Thursday, January 22, 2009

Six Months: God is Good

Remember how I said last month that I had a sense of abundance where finances were concerned, in spite of scary job news and large van repair expenses? Well, we spent more optimistically than we probably should have, so there were a couple of worrisome moments when I thought we might have a problem. Things worked out, though.

(Previous personal finance posts here.)

Our fiscal month starts on the 20th and ends on the 19th, so the past month included our final spending before Christmas. It was difficult, being busy and getting things finished up for the holiday, to stay within limits. For one thing, I didn't get cash for the envelopes when Mr. Honey's commission check hit, and so I was using the debit card and thinking I would keep a tally in my head.

(There are a lot of things floating around in my head. Just the other day, I was trying to focus on the song service in church while my mind insisted on thinking through an article on habit formation. I would marshall my mind and get back to thinking about Jesus' love and mercy toward us, and ideas about guiding children would pop into the middle of it. An undisciplined mind is a terrible thing.)

Anyway, the cash system is a good system because it is solid. There is no doubt that you have reached the end of the grocery budget when there are no more dollars in the envelope. Needless to say, using my check card, I spent more dollars than I would have using cash, and caused myself the headache of additional reconciliation of the checking account.

In a related situation, while Christmas shopping, I spent from the checking account without first transferring gift money from short-term savings to checking. I thought I would transfer the money later, but I got busy. And forgot. We nearly had a big 'oops', but Mr. Honey was able to make a transfer for me just in time.

Thankfully, we never had an overdrawn moment. We did, however, go a little overbudget in our spending and have to rearrange things.

If you have been following our financial journey, you will remember that Mr. Honey got the word from the boss that he needed to sell, sell, sell if he wanted to keep his job come February. He has been under a lot of stress and strain, and has been working almost constantly. The week before Christmas, he made a sale that put him over the top! Calloo, callay!! So his job is a little safer than it was a month ago. Last week, the company laid off 1000 people internationally, and Mr. Honey was *not* one of them. (Some of the folks that *were* laid off could ill afford it, though. Who can afford to be laid off, anyway?) This was the first time Mr. Honey's company has had a mass layoff. They didn't even do that during the Great Depression.

The week before Christmas, Mr. Honey expressed frustration with his phone. He had $50 from a Craigslist sale that he was saving for something else, but he decided to put it on a new phone instead. He listed a couple of other things on Craigslist to make up the difference between what the phone cost and his $50, and we decided for him to go ahead and get the phone and we would cover the cost using money from another bucket until the items sold. However, purchasing the new phone ended up costing more than we thought it would. Those telecom companies get you coming and going. (They also told Mr. Honey he would have a $50 credit for all the hassle he has gone through with his phone-- then later I found out that credit will be applied *at some point* to our phone bill, not directly to the purchase of a new phone. And then when we received the bill, it was over $100 more than it should have been and he had to spend a good forty-five minutes letting them know that they had put one of our phones on the wrong calling plan. Erg.) But now Mr. Honey has the phone he needs, and Triss has my old phone (I got Mr. Honey's old phone). She is paying the monthly add-on fee ($10) herself.

Mr. Honey's monthly commission paycheck arrived the week before Christmas, and was less than I had planned for it to be. Living on commission is so exciting! I redid the budget for the month, and we ended up only putting a couple hundred dollars into the emergency fund, bringing it up to not quite half the Babystep 1 amount of $1000. (In November we had to use most of the e-fund to fix the van.)

Christmas was joyous and peaceful.

About two weeks into January, Mariel slammed into a metal light pole while running a race with some friends at the park and split her chin open, which required Urgent Care attention. Then, this week, she fell on her wrist while roller skating and fractured the growth plate of her humerus, requiring x-rays, a splint and a sling. We went to a nearby free-standing emergency room for that one. We have spent around $85 on doctors for her so far this month, and $12 on pain medication. She has more doctor visits and possibly a consultation with an orthopedic surgeon upcoming, so our doctor bills will be significantly more than usual this month.

Mr. Honey has been having lots of back problems and has finally found a chiropractor that will work for him. (We pay chiropractors a specialist copay.) He is going to be receiving adjustments a couple times per week for the next month or so, and that will also raise our doctor bills. (He feels awful about this, but I just want him to be free of pain. He sits up late until his eyes won't stay open because his back hurts so much every night. I really hope this chiropractor will be able to help him.)

The Lord has provided for all these doctor bills! Mr. Honey's commission check this week was several hundred dollars more than we were expecting. Great work, Honey!

When I paid the bills last night for the beginning of the new month, I was able to put aside money for the doctors, finish refilling the emergency fund to the Babystep 1 level of $1000, and still pay $300 over the minimums on the credit cards.

The best part of all is that when these needs arose, we are able to take care of them with cash. I know I keep going on about how wonderful it is to just have the cash and take care of it, but we were so foolish for so long that I feel amazing comfort every time I tense up at an unexpected expense and then realize I can relax because we have it covered. I can't tell you how I felt both times Mariel hurt herself, when I realized that I could just comfort her and not have to worry about where the money was coming from. I could even treat her to a small something special as a get-well gift.

The car still needs some repairs and I have that money in the short-term savings account. The kids are due for eye exams and well-child visits, too. I think we'll do those in February, after the dust settles from our recent expenses.

Our monthly clothing budget is $25 per month. I know that is pitifully small for a family with three growing children, but you would not believe the volume of clothing other families give us. (And we love receiving so many nice things! We pass the things we can't use to other families.) Still, the smallness of budget does leave a little to be desired, especially on hard-to-fit items, like jeans. I took some of the extra money from Mr. Honey's commissions this week and purchased Triss two new pair of jeans on sale at Burlington Coat Factory. She really needed them, as she had only one pair of jeans, and those were at least an inch too short.

We also made a purchase from the Erskine family business, Living Books for the Ears, which came out of our school budget. They are discontinuing a lot of their materials in anticipation of the new law from the CPSC, the Consumer Product Safety Improvement Act. They asked that each order be at least $50, so I spent a little over that and got some wonderful audio books and radio shows, including history stories, Shakespeare and classic literature retold as radio plays. My parents fixed the kids up with mp3 players at Christmas, so my plan is to load these shows and stories onto their players and they can listen whenever they want. We have a few CDs of this type already, and the kids love listening to them.

(I am disgruntled at the poorly worded CPSIA, and get so disgusted with the way the people on Capitol Hill jostle around and grandstand and blame each other when they really need to just *fix* the thing, but that is a post for another day.)

So, it's been six months since we started our new gazelle-like intensity. Our credit card balance has gone down around $5,500 since July, an average of almost $1000 paid off per month. At the beginning of the process, we couldn't see how we would be able to pay more than maybe $100 over minimums each month, but God has been faithful to bless our efforts. We have a little over $11,000 left to pay off, and if we continue the way we have, we will be done with credit cards in thirteen months (or less, given the way the debt snowball works). This is a big improvement over my expectation when we started, which was that it would take us over two years to pay of our credit cards.

After we get those finished, we still have our car note. (Very aggravating paying a car note on a vehicle that has over 100,000 miles and is beginning to fall apart. Please be cautious if you decide to finance a new car. Or just drive a beater until you can pay cash for a late-model, low-mileage used vehicle, like Dave says. Don't do what we did.)

Once we get that finished, it will be on to pay off the house!

I wonder how long it will take?


tootlepip said...

I read a blog started by another family that had huge debt to pay off and she has some great posts. I thought you might like it if you haven't already seen it. The address is:

I read your blog almost daily, though I don't comment very often.


Katie said...

Thanks for reading, Pam! :O)

I read that blog, too! Isn't that funny? I also like reading The Simple Dollar. Maybe I should post some links to frugal and debt-free type blogs.