Debt Free Month! Or not...

Note: This is the story of why April 2011 is no longer our debt payoff month.  It's a bit long, but I tried to make it flow for easy reading.  I hope you get something worthwhile out of it... please feel free to comment on your own experience!

About 3 years or so ago, we got serious about getting rid of our debt.  At that time, we had some substantial credit card debt (thanks to financial classes that were not a timely investment) and a lot of student loan debt (thanks to a private college that kept hiking rates).  We did have a financial game plan before we got married, something that I highly recommend for committed couples of all types, and we paid everything on time with extra when we could afford it.  But it becomes very easy to slip off the debt payoff wagon when things don't go quite like you expect.  For instance, it took a lot longer than we had planned for me to start my first career job.  We also discovered that there are some peripheral expenses to being a military officer (and really, just having a career... lunches out, anyone?) that we hadn't accounted for.

So, when I did get that job in April 2007, we recommitted to paying off our debt faster.  Much faster.  Because I have graduate loans, some of our debt had a 20 year payoff period.  Crazy!  I did not want to be one of those parents who writes the last check for their own student debt just to turn around the next month and start paying tuition for my own kids!  We crunched the numbers and decided that we could live off my husband's income for bills and groceries and in turn use ALL of my paycheck towards debt payoff.  As an engineer, I brought in just over half our take home pay, despite also taking a bigger tax hit.  By moving from a retail job at $10.75/hr to a career position, I had effectively doubled our total income.

This system was tough at times, but it had a huge effect.  Both of us kept lunches out to twice a month.  Dinners out were also twice a month and we tried to do one as a date night and one night out with friends.  We carefully budgeted for everything, especially household items and groceries.  It was hard sometimes, especially when friends bought new cars (mine was 15 years old) or went out to dinner constantly; but seeing those numbers go down was worth it!  At some point in our debt payoff scheme, I calculated how long it would be till we had canceled out all of our credit card and student loan debt.  The answer?  Fall of 2010!  Much better than December 2026!

Fast forward 18 months, to August 2009.  My husband got orders to PCS, which is military-speak for "relocate your life".  We only got about 8 weeks' notice, so we immediately changed our plan; no extra moving debt for us!  We kept paying debt minimums (of course), but everything else went into a savings account, just in case.  Moving is expensive, even when it's reimbursed, and it means finding a new job for me; there are no guarantees.

After lots of moving fun (read: annoyances), I wound up unpacking the house about three months later (the military is also fond of sending people to training, heedless of timing).  We planned for me to be out of work for about 9 months.  At the time, most people in my industry who were looking found new jobs in about 6 months, but they could go anywhere.  I recalculated that debt payoff date using our new lower cost of living (city to small town move): if I had a comparable job/income by July of 2010, we would be debt free by April 2011.  Still awesome!

You probably know, or can guess, most of the rest of the story.  The economy is still down; the local economy is non-existent for highly-skilled/educated jobs.  Our experience living on one income has been a lifesaver; my husband has been promoted and gotten the commensurate raises since then, meaning that his income now roughly equals our starting income from four years ago: his career plus my retail job.  We can and do live on one income comfortably, but April 2011 is no longer our debt payoff month and it's hard to say what it is now.

Some good things we did:

• Savings build up.  We rarely touched this, but it has given us tremendous peace of mind and stopped us from running up credit card bills (if we're not willing to sacrifice savings for something, why would we pay interest for it?).  We recently reduced the disproportionate amount we had to pay off a couple of low balance, high payment loans, which has been great for our cash flow while still leaving us plenty for emergencies.
• Early debt payoff.  The credit cards and loans that were paid off before we moved (plus the two paid off since then) meant that our minimum payments were much lower.  Our original minimum payments would leave no wiggle room on a single income, so this has made a huge difference.  We are also continuing extra debt payments, albeit at a slower pace.
• Rented out our property.  It doesn't cover the mortgage, but the extra money that this brings in is being split between debt payoff and a baby fund that will likely purchase our next (family-sized) vehicle.  This income is only guaranteed for the length of the lease, however, so we don't count on it past a certain point.
• Living on one income.  This move would have been an insane adjustment with no prior experience; instead, it was just a question of juggling some numbers.  I cannot overemphasize how little stress this has caused us and how horrible it could have been.

Now you know the story of my not-quite-debt-payoff month.  What about you... have you set financial goals that you've needed to re-evaluate?  What steps have you taken that turned out to be great in the long run?

Random Findings

My post about our former debt free month is coming soon, but I ran across a few unrelated links today that I want to share before I forget:

• First, the most important one: Preeclampsia Fundraiser.  My sister works for the Preeclampsia Foundation in Florida and every year they host a promise walk, just like those cancer walks we've all been on.  Pre-eclampsia is basically a condition during pregnancy where a woman's blood pressure rises to levels dangerous for both her and the fetus.  Although there are some known risk factors, it can develop with absolutely no warning.  Even with modern medicine pre-eclampsia is dangerous (sometimes fatal) to both parties and generally leads to early labor induction (with all of early induction's risks) when it is caught.  Besides labor induction, there is currently no treatment or prophylactic available.  The participants try to raise some donations themselves, so if you could help out with even $15, you would be doing a great thing!  
• Second, a fun link: Suvudu's Final Cage Match of 2011.  Alright, so this is for sci-fi and fantasy geeks like me, but here's the scoop anyway: Suvudu runs a cage match of dozens of sf/f characters from different series each spring.  Each match also features a write-up of how the judges think it will go, but the winner is determined by an online voting poll.  The tournament is single elimination and eventually results in a final showdown: this year, Quick Ben from Steven Erikson's Malazan series is pitted up against a favorite character of mine: Vin from Brandon Sanderson's awesome Mistborn series.  You (yes, you!) can go vote for who you think would win in a fight between them; no registration is needed and you can only vote once, so no annoying reminders from me either.  And if you like me at all, you'll vote for Vin!  ;-)
• Lastly, an everyday life link: Thoughts on Tipping.  I think that pretty much sums up what I think on the subject (especially about auto-gratuities).  I will add two thoughts: one, a party of 6 is not a "group", even though I've observed more restaurants lowering this number.  It would be more effective to have a policy of "8 adults" or "more than two checks".  Two, when out with a large party, we let a waiter or manager know (before ordering) that tips will be higher if they are not automatically included; otherwise, they will get the 18% only or (if the tab includes the "suggested" tip and we can adjust down), 18% will be the maximum they get for great service.  This has worked the majority of the time, both to get rid of the "auto-tip" and getting us wonderful service.

Alright, off to do some quick homework and my beginning of the month financial update.  Then tutoring, class, a volleyball game, and hopefully back here to write that debt payoff month post.

Three Weeks!

Wow, I have not blogged in a long time.  Almost like I've been busy or crazily exhausted in the last few weeks...

First, I've finished a couple more books since my last post.  As always, my reviews are on Goodreads; this month I read The Wise Man's Fear (5 stars) and The Forgotten Garden (3.5 stars).  Wise Man's Fear was the second really excellent book I've read this year and Forgotten Garden is my latest book club read, which I think will yield some very interesting discussion!

Second, I haven't hyperlink spammed you recently:

• Elementary Math vs. The Real World - You'll be unsurprised to see how disconnected they are.
• Good Social Science - Were you aware there's a growing epidemic of whooping cough (pertussis) in this country?  If not, you should be, especially if you have young children.  This short article makes a great point about people who cannot vaccinate because of health complications.  If you can (and most people can), please vaccinate.
• Bad Science (i.e. NOT science) - What are all those researchers doing when we can just use how people feel about radiation to make judgments?  ~sigh~
• Sad Science - Well, not so much sad as disappointing.  Evolutionary theory is better proven than Newtonian theory.  No, really.  I'd love to see a similar survey from past years for comparison.
• Science & Society - This is a longer interview with the author of Panic Virus, a book about the autism/vaccine scare and what caused and propagated it (I have not read the book).  Fascinating mostly because the author fully acknowledges something that most scientists overlook: anti-vaccine (and anti-science) movements are popular because they give people answers, even if they're wrong answers.  Regardless, it's an interesting look at how misinformation gains credibility and the role that major media plays with its lack of fact checking.

Okay, that's a lot of science, but it's all relevant and readable and interesting, I promise.

And lastly, I have planned another financial post in honor of what would have been our debt payoff next month.  Coming soon!

Unexpected Book Review

Today I finished a book that I wasn't sure I wanted to read, although I devoured it in less than 24 hours.  It's the (probably) last book in one of my all time favorite series and it was just published a week ago.  This is a series that I enjoy so much that I've only ever recommended it once.  If you don't like this series, then you don't like me, and I wouldn't want to find that out after months or years of friendship with someone!  It's the only book series I've ever kept to myself that way and I always eagerly await new installments.

Regardless, it was hard to open this book, knowing that it was the end of characters I admired and enjoyed.  Knowing that there were a lot of negative reviews already circulating.  Knowing that a bad book, especially a poor ending, would forever color the good ones.  Nonetheless, I started it yesterday.  And finished it this afternoon.  And you know what?

It was amazing.  I mean, it was absolutely what I would expect from this author, who I already thought was highly underrated in the fantasy community.  The book was actually a collection of four short stories that got better as they went.  The last story in the book was the reason for all the early negative reviews.  You see, the author killed off a main character, but I could not have asked for a better story or a more realistic treatment of the characters (who are the best part, in my opinion).

So in short, I'm glad I took a chance and read it, because otherwise I would have missed some great storytelling from a favorite author.  My full review is here on Goodreads and it's the only 5-star review I've given this year.

Ever taken a chance on a book and been rewarded?  Do you have a book or series that speaks to you and only you?

Crafty Wishes

I'm feeling the urge to be crafty.  I had to put off joining a quilting class that I really wanted to attend for extraneous reasons and I feel the need to make up for that!  I'm actually working on two cross-stitch pieces for two different friends, plus one for myself, but I really want to sew today.  Cross-stitch is great for relaxing or having something to do on long car trips, but today I want to make something.

However, I don't really have any projects going at the moment, other than the monstrous pile of repair work that I should do.  I love this platypus that my friend Amy made in just one day!

So how about it crafty friends?  Any cute, quick projects to suggest?

Or any websites or stores where you get great bargains on quilting supplies?