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Problems of Abundance

July 29th, 2010 at 10:38 am

My father, a far wiser person than I, tells me that I have "problems of abundance." Don't know what to do on Saturday because you have too many invites? Problem of abundance. Not sure which leftovers to re-heat? Not sure what to wear? Right - Problems of abundance.

Today, I have some unexpected problems of abundance. My husband's company stock is up -way up. We sold some last week, and now we're wondering if we should sell the rest of it. Partner equalization at the firm meant I got $850 'extra' dollars this week, plus payment for travel expenses, and I'm told I'll be getting an 'extra' $75.00 each month. Earlier in the month I recieved a partner distribution -something we are supposed to get regularly, but haven't been able to count on in the tough economy.

I am taking 1/2 the $850 and putting it away for taxes (I am responsible to pay my own taxes quarterly -no withholding), the remaining money is to be split between savings accounts (emergency fund, vacation and christmas). The $75.00 each month is going to go (for the first time in a long time) into my retirement fund. About half of last week's stock sale is being held for taxes, the rest will pay for our new front stairs. The partner distribution is going to be held for taxes.

I am feeling more confident than usual that at the end of the year we'll have held enough money back for taxes. (Because my stake in the firm changes every year, as well as my compensation, we can only guesstimate what we'll owe each year.) If there is 'extra' left over after we pay the government, we'll then probably hold half that in reserve for next year, and put half into our existing debt.

I hope I'm making the right decisions here - I know it's probably better to put some of our newfound $ to our existing debt, but I'm also aware that I need to add to the emergency fund (which was depleted by a series of car disasters), should be funding some kind of retirement, and putting $ aside for Christmas and a planned vacation in 2012 is intended to prevent us from adding any $ to our existing debt.

Problems of abundance. Thoughts as to whether this plan is unreasonable...?

The Plan! The Plan!

August 18th, 2009 at 07:24 am

My apologies to Fantasy Island. I used to love that show when I was a kid, although I suspect now that I had no idea what was going on during the episodes. At our house, I also suspect that we've been living on our own little Fantasy Island.

The first payments to the credit cards in our new reduction plan began today. At the current rate, our credit card debt will be paid off in 2 years.

I created a budget based on the payments we were already making to the lenders (which were greater than the minimums), so that the shock of our more focused frugal lifestyle wouldn't be derailed before we could appreciate some of the benefits. For example: I didn't cancel the cable/internet. I am leaving the cell phone plans alone at $30/mo for my husband and I. And, I have told myself that it is ok if I want to buy a coffee or have an inexpensive lunch out.

I also built 4 savings goals into the budget: the emergency fund, a Disney Cruise (for 2012), a Christmas fund, and a fund for a china cabinet. People would be absolutely right to say that we should be putting every cent into our debt reduction. The fact is, the all or nothing budgets haven't worked for us. My thought is that by building some of our wants into the budget, we'll have an incentive to keep to the plan.

If the debt reduction budget works out the way I've envisioned, we'll have extra each month -my plan is to put that extra towards the credit card debt.

We will continue to carry a heavy burden of student loan debt (my law school loans top $100,000), mortgage and car payment. I will start looking at those once we've paid off the credit cards.

Thinking about our financial situation is both frightening and empowering. I know how we got where we are, and I'm trying very hard to stay positive and focused on where we are going to be.

Debt Reduction Without Painful Math!

August 6th, 2009 at 06:10 am

I admit it: I hate math. Too many numbers make me downright edgy.

My fear of extraneous math had prevented me from appling payments to our credit card debt in a way that works for us. Sure, I paid more than the minimum, but I never seemed to be making much progress. I figured it was an evil credit card company scheme to keep us in debt and that there was nothing we could do.

Wrong. Enter dueminder.com. You put in your credit card (or loan) information, it tells you the most effective way to apply your payments. Or snowball or avalanche. Whatever you want! If your circumstances change, update your info for a new plan. It tells me how much to pay on which card when, and I like plans. Easy to follow plans. With charts. And no math!

Dueminder will also remind you to pay your bills, which for me isn't a problem, but I can see the utility. I have taken to scheduling all my bill payments on the first weekend of the month - so they get paid all month, and I put it out of my mind.

With my newfound website, we now have a good plan going forward.