2010 Wrap-up

I know it's been a while since either my wife or I have blogged here -- chalk it up to being a musician during the Christmas season.  Oddly enough, it seems as we get closer to the actual day of Christmas, the less pressure there is on us as musicians, as if the whole of the world got so much Christmas spirit from the 1st to the 20th of December that they're just ready to have a Silent Night for a change. 

At some point I'm hoping either my wife or I can post something meaningful or useful here, but for now, I thought I'd give you a bit of a wrap-up for the year 2010 and let you know where things stand with us.

First of all, as you can see at the right, as of this writing, we've paid off over $36,000 of our original $124,000 of debt.  That's a great feeling, but there's still a long way to go.

Even more important, we've got our student loan whittled down to just under $1,600 -- payments I have scheduled for the next couple of days will drop it below $1,000 before the year's out, and it ought to be gone before we celebrate Martin Luther King, Jr.'s birthday.  That's been our main goal the past six months or so, and it's paying off.

Sadly, to get the loan to that place, I made the decision to decimate our Rainy Day account, at least temporarily.  I know that most financial experts will tell you this isn't a smart move at all, but for us, it made sense.  We still have enough money coming in from several sources, so a financial crisis would have to be pretty major to wipe us out.  We're both still relatively young and fit, so a medical crisis is unlikely, at least before we get the Rainy Day funded back to where it was.

Replenishing and bolstering the Rainy Day fund is our next goal immediately following the payment of the student loan.  Thankfully, to help that out, I should be getting royalty checks from some of my music publishers in the first couple months of the year.  I'm really not worried about having less than $700 in our Rainy Day account, because in an absolute rock-bottom, worst-case scenario, we do have just over $50,000 combined in our IRAs.  Yes, there would be penalties there, but if it was between taking the financial penalty and being destitute and out on the street, we'd take the penalties.

When we do turn our attention to Rainy Day, we're likely going to sock away as much as we possibly can.  The economic climate still doesn't feel all that great, and our public schools -- at least the part we know well here in central Indiana -- are taking a huge hit.  I'm an hourly employee, and relatively cheap for what I do and what they pay me, so I think my odds of having a job with the school for next year are still pretty good.  My wife, on the other hand, is a certified music teacher, earns half our household income from her one job (as opposed to me who needs three or four smaller jobs to make my half), and music, tragically, seems one of the things likely to get cut in such a time.  We know there's a very real chance her income will fall next school year, so we're not just going to get our Rainy Day back around $6,000, but are going to take it as high as we can, hopefully around $17,000 or so by the time her contract -- and her regular paychecks from this school year -- run out in early August.  That $17,000 isn't enough to fully cover our expenses for a year, but in a worst case scenario, that would keep us afloat for a good six months or so.

After that?  Well, it's still too early to tell.  I'm still hopeful we can pay off our mortgage by the end of our 40 months, but like all good dreams, that outcome isn't certain.  What I do know is that at the end of our 40-month experiment, we will have less debt than we do now, and far less debt that we would have had if we had never undertaken this experiment in the first place. 

With the new year just around the corner, it's time to start thinking of what you want your 2011 to look like.  If you want to improve your financial situation and get yourself out of debt, then I invite you to join us and share your success stories.  There's never a better time to start than right now. 

Ellen and I wish you all a very Merry Christmas and a joyous New Year, and we hope that peace and prosperity will follow you all the days of the coming year.