Well… Murphy came to visit this weekend. Luckily, we were mostly prepared for him.

We are hosting a foreign exchange student from Belgium for the semester and on Saturday we planned to be tourists for the day in San Francisco. Before we left, my husband went out to the fridge in the garage to grab something and found water all over the ground. Apparently, our hot water heater was leaking. We actually think we caught it pretty early, which is a blessing!

My husband attached a hose to it to drain it and called my brother, who owns a plumbing company, to ask some questions. He then had us call my nephew (who works for him) to order a new water heater. The upshot of it is, it’s being delivered and installed today, and it didn’t ruin our plans to go to SF.  We are also very lucky to have generous neighbors who we are close to who allowed us to shower in their house. We were like a parade going in and out on both Saturday and Sunday nights.

We could have gotten a water heater yesterday from Home Depot and been in business one day sooner, but we decided the cost savings was worth it to wait one more day… in both time and money. We will get the water heater at cost and my nephew, who is a plumber, will install it for us. My husband will help, but the learning curve will not be there because he isn’t doing it himself. (My husband is very handy and takes on a lot of home repairs. But sometimes, we choose to leave things to the professionals. Especially when they are our brothers and nephews!)

As you all know, we are in credit card debt, but about 6 months ago we started some new sinking funds, two of which were appliances and home repair so, coming up with the money won’t be an issue because it’s already there. I will be sad to part with it but am SO happy we have it. What could have been a major setback (especially to our hearts and minds) just became a relatively minor inconvenience.

We were able to play tourists for the day and not stress too much about our water heater issue. We had a jam-packed day in San Francisco. We visited and walked over the Golden Gate Bridge, drive down Lombard Street, climbed to the top of Coit Tower (the only touristy thing I had not done before, I’d been there but never to the top), ate clam chowder on Pier 39, played games at the Musee Mecanique, walked around Fisherman’s Wharf, and ended with dinner in North Beach, which was a special request from our student who loves Italian food! It started out rough but ended up being a great day!

We don’t know the final cost yet of our water heater, but we will pay it and keep plugging away, at both our debt and replenishing our sinking funds!

Just a quick thank you post to all the kind people who have commented on my posts. I read and appreciate all the comments and suggestions you guys are giving me and am even trying to put some of them into practice.

I have so enjoyed being a (mostly quiet) part of this community. I blog for my own accountability and rarely comment on other blogs, (but I'm working on it). But I love to read the comments on everyone's blogs. This is such a smart, creative group of people and I appreciate how willing everyone is to share their knowledge and ideas!

Thank you all!

It has literally taken me 25 years to dig out of the hole I started digging when I was 18, and I'm not done yet. At its peak, our credit card debt was $24,904.68. We are down to $10,760.96, progress, sure, but not credit card debt free. 

We have had periods in our life over the last 25 years where we were credit card debt free, but inevitably, we would rack the credit card debt back up. 20 months ago, we hit our all-time high in credit card debt and are finally seeing the light and making real changes. We are adequately funding our sinking funds, planning for upcoming expenses, and cash-flowing everything we can to avoid going backwards with our progress. We even have a baby emergency fund for real unexpected expenses.  Our progress has been slower than we would like, but it's still progress. 

We have both short- and long-term savings goals within our envelope system. Long term we are saving for: new (to us) cars, home repair/furniture, and appliances. More immediate savings goals are for: car repairs/tires, car registration, annual car insurance, home essentials, health essentials, clothing, school costs, and Christmas. Funding all these different sinking funds “slows down” our progress, but they are the reason we have progress. Without these sinking funds, we would have to charge every expense that pops up.

We also contribute to our retirement. As a teacher, nearly 11% of my income is taken out of my paycheck and put into CALSTRS, before I even see it. I also contribute an additional 15% to my 403b. My husband contributes 13% of his paycheck to his 401k and gets a 3% match from his employer. On top of that, on his first paycheck of every year, his company gives another 6% into his 401k they call profit sharing. All told, we contribute about 23% of our pre-tax income to retirement every year. (I know we could be out of debt faster without doing that. I know the math supports pausing retirement to pay off high income debt. But I also know that our peace of mind is worth the extra time/money in debt. We watch my husband’s parents struggle in their retirement because they didn’t plan well and never want to be in that situation.)

We are also trying to be strategic with any unexpected monies that fall into our lap.  Right now we only have a baby emergency fund and want to grow that so we put a small amount (based on how much “extra” money we get) into savings, a very small amount of unexpected monies gets dedicated to the buffer in our checking account and the rest goes towards our credit card debt.

I wish it didn't take us 25 years to learn these lessons but at least we have learned them. Our kids have seen us struggle and hopefully won't make our mistakes. They both (by their own choices) use the envelope system. They both save 20% of their income. They both tithe 10% of their income. Our 20-year-old has started his Roth IRA and our 18-year-old has earmarked $1500 in her savings to start her Roth IRA.

Our kids are so far ahead of where we were at the same age and my only consolation is that I think part of the reason for that is the struggles we have had. Hopefully they will never struggle the same way and will live within their means, which was our biggest mistake.

All these choices and how we handle our money are a result of our credit card debt and how we have treated credit cards since we were 18. We don’t blame the credit cards and we don’t blame the credit card companies. We blame ourselves. I CANNOT wait for the day that we owe nothing to our credit card! The way we use and allocate our money will change drastically. Right now, we have to use our money in the present to pay for purchases from the past, and it will be so freeing to have more choices.

44-year-old self, you are growing up. You are handling your finances and credit cards more responsibly. And you are going to get out of debt. All the hard work has taught you so much and will help you in the second half of your life. The mistakes in your past don’t have to be the mistakes in your future. But, remember, it's okay to stumble. You don't, and won't, get everything right. The important thing is to persevere! Keep going!

44-year-old self, you are making progress, but it’s also okay to need a pity party once in a while.

Today, I’m pulling myself up by my bootstraps and getting back to it. I will get break the $10,000 threshold. I will stay the course, and I will get out of debt. I have to remember that this debt is 25 years in the making. It didn’t happen overnight so it’s not going to go away overnight… but it is going to go away!

Let me start by saying, credit cards aren’t inherently bad. Actually, when you manage them correctly, they are good. I, however, have not been a good manager. In fact, I’ve handled them poorly for more years than I have handled them well.

Dear 18-Year-Old Self,

Don’t sign up for credit cards yet. You don’t have enough experience with finances: paychecks, bills, reconciling bank accounts, etc, to make informed decisions with credit.

Among other things, you don’t make enough money to warrant needing credit cards. You work at a retail store making just over minimum wage and you live at home. You don’t need credit. If you can’t afford to pay cash for it, you can’t afford it and you don’t need it.

Let me reiterate, credit and credit cards are not intrinsically bad, but the way you will handle them at 18 is. For the first month of two, you will be so responsible and pay-off everything you charge. But as the months go on, you charge more and can afford to pay less, and before you know it, your card will be maxed out and you will be making minimum payments.

As a young and naïve adult, you will think that because you can afford the minimum payments, you can afford whatever it is you are buying. That’s just plain wrong!

Think about it this way: do you want to be paying for that sweater you are wearing now, at 18, when you are 25 years old and don’t even have anymore? That is how credit works. In your present, you are paying for your past, with no end in sight. It truly is a viscous cycle.

You are not responsible enough for a credit card and it will take you literally 25 years to dig yourself out of the hole you started digging at 18. You need more experience managing the money you do have before you start trying to use money you don’t have.

You will get there but give yourself a better foundation first. Try the envelope system, try only using your bank card, write checks, but don’t sign-up for credit cards yet. I promise, your future self will thank you.

Response from my 44 year old self coming next week.

I’m starting to get “debt-pay-off-fatigue”. (I don’t know if it’s a real thing, but it sure feels like it!) We have been slogging away for 20 months and it’s still not gone! (We know it’s our own fault and that we did it to ourselves. We take full responsibility but are just sick of it!) We have paid off 57% of our total debt and are hoping to pay it off this year, but we are tired.

When we first got deep into credit card debt, we worked hard at payoff. We got “down” to around $19,000 - 20,000 very quickly. And then we hovered around there for months… like 10 months! For one reason or another, we weren’t making much progress. Some months we only paid off $100 and some months we put $200 back on. It was infuriating! Then, we finally broke that threshold, and we were so happy. Progress was fast and furious for several months… and now it’s almost non-existent.

Christmas and the holiday season are always expensive, but they massively slowed down our progress! Our last three credit card statements have shown almost no progress. ☹

Right now, I’m really feeling debt-fatigue. We are so close to breaking the $10,000 threshold, but we still feel so far away! Even though we “only” have $10,700 in credit card debt, I don’t think we will be able to break $10,000 by our next statement. Due to some upcoming expenses, we only assigned $774 to go towards our debt, but then we need to add interest.

We hovered at the $19,000-20.000 threshold for months and now I feel like we are doing the same thing at $10,000. We just can’t break it.

I know we will… I know we are close… I know we will get out of debt. I’m just having a pity party today.

I know this is a weird topic to write about on a financial blog, but I have found for myself that I start to spend more when I am not taking care of myself. These are some of the ways I recharge my own battery without spending too much money.

Renewing yourself and self care are super important in this fast-paced crazy world we live in. But when you are on a budget, it can sometimes be difficult to find ways to do so frugally. In a lot of ways, I’m really lucky that I am in introvert and recharge my battery best when I have some “alone” time. Most ways I recharge my mental batteries are pretty cheap.

The best thing I can do for myself and my mental health is to take a long, hot bath with a good book. I love to take baths and I love to read, combining the two is heaven… and it’s free. However, even with adult children, sometimes it’s hard to find the time to take a long bath, but I try at least once a week. I like the time by myself without a care in the world.

Just spending time reading helps me to recharge. Although not always free, it’s definitely a pretty frugal way to spend my time. I love to read almost anything. I read both fiction and non-fiction alike and enjoy them equally. When I am really low, I will almost always choose fiction because I don’t have to think about it. It gives me time out of my own head where I don’t have to worry about my problems.

I love tea. Just sitting and enjoying a great cup of tea in a beautiful bone china tea cup and saucer feels incredibly decadent to me and mentally fills my bucket, for a nominal cost. I have dozens of tea cups and saucers to choose from as well as many flavors of tea. Tea time becomes a well deserved break from every day.

Another way I recharge my batteries and tend to my mental (and physical) health is through exercise. I walk and weight train and both improve my physical and mental well-being for free. I’m not an outdoorsy person, but I love hiking, not because of the nature but because of the physical challenge it gives me. I strength train 4 days a week and I have noticed that when I work out consistently, in general I sleep better and feel better.

I love a myself a good pedicure. It is probably the most expensive thing I do for my mental health, although it’s not terribly expensive. Prior to committing to get out of debt, I got pedicures at least monthly, now I only get two or three a year so they are extra special and feel extra indulgent.  I do have a hair and nails envelope but feel guilty getting pedicures while I still have debt so I don’t get them often, but once our credit card debt is paid off, I think I will revert back to monthly pedicures. I love them. They are time to relax, be by myself, and read a good book.

The last thing I do to renew myself could become expensive if I let it. I love to go to Barnes and Noble, look at books, and sit down to peruse them with a chai tea latte. Unless I have a gift card, I usually only allow myself to buy one book. We don’t have a Barnes and Noble where I live so I don’t do this often, but just like a pedicure, it feels so indulgent.

PS Today I was on an interview panel for work and had to meet my principal at the District Office about an hour later than my usual work time. I chose to wake up, do a longer-than-normal-workout-on-a-weekday and take an hour long bath. It was glorious and just what I needed!

I know I’m a little late with my goals, but life has been hectic.

Last year I only had two goals, to decrease debt and increase our savings. We were only successful with one of those. We decreased our debt by almost 50% last year. But our savings decreased as well. On the plus side, however, we didn’t increase our debt and cash flowed nearly $20,000 of expenses in that year.

Our goals are pretty basic. I have the same goals for 2024 that I had last year as well as one additional goal. I want to decrease debt (with the outside goal of eliminating our credit card debt), increase our savings to $5000 (from $1500), and move across the country without accruing more debt.

Goal 1: We owe right around $10,700 on our credit card. We didn’t quite make our goal of $10,500 by 12/31 but I’m not trying to dwell on it. We will definitely decrease out debt, but I’m hoping we can actually get rid of this credit card debt once and for all. I think becoming consumer debt free is a stretch goal this year, but I don’t think it’s impossible. To stay accountable, I also want to write debt updates every month. Some months will be better than others, but I think consistency and accountability will help our overall progress.

Goal 2: Increase our savings from $1500 to $5000. Our savings took a hit this year. 2023 was an expensive year for us between travel and helping our kids launch into adult hood. This year should be better so we shouldn’t need to dip into our savings as much and in fact should be able to build it up some. With each of The Husband’s 3 paycheck months, we will dump an extra $500 into savings which should help us meet our goal.

Goal 3: We have a potential (but likely) move across the country coming. We know it will be expensive so we have been planning for it. We are hoping to be able to cash flow the whole move and what we will need to buy when we get there. We plan on leaving a lot of our furniture, as it is very old and worn down. We have a “furniture” sinking fund that we have been putting money into, as well as a sinking funds for appliances and home repair. We are hoping this will be enough savings to move without accruing any more debt.

That’s it. Those are our goals for 2024. All doable, but all needing planning and perseverance. I'm hoping 2024 is the year we finally get out of credit card debt!

What are your goals for the year?

Christmas is expensive for everyone… so it always is my goal is to give a useful gift that doesn’t cost a lot of money.

This year, I made 5 different soaps for all the women/girls in my life. I made a Lemon-Poppyseed exfoliating soap, a shave soap, Rose soap, Mango-Papaya soap, and a Milk and Honey Soap. I gave 27 gifts of soap, 5 bars each. The total I had to purchase for each gift came out to $10.82 per gift. I have been making soap for a couple years, so I didn’t need to buy much in the way of equipment. (I did buy a new stick blender for soap use only and chose not to factor that into my per gift cost.) In addition to 27 gifts, I have several extra bars of soap left over. In total, I probably have about 20 “extra” bars of soap. My daughter and I will use them and I can still gift them as necessary.

For the men in my life (men only, younger boys got something off of their list), I made homemade, food safe wood butter. I also included a wooden spoon and microfiber buffing cloth. The total for each gift came to $7.16 and I made enough to give out 30 gifts plus have 3 left over.. The wood butter is made out of walnut oil and food safe beeswax. I needed to purchase 3 gallons of walnut oil, the mason jars, wooden spoons, and microfiber cloths. I already had enough beeswax from a project a couple years ago. (Clearly I bought too much then, however, I did factor in some of the cost of the beeswax when figuring out my per item cost.

I’m very pleased with my per gift price. I’m also very happy that the are useful, consumable gifts. I know we don’t need any more “stuff” in our lives and I imagine a lot of people feel the same way, so I have been trying to give gifts that are very useful and/or can be used up.

I’m already thinking of and looking for ideas for next year’s Christmas gift. Any ideas?