Revisiting Budgeting and Surviving (and Succeeding) Just Above the Poverty Line

A few months ago I mentioned I had been starting to follow the Dave Ramsey budgeting and financial planning method. I am pleased to report it is working really well! I traveled in February and March and my husband and I couldn't figure out how to keep up with the budget we had started in January. We noticed a difference. Money walked away...about $1000 wandered off into stupid, unplanned for purchases. That money could've been used towards paying off my car loan.

Lesson learned. We need a budget! Not only do we need a budget, through trial and error trying to find or rhythm with this program, we found we need the envelope system. The good, old fashioned, "there are $500 for food this month, $500 goes into the food & household envelope at the beginning of the month and when it's empty, it's empty" method. We run the following budget line items off of the cash only envelope system: food & household, gas, bus, entertainment, VB blow money, and my husband's blow money. The rest is debit and we reconcile the books at the end of the month (cuz I am too lazy/distracted to reconcile as we go).

Facts: my husband and I are living on 1 full time income (I just this month picked up some part time work that will cover 1 bill/month). We are living at only a few thousand dollars a year over the federal poverty line. But, with this considered, we have successfully paid off $5000 in debt since January. We have no credit card debt, and we are nearly finished paying off a car loan (on a 2012 I bought in 2013!) and after that will follow Dave Ramsey's "debt snowball" concept and apply all of the car loan money towards the student loan to pay that down too! That means within the next 12 months we will be 100% debt free and can start saving for a down payment on a home and retirement!

This has been challenging, it has caused arguments. But now after 7 months, I can say we have a really good system in place. Our finances are in check and we even have extra money every month to throw at debt. This is after we have put money towards saving for gifts, saving for travel, saving for French class tuition, saving for car repairs, saving for dental, saving for medications, saving for clothes. You get the idea. I highly recommend you give this method a try if you are having trouble managing your finances or if you find yourself with a lot of debt.

Even if you aren't much of a reader, Dave Ramsey's radio show is broadcast for free from his website. It's not a bad listen (if you can ignore the 3% of the time he spends on his extreme right politics) and you can learn a lot about winning at money. Here's his website. "The Total Money Makeover" and the workbook were what we used and found it to be enough information.

A Move and Cabin Fever

I've, luckily for my sanity's sake, had the fortune to move into the largest urban area on this island. Population 106,172. I am still coping with staying at home and not having work outside the home or regular income. And this city has been dumped on with so much snow this winter they are taking it out in dump trucks daily just to sort of have some poor control over the roadways. To top this off we have had rolling power outages on the coldest days of winter so far. Awesome! I thought I was living in a first world nation...

Needless to say, I have wanted to punch holes in the wall, have put on some undesired weight and am generally irritable and stir crazy. I am trying to cope by building routine into my life. I have always been resistant to routine; a free spirit, routine is for normal people. But am finding that designing some routine is helping not feel like the whole day has been wasted on facebook.

My new routine is still under development. I have been at it a little over a week now and I like this aspect of it. I drive my husband to work every morning. Not being a morning person, waking is always painful. I start the day in a deliriously, miserable state. My eyes hurt, my body hurts, my brain often hurts. I resent being a chauffeur. Once I get back from the 30-40 minute round trip, I make a cup of tea, set a timer for 30 minutes and allow myself uninterrupted access to facebook and whatever else I "need" to look at on the computer. I try to find some interesting articles to read later from what my worldly friends share.

So far I found a link to 24 invaluable things to learn for free online of which I have started the French lessons. Having majored in Spanish, I will tell you this free software is well designed, however I can't get the microphone part where I speak to work...so I am skipping that for now. There is also an interesting link to the art of negotiation I would like to take some time with as well as a link to learning about investing.

On the topic of money, one of my biggest sources of anxiety, I have taken major steps to conquer this anxiety and control the little money we have in our life at this time. We are working with the Dave Ramsey model of spending down to zero - allocating every dollar to a line item in a budget. During some of the days we had rolling power outages, my husband and I marathoned our way through his book The Total Money Makeover (tip you can find this used for pretty cheap at used bookstores and on amazon) and the accompanying budget workbook. I feel like we are better off than we realized and we are on the right step towards progress. We are already on Baby Step 2 and well into it as I have been working on my debt snowball for 4 years now. I have paid off $15,000 in credit card debt (and now owe $0!), paid off a car loan, paid off 2/3's of new car loan in less than a year and have brought my student loan down to $10,000. My outstanding debt is about $16,000 and my husband and I expect to have this gone in two years on one lower middle class income! Woot!!!

Disclaimer: Ramsey is an Evangelical Christian. For those sensitive to too much biblical reference (like myself) I will tell you it is 95% good (*read easy to understand) financial advice and a very tolerable 5% biblical reference. This method and book was recommended to me by my friend Derrin, who is successfully living the life I hope to live (thank you a million times! and I do thank her often for this advice). It holds true to his radio show too, I have been streaming his daily podcasts online. I am finding my brain is more engaged and as they say knowledge is power, I am learning more about money which I think is aiding in suppressing my anxiety.

I am now trying to motivate myself to add a 20 minute daily walk to my new routine. I am putting a lot of time into my jewelry business, a fantastic distraction to the fact that we are in month two of the never ending winter season. But I need some air and some movement. I was too late to the game to join a hockey league (as far as I can tell) and am truly awful at exercising alone. I have yoga tapes and have used them once all winter. So...as I don't have much social interaction (still...grrr), I polled facebook for tips on motivating myself to take a 20 minute walk in my boring, 1970's construction, shopping mall neighborhood (P.S....walking around the mall no longer an option as they got damaged by their sprinkler system during the rolling outages...*insert expletive here).

So...long winded today it seems...an excellent piece of advice received is as follows "Have a goal to take one interesting photo during your walk - since your neighborhood is not inspiring in the macro, look for micro things to make a good photo as you walk: an oddly shaped branch, closeup of peeling paint or a brick wall, a weird chimney, whatever." Brilliant! I enjoy taking photos. I like being inspired by everything and this may even inspire some jewelry projects. Multiple birds with one stone...*semi horn blow*. I am going to strap on my boots and stuff myself into my coat, mittens and hat and go for a short stroll...with a camera.