Monthly Archives: January 2014

Control

There are two kinds of New Year’s Resolutions that I make each year – official and unofficial.  Official resolutions are the resolutions that I write down and follow the rules in the resolution tips that I posted in November and December.    Unofficial resolutions are ones that I make that I don’t obligate myself to – either because I’m not yet ready to commit to them or because I’m not really sure how to make it happen.  Dieting is one of those.  I’m a thin person and have never been in a situation where I needed to lose weight.  However, I’ve finally reached a point where I need to change my diet.  It is not for weight reasons but because I’ve recognized that my diet is just not that healthy.  So, why did I not make an official New Year’s Resolution to deal with the diet issue?  Because I honestly do not know enough about the subject to make a good resolution out of it.  I do recall making resolutions in two separate years to eat a certain amount of vegetables and fruits each day and did pretty well with it.  But a complete overhaul of the diet?  Need to research that one.   But another reason I did not make an official resolution out of it is that I will be doing this with my wife, who is also overhauling her diet.  So, you might say that I am joining her in her resolution.

Now, my point isn’t to talk about “official” vs. “unofficial” resolutions or to talk about diets.  I mention the above as a prelude to the overall subject of control.  The past few months have illustrated for both of us the need for control.  Control over our diet, control over our finances, control over our careers, control over how we raise our kids, control over how we use social media, control over the use of our time, etc.  We live in a crazy world where a million things are screaming for our attention from every direction.  On top of that, we have the responsibilities and demands of taking care of and raising young children.

This blog started as a blog about resolutions and trying out proven happiness-inducing ideas.  Then it became a blog that would chronicle our path out of debt.  Now it is becoming a blog that will not only cover our journey out of debt but will also cover our journey to free ourselves from all the things that are holding us in bondage.  How do we get control over our lives in a crazy world?  This blog will chronicle our attempt to do just that.  Enjoy!

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Gilroy, CA – Budgeting!

Well, we have regressed.  Well, not really.   As discussed in the last post, our credit card activity consists of a bunch of expenses followed by a lump payment.  So, our journey is going to be a little disjointed.  I’m trying to figure out a way to have the credit card payments keep pace with the expenses so that we have a better feel for our actual progress.  There will be a back and forth element to it, but when you start seeing cities from northern Oregon or Washington, you know that we have made some actual progress.

The truth is that we have made real progress in that we have come up with a budget.  I put it together last weekend with input from my wife.  It was basically an updated version of what we had before, but what counts is that it was updated and is currently providing a way to measure our expenses.  How are we following it?  On mint.com.  Check it out.  It’s a great site and I highly recommend it.  It also has an app that you can download to your smartphone.  I love the app!   Today I paid cash for a lemonade at Wetzel’s Pretzels and immediately entered the transaction into my phone.  So, are expenses are now being tracked and they are being compared to an actual budget.  This step will probably be the most significant step we take in our entire journey.

Also, I enlisted the help of my 5-year old daughter.  I explained to her as best as I could what a budget is and what we are doing.  She enjoyed typing in the budget amounts on the Mint.com website and enjoys sitting with me while we look at the recent transactions picked up by Mint and making sure they are hitting the right categories.

Well, that’s it for now.  On to Oregon!

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Williams, CA – Major Progress! Or was it?

Well, today is Sunday, January 5th and we have already made it past Sacramento!  We are cooking!!  We are on a pace to be debt-free by Spring!!!  This is great!!!!

Well, sort of.

You see, periodically my wife makes payments to our two credit cards.  They are substantial amounts but they are essentially covering regular costs that we incur.  And in many cases, they are recovering less than the expenses we incurred.  So, our “progress” is not really progress.  In baseball terms, it’s kind of like when the weak-hitting shortstop on your favorite team hits two home runs in the first week.  He is on pace to hit 52 home runs but you know that, unless he’s juicing big time, he ain’t gonna hit anywhere close to the 52.  In fact, he may hit only 5.  We are the weak hitter in this analogy.

So, the progress is fake.  But….but….I don’t want to go back to Camarillo!  I want to keep going.  Fake progress or not, we are in between Williams and Willow, CA and I do not want to go back.  This fact alone is motivating me to spend less or put less money on the credit card.  Why?  Because I want to see real progress.

Now, that brings me to a brief discussion I had with my wife last night over dinner.  She was coming down with a bad head cold so the conversation was indeed very brief.  And it was mostly one-sided.  I asked her if we could make a lot of little payments…or something along those lines.  Like a $1 a day or something like that.  In other words, I want to take those periodic payments and spread them out so that our progress is more consistent.  I want to go from 20 steps forward, 19 steps back to 2 steps forward, 1 step back.  I want to see our real progress on a day-by-day or week-by-week basis.

So, our first real step in this journey is to figure out how we’re going to deal with the credit card payment situation and how we can better monitor our progess.

Well, that’s all I have for now.  It may be awhile before we hit Oregon, but we will get there.

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Camarillo, CA – Let’s Go!

Well, the day has arrived.  The bags are packed.  We are ready to hit the road.  Today marks the beginning of our journey to financial freedom.  In this blog, I will be chronicling the process that we will take to get out of the debt trap we are in.  You will get an inside look into the trials and tribulations and the ups and downs that characterize the process of getting in shape financially.

Before we begin, let me tell you a little bit about myself.  My name is……well, I wonder if I should give my real name.  I will have to do some research on whether or not that is a good idea, especially in light of the fact that this blog will be discussing financial stuff.   For now, I am a male.  My wife is, well…good guess…female.  I have two children – a 5 year-old daughter and a 2 year-old son.  We live in Ventura County, CA.  That is key and you will find out why in a minute.   I am a financial analyst by profession.  Not the kind of financial analyst that tells you how to invest your money and manages your portfolio.  Based on the subject of this blog, I obviously don’t know anything about that.   I do like numbers and I know how to analyze, so there will be an element of this process that will be fun for me.  My wife works part-time and wears a lot of hats, so to speak.  My daughter is in kindergarten and my son destroys everything in his path.  We are Christians and so that will play a role because we believe God provides and will be a major factor in how this journey plays out.

We were debt-free when we bought our current home in 2007.   The prevailing wisdom at the time was to “just get into a house.  It may be tight for a few years but you will gradually earn more and more and you will gradually get on your feet in a house that will appreciate in value.”  Well, things didn’t work out quite the way we expected.  The economy tanked.  Annual raises stopped for awhile and have been minimal ever since.  We were hit with expenses that we didn’t see coming.  Shortly after we moved in, we were asked to put in a new fence in our backyard.  We were debt-free but we didn’t have savings, so that immediately hit the credit card.  The cost of having a baby was a lot more than we anticipated.  Before long, the credit card had inflated and continues to inflate to this day.

We have attempted numerous times to make a budget and stick to it, but things happen.  We get busy and gradually forget about it.  And then something will happen to make us get serious about it again.  Life has been a bit crazy the past couple years and it has been very difficult to focus on the financial side of things.  Maybe we weren’t meant to focus on it. Maybe it was the right thing to just trust God for a couple years and take care of other things – “other things” including a very active toddler.  But, right or wrong, it is time to take action.  We are ready to tackle this thing.

So, that is the background.  How long is our journey going to take?  Who knows, but I can tell you at the minute that our credit card debt is currently at $20,790.  Some of you will say, “Wow!” and some of you will say, “Big deal!”.  But due to income restraints and the ever increasing standard of living (especially with children), we have never really been able to make a dent in our credit card bill.  We were able to refinance our house last year (well, its New Year’s Day, so that means it was technically the year before last) and so that is how we have been able to stay afloat.

Now, I’ve decided that I am going to translate our journey into geographical terms.  The starting point will be the middle of Ventura County – Camarillo, CA.  Our end point will be the Statue of Liberty in New York.  Why the Statue of Liberty? Because it represents freedom.  The route that we will take there will not be a straight shot.  We will travel to the northwest corner of Washington and then all the way to Miami, FL.  From Miami, we will make our way up to the Statue.  After we have arrived in New York, we will travel back home.  The route home will represent everything you are supposed to do after getting out of debt – saving, investing, etc. (i.e., the 3rd through 7th baby steps in Dave Ramsey’s Total Money Makeover).  Were there 7 steps?  I can’t remember.  Anyway, that is the plan.  And according to my calculations, each dollar will represent 3.48 miles.  So, every time I make a blog post, you will be able to see or envision geographically where we are in our journey.

Well, I believe I’ve said enough for now.  It’s time to head out.  Financial freedom, here we come!

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