I will turn 45 this coming week. It has been fun to look back at our mistakes and progress over the last 25 years. Here is the last installment of our money journey. 

Age 40 – 45

Our forever home ended up not being our forever home. But only because we are planning to move out of state. (If we were going to stay in California, we wouldn’t ever leave this house.)

Upgrading our house also upgraded our mortgage and our monthly bills. We could mostly afford it. We were not living quite as paycheck to paycheck as we had about 2 months of bare bones expenses in the bank, but we also had $13,000 of credit card debt. From ages 40 – 43, that debt yo-yoed. We got our debt as low as $9000 and it ballooned up to almost $25000. Being $25000 in credit card debt was finally the kick in the pants we needed to address our debt and our spending habits. (Don’t ask us why it took so long because we can’t tell you… other than that we were dumb!)

2 years ago, we really started to make a concerted effort to get out of credit card debt. We started adequately funding our sinking funds and our retirement. We started cash flowing all of our expenses. We decided if we couldn’t cash flow it, we didn’t need it. (That was a huge adjustment to just swiping a credit card!) And we have made progress.  We currently owe about $8500 in credit card debt, down from a high of $24,907.  We have a plan to have it paid off by May 30. Most of that was through payments, not windfalls. We also changed our habits. I will get a stipend check on May 10^th for about $1800 for coaching soccer that will all go towards debt. Then, on May 20^th, I will get a retro check because our negotiated raise is back dated to July 1^st, for around $4000. That too, will all go to debt. Lastly, because we sold our house, we won’t have a June house payment and half of our normal mortgage payment will finish paying off our credit card and the other half will go into savings.

2 years ago, we also started giving regularly to our church. Prior to that, our giving was very sporadic and only “when we had money”, which really translates into not very often. “Giving” is very important to us. We give monthly to our church, we purchase Christmas presents every year for two local charity organizations, we purchase and pack boxes for Samaritan’s Purse, and we volunteer regularly at our church.  We don’t think it is a coincidence that our financial fortunes started to turn when we made a concerted effort to be more generous with our time, treasures, and talents.

We only have a small emergency fund of $2000 right now, but we have 1 month of bare bones expenses in cash/sinking funds. We don’t have a big emergency fund (yet) but we aren’t living totally paycheck to paycheck either. Our debt continues to decrease, and our savings continues to increase.

After putting this all on paper, I see so many mistakes we’ve made, as well as a few bright spots along the way. I feel like most of our retirement mistakes were made earlier in our career, cashing out 401ks and pensions. Now, we are pushing hard to save enough for a comfortable retirement and are putting a good chunk of our pre-tax income into retirement every month because we are trying to play catch up. (I put 23% of my pre-tax income into retirement and The Husband was putting 19% (including his 401K match and profit sharing) but with his most recent raise it is now at 22%.) But I feel like our biggest credit card mistakes came in our late 30s and early 40s. We should have known better but we chose to keep our heads in the sand for far too long. However, as I’ve said many times before, we are making progress and we will get out of credit card debt!

It's been a rocky journey and we learned some difficult lessons. More than learning them, we’ve put them into practice. Hopefully this time next year, I can write another post explaining how we manage our finances now that we are credit card debt free and aggressively saving! This time next year we will be in a new state, with a new house, and paying new bills. It will be so interesting to see where we are.

It has been really fun and eye opening to look back at the choices and mistakes we’ve made over the last 25 years of our life.