Friday, February 14, 2014

Bye Bye Bank of America Visa!

Thanks to a sore shoulder from our accident in December, I received a settlement from the other guy's insurance company. We were able to pay off our Bank of America Visa with it - two months ahead of schedule!  Aaron and I are SO excited!  The first few debts we paid off were rather small. I think QVC was around $40, Old Navy was around $80 and our dentist bill was just over $200. We were able to knock those out fairly quickly but we had to really work at the BoA bill. It was over $3,100 when we began our debt snowball!  Having that first big one gone feels good!  We had it paid down about 1/3 to $2034 when I got the settlement, which wasn't much more than that amount. 

There was no question on what to do with the money. Jake (my oldest son) asked me what I would have done with that money had I not been following Dave Ramsey's plan. I told him I'd probably buy the materials needed to reroof our house and finish fencing in our backyard. The rest, I'd spend at Hobby Lobby, of course. ;)

We don't really need a new roof - I just don't like the roof we have. (I know....vanity, vanity!) Half of my little ranch-style house is shingled. The front half has a red rolled fiberglass roofing product that is downright ugly. Yes, you understood correctly....only half of the roof is covered in the red. It's terrible. Seriously. I asked Aaron if we could just take off the red stuff so the whole thing was shingled. He explained that we can't do that because it is screwed down and if we take it off, those holes will leak. Since the roof doesn't currently leak, it is not high on Aaron's priority list to re-do. I will have to wait . . . unless it starts leaking.

Seriously, it's kind of funny to think how differently I feel about money and how my thought process has changed. Whenever I come into money, my first thought is to put it on debt. Whenever I get an unexpected bill, my first thought is Oh no!  This will slow down my debt snowball! 

Who am I and where did the old me go? :)

Thursday, February 6, 2014

Blow Money aka Pocket Money

If you follow Dave Ramsey, you know there is a budget line called blow money.  Some folks call it pocket money, others call it his & hers money.  The idea is that you can spend your blow money on whatever you'd like without busting your budget.  Dave advises that you take your blow money out in cash rather than use a debit card.

When we first created our budget, I wanted blow money.  Aaron did not want us to take any; he wanted it all to go to the debt.  I wanted to take out $20 per pay period to split, which would have given us each $10 every two weeks.  After realizing that if I had blow money, I would definitely spend it, and after crunching the numbers ($20 x 26 pay periods) I realized that was a lot of money that could go to paying down debt and I changed my mind.

Last night at our third FPU class the topic of blow money came up.  Our coordinator (who is my dad) asked if anyone was not allowing for blow money in their budget.  Aaron and I were the only ones!  It started quite a big discussion and everyone seemed to be of the mindset that we should take blow money.  No one really said anything to convince me to take it, but I am open to the idea if Aaron is.  For now, I think we will continue to leave that budget line at zero and have every dollar go to the debt snowball.  I will be so glad when the last credit card is paid! :)

Wednesday, February 5, 2014

Tax Trouble...Double Trouble!

So I've been working on our taxes and I am a bit disappointed this year.  Typically, we don't usually owe taxes so anything we've paid in over the prior year, we get back in a return.  Furthermore, because of the Earned Income Credit and the Child Tax Credit, we get more back than what we paid in.  It appears that is the case with the Federal taxes, however the NC state taxes has become a thorn in my side.  :/

Last year on my 2012 state return, I took a credit called the Credit for Children with Disabilities.  It is a credit designed to offset education costs for children with special needs.  I researched it and found that Brady was a great candidate for the credit.  He has cerebral palsy (diagoned at 10 months old) and, as a result, he also has severe dyslexia.  He has always been homeschooled but was tested by a school psychologist a couple of years ago so I had all of the paperwork to prove his disability.  I listed all of our homeschool expenses as well as his private reading tutor's charges and took the credit. 

This past December, I was audited on that specific credit.  I received a letter asking for additional information on Brady's disability and proof of expenses.  I promptly responded with all the required information and heard back just last week that we were not eligible to take the credit.  After talking with the auditor, I was told that the credit is only designed for children who have been in public school for at least two semesters and then pulled out because the public school was not able to service the child.  (The way the credit is written is not very clear and it was an oversight error on my part.)  As a result:  I owe the state $599.12 in taxes from the 2012 tax year.  Agh!!

Because I thought we would take the credit again in our 2013 taxes, I didn't ask Aaron to adjust our W4, which is the paycheck withholding form.  Not enough taxes were withheld, so, for the 2013 tax year, I owe the state of North Carolina over $1,000.  Combined, I have to pay in more than $1,600!  Double agh!!

Our plan is to try to cash flow the $599 within the next month.  Next, we will e-file our Federal return and holdout the amount we owe the state, then plop the remainder of the Federal refund on our debt.  We are hopeful that by the time we receive it, we will be able to completely wipe out the Bank of America Visa, which is our target debt right now.  We are sending anything and everything we can to that Visa and it's balance is just over $2,000.  I'm hoping next paycheck we can get it down to where the return will wipe it out.  If not, it'll be close!

I can't help but think that if I had gotten a surprise $600 bill this time last year, I would have cried.  I literally couldn't handle the extra stress in our finances.  This year, as much as it annoyed me, I took it with ease.  There is something about having a handle on your finances, and having an ememgency fund, that just makes dealing with surprises easier.  I'm so thankful for FPU, Dave Ramsey and his ministry.  I'm also thankful the Lord directed me to him and his program!

Shouldering the Debt

Well, I received some good news yesterday afternoon about the car accident we were in.  The other guy's insurance company is going to reimburse me for the copays I paid out to my doctor for my shoulder injury but - here's the good part - they also insist on paying me something for my "pain and suffering"!  From what I understand, the whole idea is to pay me something so that I won't come back and sue them for major damages later.  I'm not really the type to sue (I've been sued before - and cleared - however, it was no fun to go through.) so I wasn't even thinking about the possibility.  They are offering me $2,500 plus my $60 copays and a $500 'bonus' in case I need any other treatments for a total of $3,060.

If the Federal tax return pays off our target debt (currently Bank of America Visa), the next one on the chopping block is $3,600 to Lowes Home Improvement which is Aaron's barn materials.  That card is on an 18 month special 0% financing plan, however it is our next smallest debt and must die. 

I think it's kind of ironic that my shoulder pain will almost completely pay off Aaron's barn, which is coming along nicely I might add.  :) 

Once the barn is finished, I get the shed (which is attached to The Chick Inn) all to myself, so I am profiting from the barn as well.  I can't wait to clean the shed out and set up a cute space for me and the chickens!  My favorite part of the shed is that there is a window to the coop from inside the shed so I can just open the window and have feathered friends join me inside.  :)  I'm going to paint it up cute and add a fabric skirt to the workbench so I can hide uglies behind it.  I've got big plans for that little shed!  (I've even dreamed of making it a sewing studio.  LOL!  It's 8 feet by 8 feet! That would be one tiny sewing space.....but I'd take it!)  :)

Here's a picture of the barn in progress. Kip has been a great helper with the construction process. He is about fearless on the roof which makes this mama hen a nervous Nelly!  :)

Two decades of (mostly) wedded bliss! :)

Today is my 20th wedding anniversary!  Yep, I think I finally hit the "old married lady" least to my kids I did.  :)

Aaron and I have been somewhat struggling on just how to celebrate our 20th.  We've always said that we would celebrate it together in Disney World...our special spot.  We spent our honeymoon in Disney and we were also there on our 10th anniversary.  Of course we've taken the kids other times, but we like to spend time together there by ourselves too. 

Since learning about Dave Ramsey, we quickly decided that a Disney trip was out of the question for now.  We strongly feel the urge to get out of debt as quickly as possible.  So much so, we were torn over whether to even go to dinner or not.  We had set aside $20 for a meal out and we were planning on using a theater gift card to go see a movie together.  We were both feeling like the $20 should go to the debt snowball so the plan was to pack a picnic and go see a movie for zero dollars out of pocket.

I teach piano on Wednesdays plus we have Financial Peace University on Wednesdays nights, so we had set aside tomorrow for our anniversary celebration day.  Well.....Aaron picked up overtime for tomorrow.  (Side note:  they weren't going to give any OT this month at all because of some schedule changes, so when he saw the opportunity, he jumped on it.)  He is scheduled to work from 5:00 a.m. to 6:00 p.m. and has to work early the next day, so really there isn't enough time to work in a movie date.

So then we decided to celebrate this morning.  We were going to have breakfast together and then go make a payment on our debt snowball.  We also thought about going to the beach and doing some budgeting forms together that are on our to-do list.  Well, he came home last night with good/bad news......

The good news:  he was asked to attend a staff meeting which is quite an honor from what he was told.  The bad news:  the staff meeting is this morning.  Doh!

So, once again, our plans were thwarted.  I got up early this morning and made him French toast for breakfast.  We were able to hang out for a little while before he left at 8:30.  He may be home in time to sneak in a picnic lunch but I'm not holding my breath.  ;) 

I could be upset and have thoughts like after twenty years of marriage, this is what I get....nothing  -or- I can't believe he took overtime on our special day -or some other nonsense.  But the fact of the matter is that I love that he is digging in and working as hard as he can to lift us out of debt.  I'm sure he doesn't want to spend extra days in the jail, but he is willing so that we can be debt free.  I've got a great partner in life and I am so thankful for him!

We exchanged gifts this morning.  I had made Aaron two pound cakes yesterday while he was at work.  I gave them to him and told him that he didn't have to share - a rare thing in this house of kids & teens!  He gave me a very sweet handwritten card with a Disney IOU.  :) 

This whole situation reminds me of how marriages, as much as we like to think they are, are not the fairy tales we read about in books.  Don't get me wrong, I love a good Disney princess story, but true love - the kind that takes patience, understanding, forgiveness, patience, work, dedication and did I mention patience? - is the true fairy tale.  Marriages that last have fun times, but also not-so-fun times, and they all have one thing in common:  commitment.  Marriages that work aren't always glamorous, in fact they rarely are!  But they are formed by two people who love each other, and beyond that love, are committed to staying together in good times and in bad, for richer or poorer, til death.  I love that Aaron and I have twenty years of commitment and love together....that's my favorite fairy tale of all!  <3 p="">