  Pay down debt, specifically credit card debt.

4.  Build up my EF.  Right now it is at $1,610.

5.  Continue to simplify my life through living a frugal lifestyle.

6.  Become a better cook, learn new recipes, etc...

So, this is my little blog on my financial adventure for the new year.  Frugal people are organized people.  I think it is impossible to lead a simple, frugal life unless your organized.  Being busy all the time, never slowing down to reflect on life, is sure to lead to chaos and poor finances.  I've found that since I've made a conscious effort to save, watch my spending, and basically simplify my life; I've had peace of mind.  Every household is different, so how each of us goes about practicing frugality will differ.  Throughout my journey in the next 8 months, I imagine I'll tweak a few things.  Nontheless, this is a start.  I'm just thankful that I found FV and got back on track.

 :)
 

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Your husband would be eligible for unemployment after he is laid off and until he is back on a payroll, could be a great income source while he is getting his business set up. ANYTHING that your husband does to get the new business set up can be tax deductible as well as the second phone line in your house. Phone calls, gas to go to auctions to look at machinery, stamps, heat and electric for a home office, anything. Start planning all that early and inevitably you will get pregnant when the business starts, that's what I did. Found out I was pregnant three weeks before our restaurant opened. God works in mysterious ways. Good luck and remember businesses don't last forever, family is more important.
 

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good luck, i know here in nebraska he would get unemployment, he doesn't have to relocate here. hopefully it is the same where you are
 

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Shannon, I wish your DH the best on starting his own business. My DH started his own busness this year and has loved it. I too, at the moment am paying for all household expenses. DH covers all his bills and expenses for his business at the moment until he can start pulling a larger profit. I wish you both the best.
 

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Puffy said:
Your husband would be eligible for unemployment after he is laid off and until he is back on a payroll, could be a great income source while he is getting his business set up. ANYTHING that your husband does to get the new business set up can be tax deductible as well as the second phone line in your house. Phone calls, gas to go to auctions to look at machinery, stamps, heat and electric for a home office, anything. Start planning all that early and inevitably you will get pregnant when the business starts, that's what I did. Found out I was pregnant three weeks before our restaurant opened. God works in mysterious ways. Good luck and remember businesses don't last forever, family is more important.

Ditto...... on the pregnancy. Even though it was now over 20 years ago, we had tried & tried to get pregnant for over 6 years. We then decided to buy a business. I thought I was so tired from trying to get everything going with the business, then found out that I was so tired because I was pregnant!! Had our second son 30 months later & couldn't have timed it better if it had been planned that way!
 

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good luck with the business! I hope it works out. I definately agree that in order to be frugal, you must be organized! Great job w/ planning your budget!
 

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It looks like you are planning very well......I ditto the unemployment insurance and remember the tax benefits too. Keep all receipts of expenses that will be necessary for starting up your business.
Good luck.
 

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"Frugal people are organized people."

I like that saying!

I'm glad you are seeing this as a positive opportunity for your husband to start his own business. I wish you both tons of success!

I can't wait to read your future posts Shannon. May 2006 be a year of blessings for you.

Debbie
 

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Good luck with your journey. :hugz:

Also, good luck to you DH on starting his own business.
 

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Shannon, I think you've got an excellent plan worked out. Congratulations, I know it's difficult honestly facing the debt you carry. I'm sure you two will make a go of it. I wish your DH the best in his new business and I hope you get pregnant soon. I have a feeling that 2006 will be your year. :angel:
 

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Discussion Starter #11
Thanks everyone for your encouragement. Yes, there's a good chance my dh would qualify for unemployment, but I'm not counting on it. He's planning on making himself available to his old company for some work.

The tax write-offs can be very beneficial, so at the end of 2006, our tax bill should be less than normal. It all depends on how much testing equipment my dh needs to buy. I'm on a 21 pay vs a 26 pay so I have 14 paychecks left, then I'll go 10 weeks without a paycheck. I've always saved money, but this year, I'll be saving even more.

My goal was to pay off all my cc debt by June. This probably won't happen so I'm going to focus on paying off $6,000 by June. Tomorrow, I'm going to decrease my retirement investments beginning in January. I'll take the extra money not being invested and use it to pay off debt. If things go well with the business then I can always put more money towards retirement later in the year.

In December,

I've kept my Christmas shopping a little under budget. Also, I'm spending a lot less this year on gifts. All gifts are being paid for in cash.

Tonight, I had to stop at the grocery store and just spent $41. I got 3 dozen eggs for $2, milk for $2 a gallon, frozen veggies for $1 a bag. Everything I bought was on sale.

I've also done a couple other things to help keep me organized. I bank at two different banks. I pay all my bills online. I found at the newer bank, the online bill pay website is better. It automatically subtracts my payments so my checking account is balanced daily. I love this feature. Also, I make most purchases with one credit card. This is a credit card that I earn miles on. I've been doing this for the past couple months and so far its working out great. I pay my bill in full each month. This also enables me to keep better track of my spending.

I challenge myself monthly to reduce my utility bills. I keep the heat low during the day; usually right around 60 degrees. It helps that both of us are gone during the day.

Just about all of my laundry is hung to dry. I don't have a clothesline, but I have space in my basement to do this.

I have $450 budgeted for food, gasoline, and utilities. If I can keep under budget, I'm going to take the extra $$ and apply it towards debt reduction.

I stockpiled quite a few things this fall when a lot of items were on sale. I have enough paper products to last me at least through the winter, but probably till Spring. I use cloth napkins so I'm not buying napkins. I have enough shampoo, soap, toothpaste, laundry detergent to last me at least till summer if not longer. I've got about 20 jars of pasta sauce. I probably have about 30 cans of soup. I also have frozen vegetables in the freezer. I have quite a bit of meat; mostly chicken breasts. I could use more beef. I'm going to do my best to only buy the things I really need. I'll only stockpile if I can get a really good deal on something.
 

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I think your plan sounds great. I hope you are blessed with a little bundle of joy! Good luck with the business.;)
 

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Good luck to you. I need to do the same thing. I need to sit down and come up with a plan of my own. Because that living in a tourist town it will become a ghost town here before to long. But it will only last for a couple of months. My goal is to have all but one credit card paid off this time next year. If I can do that then I will be really proud of myself. Shopgirl to the best of luck to you and dh on both. ;)
 

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Shannon,

What a wonderful thread - I have enjoyed reading your posts for the past few months and I'm so glad to see that you have decided to start this thread. It really helps to face the situation head-on and write everything down. Sometimes that's the hardest thing to do, so WTG getting this ball rolling! I think you are doing great so far, and I admire your positive attitude. I am confident that you will reach all of your debt reduction goals, and then some!

A few things that have worked for me, being in a similar situation and trying to wipe out my debt:
~ Switching to a cash envelope system for things like groceries, household expenses, clothing, entertainment, etc. That way I'm never tempted to spend more than what's in the budget. I take the cash out at the beginning of the month, and that's it!
~ Allowing myself and DH some "non-essential" spending, within reason. For example, we have small entertainment and dining out budgets - just enough not to feel like we deny ourselves everything. That way we're more likely to stick with the plan.
~ Saving for irregular but unavoidable expenses (e.g. car repairs, veterinarian, home repairs) on a monthly basis. I literally put away a set amount (either into a savings account or in cash) for these expenses, so that I have them covered when there is a need.
~ Keeping a minimum in EF and stopping all retirement plan contributions until debts are paid off. I learned this from Dave Ramsey, and it was not easy to do because I hate not contributing anything to retirement. But taking care of the debts is priority #1 and makes more logical sense. It allows us to pay down more each month, and gives us extra motivation to pay off our debts asap, so that we can begin funding our retirement plans again.

These are just some of the things that have worked for me, so hope you'll find some of these ideas helpful. But again, it looks like you're already doing great! I look forward to reading your future updates and keeping up with your progress :)

In the meantime, best of luck and warmest wishes to you and your DH -- I hope everything works out just the way you want! :smball:
 
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Thanks very much for sharing Shannon - I often find myself identifying with a lot of what you're going through. I recently spent the last year with my DH being unemployed, and for the upcoming year we're hoping to have all debt paid off and have a baby. So I really feel like we're in the same boat sometimes.

-Sara
 

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Well my dh just told me this evening that his hours were going to get cut down to 12 hours a week. Like I said before we live in a tourist town and it is going to come to a halt this week since all the shows last show was tonight. There may be a few shows still open this week. But for the most part there are shut down for the year. When I thought that we were getting ahead of things here it comes down that we have to buckle down even tighter now. So I am going to sit down and figure out what we can make our lives a little more frugel. I am sure that if I can get dh to agree on some things mabey it wont be so bad. Hopefully he can talk to a friend that is in a buiness for himself my dh can go work for him. But that means that he will be gone 3 week out of the month. But the pay is really good for those three weeks.
 

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WTG Shannon! I'm sure you're going to succeed, because you ARE organized. I've got to do this for the next year too. I'm seriously looking at funding an early retirement for dh. We'll see if it can be done by economizing (as my dgram used to say). Best of luck on a baby this coming year.

Jean
 

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Discussion Starter #19
December 11, 2005

Well, here's an update on my utility bills for the month. I've been anxiously awaiting my electric and gas bill. I'm happy to report that both bills combined are under by $150 estimated budget. The two were $136 so I have an extra $14 for the month. Also, I used less gas than a year ago. I expected the electric bill to be up a little since we purchased a freezer and I've been using the Vornado space heaters. The electric was $67 and the gas was $69. Gas prices went up a little too, but it wasn't as much as I had anticipated. So, the real test will be next month. December/January was my highest last year. It helps that we can keep the heat low during the day. So, with the holidays coming, we'll be using more gas to heat the house. I'm just so glad that all the effort to reduce utility usage has worked. Today I bought outlet foam and vinyl for my big patio windows. Also, I'm going to put it up in the windows facing the north. I don't have drafts, but when it's really windy, It's always colder on the north side of the house. I spent $21 on a medium grade vinyl. I purchased 8 yards. I probably have too much, but I didn't want to have to go back to the store.

I made my dh's lunch for tomorrow. I had got out of the routine for a couple weeks, but I'm back on track.

Today, I just bought a few groceries. I purchased a little over a 7 lb turkey breast for $1.28 lb. So, I plan on making that for dinner, then freezing half of it, and the rest of it will be used for my dh's lunches. It's so much cheaper than lunchmeat.
 

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Discussion Starter #20
December 11, 2005

Well, here's an update on my utility bills for the month. I've been anxiously awaiting my electric and gas bill. I'm happy to report that both bills combined are under by $150 estimated budget. The two were $136 so I have an extra $14 for the month. Also, I used less gas than a year ago. I expected the electric bill to be up a little since we purchased a freezer and I've been using the Vornado space heaters. The electric was $67 and the gas was $69. Gas prices went up a little too, but it wasn't as much as I had anticipated. So, the real test will be next month. December/January was my highest last year. It helps that we can keep the heat low during the day. So, with the holidays coming, we'll be using more gas to heat the house. I'm just so glad that all the effort to reduce utility usage has worked. Today I bought outlet foam and vinyl for my big patio windows. Also, I'm going to put it up in the windows facing the north. I don't have drafts, but when it's really windy, It's always colder on the north side of the house. I spent $21 on a medium grade vinyl. I purchased 8 yards. I probably have too much, but I didn't want to have to go back to the store.

I made my dh's lunch for tomorrow. I had got out of the routine for a couple weeks, but I'm back on track.

Today, I just bought a few groceries. I purchased a little over a 7 lb turkey breast for $1.28 lb. So, I plan on making that for dinner, then freezing half of it, and the rest of it will be used for my dh's lunches. It's so much cheaper than lunchmeat.
 
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