Taking stock of set-backs pt 3: Car repairs

We were so excited last spring when we purchased our new-to-us car--with cash--and had begun the life of the two-car family and the freedom that that would allow us. Indeed, we really have enjoyed the station wagon with all its space and available room for the girls and our large travel arrangements. It's a little rough on gas at times, but it is a real blessing having both cars around. Even with all of their woes.

This summer, you remember, we had the transmission blow on the station wagon as soon as we finished all of our long travels. $2000 later and a drained bank account later, we made it back up to New York with no great trials (except for Caleb's lost wedding ring) via DC and Emily's sister and brother-in-law's. When we got back to New York, however, we noticed that there was something funny with the breaks. When we took the car in to get it checked out, the very friendly (also very trustworthy) mechanic we found we needed new breaks and new tires. $900 later (and another cleared out bank account and our summer bonus money spent) we have a very fine car. To be honest with you, it was here that I realized we were going to be in for a long, hard slog.

With medical bills, car repairs, house cleanings, and other distracting monetary struggles we are finally coming back to where we were. I'll admit that the temptation is to be discouraged is just slightly stronger than overwhelming from time-to-time. I'd like nothing better than to pout and shake my fist towards the heavens, but that's ridiculous: the heavens are neither to blame nor in any position to respond. Taking time to look over the progress we have made over the year despite of the set-backs has been a real encouragement for us. Though we have struggled against That Horrible Woman and against our lack of affluence and the uncertainty of our position, we are still on some course towards success in our endeavors.

Our Story pt. 4: Starting over again

Believe it or not, the time in North Carolina was very good for our family overall. We learned a lot about ourselves. We discovered that there's a lot more to our relationship than just financial security and job satisfaction. We also learned how to apply for and to use government assistance programs, specifically the WIC program to help supplement our grocery budget. Parenthetically, WIC is a wonderful program, and the people who work for the WIC offices in counties across America need as much emotional support as they can get for all of the good they do for families.

From the time we moved to North Carolina in April until after little Z was born in August, Caleb spent days filling out applications and going to interviews. We had very exciting prospects, but nothing was coming through. Caleb actually had a great interview after Emily's folks sprang for a trip to Myrtle Beach for a week with a school in Greensboro that would have been ideal. The man actually said, "You're the one I want. I'm putting your name in front of the board." After that we never heard from them again except to hear "oh, no one called you?"

Right before Caleb took a trip to DC to visit some friends he got a phone call from Augustine Classical Academy about a position teaching Latin. During that weekend Caleb had a long conversation with the headmaster, and when he came back we sat and prayed about the position and took a long time going over our finances and what we could afford. When the original deal from ACA came through they could offer us ~$9500 with the possibility of $14500 (a very slim possibility). We ran the math, talked things over, and with the school providing housing, we were set to move; and move we did right after little Z was born. Caleb moved into the new house while Emily went to Cincinnati for her sister's wedding. When it was all said and done, last year we made $18500 from ACA and survived the year.

Next time we'll talk about making life work on a tight budget.

Our Story part 2: Deciding to change the future

When I wrote about how we got into the financial mess in which we currently find ourselves, I left it intentionally brief. There's time to discuss the results of our coming to our senses in later posts. I want to talk today about the events that led to our making the decision to start Financial Peace University.

There are few things more demoralizing than overdrawing on your checking account. Really, there's no reason to ever do it; but people do it every day. It felt like no matter how we careful we tried to be, the numbers at the end of the month were always red on the Bank of Evil (aka Bank of America) website. Part of that is because they have this horrible policy of never denying your card no matter what your account looks like, and there's that insidious (possibly illegal) practice of listing your debit card transactions from largest to smallest. As much as I would like to keep verbally abusing them, this is about personal responsibility.

Emily and I tried budgeting for several months. Usually, this was Emily sitting down with Excel or Word and listing expenses and then we would  spend the money as though the "budget" didn't actually exist. This vicious cycle repeated itself between November of 2008 and March of 2009 (estimated). It was during this time that our church decided to host Financial Peace University. The promotional material talked about people who saved so many thousand dollars and paid off up to $5000 in debt. We figured we needed to do something to change the status quo. We may not have paid off that much debt in those 13weeks, but we all agree: the best $100 we've ever spent.

Our Story part 1: How we got into this mess

When we started working on this blog, we wanted to create a place where we could keep ourselves accountable; and hopefully provide encouragement for those of you who read our stories that the future is not as grim as it may appear at times. Coming to the realization that we had to start taking responsibility for our finances took some time, and we have had to constantly reaffirm our commitment to our goals and our future. As we move closer to our being received into the Orthodox Church, I thought it would be appropriate for some financial confession.

If I'm being honest with myself, I financed my way through college and graduate school by reasoning that ten years (the estimated time to repay student loans from the time you graduate) really isn't that long, and I'd have a job that paid well enough to cut that time in half. When I received my bill for $28,000 from Gordon College, I was just thankful that it wasn't six figures like others of my graduating class. Of course, I didn't take into account that my first job out of college would pay me $7.50/hr, nor that I would jump right into graduate school-- taking on another $25,000 in student loan debt. I also had to fix my car ($3000) and buy a new one. (Yes, I bought a new car.) $14,000 later and I was $67,000 in the hole. Then we got married (bringing another $15,000 into the mix), got a well-paying job, and proceeded to blow our money like children! By the time we realized that we were in trouble, the damage had been done: we were in deep debt and struggling to pay our monthly bills.

Looking back on it now, a lot of this could have been avoided if we had been a little more discerning in our choices. For one thing, I definitely wouldn't have hit "accept" on the loan with a 10% interest rate.  I probably also would have bought a nice used car with the money I got from selling the old one. Now we're stuck paying for our mistakes, and missing out on a lot of the fun things in life now because we've made a decision to change our family tree and give our family a brighter future.

Sometimes, paying off debt really stinks.

Have you ever prayed for patience?  Whenever I do, it seems virtually guarenteed that within mere hours something will come along and test my patience to the limit, usually leaving me furious, frustrated and all together impatient.

The same thing seems to happen whenever I make a resolution of any kind, including getting serious about getting out of debt.  Not too long ago, I blogged about our Emergency Fund and how we've used it a few times, but it generally seems to cover things.

"Things" in this case does not include a rebuilt transmission, as we discovered last week.  No, a transmission generally runs about twice our emergency fund ($1897, to be exact).  So, what to do?  We were able to squeeze about $100 extra out of our budget for the month, but that still left us about $800 in the hole.  To make up the difference, Caleb's dad stepped in and provided.  In our July budget, we will be paying him back as soon as our four walls (housing, food, transportation and clothing) are covered.  Then, we'll be rebuilding our emergency fund.  Even with Caleb working an extra job and nearly doubling our normal income, we won't be able to go back to our snowball until August, unless money drops from the sky.

Financially, I know we'll be fine.  Emotionally, I'm pissed off, frustrated, tired and, in moments of weakness, ready to throw in the towel and just be defeatest about the whole thing.  It seems like every time we're ready to really get going with paying down the debt some little thing pops up and wont let us do it quite yet.  When will it end?  When does it get easier?
Well, not yet.
The good news is that we are not going through this alone.  God always knows when we're at our most exhausted (physically, emotionally, financially, etc.) and uses that exact moment to remind us of his love and provision.  In that vein, two things happened this week.  The first was a talk that Dave Ramsey gave at my uncle's church.  He sent me the link to the videos.  In that video Dave talks about how when the transmission blows (and he uses that example) is a test.  This is when the rubber meets the road.  If we weren't really committed to being debt free, it would have been really really easy to open a new credit card account to pay for it.
The second moment was at church this week.  The gospel reading was, of course, Matthew 6:19-34.  Do not be anxious. I know what you need.  I'll take care of you.  Keep doing what you're supposed to do and let me handle tomorrow.

Budget Night

At the end of every month, we do our budget.  For us, that means sitting down together with a monthly cash flow plan and an allocated spending plan, a pencil (with a good eraser), our computer's calculator and Dave Ramsey's  Gazelle Budget software.  Since Emily is the nerd in this relationship and likes to work out the nitty-gritty details, she gets the pencil and paper.  Caleb, being more of a free spirit, takes the computer.  Together, we work out how much money we can expect to get this month, when it's coming in and what we'll need to spend it on.  Every month is different, so we have to sit down every month and change things.  We discuss places where we're spending too much, or not enough.  Then, after we've got all the necessities taken care of, we take all that's left over and put it on our debt.

This month, we'll be putting $990.19 towards our debt.  We'll be finishing off a medical bill and starting on Emily's student loans.

Baby steps, baby steps...

You can come too!

If you read our previous posts and thought:

 - That sounds like fun!

 - I've always wanted to do something like that.

 - I wish we could be debt free by then.

 - How is it even possible to do that?

.... or something along those lines, here is your answer.

You can do it!  You can come too!

In order to join us on our road trip, you need to be willing to do the following:

- Pay off all your debt (except for a mortgage) and never take out another loan or use another credit card ever in your entire life.

- Save up enough money to pay for the whole trip and any supplies you need to buy in cash.

We learned how to do this by attending Financial Peace University, which we highly recommend, but it's not really necessary.  You can get any of Dave Ramsey's books, or Larry Burkett's books from your local library and use the forms they provide.

The first thing we did was build a little Emergency Fund of $1000, and put it in a savings account that we can only access with an ATM card with a $300 limit.  We have used this to pay for new car tires (when we ran over a screw), fixing the washing machine, buying a working refrigerator, emergency room bills, and living expenses while unemployed.  Every time we use it, we immediately fill it up again as quickly as possible.  We've been going for almost two years with this plan and have yet to completely drain the fund. Because we have this fund, we don't have to carry a credit card for emergencies.

Then we began paying down our debt using the Debt Snowball.  So far we paid off (and closed) two credit cards, various medical expenses, and our car.  We are currently working on (ahem, doing battle with) Emily's student loans and have Caleb's student loans waiting in the wings.

To do this, we have been sitting down every month to do our budget together.  This is probably the most important part of our plan.  When we do our budget we talk through all the different things that we spend money on.  We can think of ways to reduce our expenses and talk about where we need to spend more this month.  By talking through it and working on it together, we know where our money is going and why. Of course, this is often the hardest part.  While we have gotten used to sitting down and crunching numbers each month, we need to do better about tracking our actual expenses and adjusting for those things that pop up mid month that we didn't budget for.

Like anything worth doing, it's worth working hard to get it right.  We've found that we're better able to work together and take control of other areas of our life too, like keeping the house clean, reading and praying together, planning meals, disciplining the girls, etc.

Want to know more?  Read about Dave Ramsey's Envelope system, which will help you use cash (instead of a debit card) and keep your budget in check.

Who We Are And Why We Want To Take This Trip

We are the Shoemakers.  At the moment, we number four: Caleb and Emily (the parents), Anastasia and Zoe (the kids).  Caleb and Emily have been married for three years.  When we got married we made $40k a year and were $84k in debt.  In the summer of 2009 we attended Dave Ramsey's Financial Peace University and realized that it was time to grow up, take responsibility for ourselves and our finances, and get out of debt as fast as possible.  We started off well, but suffered a major set back when Caleb lost his job in March of 2010.  In the fall of 2010 Caleb found a new job and with two little girls in tow we moved to the little town of Cambridge, NY so that Caleb could begin his new job teaching at Augustine Classical Academy.  We were very excited to take the position even though ACA was still in its beginnings and unable to pay its teachers a full salary.  We have continued to chip away at our debt and as of today we owe approximately $64k.
As one might expect, it has been difficult to continue paying off debt over the past year.  Emotionally, we've felt extremely justified in stopping for ice cream, ordering Chinese, buying something nice for the house and otherwise busting our carefully constructed budgets.  While we continue to strive towards our goal, we need something to help spur us along, to give us the "Gazelle Intensity" that Dave Ramsey talks about.
We are dreamers and we have always loved to paint beautiful pictures in the air about what our lives will be like once we are debt free; what we could do when we're debt free; the amazing things we might be able to accomplish when we are debt free.
Well, we're tired of dreaming, so we're going to make it happen.  We're making a plan and we're going to stick to it.
We want to be debt free by the end of 2013 (when Caleb turns 31).  And, in the Summer of 2014, we will take Our Great American Debt Free Road Trip.
AND, as if that alone wasn't enough, we want to invite you to come with us.  If you're debt free, or will work to become debt free by the summer of 2014, we want you to join us for some (or all) of Our Great American Debt Free Road Trip.