Home > Archive: August, 2023

Archive for August, 2023

A Step Raise!

August 31st, 2023 at 09:19 pm

I just started year 18 of teaching! I can’t believe it. I teach in Northern California at a continuation high school, and most days I love it. Year 18 means I get a step raise. It is not a traditional merit based rase, it is purely based on years of service. If I have done my math correctly, it looks like I will be taking home an additional $300 per month.

Most times when I get any sort of raise, we increase the amount I contribute to my 403b, but not this time. As we are trying to become more financially solvent, we are seeing where we have some holes in our budget. We have sinking funds for many categories, but we have inadvertently ignored some possible big budget busters: home repair/furniture upgrade, new car purchase, and appliances.

We do have a general savings account and a small emergency fund, but none of these things should be emergencies. We know we will need to upgrade our furniture at some point. We also know that when you are a homeowner you need to maintain your investment. Likewise, cars don’t run forever, and we have not been putting away for a new car like we should have been. Appliances fall into that same vein. They don’t last forever, so we need to plan to replace them.

We plan to carve a little bit extra out of our budget and add that to the additional $300 from my step raise to start sinking funds for those categories. I know $100 - $150 a month isn’t much, but it is a start. Eventually, as we fully (to us) fund other sinking funds and pay off our credit card debt, we will be able to increase the amount we contribute to each sinking fund each month.

Baby steps. I always have to remind myself: we did not get into debt over night… It was over a period of many years, so we won’t get out of debt over night either. We need to be patient, stay the course, and be responsible.

These new sinking funds will put one more step between us and financial disaster!

Today is payday for my district. We get paid on the last working day of the month. It was so very satisfying to go to the bank, pull out the money for my envelopes, and then start three new envelopes! Each one doesn’t have much, but I’m so glad we started them! And I’m glad we are making a plan for the money I’m getting from my step raise and not just nickel and diming the money away.

Murphy Decided to Pay us a Visit

August 29th, 2023 at 06:22 pm

Murphy decided to pay us a visit. UGH!

We are strongly considering moving (I will do a full post on that eventually), and during the course of packing some stuff up, I walked across an area of carpet and it felt a little damp. I thought I was imagining things and I didn’t really think much of it. About 10 minutes later, I walked across the area again and it again felt damp to me. Just slightly damp, but damp. This time, I had my husband come check if it felt damp to him… and it did.

We have bookshelves lining the wall where we felt dampness, so we pulled the books and three shelves out and lo and behold, there was some wet drywall and baseboards and damp carpet. The other side of this wall is our fridge. We pulled the fridge out and saw that there was a hose leaking from our fridge. We don’t know how long is has been leaking, but it’s been long enough to damage the baseboards on both sides of the wall and about a foot of drywall too.

It sucks! Especially because we are trying to get our house ready to show in the event that we do move. This is a pretty major setback. We have fans set up on each side of the wall to dry out the water and then we will really be able to see the damage and what we will need to do to fix it.

This fridge has been nothing but a nightmare since we bought it brand new almost 7 years ago. We remodeled the kitchen in our old house and got all new appliances. The fridge we chose had an ice and water machine. The ice/water stopped working within six months of getting the fridge.  Also, things on the left side of the fridge freeze. (We have had to throw out sour cream more than once because it got shifted to the left side of the fridge and frozen. Sour cream just doesn’t defrost well.) Items also freeze in the crisper drawers. I have hated this fridge almost since day one… and this just gave me cause to hate it more.

On the bright side, my husband is very handy and he will be able to do all the work himself. It will just take time and money. It won’t be a super expensive fix money-wise, but it will be pretty costly timewise. Dry wall repair takes a while. The timing of this is not ideal, but it never would be. Hopefully we will be able to repair it relatively quickly and get back to getting the house ready to show.

Baby Emergency Fund

August 28th, 2023 at 06:05 pm

In February, inspired by another blog I read, I decided to start saving all my $1 for an emergency fund. The blog I was influenced by saves all of her $5 bills, but I don’t feel like we are in a financial position to take so much out of our daily budgets right now, but maybe someday.

As we primarily use cash, a fair amount of $1 bills go through our hands. We take them and put them in a separate envelope marked “emergency”. Each time we get to $100 in singles, I bring it to the bank and change it out for various larger bills. Currently we have $300 in the envelope, all in 20s. We are past half way to another hundred dollar mark and we will probably turn that into a hundred dollar bill when the time comes, and maybe after that we will change the singles in to fifties. We like the idea of having the money in different denominations so if we ever do have to use it, the money is actually useable and convenient.

Although it is not a huge emergency fund, it is a little extra money that might come in handy one day. And as it continues to grow, it will be more and more substantial. We don’t currently have a goal for our $1 bill emergency fund, other than to watch it grow, but have talked about different things we can use it for: appliances suddenly breaking, unexpected car repairs (that we can’t fund with our car envelope), unexpected medical bills, or maybe (once the numbers line up) we will use whatever is in the envelope to pay off the last of our debt. (That would be a dream come true!)  At this point it is all speculation, but it gives me a little peace of mind to know we have a small stash of money that isn’t already designated to somewhere.

We do have a small emergency fund in the bank, but we are nowhere near a fully funded emergency fund. Like I said in my last post, however, we are working hard at maxing out our sinking funds, so emergencies will be fewer and farther between, but a little extra insurance never hurt anybody!

The Way We Use the Envelope System

August 24th, 2023 at 02:54 pm

It's been a long time since I’ve written about it, but we use the Dave Ramsey envelope method for budgeting. We don’t follow Dave religiously, but we do like the envelope method for our sinking funds and it seems to work pretty well for us. Twice a month I go to the bank and take out anywhere from $800 - $1500 to fill our envelopes. This works for us and helps us to keep from charging on our credit cards and increasing our debt.

We have several different envelopes, as well as one separate savings account where we budget for car insurance (annually), car registrations, and tithing/giving to our church. Many people have told us we “have too many envelopes”, but we have what works for us.

Recently, as we have a little more money now because our kids are getting older, we went through and determined maximum amounts for our envelopes. Although we’ve never been destitute, we’ve never been in a place to max out our sinking fund envelopes and barely fully funded them each month. Now we are starting to see little surpluses each month and it’s exciting! It’s another sign of progress towards better financial health!

We have 9 envelopes: food, gas, car, household, hair/nails, kids, education, clothes, health/gym. We determined that food will never have a maximum because we buy ½ a cow every year and any excess in food will go towards that. We allot $600 a month towards gas and determined that the maximum we will put/keep in there will be $1000. We’ve never reached that before, but right now that envelope is sitting at $715, so we are getting close. Car is another envelope that will never max out. Car repairs come when you least expect them and can often be expensive! We have $440 in our car envelope right now. Household to us is shampoo, soap, paper goods, cleaning products, etc. and we set a maximum of $500. We’ve never gotten anywhere near $500 and usually that envelope is running at a deficit, but I’m hoping with fewer expenses and that we are now funding our envelopes with higher values, we will get there. We just did a big Costco run and got toilet paper (X2), deodorant (X2), ziploc bags, and dish detergent, and because of all that, we have $0 in that envelope, but will be filling it with our next paycheck. Hair/nails will max out at $500 as well. I actually only get my hair cut about once a year, but I’m going to be honest and say I love manicures and pedicures, although I don’t get them as often as I used to. This envelope currently sits at $290 so I could see us maxing it out in the near future. Both The Kids are now high school graduates and adults, but we decided to keep our “kid” envelope for various and sundry things. We will max “kids” out at $500. This envelope has $180. Our education envelope doesn’t have to be used to pay for senior year anymore, but as I am a teacher I am constantly paying for things for my classroom. The money in that envelope will be used towards mainly that. (The Daughter has decided she wants to be a personal trainer and as she has decided not to pursue college, we will pay for her certification course for personal training. Much of that will come out of the “education” envelope.) Once we have paid for The Daughter’s personal training course, that envelope will top out at $500. We have $0 there now as I just bought pens and pencils for my classroom and paid for my Sunshine Club membership; but we will keep plugging away at that envelope. Clothes and shoes can get expensive. This envelope currently sits at $390 and will top at $1000. Our last envelope is health/gym. We pay $160 per month to see a personal trainer. That envelope will top out at $320 which is two times our monthly cost. Currently, that envelope has $280 in it. We will only budget $40 toward it this month as that would bring us to our maximum.

Our sinking funds (not including car registration and insurance, which is directly deposited into its own savings account) sit at almost $2500. We are happy about that and feel like our sinking funds are another barrier between us and sinking further into debt. Of course we hope to only use the envelopes for their prescribed categories, but in a pinch this could function as another emergency fund.

These are the envelopes that work for us right now and as life changes, so will our envelopes. In the past, we have had envelopes for pets, dance, sports, etc. Each season of life leads us in different directions and with different financial responsibilities; there is no one way to do anything and this is what works for us right now!

"Saving" Money This Year... Sort of

August 21st, 2023 at 03:10 pm

The last couple of years have been very expensive for us and made it difficult to pay down our debt by much. I’m not complaining, just explaining. We didn’t decrease our debt by much and we were able to cashflow a lot of expenses! Going forward, things should change.

We have had two “senior years” in a row. Our son graduated in 2022 and our daughter graduated in 2023. Senior year is expensive. There are all the normal school expenses that everybody has: yearbooks, ASB, PE clothes, school supplies, dances and winter ball, sports, etc. But on top of that there are: senior portraits, prom, powderpuff football, senior trip, senior sunrise, senior sunset, senior beach day, senior movie night, senior ditch day, and that is just what I can think of off the top of my head!

Senior year was expensive for each kid but having to do it back-to-back was brutal! (I feel so sorry for parents of twins!) Quite honestly, just not having a senior this year (or a kid in school at all) is going to help our budget! It’s crazy to me how expensive public school has become. (And just to be clear, I am saying this as a public school teacher. Overall, I think there is great value for money, but the cost of extracurriculars has skyrocketed!)

In addition to not having a senior (YAY!), my daughter aged out of dance last year. We spent a TON on dance. I understand we could have told our kids no about any number of things to get ourselves out of debt faster, but we decided our kids shouldn’t have to suffer because of the financial mistakes we made, so they were able to do most activities that they wanted. (No judgement on anybody else’s choices either!) We paid about $1000 per month for dance, and it was always paid for in cash. We never charged anything for dance. Some of that money is going to be absorbed into our budget, but over half of it is going straight towards debt. Dance is, quite honestly, prohibitively expensive, just like so many elite sports in America are. We feel very luck that we were able to pay for dance, all while making slow progress on our debt, and contributing heavily towards our retirement.

Dance was so expensive. We had to pay monthly tuition, competition fees (which have skyrocketed since Covid), choreography fees, costume fees, and for food, gas, and sometimes lodging at competitions. We always brought snacks and drinks with us, but the costs still added up. I’m very happy to not have dance to pay for anymore. That’s going to help us pay down debt and fatten up my envelopes.

Making Slow Progress

August 16th, 2023 at 09:24 pm

Hi there… I know it’s been a while, but like happens to everybody, life got busy. My daughter was a senior and graduated last year plus it was her last year of dance, so we had a lot to do. I am also a teacher and the summers are always busy… but in the best possible way!

I am back to work now, so in some ways our life is going to slow down.

The last time I posted our debt we had $19,167.74 in debt. It has decreased, but not by as much as I would have liked. Our debt today stands at $14,867.79, so a total decrease of $4,299.95. And interestingly, $1000 of that came in the last month. I can’t wait to get our debt down below $10,000. I’m hoping maybe by the end of the year as we have some good months coming up as far as debt payoff goes.

In September, I will get a small paycheck for some work that was performed in July and August. I will split it in half, half will go towards debt and half will go into our savings. September is also a three paycheck month for The Husband so we are able to send more to debt with that. A little over half of his extra paycheck will go to some various expenses we have to cover and savings and a little under half will go towards debt.

In my last debt update (months ago) I was excited because our minimum payment was finally under $500. On our next statement (in literally a month) our minimum payment should be under $400 as this month’s minimum is $400. We just keep plugging away knowing that slow and steady wins the race. I have to keep reminding myself that we didn’t get into debt overnight so won’t get out of debt overnight.

I am happy we are making progress, but I wish our progress was faster! Hahaha!

I’m really hopeful about getting our debt under $10,000 by 2024! I think it’s doable if we are diligent with our spending over the next few months!