personal finance

Ten Days of Thanksgiving: Day 6

Today, I am thankful for financial stability.

Growing up, I knew we were poor. My dad gambled away his paycheck and my mom had to make ends meet on her meager daycare teacher wage. Things were tight – always. Every year, when I would receive flyers for Girl Scouts or extracurricular activities, I stuffed them into my backpack, never to be shown to my mom. I knew we couldn’t afford extras like that, so I didn’t even ask. I knew about money problems and stressing over them way before a child should know about such things.

I hated being poor. It was embarrassing and made me feel inferior. I made a promise to myself to never put myself in that boat. I would not get into debt and I would be smart with my finances.

I can’t say I have always followed through with that promise. I was in credit card debt by the time I was 21. My mom and I moved into an apartment that was far above our living means and we struggled with our bills. It got to the point where my mom was getting check advances on a nearly regular basis and I worried on a daily basis about where my next meal would come from. These are hard words to write because it was a dark time for me. It’s embarrassing to think of how we let it get this far, how we dug ourselves into such a deep hole.

We eventually moved, cutting our rent bill almost in half, and allowing us to breathe easier. We were able to pay our bills, we were able to save, and most importantly, my mom was able to quit her second job.

I am on the road to paying off my credit card bills. After the 25th of this month, I will have three payments left on my biggest credit card and, leaving me with just my bank credit card. (Less than $300 to pay that one off.)

Once I started my full-time job, I became more responsible for the bills. (I pay my mom a portion of each paycheck.) I have my own bills to pay each month. And I can pay them. I don’t ever have to worry about not being able to pay my bills. When I get paid, I give my mom her portion and then break down the rest of my money between bills, savings, and entertainment money. It doesn’t leave me a lot left over after everything is paid, but it is enough. Money is not something I have to stress over anymore. (Other than the stress of not having a lot of fun money for myself, heh.)

After spending my entire life stressing about money, it feels really, really good to be in this place. I am thankful for a job that leaves me with a good paycheck twice a month. I am thankful for a mother who can and happily does support me so I don’t have to do this all alone. I am thankful that I am not materialistic and the things I’m lusting after are things I need but are also things I’m willing to patiently wait and save up for.

Struggling with money is terrible and frustrating and scary. But you can fight your way out of it and come out on top. My mother and I are proof of that.

Categories: Personal Finance

A Grocery Dilemma

My mom and I have a serious problem. A serious spending problem. In August alone, we have spent around $710 on groceries.

For two people.

That’s ridiculous.

When I read about others’ grocery budgets and bills, I am in awe of how little you manage to spend. I know eating healthy is more expensive than eating junk, but I also know you can eat healthy on a budget.

Our problem doesn’t simply lie with our weekly trips to Publix, it’s also those little midweek trips we like to take when we only need to buy a few things, but always seems to be at least $30.

I need your help, blog friends. In a big way. How the heck do you guys keep your grocery bills so low?!

Here are some statistics on our grocery problem:

Toiletries are included in the $710. We’re thinking of doing a separate biweekly toiletries trip at Target. How do you shop for toiletries?
We usually buy our meat in small quantities, to only use for one meal. This tends to be very wasteful, though, so is bulk the way to go?
We buy our fruit/veggies at the grocery store. Our Farmer’s Market doesn’t open until October 1st.
We only buy weekly now, though I would like to switch to biweekly.
We do use coupons, but only the ones from the Sunday paper generally and they don’t yield us a whole lot in savings.

There is a Sam’s Club 6 miles from where I live and a Costco around 8 miles from me. While I would like to start shopping at a bulk-food store, we just haven’t gotten around to it yet. Is it worth it?

Any help, tips, and/or smacks upside the head for being such a shopping dimwit are greatly appreciated!

Categories: Books

Book Review: Your Money, God’s Way by Amie Streater

I chose this book because I feel as if my finances are in a state of disarray. I want to get my hands on any book that opens my eyes to handling money and this one did the trick! I really had no previous thoughts going into it. It was the first book on money I had ever read and I was just looking for something to help.

This book was exactly what I needed. In the beginning, Streater tells you her story: how she was living above her means and using credit cards to help whenever needed. How a sermon on a CD opened her eyes to the way she was living. She, along with her husband, began taking steps to become debt-free and is now there. But it was a long process, and through it, she became an associate pastor of financial stewardship for a large church.

The book emphasizes 7 “counterfeit convictions”, alongside “timeless truths”. The counterfeit convictions are the things we tell ourselves about why we’re in debt (i.e., “It is my Christian duty to be at the beck and call of everyone who wants me to help them out of a jam.”). The timeless truths showcase how we should be living (i.e., “You have to take care of yourself first if you’re going to be in a position to help anyone else.”). The book was packed with stories of how other people got into debt and how their reasoning was wrong. At the end of the book was a great little budgeting lesson. Streater broke the budgets into three groups: Level 1 (people with debt who can’t afford to tithe 10%, save 10%, and use the 80% for living expenses – which is the formula Streater says is best.), Level 2 (people not in too much debt and can live out the 10-10-80 plan), and Level 3 (the most fun level – no debt at all!) Streater also mentions writing out a Level 3 plan, even if you’re at Level 1, to give you something to look forward to. She emphasizes that you have to constantly go back to your budget and rework it to account for pay raises, bonuses, and other expenses.

After reading this book, I am now even more focused on getting out of debt, saving money, and beginning to tithe 10% again. I need to know exactly where each dollar of my paycheck is going and stop lolly-gagging around with my money.

I also want to reference two quotes from this book that really stood out to me:

“In Luke 16:10, Jesus said, “He who is faithful in what is least is faithful also in much; and he who is unjust in least is unjust also in much.” In other words, if you can’t budget, plan, save, and give on $35,000 a year, you won’t be able to do it on $350,000 a year either.” (p. 118)”

“…[W]e didn’t talk much during dinner, which was Mexican food capped by chocolate sundaes for the kids. The kids were just picking up their spoons to dive in to the gooey goodness when Addision, five, demanded, “Hey, shouldn’t this sundae have a cherry on top? Where is the cherry?”…I wonder how often God watches me and has the same reaction I had to Addison. I wonder if He ever thinks, Hey woman! Look around you. So, things aren’t perfect. How about expressing a little gratitude for the sundae? Not everyone has a sundae, you know.“

If you want a faith-based answer to why you are in debt and how you can be free from it, I would recommend picking up this book. I’m so glad I picked this book because now I’m even more excited to work on my budget.

Have you ever read a book about money? Did you get anything out of it?

Disclosure of Material Connection: I received this book free from the publisher through the BookSneeze.com book review bloggers program. I was not required to write a positive review. The opinions I have expressed are my own. I am diclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising“.

Categories: Personal Finance

The Word Loan Isn’t Always a Dirty Word

As I mentioned last week, I’m drowning in credit card debt. It feels surreal to think that, to know that I jumped off the deep end when it comes to finances and ended up here.

All throughout my life, my parents struggled with money. We shouldn’t have struggled with two working adults, but with my dad’s gambling problem, we did. He would gamble away his paycheck and my mom was left to pay all our bills and extra expenses on her daycare teacher’s salary. It wasn’t easy. We were evicted from many apartments. I learned at an early age the concept of money and the fact that we didn’t have a lot of it. I never told my mom that I wanted to be in Girl Scouts or join a baton-twirling team (every year, we would be given information to join a team. Stop laughing.) because of the money issues. As much as I loved going on field trips, I hated letting my mom know she would have to fork over some money to pay for it.

The truth is, we weren’t destitute. We never went hungry, we always had a place to stay, and we always got new clothes at the beginning of school. I just had an innate understanding that we were always struggling and didn’t have a lot of extra money laying around. I knew I couldn’t ask my mom for a new outfit every week and I was sixteen before I had my first cell phone.

I promised myself that I would never find myself in debt. I would work hard to make sure I never made the same mistakes as my parents. Credit cards would not even be an option for me. I would be financially stable. But I slowly began accumulating my credit cards. In May 2006, after I opened up a checking account with my bank, they gave me the option of starting a credit card. I talked it over with the financial adviser and my mom and decided to do it, only because it would help my credit. Over the next two years, I was extremely responsible with it. I would use it and then pay it off every month. I was never late on a payment.

In the spring of 2008, I was outside of Old Navy one Sunday with my mom, waiting for it to open. My mom had recently gotten an Old Navy credit card for $300 and gosh darnit, it was warming up outside! I wanted some new, summery clothes! (Probably not the best way to go about applying for a credit card…) I thought I would get a credit card around $300-$500. Never would I expect getting approved for a $2,500 credit card.

Right there, I should’ve put on the brakes. Aside from school loans, I had never been responsible for that amount of money in my life. And not only was it a lot of money, but it was also a credit card with a lot of money. Even. Worse. Over that spring and summer, I fluctuated between jobs, and the job I did have didn’t offer me a lot of hours. (Plus, that was the summer that gas was close to $4.00 a gallon and I was traveling up to Tampa for a class twice a week.) So I was using that credit card like it was going out of style and paying the minimum payment every month.

But I was paying it. Every month.

In August 2008, a few weeks before I was supposed to start my final internship, I applied for a Target credit card to buy some more professional clothes for teaching. Like the Old Navy card, this is also a card decision I made spur of the moment and it wasn’t a good idea. Luckily, I was only approved for $300 but I quickly used that up. The interest rate is ridiculous and I’ve been late quite a few times, giving me $30 extra a month I have to pay.

The only card I’ve paid on time consistently is my bank credit card. The other two have been maxed out repeatedly. I’m working towards paying off my Target credit card as it’s the one with the lowest balance and would be the easiest to pay off. My Old Navy credit card is with a collection agency – something that makes my heart break in two every time I think about that.

Over the past 2 years, I’ve done little to get myself out of credit card debt. From August 2008 – February 2009, I was out of work and that’s when my cards got out of hand. I still managed to pay my Target and bank credit cards every month, since the minimum was $10-$20. But for my Old Navy credit card, with a minimum payment of $80, I couldn’t do it. So I would pay when I could, but it was never consistent. And even when I started working again, I didn’t do the responsible thing and put a lot of money towards my credit cards. Part of it was our finances, we were living above our means and I had to help out. Part of it was school, having to pay for my own books and part of my tuition.

So that’s the past. That’s what I’ve done and how I’ve gotten to where I am now. I’m focused on getting in control of my debt and getting rid of these credit cards. (Well, I am looking to keep my bank credit card since I do still want to have a card for my credit.) Kyla has mentioned considering a consolidation loan a few times. The word loan sounds like a dirty word to me, and the word consolidation sounds too financial for me to contemplate. So I just brushed her off the first time, thinking I don’t really have that much in debt. (That’s always a scary way of thinking. Any debt is too much.)

I talked it over with my mom this weekend and it sounds like a pretty good idea. The way she explained it was that if the bank were to give me a CL, they would pay off my credit cards and then I would owe them the money they paid. It would be taken straight out of my account each month. It really sounds like a great idea because there are times it feels so overwhelming to think of how much debt I have to pay and the fact that I have to deal with a collection agency.

I’m thinking seriously about applying for the loan. I think it would help me get this whole debt mess straightened out and give me a solid plan to pay it off.

Have you ever gotten a consolidation loan? Have you ever been in any kind of debt? How have you gotten out of it?