Update

Well it has been quite a while since I have posted an update on my financial situation. We have not been able to get out of the lease on our house early. This means we will be here until at least the end of September. Unfortunately we are still working on getting our bills caught up and are getting there very slowly because of this situation. We have cut back drastically on everything. We have no cable, no home phone, and limited cell phone plans. We rarely eat out and I have drastically cut our total grocery bill by combining coupons with sales. When we are on the go and are forced to eat out, we eat from the dollar menu. All clothes that have been purchased in the last several months were from the thrift store and only when absolutely necessary.

I have tried looking for a second job recently without much luck. I have applied for dozens and have not had even one interview. Hopefully something will come up soon.

Whenever I feel like we are finally starting to make progress, something big hits and sets us back again. Because of this, I have decided to move on to step 1 and save up an emergency fund of $1000. I have set up a $50 automatic transfer from my checking to my savings the day after my payday (biweekly). If I calculated that correctly, it will take me 9 months to save up $1000. Hopefully I can build it up much quicker than that. That is just a starting point until I feel that I can increase this amount.

Dave Ramsey would probably not approve of this, but let me explain to you why I have made this decision. Our monthly bills add up to more than we bring home. This does not even factor in food or gas. Because of this we basically have to prioritize what gets paid and what doesn't. We are constantly getting threatened with disconnection of one of our utilities. Sometimes we have to write a check when the money is not there (electricity for example). Usually we do this about 2 days before payday hoping it won't clear until payday. Unfortunately for us, it usually clears the next day. And all of the smaller debit charges that go through the same day get posted after the large check so that the bank can charge more insufficient funds fees. I have lost up to $300 in one month because of this. Even though if that one check had not gone through nothing else would have bounced. But the bank will automatically put everything else after that check and charge 5 or 6 fees instead of just one. It sure makes it hard to dig out of a hole when the bank is just digging it deeper and your monthly bills exceed your income.

By forcing myself to automatically put something into savings we can take the money out of savings with no fees when an emergency comes up instead of letting the bank get rich off of us poor people.

I urge anyone reading this to never allow yourself to live beyond your means. I let my husband talk me into something that I knew we could not afford and I regret that every day. I do not blame him for this. He already feels bad enough for getting us into this situation. I mostly blame myself for not standing my ground knowing this would be a terrible move.

I will end this post with a plea to anyone reading this. Do not allow anyone to talk you into making a mistake as big as this. I can tell you my husband might have been upset for a little while, but not nearly as upset as we both are now.

A Better Alternative to Getting a Second Job

I have been stressing about getting a second job for a while now. Since I am a single mother, it would be very hard to work another job. Then I realized that I don't necessarily need to do that. I can work by saving more money instead of making more money. This would essentially create the same effect towards paying off my bills. Since I enjoy saving money, this will be way more fun than working a second job.

Here are just a few tips for saving money for yourself:

1. Groceries

Start by shopping at a discount store such as Aldi. Try to buy generic foods as much as possible. Also try combining coupons with sale items at your local grocery store. Check out couponmom.com for free weekly lists which combines coupons and sale items. Many of these items turn out to be free and sometimes you even make money. Be careful with this though. It can be easy to get too carried away and end up with way more toothpaste than you'll need for the next year! Also when using this list, consider your alternatives before buying. I usually sort the list by percentage saved and mainly focus on items that are more than 50% savings. If there are certain name brand items that you frequently purchase consider buying coupons from a coupon clipping service. You can buy multiples of the same coupon that way.

2. Don't eat out! I know this is easier said than done. This is my biggest weakness because I hate cooking. Is there such thing as a restaurantaholic?

3. Consider canceling subscriptions or services that you do not use.

4. Shop around for insurance, cable, internet, and anything else that you can't completely cancel. I recommend doing this annually.

5. Shop at thrift stores or consignment shops for clothing. You would be surprised at what you can find in these stores.

6. Save on electricity by turning off lights and televisions when not in use. Also unplug small appliances, laptops, etc.

7. Think before you buy! Whenever you are about to spend money, ask yourself "Do I really need this?" You will be surprised how often you will put it back when you do this.

Feel free to share your money saving ideas below.

You Need a Budget

YNAB Pro is a great budgeting program that I just downloaded about a week ago and I absolutely love it! I have tried several different ways of budgeting over the last year, but this is the easiest and best yet. You can download your transactions from your online bank directly into this program and allocate the transactions to the categories you want them to go into. The best thing about this budget is that it teaches you to use this month's paycheck to pay next months bills. I desperately need to get to that point because I have a bad habit of going over budget at the end of the month and running into overdraft fees. Click on the above link to download a free 7 day trial. A credit card is NOT required for the trial. It just won't work after the trial period is up.

Cash for Completing Surveys?

A friend introduced a survey site to me. I have tried others in the past without much luck, but since she has been paid by them several times I figured I would give it a try. You earn points for each survey you take and once you accumulate so many points you can cash out for money. She seems to cash out $10 about once a month. You also get points for referrals so feel free to sign up here: mysurvey.com

If you know of any others that pay feel free to share them. I am always looking for more snowflakes!

The Impact of Snowflakes

You might be asking yourself right now what snowflakes have to do with getting out of debt. Snowflakes are any money that comes in that you were not expecting throughout the month. This could be from selling things on eBay or Craigslist, having a garage sale, doing surveys, picking up extra jobs, money that was budgeted but not spent, etc. I am about to show my snowflakes for the last few months and I think this will amaze you. All of this extra money should be put towards whatever step you are on in the baby steps. Right now we are on step 0, which is getting caught up on all of your bills. We are almost caught up but with Christmas around the corner they may not be completely caught up until January. Then we can start on step 1 the $1000 baby emergency fund.

September 2009 Snowflakes

$30 from Chase Leisure Rewards
$150 unexpected child support payment
$37 from rolling coins
$5 found doing laundry
$4.69 profit from BeautiControl sale
$5.01 payment from Half.com
$100 fiance won contest at work
$29.98 canceled two monthly subscriptions at $14.99 each

$361.68 Total Snowflakes for the month of September!

October 2009 Snowflakes

$150 from helping my dad with a painting job
$8 Chase Leisure Rewards
$330 fiance cashed in vacation pay
$2179.69 insurance check for fire
$6.26 secondspin.com
$4.20 kgb text answering service
$47.45 eBay sales
$29.98 canceled internet on both cell phones at $14.99 each

$2755.58 Total Snowflakes for the month of October!

November 2009 Snowflakes (So Far)

$380 helping my dad with a painting job
$5 won Wendy's gift card at work
$517.80 refund from Directv
$50 visa gift card for winning employee of the month
$50 fiance received for his birthday

$1002.80 Total Snowflakes So Far for November

As you can see we have found $4120.06 in snowflakes since the beginning of September. I know we had a couple of large snowflakes but as you can see all of this little money adds up. Now I will tell you a little bit about some of these snowflakes.

If you have a Chase checking account, stop in to your local branch and sign up for the leisure rewards card. It costs $25/year, but you earn much more than that back. As you can see I earned $38 so far since September and will be receiving $15 any day now.

As for the $150 unexpected child support payment, my ex-husband agreed to pay for all of the kids medical bills, dental insurance, and any other needs that come up if I agree not to take him back for more money, which I can do. Their dental insurance comes out of my paycheck because he does not have that option where he works and he reimburses me for this. I also add any copays for doctor visits, prescriptions etc. The thing is he pretty much pays me for this whenever. Right now he owes me $155. I never know when I am going to get it so I don't budget for it and when I do get it I count it as a snowflake. If he really starts slacking more in paying me back for these I will ask for more child support and I will get it. But for now I will try not to cause the drama unless it is necessary.

My dad works full time as a truck driver, but also does work for some office buildings when they need painted. He had a huge job and needed the help and I was happy to do it for some extra cash. Now that that job is done I need to find another way to make that kind of extra money.

kgb is a text answering service. You can text them a question at 542542 and they will send you an answer for a fee of course. I occasionally jump online and answer some texts for them although I have not done that in a while because the pay is not great. I did make $50 one month but worked at least 10 hours to get that. But if you are interested you can go here: http://542542.com/agent.

The two biggest snowflakes we had are the insurance check and the Directv refund. We had a small fire in our house and that's what the insurance check was for. We did not have to replace the items lost right away so elected to use it to catch up with our bills instead. The Directv refund is from them charging my debit card last month for the boxes we had until they got them back. We were not expecting this money so soon because they said they were going to send us a check in 6-8 weeks, but I guess we yelled enough about this because they ended up refunding my card.

Another Source of Income?

I just finished building a website that I am actually very impressed with. It cost me very little to set up and I am trying to find as many free advertising methods as possible to get it going. You can check it out here.

If you have an expertise in something, you can use that to your advantage by creating your own website with very little money. There are lots of free tools to use out there to help you along. The only thing I paid for was the domain name and the monthly hosting fee.

I plan on taking a percentage of my profits to build other sites for other school districts and making these sites better or more user friendly.

Does Debt Control Your Life? Take Your Life Back!

So I have somehow managed to get myself into over $50,000 of debt which includes credit cards, a car loan, and student loans. My fiance also owes $7,000 to the IRS. This is a horrible situation for anyone to be in and unfortunately too many people are and consider it a fact of life. It does not have to be. Can you imagine how much money you will have if you have no car payments, no credit card payments, and no other loan payments? I decided several months ago that I will never get another credit card or loan ever again. Right now we currently rent a very expensive house and are going to try to get out of the lease so that we can move somewhere cheaper where we can concentrate on pursuing our dreams. My fiance and I have a lot of dreams of owning our own business, taking vacations, and owning a nice home. We know we can not achieve this without making some changes.

So here are our current goals:

1. Save up $1000 for a baby emergency fund.
2. Pay off all debt.
3. Save up $10,000 for a fully funded emergency fund. The purpose of this is to cover expenses in case one of us loses a job.
4. Invest 15% of our income into retirement.
5. Save up for kids college funds.
6. Pay off the house.
7. Build wealth like crazy and live like no one else!

These 7 steps are part of the Total Money Makeover Plan. If you are tired of your debt controlling your life the first thing you need to do is read "The Total Money Makeover" by Dave Ramsey. This is the best book I have ever read. You might not even realize just how much your debt is hurting you until you read this book. Think about this: for each step above and each small debt you pay off, that adds more to your monthly income. Most people don't think this way because they are used to it and think everyone lives like this. Guess what? Rich people aren't just lucky, they are smart. The only monthly payments they have is on their utilities. Instead of paying interest you should be EARNING interest.




Now we are thinking of adding a step after step 3 to save up a sizable down payment on a home that will leave us with a lower mortgage payment. We also know that we are going to add a few thousand dollars to a replacement car fund so that we can pay cash for a car when we might need it. We are also starting a few different sinking funds which means we will put so much money a month into a fund for a particular thing such as Christmas, home repairs, car repairs, etc. That way these things won't sneak up on us leaving us trying to figure out how to pay for them.

Keep checking back for progress on our plan and feel free to e-mail me with any questions you have.