Monday, September 17, 2012

Financial progress... or lack there of.

Five years ago I was looking into filing for Bankruptcy. I had a good income considering I'm a single mom. But after severe illness, immense hospital bills, running up credit cards to support my family when my pittance of an Emergency fund ($2000) ran out and I didn't have income coming... well, things got a little rough. I had over $50,000 worth of unsecured debt; and $80,000 on a mortgage for a house I couldn't afford; and $13,000 worth of a car loan on a six year old vehicle that I couldn't afford to pay for. AND everyone wanted their money NOW.

Today, my only debt is a couple of hospital bills I received last month that I'm spreading out over the rest of the year to enjoy using Health Care Savings Account funds (pre-tax dollars that will be getting deposited into the account every two weeks).

I've been (mostly) debt free for several months now. And I've been planning and determining how I'm going to boost my emergency funds debt and save up for a down payment for a house. And yet, every dime I put into savings seems to weasel its way right back out. When I figure my budget, I think I should have $1,000 every month of discretionary money that should certainly be able to go into savings. Yet, every month I'm seeing NOOOO progress on the savings front.

I know some of the things I'm doing wrong, but it's hard to imagine that it's covering the complete cost of what I'm spending.

So, I'm looking back at what I did right in the past.

1. I couldn't afford the house plus the expense of commuting, but needed to keep my job. Working locally would have been a drastic pay cut. So, I gave the keys to the bank and found an apartment that was inexpensive. --What I'm doing right now. I can afford a nicer apartment. But this one 'will do'. I'm cleaning and polishing and re-arranging to keep it fresher and convince myself I love living in this small apartment just a bit longer.

2. I couldn't afford the car I had. I tried to keep it for several years. But when push came to shove, the bank took it, as well. I bought an inexpensive car on Craigslist with the money from my then new emergency fund. That particular car ended up costing a fortune in repairs and only lasted about a year. BUT, I had another emergency fund in place which was the down payment for a slightly more expensive car. I ended up with payments for about six months at a finance here dealership. If I have to do it again, the second alternative gave me a better vehicle and didn't wipe out my emergency fund as much... so that's the route I'd take again. -- What I'm doing right - I'm putting $200 a paycheck (every two weeks into savings). What I need to do better, stop dipping into that money every time I get a little short.

3. I cut back drastically on all the services that I could handle. What did I keep? I did keep cable, as I was no longer going to go to movie theaters (except for special occasions) and was cutting back at eating dinner out. Basic cable with the $.99 movie package was going to be most of my entertainment expense. --What I'm doing right - Still have the same basic cable. BUT I have explored Amazon Prime's free month trial. And am thinking about trying out NetFlicks free month trial. From what I hear, folks love it at first, then get tired of the same old, same old after a while. I'm going to watch some cancelled series I always wanted to watch and cancel before getting charged. Probably might have been wiser to not get 'hooked' on streaming. But honestly? I don't really have that large of a watch list.

4. I cut down the internet service to the slowest speed that was still high speed. I need it for working from home, but didn't need the upcharge to get things done faster. Was it annoying that slow? Yes, still is. But it's fast enough I can stream videos. I can live with it. --What I'm doing right. Still at a pretty slow speed.

5. I did keep my cell phone and data plans. That's a possible cut in the future, but geez. It's my connection to the world and I use my smart phone more often than my laptop to look things up. I pay for myself and my adult son... because he can't afford another monthly bill and this way we stay in constant contact. We're close even if it's only cell phone calls every couple of days. I don't want to cut that out. BUT I did cancel home phone service. I have not missed it a single bit. There's less telemarketing, one less voicemail to listen too. If I don't want to use my cell phone (work conference calls, phone is dead, etc) - I use Google Voice to make my calls with a $15 headset on my laptop. --What I'm doing right. I won't ever go back to a land line unless I had a business to run. If someone needs to call me, they get my cell phone number. If I need to make a call that's going to go long, I can use the free Google Voice app.

6. I made a big meal every Sunday that I could divide and freeze leftovers from for work. After a few weeks, I even had variety in what I could eat at work. --What I'm doing wrong.  THIS is something I really need to do again I think. I'm spending on average $7 - $10 a day on breakfast and lunch at work now.

7. We ate out one night a week - my son's treat was McDonald's on Wednesday (kids meals are cheaper that night) and I would usually get something off of the dollar menu at Wendy's. -- This is another thing that might be part of the issue, we've been eating fast food about three nights a week. It's not healthy and not fiscally wise.... it's just fast.

8. I cooked most of our meals from scratch. I only have a handful of trust-worthy and kid-friendly meals... so they got repetitious and old. But they were cheaper. -- This is another thing. When I got really, really tired - I started going for the already prepped food that you just heat and eat. Again, not healthy, not fiscally wise... just fast. And it isn't THAT hard to try to find new recipes these days.

9. I love going on trips and vacations. We went from a week in Orlando every other year down to two weekend trips a year within driving distance and one camping trip (most of our gear is already owned). I did do a celebratory trip to Orlando when I reached the over 50% debt paid off mark. And figured that once I was back on my feet, we'd go to every four years instead of every other year.  -- I thought I could get away with a longer driving vacation instead.... but I think it would be better to switch back to the shorter trips more often. I spent about $1800 for a week in Rapid City this year and it was a really long trip. I think my son and I would have had as much fun for a fraction of that over two weekends. And some of that could have stayed in savings. Plus now, I really don't have anything to look forward to until my next trip which can't be until after the new year.

10. Medical shortcuts. Not something I  would probably suggest to anyone else. But I spent a LOT of money on medical testing because I knew I was ill. But they couldn't figure out what was wrong with me. I only quit pushing for testing because I was frustrated with the lack of results. But honestly, it was a wild goose chase. I found a couple of studies two years ago that pointed out that one of the crucial tests I was getting done would be misleading in a specific scenario. And ALL THE DOCTORs kept pointing to that result as if it was written in stone saying things like "it seems so much like severe B12 deficiency, but your results look fine." sigh. In the end? Once I got them to ignore that test result, I got treatment, and I got better. -- Technically not the same thing, but now I just need to keep my body from breaking down. I've had two major surgeries each of the last two summers. Less medical expenses = more money for saving.


See?

Going through this list has already pointed out a handful of good opportunities to improve my budget. I probably can't do much with the medical expenses thing. But I've been really good at making sure I set aside pre-tax dollars for it. And so far, so good. At least I'm getting the tax benefit.

So, for planning. Get back into cooking big meals Sunday nights and smaller meals during the week from scratch. Take breakfast and lunch to work. Might even buy a case of my Pepsi and bottled water to the office for my drinks every day. Plan a camping trip for next summer and two weekend get aways. Of course, next Summer/Early Fall is my son's wedding. But if I can save up in the meantime by getting things back under fiscal control, it shouldn't make too much of a dent in my savings. Bride's father will pay for the wedding 100% (last I knew; that's why we were waiting until 2013 to schedule it) so it'll just leave the Rehearsal Dinner to me. AND I have tons of ideas of how to make it special, but lower cost.  Just need to get the bride to finalize the where and when so I can get to planning.

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