Progress?

Well folks, it's been about a year since the last substantial update, and we have been extremely busy pushing through a multitude of problems.  While we have paid down on all of our debt across the board, it feels like there hasn't been much movement (which is why the debt snowball is so psychologically awesome).

After plowing through our smaller debts last year, we were left with larger ones with long pay-down timelines.  Over the past year, however, we have made great strides to reduce all of them, and now we're just about to the point of making huge gains and cascading payments through the debts once again.  All I have to say is you really need to push through the pain and make this happen.

I think this is the point that most people throw up their hands and say "well, I tried, I can't make it work" and then give up -- going back to the way things used to be.  If you can stay motivated, it is very much worth it to keep pushing.  How does one do that you ask?  Well, I tried to gamify paying down debt.  I did it by making a spreadsheet and giving myself "achievements" for hitting certain levels of debt, and giving myself a nice carrot to run to after I made it through the sprint.  What that carrot is will be different for everyone, but find something that motivates you and push for it.

Among the setbacks, most notably we have continued to have large medical expenses and our van was totaled.  We had insurance, but the replacement value wasn't enough to get something in good shape, so we had to finance.  The van is our primary vehicle, and it needs to be reliable. I'm driving a 15 year old Eclipse now, and we couldn't risk having two cars that may or may not work :).

Regardless of that, we have been able to recoup the car payment by adjusting lifestyle and budget -- so we have the liquid funds like we did before the accident.  What pumps me up is that we will have even MORE liquid funds available after the van is paid off than before we bought it.

I'm excited to be able to actually post payoff goals here in the coming months, rather than sitting on my hands for year.  Here's to a more productive 6 months!

Still On Track

We are still on track with the plan I came up with at the beginning of the year. With that being said, we've paid off my car and are about to pay off another card by next week. It's awesome seeing these things dropping at an increased pace :).

The biggest thing that will get you on track and keep you on track is setting a budget. I know it's something that everyone says, but it seems like no one actually does it. We've split it into two types: recurring bills and snowball budget.

We start by taking all of our recurring monthly bills and have those subtracted off the top of any income we get for that month. This also includes taking money out for fun stuff (eating out, going to the movies, etc). After that is accounted for, we work on the "snowball budget". This budget is made up of extra money that doesn't have a home. If there isn't anything extra we need that month, then it all gets divided between various debts to knock them down/out. Just last month, there was some landscaping work I wanted to do, so that money came out of this extra slush fund. Sure, it slowed down my snowball, but we made the improvements with cash, and still payed extra on debt.

Making the time to sit down and work this out is super important, and it keeps both you and your spouse on the same page (and eliminates any arguments as well.. bonus). We are currently in the process of becoming foster parents as well, and planning out all of the expenses that go along with that has made climbing this mountain very achievable.

Speaking of fostering, we originally wanted to adopt but found the process way to expensive -- absurdly so (I mean, the kids need help. Why make it hard?). We found that by fostering to adopt, we can help kids in need AND have the option of adopting the ones that have been permanently separated from their parents by the state. The best part is the State basically pays for the adoption -- so it's a win-win for the foster kids AND us :).

The moral of the story is if you want your financial life organized, YOU have to be organized. Tell your money where to go -- don't wonder where it went at the end of the month. By doing so, you will be able to accomplish some pretty awesome things.

Slow and Steady

It has been five months since my last post, and I have learned something in this time -- getting out of debt is a process. It is something you have to be patient with because you will be much better off in the end.

While slow, the last few months have been very fruitful. I was blessed with getting a new job that along with a significant pay increase allows me to work from home 100% of the time, letting me help out if the kids are sick. The new job has also freed Terra up to do volunteer work at a local charity that helps families that are struggling (just like we were a few years ago). Sure, she doesn't have an income to help us get out of debt faster, but she's playing a key role in helping families getting back on their feet, and that is much more important than shortening our timetable slightly :).

Doing our cash-only Christmas this year slowed the snowball down, but it is always nice starting the new year off w/o any extra debt :). Now that the new year has started, I've kicked things into high gear again. I'm about $800 away from paying my car off (which makes it really tempting to just take all the money I can one month and pay it off). So, in a few months, I'll have two paid for cars and lots of $$ back in my pocket -- all to knock out the next debt which is sitting around $2800. By year's end, I should have this one and possibly the next one paid off, freeing up an additional $500 or so in cash flow. I have to say, it feels good getting traction on this stuff :). Just keep at it, and you'll hit your goals.

Help Comes From The Heart

First off, I just wanted to say a huge THANK YOU to everyone who donated to our campaign. I feel very humbled by the fact that we were able to raise $5450, which had a massive impact on our financial situation.

The last few months have been busy with our noses to the grindstone. We were able to pay off Terra's van as planned, and made small strides despite some dental needs that came up. But, that all changes with the campaign :)

Now for the fun bits:

We were able to pay off three major medical debts and a few minor bills. In all, these bills represent $450/month of expense that is GONE. This gives us a HUGE amount of breathing room, and allowed me to pull Terra's check out of the budget so that it is finally extra money. This extra can go for extra snowball money or fun money without impacting the established get-out-of debt plan -- which makes me very happy :). Words cannot describe the relief I'm feeling at this point.

However, this isn't the best part. I recently discovered that Aetna is reprocessing all of our Vivaglobin claims as a pharmacy benefit instead of a major medical benefit. Translation? That means that instead of each dose costing $800 per kid per month (then subject to deductibles and 80/20), each dose is $65 flat. $65!! Since Aetna's pharmacy was one of the three major debts we paid off with the campaign, we will be getting approximately $1200-$1500 back from Aetna. THIS IS HUGE :)

I'll use this to pay off the remaining balances on some of the smaller bills and use the rest to continue walking up our debt snowball. Sure, our deductible will be replaced, but we are in a pretty good place now and that's ok :).

THANK YOU again to everyone who has donated and who has been praying for our family. You can still donate at From The Heart by specifying our family in the notes, OR you could go see what other great families are being sponsored and help meet their needs :).

And So It Begins....

It is February 16th, and already we have reached that magical time where our $3500 medical deductible has been met, our $1000 HealthFund is gone, our $2000 Flex Spending Account is gone, and we are now in our 80/20 period. That being said, we still haven't got all the bills yet for the $3500 already incurred :( (minus $1000 for the HealthFund). Dealing with THAT will be no fun.

From here on out, the girls meds should cost us around $400 a month. The thing I'm MORE worried about is the fact that around $2500 is owed to Aetna's pharmacy. I know they allow payment plans, but the little bit of info I've got so far indicates that those plans are spread over a term of around 3-5 months. That means we could be paying $600 per month to catch up, on top of the new $400 per month. Needless to say, that's not going to work :). Now the worry bit -- are they going to withhold their meds until we pay off the existing balance? I would HOPE not, but who knows with the state of the medical industry these days. That being said, I'll post more when I know more.

On to Happier news.

Terra's van will be completely paid off by the end of March (or the beginning if I can work it in) about 6 months ahead of schedule. Next up, Piper's hospital bill from all of our Cincinnati trips last year will be done in another 4 months (around July). After that, Makenna's Cincinnati bill should be knocked out in another 4 months (around November). Looking further out, my car should be paid off about this time next year - about 5 months ahead of schedule. THAT is the debt snowball in action :). Four medium sized debts being knocked out as you compound their payments.

In all, that represents around $7000 worth of debt. It's not as aggressive as I would like, but well, we have some pretty serious new expenses to deal with :). On the bright side, none of this is including Terra's income, so I should be able to accelerate things depending on how many hours she can get in the next few months.

The girls' doctor is also going to switch their meds, so I'm hoping the new one is somewhat cheaper :). I'll let you know how that goes later.

Tis the Season

Tis the Season... well, it is according to the stores anyhow. Since before Halloween there has been Christmas stuff out. Anyone listening to Christmas music yet? :).

Christmas is a time where a lot of people can get into trouble. You want to do everything you can for people you care about, but your heart usually gets bigger than your wallet. Instead of stopping, most people just charge it -- and before you know it you end up getting yourself a big nasty bill for Christmas.

For the last couple years now I've been doing a cash only Christmas. The first year was a bit of a train wreck due to medical bills and improper budgeting, but things have been getting a bit better as I get more experience. Even last year, I couldn't do as much as I wanted due to medical bills, but I used those two experiences to make this year spectacular.

I had planned way ahead of time and got all the Christmas money put back for the girls this year in October. Words cannot describe the feeling of satisfaction I had when I deposited the funds into that account. No more do I need to worry about where the money will come from. No more do I need to worry about if I can get things for the girls . No more do I need to worry about the aftermath of how to pay for a debt fueled sea of disaster. It is all taken care of -- and it's going to be a blast to do the shopping.

I've felt pretty bad about the last couple years just for the fact the kids got screwed because of my poor planning and not being able to handle the financial maelstrom we were handed. Not this year though. I'm making up for those lean years and then some. I know they are too young to really know or care, but this is something I feel I really need to do for them. They have been through so much in their short little lives, I want Christmas to be spectacular for them this year.

Speaking of spectacular, we now have four debts about to fall out in the next 6 months (all pretty much at the same time). The combined payments for all of these are right around $600 a month. That's $600 I get back almost immediately as they all drop out within months of each other. That's huge, and will go a long way in bringing the next monster down. One of those four is the Van. It only has about $1000 left, and will be a big psychological win for us (actually something directly tangible for payments).

The only thing that could be a sore spot is medical expenses for the first part of next year. Our insurance resets, so we are going to be having to pay for the girls medication (retails at $2000 a month) until all the deductibles and out of pocket expenses are hit. Thankfully there is a non-profit that is going to be working with us next year to help raise funds to offset some of these expenses. "From the Heart" is a organization started by a friend of ours with the goal of helping families in need of care they cannot necessarily afford. Go find it on Facebook or Twitter and follow. It is a great organization with a good heart and very noble goal. They will also appreciate any donations you want to contribute for their sponsored families :)

I guess my only parting words of wisdom would be to not charge Christmas this year. Sure, it may be hard, but you'll be thanking me in January when that bill doesn't arrive in your mailbox :).

David 1, Goliath 0.

We just found out this week that Aetna has APPROVED my daughters treatments. I'm not sure whether it was the second appeal (or second level appeal as they internally called it -- a source for more confusion about what was going on), the extra info the Doctor submitted, or the fact I had to submit a fax to let the Doctor appeal on our behalf. Frankly, I don't care at this point, because I'm sure whatever process that was involved isn't meant for mere mortals to understand. I'm just basking in the glory that I don't have to drive 4 hours a week for treatments now, and that we aren't saddled with over $20,000 of outstanding medical bills for 3 months of medicine.

You heard right folks, because it was on appeal, they are covering all of the past treatments up until now. This is HUGE, and means I can get back to working my debt snowball instead of piling money up to pay for potential bills. It seems like it is just in time too, because I just discovered about 2" of standing water in the bottom of my furnace due to what probably is a clogged drain pipe. I need to get a service tech out to tackle that one ASAP :)

Wednesday is our first try at doing the treatments at home. We've received all of the supplies for a month, so we are set to get this going. Hopefully it is a bit easier on the girls being able to do it here instead of there. It should be more comfortable in any event.

It may be Crap, but it's mine.

Project "find a beater" has been a success, and as of last Friday, I'm the proud owner of a 96 Grand Am. To be fair, it probably isn't that much of a beater. I mean, the interior is a bit rough, the engine is strong (recently rebuilt), and the body is in GREAT shape. The kicker is, I managed to pick it up for $850 :). It has 155,000 miles, which is low for a car that old.

The only REAL problem with it a small exhaust leak between the header and catalytic converter. Out of comic curiosity, I called a muffler shop to see what they would charge me to replace that section of pipe. Apparently "they would HAVE to replace the entire cat for that pipe to be replaced" -- at $600. I was trying really hard not to completely laugh at the guy considering the car is only worth $850 :). After some quick searching at Advanced Auto Parts, I found I can fix it for under $50. SO, that will be my project for this weekend. After that is done, I'll be able to start driving it as my daily, so the Vibe will be listed for sale soon. It will be good to finally get this debt snowball rolling.

If anyone is interested, it is a 2003 and in awesome shape, 88K miles, and I will be listing it for $6800 :).

I'm actually kind of excited about this in a sick sort of way. It reminds me of getting my first car. Even though it isn't all that great, you can enhance its value by accessorizing it :). I'm totally going to be getting an 8-ball shifter for this thing... :)

It has been a LONG month...

Indeed, it has been a long month. Nothing seemed to be going right in the midst of getting beat down by bills, but I have a plan that might do the trick.

Basically, I'm going hardcore and have been getting rid of services and picking things to sell to try to get extra money and to reduce monthly outlay. The latest victims? DirecTV and Vonage. Most of our entertainment comes from Xbox Live and network TV, so the DirecTV had to go. I dropped Vonage and went back to a basic line just so that the alarm has something to use.

The next step will be to get rid of my car. I'm currently looking to pay cash for something around $1500 or so. The idea is that by spending $1500, I can free up roughly $6800 in debt and get rid of about $300 a month in monthly obligations (depending on what I can get for the vibe, of course.)

I've also been working like crazy in a second job to help fund the car plan, so hopefully this will fall into place soon. I'll keep you updated on how it is going when I get the snowball rolling.

Silverish lining?

Things are starting to look up I think. All but one of the claims I talked about last time have been paid, and the last one is just probably stuck in the red tape. We did confirm that both girls do have the genetic disorder, but at least we know what the problem is now.

Piper had a tube put back in, and I've seen a bit of what that will cost -- roughly $1000. The good news is we're already in the 80/20 part of our insurance, so we'll have the rest of the year to basically coast through stuff.

I JUST did my taxes, and between all the medical expenses and other things, we're going to be getting about $4,000 back. Combine that with the couple side jobs I've picked up, and I'll have just about $5,000 to tackle the latest round of medical bills. I SHOULD be able to pay off the $2500 loan for our last hospital stay, the $1200 or so for the tubes, and get our emergency fund back to $1000. After that stuff is all out of the way, I'll be able to be hitting an extra $150 on the van bringing that payment up to $340. At that rate, I'll only have about a year left to pay to get rid of it. Hopefully, I'll get some more side work between now and then to get rid of it faster :)

Tis the Season

With the holidays approaching, some of you may be thinking ahead to all of the fun things you are going to buy, or perhaps the credit card bills you will be left with after things are over. Being a tech junkie myself, I've been greatly tempted by some of the gadget Black Friday deals. So far, I've been able to show some restraint, and my plan for the shopping season should help me continue that trend.

I've decided to do a wholly cash Christmas this year. Sure, it won't be quite as extravagant as previous years, but I'll also not have any after Christmas buyers remorse when those bills start to show up. For friends and family, we are going to do a very small card/candy type of deal saving the bulk of the money for the girls. We're even not really doing anything for each other this year either (our iPhones were our present this year). Although, I am hoping that we'll get enough cash from family for me to go buy a toy of my own :).

We did pretty much the same thing last year and people in the family didn't really complain about it (which is the common fear I hear from people). This year, we actually have a higher budget due to the full year of planning.

Here's to a cash only Christmas and continuing on the debt snowball! Just think of what I'll be able to do next year!

Medical Bills Are Fun - Update 2

Good news!!

We got approved for the 0% financing for 18 months. I've got the paperwork here to sign and send back, but this is good. I don't have to take out money from any other credit lines and get screwed in the process. Sure, this will slow down our snowball a bit, but that's ok. In the grand scheme of medical expenses, this is minor :).

I'm actually working on a fun side project that has some serious potential after I get it up and running. I'll keep you all posted on the progress :).

Medical Bills Are Fun - Update 1

Well, there is a silver lining. I called the hospital to try to negotiate the bill down some if I paid them in one lump. They said that since they already discounted it from insurance they couldn't discount it again -- Whatever :). I'm sure that if I was able to prove I had no ability to pay they would drop it down some -- but that's a rant for another time.

I did find out that even though they have a couple different payment plans, the one I'm going to apply for has 0% for 18 months. This is actually a pretty sweet deal. Sure, I'm taking on more debt, but I'm not getting hit with any interest. If i did the same thing with my line of credit, I'd be paying nearly 10% on the money for an indefinite amount of time since it is the last on my snowball. With the payments on this being split to 18 months, it makes it a reasonable $139 a month. I've got more than that dedicated to the snowball, so it is going to all be piled on this debt. I should be able to pay this off in about 13 months if I can stick to it.

After that is paid off, then I'll have about another 13 months to go on the Van, so I should be able to knock out two major debts in 26 months. I really sucks thinking about things like that, but I made this bed, so I've got to sleep in it. Thankfully, after I get some traction going the rest will go fairly quickly.

On a side note, I've already burned through $1200 of my $2000 FSA... in 2.5 months. This thing is going to be burned out well before the year until it resets. Hopefully the coming months won't be nearly as taxing as the last year has been with medical expenses.

Medical Bills Are Fun

Remember back when I was talking about our hospital visit that we never got billed for? Well, the nice folks over there must have figured out they never billed us and sent us one -- for the expected amount of around $2,500.

I definitely don't have enough in the emergency fund to cover this (or to really begin to cover it), so I'm left with two choices. Get a personal loan to cover it, or use a line of credit I already have available to cover it. In dealing with hospitals in the past, they will usually allow for 3-4 months of payments to be made without interest, but if you need more time than that they insist you go with an outside credit agency of some sort. Since I can't afford an extra $600 a month (blasted current debts), I'm forced to go the route of financing this expense.

I suppose the route I go all depends on the interest rate and terms of the loan I might be able to get. My line of credit is set for 9 years at 9.9% interest. Technically, this is the last thing on my debt snowball, so this $2,500 will be lingering for a while. On the flip side, a separate loan I would get would most likely be on the 3-5 year term and add about as much to my monthly payments as the increase on the line of credit. The only downside to that plan is that this new debt would be at the bottom of my snowball, and would take president over my lowest item now. This in theory should make it go away faster, but then again, it will push off the current loan I am working on eliminating for another couple years. come to think of it, that loan will probably be gone in two years if I keep paying the minimums.

I'm still not sure what to do, but I am leaning toward getting a separate loan. sure, It is a bit psychologically defeating to know I'll be "taking a step back", but then again, I should be getting a raise soon and that will help knock this stuff out.

So yes, Medical Bills are fun. Fun indeed....

Revisiting Your Budget

After a few months of both of us working, we realized that we should have a LOT more money left over than we were netting. We had a basic budget, but figured we could handle some of the non-budgeted items on a case by case basis. Let me tell you, that DOES NOT work :).

We decided to sit down and completely redo the budget, and account for all of the out of budget items we could think of. We calculated it by looking back at averages to better estimate some of the over budget categories. Writing all of this stuff down was a very good exercise for the simple fact that we found the $800 we were missing (and it was a bit frightening).

Doing what Dave says by writing every dollar down before the month is something you REALLY need to do. I thought I could manage the extras, but there are too many extras that can creep into the picture and pretty soon you're missing a large chunk of money. Thankfully, after doing this, we came up with an extra $200 to put toward toward our debt snowball.

Here's to keeping that snowball rolling!

One Card Down...

I am happy to report that we have paid off one of our cards! No more Khol's charge! Now to tackle the next smallest debt in our debt snowball -- our van. We've got roughly $4900 to go on it and I think we can do that by the end of the year, but probably sooner if we play this right.

Check back later, I'll keep you updated :)

Major Milestone In Sight

My wife and I spent some time the other day to go over finances since she's been working again. Instead of working her extra money into our monthly budget, we decided to apply her money directly to our debt snowball.

Even though the likelihood of her working more than two days a week is fairly high, we decided to go on the conservative and only do our calculations based off of two days. With this in mind, we will be able to pay off one of our cars in six months. What's exciting is that if she works more than two days a week, or if I get some extra money with my side jobs, we can reach this goal much faster.

We also extrapolated this out and found that we would be completely debt free except the house in three years. Factor in raises and extra income and this snowball is starting to get really exciting :).