The Oft-Untold Other Side of Debt-Free Living

If you truly follow the Dave Ramsey plan - live like no one else, sacrifice and pay off your debt (including the mortgage) like crazy - there's one little side to being debt-free that isn't often mentioned.

The hardest part of debt-free living comes in the months immediately following debt-freedom.

Why?

You've sacrificed and put every penny to paying things off. You've delayed pleasure and "would like to's" that didn't quite make the must-do's.

And suddenly you'll find yourself with available funds to start addressing those things, but not enough to take care of some of the bigger things.

Example #1: Our well-driven Buick, purchased when we returned to the US from England, finally gave out. In April - a full month before I changed jobs and several months before we had the house paid off. Even now that the house is paid off, we don't have cash set aside to replace the car. We have two choices: Take out a car note (why pay off your debt if you're going to do that?) or carpool. Needless to say, we're having lots of quality time carpooling these days. Arranging who is the lead driver on any given day is a pain, but it's what must be done.

Example #2: The long drought cycle in Texas, combined with the shifting clay soils of our area, finally did a number on our foundation and we had to have it repaired. We had cash for that, but we don't have money to fix the landscape (yet), the wall cracks (yet), the broken tile (yet) and so on. It's like living in one long home remodel project - patience is the name of the game.

What's important to keep in mind is that while YES, you have equity that you can borrow against to get everything you want/need to have done right away, NO, you shouldn't do it, The process of becoming financially free wasn't to go right back down that path. No matter how much you hate looking at broken tile in your foyer or the Yard of Desolation.

So tomorrow...what the foundation repair process looks like.

Source

So This Happened Last Month

We 100% own our home.

We're 100% debt-free.

We're 100% in shock that our "pay off by May 2017" plan transformed to "pay off by January 2017" plan transformed to "pay off by November 2016" plan transformed to "Hey Shannah, I paid off the house today on July 20th" reality...all within a couple of months.

We're still processing it all.

Give Yourself a Break - Rediscover Who You Are

While you can do anything for a period of time, it's important that you recognize when you need a break. Because if you don't take a break, the pursuit of wealth in one area can lead to poverty in another.

What I mean by this is:

• Pursuing security at work can lead to poverty in family time.
• Pursuing quality of life can lead to poverty in finances.
• Pursuing relationships with others can lead to poverty in self-esteem.

Nearly everything is on a pendulum. Because I'm a person of faith, about the only thing that I can see that doesn't swing from wealth to poverty is your relationship with God. In that case, wealth in your relationship leads to wealth in your sense of self, security and contentment.

That's all to say that Kelly and I have tried, as best we can, to keep things in balance. We've been pursuing financial security (working to pay off our mortgage) while at the same time, trying to carve out time for relationships with others and ourselves as a couple.

What we've not kept in balance is White Space time. Truthfully, Kelly's done a little better at this than I have, but the bar is pretty low there.

Starting in January, we began letting some things go. Things that were good and necessary for a time, and now are still good but aren't as necessary.

And as a result, we've found ourselves with empty weekends. Weekends that we've filled with the things of "normal" life - meeting our friends for weekly runs (or running in races), grocery shopping and (as I call it) playing in the kitchen. We've read books, listened to podcasts, gone for walks and have started daydreaming about things we'd like to do "just because."

It's like the Hayleys have found themselves again. And maybe that's exactly what's happened.

We don't regret for a minute all of the time, energy and sacrifice that we made to get to this point. As I said at the start, you can do anything for a period of time. For us, making sacrifices for a period of time was well worth it to feel what we are feeling now - and to know that even greater things are to come.

If you're in the midst of the journey of living like no one else and are starting to feel discouraged, let me encourage you - keep going. Yet along the way, don't forget who you are. Regular touch points with the things that matter most in your life will reinvigorate you and give you strength to continue on.

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The Count Down

It's starting to get real.

Riddle Me This

Why is it when you're scrimping and saving, as the Hayleys are (trying to pay off our mortgage quickly), that you want crave low-cost food?

I'm talking bologna, spaghetti, salad suppers and tuna on matzoh. And plenty of home cooking, of course.

Delicious.

And it helps the budget, too, so that's a good thing.

On a slightly unrelated note (but not so much since it's a low-cost food), how do you eat your Oreo cookies? I twist them apart, eating the chocolate cookie wafer first then the icing-covered cookie wafer last.

Source

Future Dreaming

The Boy and I are deep into future dreaming.

We've finally seen the light at the end of the journey to total debt-freedom tunnel - we even have a pretty good idea when we'll be at the end of the tunnel.

It's hard not to think about what that will mean...and since we have no idea what it will actually be like to not owe any mortgage payments (or payments of any kind, really), we're merely dreaming.

• Dreaming of the day when we can go and visit the child we've sponsored for years through Compassion International.
• Dreaming of the day when we can drop side jobs and slow down.
• Dreaming of the day when I can show The Boy my beloved Kenya.
• Dreaming of what we can't even begin to dream of...

It's the future. And we can't wait.

Tossing It Out

I finally did it.

That's right, I threw away all of my old unmentionables. The drawer, formerly full of the wrong size, the worn out and the forlorn was cleared out to make room for a bag full of right sized, in mint condition replacements.

Definitely not going to show these on a blog for goodness sake!

But here's the interesting part of this 101 challenge: I learned that I probably should have been born in the Great Depression.

Really - I found it nearly impossible to throw things away, despite the wrong size and the wear-and-tear. After all, the goods were still serviceable. And if it's serviceable, isn't that the point? To be of service? And to throw away something that's serviceable seems wasteful.

I'm not sure what to make of this, honestly, though I think I'm at the age where I really don't care what others think. I'm old enough to understand that things have value.

What I think I'm not yet old enough to understand is that sometimes it's ok to allow yourself certain luxuries that aren't budget-busters.

I'll have to keep working on that one.

This is What Gazelle Intensity Looks Like

The Boy and I spent some time looking at an amortization schedule the other day. That's when  we relized that we're scarily close to paying off our house loan.

Now I'm not saying that we're going to pay off the house next month or even next year. However, we've only been in the Hayley house since May 2009 with a 15-year mortgage that we've paid extra on, bringing us very close to pay-off time.

Close enough to get excited and laser focused.

Dave Ramsey would say we have "Gazelle itensity."

Source - Dave Ramsey

That's why a fancy dinner out these days includes hitting up our favorite fancy Southwestern restaurant when they do an anniversary party with a free buffet.

Literally hundreds of people in line

It's also why I made a countdown chart and hung it in our bathroom.

I built this using a couple of different charts - download your own here.

Motivation is what it's all about.

Ready for a Different Kind of Rain

We just finished another 101 List item and it's a doozie: We fully funded our emergency fund.

A fully funded emergency fund includes enough cash to cover 3-6 months of expenses. This isn't want-to-haves or not pleasure spending. We're talking flat out expenses like the mortgage, insurance, food and electricity.

We'd been close for a long time, so long that we moved on to the next Dave Ramsey baby step and started investing 15% in our retirement funds.

Then we got new jobs, things changed and we felt we should build a larger fund - stockpile in case of a very rainy day.

That is a far harder thing to do when you're putting 15% of your income into retirement and tithing 10% of your income to God, plus paying expenses, saving for the want-to-haves and enjoying limited pleasure spending.

So we scraped and we saved every last penny and put it in the emergency fund piggy bank.

And finally, we did it.

Now on to putting every last penny onto our mortgage. Hayley House balance, we're gunning for you.



Source - via www.SeniorLiving.Org

Dog Days of Debt-Freedom

The financial sages will tell you that there are hard times in the pursuit of becoming debt-free.

Usually that's discussed in the context of digging out of a mountain of stupid debt, like credit cards, car notes or excessive student loans.

Then there's the debt-free slog for the ultimate prize: 100% debt-freedom with a paid-for house. This takes far longer than you dream possible, even when the outside world would say you're moving faster than anyone would dream possible.

But you know the truth: Putting money aside to save up for annual expenses, preventative maintenance, retirement savings and...and. It is a daily battle that often leaves you feeling like the needle isn't moving as much in the direction that you want.

These are the dog days of becoming debt-free. Long. Hard. Days (weeks, months and years) where only pure determination keeps you moving along.

These are the days when you feel pleased with your efforts, everything is going along ok...then you realize on a beautiful early summer evening that you'd love to have a covered patio but pledged to not do renovations until the house is paid off. Frustration!

Or you sit down to crunch the monthly budget and realize that, despite scrimping here and saving there, you aren't putting as much extra on the house payment as you'd hoped. Frustration!

Only the knowledge that the prize is worth the (seemingly) never-ending effort keeps you moving along.

Just to be clear: The Boy and I are living the dog days right now and both of those frustrations reared their ugly heads this weekend...causing us to raise some ugliness of our own.

On the Level

Whew. Another big we-needed-to-do-but-hadn't-done item checked off the list:

We now have the proper amount of life insurance. (What's the proper amount? 10x your annual income.)

Getting insurance isn't hard, but it does take time - and bodily fluid contributions, paperwork and a meeting with an insurance health reviewer.

Doing With Less to Have More

It's funny how to have more, you have to do with less.

For example:

• To have more time, you need to do less.
• To have more money, you need to spend less.
• To have more harmony, you need to fight less.
• To have more confidence, you need to worry less.

And, if you are lucky enough to work for a company that offers an HSA (Health Savings Account), in order to have more more money saved for medical needs, you need to accept less money in your paycheck.

Of course you can contribute to an HSA by writing a check, but a wise person contributes primarily through payroll deductions - reducing one's overall annual federal tax burden.

For the record: The Boy and I are wise people.

That's why I finally got around to calculating my appropriate contribution and authorized our accounting group to make the regular payroll deduction.

Short term cash loss. Long term financial security. It's a good trade-off.

It's also another 101 item done.

Financial Fun

Yes - finances can be fun. They're really fun when you're making wise decisions instead of boneheaded mistakes.

Trust me on this.

Several years ago, The Boy and I read Total Money Makeover by Dave Ramsey. We didn't really need a money makeover - we're financially conservative folks. However, we loved Dave's simple, easy to follow approach to making financial decisions.

A plan. It's a wonderful thing.

We've been fans ever since. In the ensuing years, we've taught Financial Peace University several times at area churches. It's great fun to see other people make wise decisions and build personal financial plans. Really.

So it was a bit of a surprise - and a bit not, since the Dave Ramsey organization is built on masterful marketing - to get an emailed invitation a few months ago to a FPU (Financial Peace University) Coordinator Rally.

We RSVP'd yes (of course) and looked forward to whatever the event would feature.

It turns out that it was, as I suspected, a masterful market strategy (judged by this professional marketer, anyway!). A limited group of FPU coordinators, I'd guess around 200, were invited to a nice evening preview of changes to the FPU curriculum.

And the preview was given by Dave Ramsey himself.

Very, very smart. For the cost of a small ballroom rental, snacks and tea, as well as staff time and travel, a group of 200 people felt very very special. That's incredible ROI (Return On Investment)!

Do I feel used/taken advantage of? Heck, no. The evening was a great experience. We ran into our two favorite realtors (The Kochers...if you live in Dallas, you must use them), we learned more about the great changes to a program we enjoy teaching, and...

...WE MET DAVE RAMSEY.

Our friends asked if we had a chance to talk to Dave. I told them that I had a chance to talk to Dave, and because he's married to me, The Boy didn't.

How to Buy a Used Car with Confidence

The Boy and I did something last week that we rarely do - we bought a new (to us) car.

We don't buy cars often because cars are a practical purchase for us, and practically speaking, we don't need a new car very often. But with our existing car having just rolled past 185,000 miles - and our need to keep Old Glory, The Boy's beloved classic pickup, from being driven just any old time -  the time for a purchase had come.

Just because we don't buy a car often doesn't mean that we didn't know what we were doing. Here are the steps that we followed to make a wise used car purchase.

1. Save, save, save. Every month, The Boy and I make a car payment to ourselves. The money goes into a sinking fund that accrues over time to fund our next car purchase. We're pretty radical, so we saved $500 a month for a few years to have enough to purchase the car we wanted.

2. Know your needs. Before buying, it's important to know how you'll use your new vehicle. Do you commute a long distance? How much interior space do you need? The Boy and I do not commute a long distance, but we do take the occasional road trip to visit friends and family. Good gas mileage is important to us. We sometimes travel with friends, so we wanted comfortable seats in the front and rear, along with ample legroom for everyone. Since we live in a metro area, it's critical that the car have good get-up-and-go so we can merge onto the freeways. Looking at everything, we realized that our ideal vehicle was a mid-sized sedan.

3. Do your homework. Understand what vehicle makes and models meet your needs. Then get busy understanding the market rates for those vehicles based on condition and mileage. A good buy goes to an informed buyer.

4. Don't start shopping until you have the money. Write this down: If you start shopping for a vehicle before you have the money saved, you will buy something that you can't afford. So be patient.

5. Start shopping when you have the money. Take your time, look at lots of sellers, be willing to wait.

6. Ask for advice. We narrowed down our options to just three vehicles - not three types of vehicles, but three literal cars. Then we emailed people we trust regarding car matters (ahem, my dad) and called to talk to our long-time mechanic to get their opinions on our choices.

7. Go shopping! Armed with our information, we headed out to buy. In our case, we bought a used car from a dealership. The three cars we were interested in all had less than 30,000 miles. Two were the same make and model, but different colors. The third was a different make and model. I knew I liked that particular vehicle, because I'd driven one last year on an extended business trip...which reminds me, it's smart to rent different cars that you're interested in when you're travelling. It's a great way to see if you really like a vehicle or if you just like the idea of the vehicle.

We immediately crossed one of the three vehicles off our list because the color didn't appeal to us. We test drove the car that we'd not driven before and really liked it - liked it so much that we were able to decide instantly that it was the car for us. Remember, we'd driven the other model before. If we hadn't, we would have driven it as well to compare the two.

8. Be smart when purchasing. Don't forget - the sticker price isn't the final price. First, you should always ask for a deal. Work to get the best price for you and fair price for the seller. This is where your homework helps - you should know what the car is roughly worth, based on mileage and market rates. Second, the sticker price doesn't include tax, title and license. Expect another 10% give or take on top of the agreed purchase price to cover those items.

9. Contact your bank and your insurance company. Before you write the check, call your bank to let them know you'll be dropping several thousand on a vehicle. (Unless you regularly write large checks, which we don't!, your car purchase may be flagged by the bank and payment delayed.) And you want to make sure you get the car onto your vehicle insurance policy as soon as possible. In Texas, our purchase is covered by our policy for 30 days without a call, but we knew it was smart to get the coverage officially in place as quickly as possible.

10. Remember that you can always walk away. No one is going to hold a gun to your head and make you purchase that car. You can always say no, wait a little while, or purchase something else instead. Never forget that you're the buyer - you're not a prisoner. And no one can make you buy something that you don't want to buy.

Follow these steps and you can be reasonably assured that you'll make the wisest purchase possible - wise for your pocketbook and wise for your peace of mind.

We love our "new" car!!

It IS a Big Deal

Getting out of debt is a big deal. A very very big deal.

Think about it - no student loans to pay. No credit card bills. No car payment.

Getting out of debt is a big deal. So we were super excited to help our friends send the LAST payment for their LAST student loan.

Now this fearsome foursome are mostly debt free...just two home mortgages to go.

Penny for your Thoughts

For all who say pennies aren't worth anything, I say a penny can be worth everything.

Case in point:

The Boy told me last month that the balance on our mortgage would be $100,000.00 when we made our next house payment.

Knowing the psychological impact of .99, I begged him to schedule our monthly payment for:

The Payment + Extra + 1 penny

And because he loves me - even though he said I was crazy - he did.

So now we owe $99,999.99 on our home. It does feel especially wonderful to only owe five figures, vs six figures, on our home. That's the power of a penny for you.

Today's Plan

We're off to work as book-selling volunteers at this event all day today:


Source

If you're going, swing by and see us!

Feeling Thrifty

I set a very random goal for myself – to buy something at a resale store – for one reason: because I’ve never been to a resale store in the US. I purchased my favorite go-to cardigan at a charity shop (aka – thrift/resale store) in the UK on a day of freezing-cold desperation. That worked out so well, it seemed I ought to give it a try here in the States.

Plus, the ladies on one of my favorite blogs, Academichic (soon to close-up shop – sob!!), thrift proudly and often. I felt inspired.

The other weekend, I headed to a store I’d been following on Facebook, the Clothes Mentor. Inside I found a wonderful assortment of quality brands, in good condition, well-organized racks, and helpful staff.

Even better, I found a Ralph Lauren skirt and Liz Claiborne capris that I liked enough to buy. Total cost? $20.

Hmm. I think I might have to visit resale shops a little more often!

Your Way

The Boy and I have been catching up on podcasts, including several back episodes of The Dave Ramsey Show.

In one, Dave talked to a man who was having problems coming to agreement with his wife on the family budget. The man shared that he had a hard time standing up to his wife, who was the major breadwinner in the family.

Me: That would never happen to us. I wouldn't force my way.

Him: That's because your way leads to destruction.

Confession Time

As mentioned earlier, The Youngest and I went for a professional clothing fitting while she was visiting.

I feel the need to clarify that:

1. We went for a particular type of clothing fitting... something foundational, you might say. And
2. The Youngest is one of perhaps 3 people in my life that I would feel comfortable taking on this type of expedition.

Though slightly mortifying and infinitely more personal than I could have ever imagined, we had a good experience and learned a lot, to boot!

I had such a good experience that I decided to pick up a couple of items for myself. I handed over our debit card, which was quickly swiped while my purchases were wrapped in swathes of purple tissue paper and curling ribbon.

Your total was $238, the cashier says, smiling and handing me back my card.

In real-people land, I'm wondering how this woman can smile while delivering a financial stab to the heart of a once-happy shopper.

Oh, ok, I say, managing not to pass out on the spot.

By the way, she adds. Our policy is that purchases can be returned for exchange or store credit only. Thanks and have a great day! We'll see you next time.

Yeah, right. You'll see me next time if next time can be defined as in my next life.

On the way back to meet the boy, The Youngest asks how I'm going to tell him about my financial fiasco. I honestly don't know. This has to be The Worst Thing Ever.

My immediate strategy - borne out of despair - is to say nothing.

It doesn't work, of course. My purchase feels like a purple paper and ribbon wrapped elephant dancing around the room. I can't eat dinner. I can hardly sleep. By the next morning, I was an absolute wreck.

Honey, I have to tell you something, I manage to tell the boy before starting to cry. I've done something awful and I just feel like I've failed you.

Him: What did you do?

Me: Well, I bought some things for myself. I know we didn't really have money budgeted...and even if we did, we didn't really have that kind of money budgeted.

Him: How much did you spend?

* Gulp. Pause. *

Me: Nearly $240.

Him: How many bras did you buy?!?

Me: That's the worst part!! Only TWO!

My boy does love me. He simply laughed and gave me a hug. I'm not naive enough to believe he didn't mind the expense. But he knew I truly was devastated by the whole experience.

The rest of The Youngest's stay with us, the boy would pause while playing with the Wii and say:

You know, it would be really fun to own a Wii.

But Shannah had to buy a bra instead.