Yesterday, we finally did it. Our beloved Chevy Cavalier that I've had since March of 2000 is finally gone from our lives.
Okay, well, that's not entirely true -- we gave it to my wife's uncle, so I'm sure we'll hear about it from time to time, see it every so often, and know of its whereabouts for another few years, but at least for us directly, it's gone from our lives and our garage. In fact, I've already taken my bike off the hooks and set it right-side-up on the far side of the garage, inflated the tires -- all I need now is motivation to get going on it.
Even though we got no money for it, we're going to save in many other ways:
Insurance -- I'm going to call this morning as soon as the insurance office opens and cancel our policy on the car. No need to insure a car that we don't have any more, is there? That right there ought to save us about $300 a year.
Registration -- We spent probably around $40 or $50 a year to register the car, and that's now money we won't have to spend. (My wife's uncle says we can take the plates and registration back in to the license branch and get a refund on part of what we spent, but I'm going to just wait and see on that. Not that I don't believe him, but I don't trust the government to give back a single cent of money they're already got.)
Maintenance -- Even though we drove that car about 30 miles in the last year we had it (most of those were to the service station), we still got the oil changed every six months or so. If we'd kept the car, we likely would have kept getting oil changes, and as things wore out from old age and disuse, we would have paid to replace them.
Clutter and Peace of Mind -- I once read somewhere that you spend a certain amount of time (which, when you come right down to it, is almost equivalent to money) every year on every possession that you own. The less you own, the less time (or money) you spend. We spent quite a lot of time worrying over the car, fretting over the car, thinking we ought to do something about the car, and occasionally actually doing something with or to it. On top of that, add up all the random seconds here and there the car caused us -- it took up a lot of space in the garage, so getting to tools on the far side was a slow, painful balancing act of trying to get the tool and not get killed. If the car hadn't been there, those seconds -- probably adding up to at least a good three or four minutes over the year -- wouldn't have been spent. Small beans, I know, but beans is beans.
In the end, the parting wasn't nearly as bittersweet as I thought it was going to be. Yes, we had good times in that car. It was the car we drove away from the church in after we were married, and the one we drove on our honeymoon. It took us to Florida, and to Boston, and back and forth to school hundreds of times. It was a good little car for a couple just starting out their life together, and for that, we'll be forever thankful.
But time has moved on, as it always does, and it was time for the car to go on its way. I hope it will be as good to my wife's uncle as it was to us, and just knowing that someone is somewhere getting some good from it makes it all worth it.
In non-car-related news, as you can see from the numbers on the right, our student loan is now south of $15,000! If my calculations are correct, we've paid off just shy of $3000 on that loan in the past month. We're still a little behind where we want to be in terms of the total debt payoff, but we're making some serious headway. Our current goal is to have the student loan kissed goodbye by Christmas.
Anyone else making strides on their debt payoff, or getting rid of possessions that are cluttering up their lives and costing them money? Feel free to post in the comments section and share for all to see.
Tuesday, September 21, 2010
Sunday, September 12, 2010
Money Down the Drain
While cleaning out the old car yesterday in a prelude to giving it away, I came across a compartment full of disgusting, fused-together coins. I had no clue what had fused them together, and even less desire to find out. What I did know (or hope) was that water, The Universal Solvent, would separate them and render them once more individual coins.
So, I put them in a cup of water and let them sit by the bathroom sink. After a while, I went in (leaving the light off because the light from the hallway was sufficient, and why waste the electricity if you don't have to, right?), upended the cup over my hand, and let the water drain out. What followed was a long series of drips ... and two clangs as two coins hit the sink.
Not wanting to lose what I had given so much effort to separate, I turned on the light and fished out the nickel that sat half-way in the drain. Of the other coin, I saw no sign. I had heard of figuratively losing money down the drain, but this, my friends, was the first time I had ever literally lost money down a drain.
Now, knowing the value of my time, I was heck-bent if I was going to go fishing in the drain for what was, in all likelihood, a penny, but the whole experience did get me thinking about how we figuratively throw our money down an equally figurative drain. What are some of the money-drains in our lives?
Interest on Debts This is a biggie, especially for my wife and I (heck, just look at the name of the blog!). Every dollar you pay in interest on a debt -- especially things like credit card debt and payday loans -- is money that is just being frittered away. Sure, there are tax advantages to some sorts of interest, and the money you borrowed in the first place served some use, but now that the only thing remaining is the debt, it's just nickels and dimes and dollars down the tube.
Stupid and Pointless Fees At one point, my parents asked me to look at their finances to try to help them work some of the monetary magic my wife and I seem able to work in our own lives. I noticed one credit card my dad had that socked him some huge fee every year, just for the joy and privilege of carrying the card. With the hundreds of different credit cards out there (even after the economy's problems and several rounds of credit card reform), paying an annual fee to have a credit card is setting fire to the bills in your wallet and watching them burn.
Not Comparing Prices or Not Waiting For Sales Every week, there's a fun mystery in our house. I call it, "Where will we buy our groceries this week?" My wife and I don't eat a lot in the way of food, and our tastes in groceries aren't all that exotic, so we can really buy our food about anywhere. There are some items we'll only buy certain places (milk and green pepper nearly always come from Aldi), but beyond that, one store's generic is as good as another's.
So, we get the circulars on Thursday, and while I teach piano lessons on Friday, my wife decides which store has the best deals, the most things we can stock up on, and that's where we go. We may only save four or five bucks each week by doing this, but over a year, that adds up.
The same is even more true of big-ticket items. Patience -- in the form of waiting for sales -- is not just a virtue, it's fiscally smart. Waiting for not just an okay price but an outstanding price can be hard, but it can also be rewarding when you get that TV or computer you wanted for half of what it normally costs. Also with big ticket items, if you don't ask for at least some money off, something extra thrown in, or a free service plan, you're feeding dollar bills to your dog just to see what comes out the other end ... okay, that analogy was gross and not completely apt, but you get the idea. The number of times I've asked for a freebie or a few bucks off isn't that many (not many big-ticket purchases), but it's resulted in about a hundred bucks off our kitchen appliances, two years of free oil changes on our Honda, and $65 back when we got rid of our home phone line and went straight DSL.
This list is far from exhaustive, but it's a start. What other times and in what other ways do you throw money down the drain? Let us know in the comments section.
So, I put them in a cup of water and let them sit by the bathroom sink. After a while, I went in (leaving the light off because the light from the hallway was sufficient, and why waste the electricity if you don't have to, right?), upended the cup over my hand, and let the water drain out. What followed was a long series of drips ... and two clangs as two coins hit the sink.
Not wanting to lose what I had given so much effort to separate, I turned on the light and fished out the nickel that sat half-way in the drain. Of the other coin, I saw no sign. I had heard of figuratively losing money down the drain, but this, my friends, was the first time I had ever literally lost money down a drain.
Now, knowing the value of my time, I was heck-bent if I was going to go fishing in the drain for what was, in all likelihood, a penny, but the whole experience did get me thinking about how we figuratively throw our money down an equally figurative drain. What are some of the money-drains in our lives?
Interest on Debts This is a biggie, especially for my wife and I (heck, just look at the name of the blog!). Every dollar you pay in interest on a debt -- especially things like credit card debt and payday loans -- is money that is just being frittered away. Sure, there are tax advantages to some sorts of interest, and the money you borrowed in the first place served some use, but now that the only thing remaining is the debt, it's just nickels and dimes and dollars down the tube.
Stupid and Pointless Fees At one point, my parents asked me to look at their finances to try to help them work some of the monetary magic my wife and I seem able to work in our own lives. I noticed one credit card my dad had that socked him some huge fee every year, just for the joy and privilege of carrying the card. With the hundreds of different credit cards out there (even after the economy's problems and several rounds of credit card reform), paying an annual fee to have a credit card is setting fire to the bills in your wallet and watching them burn.
Not Comparing Prices or Not Waiting For Sales Every week, there's a fun mystery in our house. I call it, "Where will we buy our groceries this week?" My wife and I don't eat a lot in the way of food, and our tastes in groceries aren't all that exotic, so we can really buy our food about anywhere. There are some items we'll only buy certain places (milk and green pepper nearly always come from Aldi), but beyond that, one store's generic is as good as another's.
So, we get the circulars on Thursday, and while I teach piano lessons on Friday, my wife decides which store has the best deals, the most things we can stock up on, and that's where we go. We may only save four or five bucks each week by doing this, but over a year, that adds up.
The same is even more true of big-ticket items. Patience -- in the form of waiting for sales -- is not just a virtue, it's fiscally smart. Waiting for not just an okay price but an outstanding price can be hard, but it can also be rewarding when you get that TV or computer you wanted for half of what it normally costs. Also with big ticket items, if you don't ask for at least some money off, something extra thrown in, or a free service plan, you're feeding dollar bills to your dog just to see what comes out the other end ... okay, that analogy was gross and not completely apt, but you get the idea. The number of times I've asked for a freebie or a few bucks off isn't that many (not many big-ticket purchases), but it's resulted in about a hundred bucks off our kitchen appliances, two years of free oil changes on our Honda, and $65 back when we got rid of our home phone line and went straight DSL.
This list is far from exhaustive, but it's a start. What other times and in what other ways do you throw money down the drain? Let us know in the comments section.
Monday, September 6, 2010
Focused Intensity
Goals are a great thing. Having a place you want to get to or something you want to accomplish is a tremendous thing to have. The problem is so often, we feel like we're meandering toward our goals. It can feel not like we're a horse streaking to the barn after a long journey, but rather like we're a dog crossing a field, stopping to sniff every tree and rock while marking our territory along the way.
Then there is the joy of Focused Intensity.
Right now, my wife and I are in the throes of Focused Intensity. We have our Big Goal -- being debt free -- and we have our smaller goals. In this case, our current smaller goal is being rid of our student loan, which as of this writing sits at about $17,840. We are doing everything in our power to eradicate this loan, focusing every ounce of our will and every dollar of our making toward it's non-existence.
We've wanted this loan gone for a while, but now, we really want it gone. We want it gone so badly, we're willing to put off pretty much every other expense in our lives (not our bills and mortgage, of course, but every expense outside of that) to make it happen. We want every available dollar to be going toward that loan, and we do mean every dollar:
Extra Income: We can pay our bills and mortgage on the money my wife makes teaching. That means that any of my income -- school income, church music director income, piano lesson income, composing income -- goes toward the debt. $60 for a day's worth of piano lessons? Put it toward the loan. $500 royalty check for composing? Put it toward the loan. $400 from two weeks' work at school? Put it toward the loan.
Snowflaking: This is a twist on Dave Ramsey's "Snowball" method of paying off a loan (I think I heard about this on The Simple Dollar, but I'm not sure). You take every small, tiny amount of money you can, and you apply it toward the loan. With the student loan, I can make one payment every day. That means that every day I get any income, I put that income toward the loan. In the past two weeks, I've made five payments. Financially, this pays off the interest I've accrued since the last payment (sometimes as little as $1.72) and drops the principal, meaning the next time I pay, there will be a smaller principal balance accruing interest. Psychologically, it means every time I look at that principal number, it will likely be smaller.
Snowflakes are anything, from the $5.72 refund from Verizon after I canceled my cell plan and got on board my father's, to the fact our Visa bill for the month was $100 less than budgeted. No amount is too big or too small to snowflake it.
Frugal-ing: Anything we can do to reduce our expenses is extra money I can throw at the loan. Even though the temperature today is going to get to 85, the breeze is nice and strong, so we've got the windows thrown wide. Total cost to climate-control the house for the day? $0. Sure it's just a couple of cents, but it adds up. Driving the car to school with the windows down has made a difference, too, as I've noticed an increase in our gas mileage, meaning I have to spend that much less at each fill-up. As I write this, I've got a crock pot of chili cooking, which for about $7.00 in materials and electricity will provide about 4 meals for each of us, saving us a ton of money over what we could spend to eat out or on prepackaged "convenience foods." The journey of a thousand miles begins with a single step, and the eradication of a student loan begins with a single cent.
Selling the umbrella: I sat down with my Spreadsheet today and looked at our finances over the next few months. In my spreadsheet, I've got not only our anticipated income and expenses, but also an interactive amortization table of both our mortgage and student loan. I can see how putting various amounts of money toward a loan will change its life just by moving some numbers around.
I made the realization this morning that if we continue to put all our available money toward the student loan, the balance on it will be under $4000 by Christmas. If we dip into our Rainy Day fund (i.e. Sell part of our financial "umbrella") we can give ourselves a nice Christmas gift of paying off the loan. We make 1.1% on the Rainy day account and pay 3.25% on the student loan, so the math works in our favor; and since my wife is guaranteed a job until at least August, and my income streams are trustworthy, we can then take a month or two to repay the rainy day fund to its previous level once the loan is gone. I know this goes against "conventional" advice for a rainy day fund, but for us, it works.
What other ways could we be focusing our intensity to make this student loan no more than a foggy memory? Let us know in the comments section.
Then there is the joy of Focused Intensity.
Right now, my wife and I are in the throes of Focused Intensity. We have our Big Goal -- being debt free -- and we have our smaller goals. In this case, our current smaller goal is being rid of our student loan, which as of this writing sits at about $17,840. We are doing everything in our power to eradicate this loan, focusing every ounce of our will and every dollar of our making toward it's non-existence.
We've wanted this loan gone for a while, but now, we really want it gone. We want it gone so badly, we're willing to put off pretty much every other expense in our lives (not our bills and mortgage, of course, but every expense outside of that) to make it happen. We want every available dollar to be going toward that loan, and we do mean every dollar:
Extra Income: We can pay our bills and mortgage on the money my wife makes teaching. That means that any of my income -- school income, church music director income, piano lesson income, composing income -- goes toward the debt. $60 for a day's worth of piano lessons? Put it toward the loan. $500 royalty check for composing? Put it toward the loan. $400 from two weeks' work at school? Put it toward the loan.
Snowflaking: This is a twist on Dave Ramsey's "Snowball" method of paying off a loan (I think I heard about this on The Simple Dollar, but I'm not sure). You take every small, tiny amount of money you can, and you apply it toward the loan. With the student loan, I can make one payment every day. That means that every day I get any income, I put that income toward the loan. In the past two weeks, I've made five payments. Financially, this pays off the interest I've accrued since the last payment (sometimes as little as $1.72) and drops the principal, meaning the next time I pay, there will be a smaller principal balance accruing interest. Psychologically, it means every time I look at that principal number, it will likely be smaller.
Snowflakes are anything, from the $5.72 refund from Verizon after I canceled my cell plan and got on board my father's, to the fact our Visa bill for the month was $100 less than budgeted. No amount is too big or too small to snowflake it.
Frugal-ing: Anything we can do to reduce our expenses is extra money I can throw at the loan. Even though the temperature today is going to get to 85, the breeze is nice and strong, so we've got the windows thrown wide. Total cost to climate-control the house for the day? $0. Sure it's just a couple of cents, but it adds up. Driving the car to school with the windows down has made a difference, too, as I've noticed an increase in our gas mileage, meaning I have to spend that much less at each fill-up. As I write this, I've got a crock pot of chili cooking, which for about $7.00 in materials and electricity will provide about 4 meals for each of us, saving us a ton of money over what we could spend to eat out or on prepackaged "convenience foods." The journey of a thousand miles begins with a single step, and the eradication of a student loan begins with a single cent.
Selling the umbrella: I sat down with my Spreadsheet today and looked at our finances over the next few months. In my spreadsheet, I've got not only our anticipated income and expenses, but also an interactive amortization table of both our mortgage and student loan. I can see how putting various amounts of money toward a loan will change its life just by moving some numbers around.
I made the realization this morning that if we continue to put all our available money toward the student loan, the balance on it will be under $4000 by Christmas. If we dip into our Rainy Day fund (i.e. Sell part of our financial "umbrella") we can give ourselves a nice Christmas gift of paying off the loan. We make 1.1% on the Rainy day account and pay 3.25% on the student loan, so the math works in our favor; and since my wife is guaranteed a job until at least August, and my income streams are trustworthy, we can then take a month or two to repay the rainy day fund to its previous level once the loan is gone. I know this goes against "conventional" advice for a rainy day fund, but for us, it works.
What other ways could we be focusing our intensity to make this student loan no more than a foggy memory? Let us know in the comments section.
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