Credit score, monthly progress update, budgeting fun

826

That was my credit score when we went to get my new car. We knew that around 700s were good credit scores. We were both shocked by how high my credit score was though, considering how much debt I still have with school loans. The dealer said usually only 80 year old women have a credit score that high. Who knows! We definitely didn't complain though because that allowed us to get a lower interest rate to finance my new car. 

About the new car- I was not excited to have to get a new car:( I loved my Honda that I've had since high school (and I LOVED not having a car payment!!). The rule of thumb for us though is that when the repairs on a car start to cost more than the car is worth, it's time for a new car. We haven't had a car payment but since we have been working hard on paying down debt and lowering our monthly debt amount, a car payment is affordable. We decided to finance the car over the longest amount possible (six years) so that the monthly payment amount was lower. As with everything else, we will pay the car off early and therefore the six year term really won't matter. We do it this way so that if there is a month where we have unexpected costs come up, we can still manage to pay everything that we owe. We also inquired about the difference in cost over the life of the car if we took the full six years to pay it off. Because our interest rate was so low, it would only add about $1,000 to the cost of the car. Obviously we don't want to pay more than we have to but in the grand scheme of things on a high ticket item, $1,000 isn't too bad. 

Onto our debt progress.

Things haven't moved quiet as quickly as I would have hoped. We have been super busy lately with work and studying for my LPC test so I haven't been able to post for a while.  We are currently at

$64,492

for my school loan total. We paid off our largest loan last month (yay!!). That won't actually drop our monthly payment at all because since we had paid such a large sum on that loan initially, we had no payment due until 2017 (another trick from the company to let interest build up). All of our other loans do have monthly payment amounts so from here on out, each loan we pay off will save us a little bit each month on our monthly amount due. I have 12 loans left to pay off!  That number can be deceiving! Some of those loans are $2,000 or less which will get paid off quickly, but still others are about $12,000 and will take much longer to pay off. We are still on this journey in hopes of being debt free in the three year time frame. I'm not sure how that will work out but we are trying! Things always come up! Doctor bills, car payments, LPC test (which cost almost $400 for the study material and the test itself- CRAZINESS!!). We try our best to stay on track. For us, summer will likely mean not having as much money left to go towards loans because of the different trips we are going on. I feel like that is okay because we work really hard on putting almost half of our money to debt and therefore taking a little bit of extra money to do things in the summer is not a big deal. I guess we have 32 months to go which would mean about $2,015 a month from here on out. Once our monthly payments drop by paying off individual loans, that total per month should also decrease. 

How are you guys doing on your budget tools? Has it made any difference yet?

On a different note, I passed my LPC exam! Once my license comes in the mail, I will officially be a Licensed Professional Counselor in Virginia. Woohoo! Hopefully many doors will open that will help to pay that debt off in the time frame we are going for:)

Upromise

This post is mostly for those who have school loans. If you've never heard of Upromise, you should sign up now! Upromise is a website that can link directly to your school loans. If you shop a lot online, a percentage of every purchase you make could be applied directly to your school loans for no extra charge. If you don't have school loans but know someone who does, you can also register as a "friend or family" to link up to another person's school loans. This is how it works:

• After you've set up an account and added whatever credit/debit cards you usually shop with, go to www.upromise.com
• Log in
• Search for the store where you are going to place an online order (there is a search bar at the top of the page)
• Upromise will then search for the store and show you what percentage you would get for making your online purchase (i.e. Vera Bradley is 5%)
• ***Click on the store website through your upromise webpage*** You only get credit for the purchases made directly through the site
• Shop for whatever you were already going to buy, check out like normal, and earn extra money!!

Within a few days, your money will be 'funded' to your account. You can track all of your purchases through the account information. I think in the few years that we've been doing upromise, we have funded almost $200.00 to loans. That isn't a huge amount compared to what we owe; however, we would have been making the online purchase anyway so we figured we should go ahead and get credit for it.

The biggest thing to remember is that you have to go through your upromise account before you go to the store website. I have forgotten that so many times and have lost out on money. I use upromise the most when I am booking a flight or hotel, buying a gift card, or shopping for random items. Amazon doesn't have a upromise percentage yet but Upromise does have HUNDREDS of stores available. You can look at the full list of store here.

Another perk to having Upromise is that you can earn money for groceries. You can plug in your various grocery savings cards (i.e. Food Lion MVP) and each time you use your card, you get a few pennies added to your account. When you want to cash in your money, you can either send it directly to your loans or request the money to come to you in a check.

We are all about finding more ways to pay down our debt. If you have school loans and you don't have upromise, sign up today! If you don't have school loans but want to help out, you can become my 'friend and family.' :) Happy Savings!

Goal update- 1 month down, 35 months to go!

In our first month of the three year challenge to be debt-free, we went from $68,303 to now $66,674!!  

The interest is so frustrating because we make a big payment but it doesn't look like it was as big because the interest grows daily! Now we have 35 months to go...and at this rate, we need to pay $1904.00 a month to meet our goal:) In a couple more months, we will have one large loan paid off and from then on, our monthly payment will be reduced with each loan we pay off, making that $1900 shrink and shrink (hopefully!!). I'm excited! Does anyone else get this excited about paying off debt? I'd like to know your plan to pay down debt!

Budget spreadsheet: A How-To

Let me start by saying that I am in no way taking credit for this spreadsheet! Luther came up with it a few years ago and I had no idea how he did it! I never was any good with Excel. Now that it is set up, all I have to do is enter the numbers! The way our spreadsheet works may not work for you and your family; however, I've had several questions on how to do the spreadsheet so here's my post:) I hope this post isn't too confusing but it is hard to describe the steps to take to make our spreadsheet. Here goes nothing!

As I mentioned in a previous post, we have our budget divided into categories. The first step to creating the budget spreadsheet is to divide your columns into your money categories. For example, our "A" and "B" column are both designated for food, "C" and "D" are both designated for gas. We use two columns for each section. The first column for each money category is for the name of the store or for what you purchased (i.e. Walmart, Wendys, Food Lion) and the second column is for the amount spent. We use all the columns through 'V' for our actual budget categories.

After we made our categories for all of our budget sections, we then made a column listing each section. The column directly beside our total budget column is the column where you input the formula.

After you set up the formula, every time you enter an amount into the appropriate column, it should automatically do the math for you in your 'totals' column. The number that is shown would reflect what you have left out of the money you budgeted for that category.

Making the formula:

Decide what you are budgeting for each money section. We budget $200 for gas each money. Our gas formula would then be:

=200-SUM(D2:D50)

After the =, put the total you are budgeting. That number minus the SUM of the cells D2-D50. We never use through the 50th cell in each column but we put that number in just in case.

Our "Transfer to Savings" section is just for us to know how much we were over or under for the entire month, in all categories combined. This shows us what we have to put into savings. If you want a similar column, the formula will be:

=TOTAL AMOUNT BUDGETED+SUM(Y2:Y12)

Your totals and columns will obviously vary from ours but this is how we track our monthly spending. Hopefully you will be able to apply this information towards your spreadsheets in a way that makes sense for you and your families.

Good luck and Happy Savings!

February Challenge--We did it!!

We did it! We didn't eat out during the month of February. It actually wasn't as hard as I thought it would be. We made several meals that had enough for leftovers, usually enough for a couple of lunches and an extra dinner. We also made a calendar of what we would eat each week which helped us to stay focused and to plan ahead.

We were UNDER budget by $82.00!! This is pretty big for us! Sadly, we are usually way over budget. In the last twelve months, we were under budget ONE time (and by $1.88 at that)! We have been OVER budget anywhere from $35.00 to $170.00!! That is crazy. We never really cared too much because we 'had the money'...that money was just designated for paying down debt and not for paying for food!

We are planning to eat out again in March...I need those rolls and cinnamon butter at Texas Roadhouse! I think our goal in March is to be able to eat out without going over budget. We also have our vacation planned for March and I know we will be eating out then. Our vacation times don't count because that money comes from our vacation fund, not our food budget. Stay tuned...

Ahhhhh...saving money is fun! Paying down debt is even better! Happy Savings!

Our lofty goal...

We just logged on to see our total school loan amount that is left after making a payment from our tax return. The total is (drum roll please)......

$68, 303!

Don't get me wrong- that is a LOT of money...but compared to starting at $120,000, it's not so bad.

Our goal (well actually Luther's goal) is to get this all paid off in three more years. Taking that amount and dividing it by 36 months comes out to about $1900 per month (totally unrealistic for us)! However, we have a spreadsheet (imagine that) that shows each loan individually so that we know how much we need to pay off each loan. Luther even numbered the order in which we will pay them. We have $3200 left on a loan that started off MUCH higher and then we will move on to paying off our other loans. We have 13 left altogether. Wish us luck and say a prayer:)

Creating a budget...where to start

I've had a few questions on where to start when making a budget. I'll be honest, figuring out what each amount needs to be in your budget is the hardest part. It takes lots of trial and error on paper before you can make one that works. Once you get that figured out, you will be smooth sailing:)

I'll try to make this as simple as possible...this is how we started:

Start with how much money you will bring home in a month (this is a little more difficult if that figure is flexible). Let's say you bring home $2000 a month or $1000 bi-monthly. As I mentioned in a previous post, we take out our tithe money before we do anything else. If you brought home $2000 a month, we will pretend that you actually make $2400 a month and therefore if you tithe, it would be around $240 a month. That comes out of the $2000 take home pay.

$2000 monthly income

-240 Tithe

$1760

Now make a list of all of the amounts that you HAVE to pay each month that do not change. For us, those amounts include:

Mortgage/Rent

Car insurance** (Some people pay this monthly and others annually or every six months. If you do not pay this monthly, you should still put the money back each month so that you have it when it comes due)

Cable 

Phone

I'll assign a guess on those totals to make the point.

$1760 remaining

-700 rent

- 80 car insurance

-50 cable

-100 phone

$830

Now make a list of other necessary expenses that might fluctuate:

Gas

Utilities (heating/cooling and water)** (We usually see a drastic difference in this between the winter months and the summer months)

Miscellaneous (things that don't fit anywhere else such as paper towels, cleaning products, etc.)

$830

-150 gas

-150 utilities

-75 miscellaneous

$455

Food- we budget $300 a month for food (including eating out) for the two of us. You would need to adjust this based on how large your family is. 

$455

- 300 food

$155

Now make a category for things you may need once in a while, but not every month:

Doctor/Dentist- $20

Gifts- $20

Blow money- $30 (only if you have everything else covered)

$155

-20 doctor/dentist

-20 gifts

-30 blow money

$85

With the remaining $85, you should designate this to areas that you need. If you have a credit card, make payments on that (disclaimer- if you have a large credit card amount, you should probably use most of your blow money on that each month). If you can ever make more than the minimum payment on debt, make sure you designate any extra to 'principal only.' Otherwise the interest gets the majority of your extra payment. Once you've paid something off with that $85, you should then apply that amount to some other form of debt, such as a car or a loan of some kind.

It's hard to make a fake budget without knowing what you make a month, what all you HAVE to pay (and the amounts), and how many are in your family but I tried to give you a rough idea. More to come on the actual spreadsheet. It involves formulas that you can plug in but I need to look at how we did that since it has been so long ago. The concept is basically starting with a figure in each category and then having the computer subtract for you each amount that you spent. There are also free budgeting tools online that you could use if they fit your needs. As always, let me know if you have questions:)

 

 

Tax Returns and February Challenge

Each year, we take out more withholdings so that we get more back in our taxes (and to make sure we won't have to pay in). Once we file our taxes and learn what we are getting back, we make a plan. We always put money back for traveling throughout the year. Those who know me know that I can't live without traveling somewhere:) Then we look at any bills we may have and pay the balance. This year, we splurged and bought a temper pedic bed from Grand. I had significant buyer's remorse and was pretty much sick to my stomach to think about how much a new bed cost; however, I am much more rested these days. When we bought the bed, we had four years of free financing (i.e. no interest). We bought the bed in July and we just paid off the balance with our tax return.

After we set aside travel money and pay off any bills, the rest of the money goes tooooo...you guess it, SCHOOL LOANS:) The total owed is now below $70k:) We're getting there!

Our February challenge is going well so far. We have not eaten out and we are more than half-way through the month! We are going to make it! As of today, we have a little more than half of our allotted food budget left for the month. That might sound like we won't come in under budget since we are half-way through the month; however, we have several meals in the pantry and fridge that will take us through another week of eating. The most we have ever been UNDER our food budget is 1.88:) We will see what this month brings!

Unfortunately some of those costs get offset by random happenings. This month just so happens to be several doctor check-ups for the both of us- meaning copays (booo!). Regardless of extra money going to the doctor fund, we should still be under our monthly goal. Hopefully we will be able to put a bunch of extra money on school loans at the end of the month with all of the money we saved. We shall see! Until next time...

February challenge

Our budget challenge this month is to not eat out! We are pretty bad usually with eating out. In January, we spent $130 out of our $300 budget eating out! When we have months like that, we usually go over our food budget. At the end of the month, going over in food isn't a huge deal because we have been under in other categories; however, if we stay on budget or even under, we can save more money! We will see how much we save! We picked February because it is the shortest month:)

And a special thanks to all of you who sent us recipes! It's hard to choose which ones to make!

Until next time...

Tithing- Why it's important

Tithing...it is such an important part of life. God has given us all many blessings and it is our responsibility to give back to God. Tithing does not necessarily have to be given to a specific church, but it should be to a church or organization that is honoring God and preaching the gospel. Our tithe money comes out immediately after we get paid...like we never had the money to spend in the first place. I spread my tithe amount over several places for  various reasons. 

My church- Greenmonte Fellowship

I tithe to my church. Not only does tithing help to keep the church running financially, but it also helps the church to be able to provide for the needs of the community (our neighbors nearby and around the world). Anyone who knows me knows that I love my church. It is a small church which was a refreshing change for me. It has the most accepting group of people from all walks of life that I have ever encountered. There are people in the church who truly will do anything to help in any situation. I have met some amazing people and some lifelong friends in our church.

World Vision

We give part of our tithe to help support children who need sponsors from World Vision. While some people are against 'large organizations' because you cannot guarantee that all of your money is going where it should, I believe that World Vision is doing a good thing around the world. We first had a little guy named Nebba and now we have a little one named Augustus. We love getting their pictures, letters, and drawings in the mail!

Spirit FM radio

I also give a portion of my tithe to Spirit FM. I first listened to them when I was in Lynchburg at Liberty University. This radio station has really helped me grow in my faith by listening to Christian music. To be honest, "Christian" pop music used to drive me insane when I was in middle school and some of high school. There are a bunch of great new artists and I love hearing them on the radio these days:) Tithing to them helps to support their radio station so that people from all walks of life can tune in and hear about God.

Grassroots Heroes 

Grassroots Heroes is a small non-profit that was started by some people in our church. They came across this squatters village, Grippes Farm, in Zambia, Africa. After seeing the village, they knew they needed to do something about it. We have seen tremendous change in this village since this project all started. They now have wells for clean water, schools for education of the children and adults, trade classes (i.e. sewing, farming) to help with their ability to earn money on their own, and bible studies to teach the Word of God. My dad and I took a trip to Grippes in July 2011. It was the most life-changing trip I have ever been on and I yearn to be back there every day. The people of Africa definitely have my heart! 

Our team that went July 2011

Some of the students welcoming us through song in one of their classrooms

Five of the teachers that have amazing stories and true dedication to teach these children

One of the men has taken up rabbit farming to make money

The school kitchen where dedicated moms cook lunch for the students

One of the new school buildings

Two of the children we sponsor

The money given to GHI to help support Grippes is used in many ways...some of them include:

• paying for students' education and lunch ($15 a month for one child) 
• support kids from Grippes who have made it to secondary school with the government ($50 a month for books, uniform, and education)
• teacher salaries (some of these teachers walk over an hour one-way to support this village)
• adult education classes
• trade classes
• specific needs (i.e. new roof, new sewing machine)

Check out any of the above websites for more information about the organizations. Let me know if you have questions:) 



"Give,and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap" (Luke 6:38).

"He who is kind to the poor lends to the Lord, and he will reward him for what he has done" (Proverbs 19:17).

"Each man should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver" (II Corinthians 9:7).

"And God is able to make all grace abound to you, so that in all things at all times, having all that you need, you will abound in every good work. As it is written, ‘He has scattered abroad his gifts to the poor; his righteousness endures forever.' Now he who supplies seed to the sower and bread for food will also supply and increase your store of seed and will enlarge the harvest of your righteousness. You will be made rich in every way so that you can be generous on every occasion,and through us your generosity will result in thanksgiving to God. This service that you perform is not only supplying the needs of God's people but is also overflowing in many expressions of thanks to God" (II Corinthians 9:8-12).

Tracking the money we spend

We made another extra payment on a loan yesterday! Loans can be so complicated with their interest rates, different due dates, etc. For example, when I went back to school to get my EdS, the loans fell under a different category (for whatever reason). If your loan total is over $30,000, you can spread your payments over 25 years to make your monthly payment lower. This isn't the best plan for interest, but if you plan to pay it off early, it can't hurt! We have done this for most of my loans even though we hope to pay it off MUCH sooner. This allows us to have money if we need it instead of HAVING  to make a very large monthly payment (about the same as our mortgage!). My EdS loans could not count towards that $30,000, meaning that the cost to get that degree (approximately an additional $20,000) had to be repaid in the standard ten-year repayment plan. That being said, we are focusing on that large loan. It started at $18,000 with a 6.8% interest rate (interest is terrible!!). We have gotten it to just below $5,000 in a little less than a year. Each time we make an extra payment right now, it goes directly to that loan because it has the highest monthly payment. Once it is paid off, we will make extra payments on another specific loan. Doing this allows us to pay smaller figures off which creates a lower monthly payment, which allows us to save more money to put on other loans, etc. It is all a big circle...but it is fun seeing that circle getting smaller and smaller as the overall amount due drops and drops:) Consolidating loans is a not a smart option in our situation. We could never pay the loans off early if we had the lump sum to pay (and unless I get on a game show, that's never going to happen). Keeping the loans separated allows us to focus on one amount at a time while we are making our standard monthly payment (with any extra payments possible). Doing it this way helps us to get the overall debt total lowered.


We keep track of our spending on a monthly budget in excel. It's pretty simple. Some months we go over certain categories (i.e. we have about ten birthdays in September and October so our gift budget for those months is shot); however, we are under budget in other categories or at others times in the year so it all balances out. Below is a list of our GOAL spending each month. It is doable:)

• Food- $300 (for two adults, includes eating out)
• Gas- $200 (includes oil changes)
• Miscellaneous $100 (includes entertainment; things at the store that aren't food items like paper towels, napkins; animal care; etc.)
• Car insurance $120 (we are now under this thanks to being over 25 and for being 'safe drivers.' Rockingham Group is the best!)
• Utilities $165 (heating/cooling and water- in Staunton the water bill is every other month)
• Doctor/Dentist $65 (this obviously isn't something we use every month)
• Cell phone $140
• Cable/Internet $120 (direct TV keeps us way under that these days! Especially if you refer a customer- if you are interested in direct TV, let us know! We can both save $10 a month off our bill for 10 months)
• Blow money $120 (Luther and I each get $60 a month to spend on whatever we choose)
• Gifts $40

I enter receipts into the excel sheet throughout the month and it keeps a running total for me. At the end of the month, I look at the excel sheet to see how much money we had left over in all categories combined. I take that amount, plus the difference from our promotions that were never figured into our budget, and make a transfer to savings. Within a few days, we call good ol' Aunt Sallie Mae and make an extra payment:)

We don't budget in our mortgage, regular school loan payments, or tithing because they come out every month before we start our monthly budget. More on tithing in a future post. Let me know if you have questions! 

The beginning- working on a debt-free life

Debt...many of us have it. Sometimes it can feel overwhelming. Some debt is a necessary and normal part of life and other debt is caused by making reckless and sometimes even materialistic choices. We have a lot of debt from school loans for going to a private, Christian university. Going to Liberty University is an experience I would never trade in a million years. That being said, private universities are pretty expensive. Luther received one degree from there and I received three. We are working hard on paying off school loans and have done pretty well so far. So well that we have had several people tell us that we should write about how we are paying off debt. One close friend even said we are her 'most grown up friends' which makes me laugh every time I think about it. This blog will be dedicated to our journey to becoming debt free. Hopefully it isn't too boring and maybe it will even help someone else out there learn how to pay off debt in a practical and easy manner:)

Here's the background:

• Luther and I met in 2005 at Liberty and began dating in 2006.
• Luther's degree in Criminal Justice resulted in approximately $28,000 in school loans. He graduated in May 2008 and we began paying on those loans December 2008 (after his six-month grace period).
• I finished my bachelor's in Dec 2007 but began my Master's immediately, meaning I didn't have to start paying on my loans yet because they were still in deferment. I graduated December 2009 with my Master's and my grace period ended June 2010. I started on my EdS in August 2010, putting my loans back into deferment. I finished that degree in December 2011 and began making payments immediately after since my six-month grace period was used in between my Masters ending and my EdS beginning. Approximate total for all three degrees- $90,000.

Before Luther and I got married in January 2009, we completed premarital counseling and worked on a budget. We still use that budget to this day. It only keeps track of our every day purchases (i.e. food, gas, insurance, utilities) but it allows us to see where we are spending our money. The major thing that has helped us is that we made that original budget on our beginning salaries and haven't changed it since. On paper, we had an extra $30 per month when we first got married. Talk about being scared! I remember my parents talking to me about tithing when I was younger and they told me that when you tithe, you will always have enough. We began tithing as soon as we got jobs and we have never needed money. God is our provider. We have since both gotten raises and/or promotions but we have not added that to our budget. We still spend money like we are on our original salaries and we save the difference...hence our plan to get debt-free. So far it is working...we have paid off close to $50,000 in four years but more details on that to come. And so our journey to become debt-free continues...