My Financial Life

My financial life right now is boooring.

And that’s a good thing.

When I started this site I was $90,000 in debt, and considering bankruptcy.  I’d just started on the Dave Ramsey plan and was looking for every possible way to scrape up any extra money  I could.

Now, the debt is nearly gone.

US interest payments on debt by sector as a fr...

US interest payments on debt by sector as a fraction of GDP 1960-2008 (Photo credit: Wikipedia)

  • I’m looking at the last $8000 on my mortgage.  I have enough in savings to pay it off today, without draining my savings completely dry.
  • My IRA gets maxed out every year, and this year, my wife’s will be, too.
  • We save or invest about 30% of our income.
  • My credit score according to is 826.

Our credit card is almost paid off every month.  There’s occasionally some overlap between our auto-payment and our charges.  And sometimes the budgeted auto-payment doesn’t match the reality of our spending and I don’t notice for a week or two.  Except for the end of last year, but that’s a post for another day.

The short version is: We’re doing well, and we’re nearing the end of our financial problems.

Our scheduled mortgage over-payments will have it completely paid off in October.  Then we are debt-free and can hopefully manage to live the rest of our lives without paying interest on money that isn’t earning us more than we are paying.   For example, I’m willing to take out a mortgage to buy another rental property, but I’m going to wait to do that until our current mortgage is paid and we have a substantial down payment ready.

No debt.

I’m not kidding when I say it’s been a long 6 years of fighting our debt.  Counting a car loan we got and paid early, we’ve paid more than $110,000 of debt in six years.

I’ve run side businesses, aggressively negotiated raises, and left companies(voluntarily and otherwise) for better pay & benefits.

I’ve watched friends and family take vacations around the world.

I’ve turned my kids down for so many things that I would love to buy them, but couldn’t because being financially secure is a much higher priority than spoiling children.  Try explaining that to a 6 year old.

And now, the debt-ridden part of our financial journey is almost over.   Finally.

So what’s next?

I have no idea.  I’d like to travel more.  Linda and the girls want us to move to a hobby farm and get horses.  We want more rental properties.

Whatever “next” is, it will be done from a position of strength that won’t destroy our financial world or put out futures at risk.

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Living On Credit Cards

About 2 months ago, Linda and I decided to go back on the envelope system for all of the parts of our budget that we aren’t able to automate.

English: Money seized during

English: Money seized during “Project Coronado” by the DEA. Going in “La Familia Michoacana” article. (Photo credit: Wikipedia)

The reason we’re doing this is because we’ve been consistently over budget when we do all of our spending on our credit cards.

The reason we switched back to using our credit cards is because it’s a royal pain in the butt to always make sure we’re carrying enough cash for groceries and gas and date night and fundraisers and cover charges, etc.

It’s still a royal pain in the butt, and we still suck at it.

But one of our envelopes is labeled “This went on a credit card” and is used for those times we forgot to grab cash before heading to the store.

In the last two weeks, that’s $500 that we forgot to bring with us.

Cash sucks.

I’m tempted to go back to using the credit card for our primary spending.  Yes, we are consistently over budget, but it’s not terrible….for some odd definition of “not terrible”.

We generally seem to have about $1000 left on the card after making our last monthly payment every month.  Every month.  The overall balance never grows, it’s just hanging out $1000 over what we have budgeted to be paid automatically on the card.

That’s a bad thing, but….

Since I make a payment every couple of weeks, the interest is never assessed on that balance.   In the last year, we’ve paid exactly $0 in interest, without any funny balance transfer deals.

By my calculations, that means our credit card has given us $1000 for free.

If we pay that off and get strict about using cash, won’t that mean our free $1000 would have to evaporate?

I like free money.

That also means that the total interest we paid in 2014 is $672.91, all to our mortgage.   Even if we have a small balance we carry, we’re not paying interest on that debt, and–worst case–we could raid our savings to make it vanish tomorrow.   I’m tempted to make that happen, but our savings goals are more important to me that paying back the free money.

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