Some fun things

I’ll start off with some positive news! With a gift of money that Nate and I got and with some of our own hard-saved money, we were able to pay off some loans. We are paying off the smallest to the largest—the “debt snowball” that Dave Ramsey preaches. It feels really good to get rid of some student loans, even if they are pretty small compared to our other ones. It definitely is motivation to get “paid in full notifications,” like this one! 

I’ve been listening to Dave Ramsey a lot. Here are a couple things he constantly says: “Debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the new status symbol of choice” and “Live like no one else so later you can live like no one else.” No matter if you like the guy or not, Nate and I are switching our state of minds to align with these principles. On Dave Ramsey’s channel on iHeartRadio, today there were some couples who did the debt free scream. It makes me feel like it’s so far away for Nate and I because we have so much debt. I don’t have any desire to do the debt free scream like the people on his show, just because I’m not like that, but I’m really looking forward to having the gratification of being debt-free. It will be such an accomplishment. Another thing that I’ve been hearing a lot on the show is couples talking about how they were able to pay off their debt. One commonality is being on the same page and being totally open with each other about budgeting and anything that has to do with money. Nate and I are totally on the same page and do a great job of communicating about money. I think that will really be an asset for us in the journey and beyond. One last thing about Dave Ramsey. He said something in one of his recent shows that resonated with me. He said something to the effect of (speaking like a spouse): “I love you so much that we are going to do this right.” To me, this means that it’s not important to have fancy new things; it’s important that we are doing something together to build our future.

I want to share something else—something that really made it clear to me why we are going on this journey. Last week Nate and I talked a bit about what our budget will be like (starting in January). Usually I get frustrated talking about money specific things because I easily become either disinterested or confused. But this time, I got to clearly see how much money we are going to allocate to different things, and it’s do-able. (Side note—I’m sure Nate will disclose what our budget is in a later post.) We are even going to budget for date nights twice a month. Yes, we could put that money toward the loans, but we want to actually enjoy being a married couple. We want to be able to go out and do fun things together and treasure this special time in our lives. Anyway, something that Nate said made it clear to me why we are doing this. He said that he doesn’t want to do this—become debt-free—for him, or us necessarily, he wants to do it for our future children. To me, that means so, so much.

Here are some other tidbits in our newlywed life together. AKA doing responsible, not fun, adult, married things.

• We went to the bank the other weekend to open up a joint checking account. That was fun. The “personal banker” kept on saying “Okay, good to know, good to knowwwwwww.” It took way too long and was super annoying. No, I do not want a Wells Fargo mortgage now. Or ever.
• We finally got a Target REDcard. I’m sure a lot of you either know about it or have one. It’s a debit card that is linked to your bank account and you get 5% off your purchases. 5% off, obviously, is not an amount to jump up and down about, but it all adds up in the end. And I’ve just discovered Cartwheel. So, I’m having, errrrr, “fun” finding Target coupons and Cartwheel deals to combine with using my REDcard to save as much money as I can at Target for the things that we need. Now the cashiers at Target can stop making me feel guilty for not having the damn FREE card that saves you money!
• We had a “check in” meeting with Nate’s insurance agent. That was, as you can imagine, thrilling.   

We are off to Mexico next week for a wedding and our honeymoon. Woohoo!

Back to Business

Well, this post is long past due; however, I feel I have a pretty decent excuse. Okay, not an excuse at all, and more than just pretty decent if it were one. 5 weeks ago today I was in Northfield, MN, helping set up for the most special day of my life. And no it was not a Super Bowl party for the Vikings; 1) because it’s only October; and 2) well, it’s the Vikings that we all hate to love. It was special because it was the day all my close friends and family gathered together to witness and celebrate Shaina and I’s profession of love and faithfulness to one another. Yep, life goal #1 is in the books, we are married! And I couldn't be happier. It has truly been a long process planning, organizing and inattentively shaking my head yes or no to a plethora of decisions in which my opinion would obviously be trumped anyway. And for good reason too. Our wedding day was amazing, and not because of my own great taste in décor or obsession with Pinterest.

Now that the dust has almost settled, both figuratively and literally, as we work at cleaning our increasingly shrinking apartment to make room for our newly-wed life together, complete with gifts, new décor, china cabinets and the like, and no where to put any of it, the official start of this massive project and life overhaul is ever looming. It’s back to reality.

Once topic I wanted to touch on, and one of the driving forces and motivations behind this process, is a comment that my now gorgeous wife made in her last post when referring to her needing a reminder of why we are doing this when:

           

            “…when we are knee-deep into hardcore budgeting and I hate dislike my life because we are so

broke and can’t do anything we want to do.”

This hits home for me. On one side I feel saddened. Who wants to make their wife feel like she can’t do what she wants to do? I know she is totally on board with this, as we've discussed this on more than just a few occasions. But I wanted to bring to light another aspect of this. Will we have to sacrifice during this process to tackle this monster head-on? Of course. However, have we not already been sacrificing in certain areas of our life because of this debt? We absolutely have. Both my wife and I have been blessed with decent jobs, and yet we already sacrifice doing things we want to just because these loan payments cause us to live close to paycheck-to-paycheck. Now I know what my wife meant when she said what she did, and in no way is this an example of us being on two different pages. The fact is that we will have to sacrifice to be able to reach this goal of paying off our large amount of debt. Probably more than we already are. But I would much rather roll up our sleeves and sacrifice a little more now, than be forced to continue our lives constrained by our financial situation. If we don’t address this now, then chances are we never will. Dave Ramsey said it best, “Live like no one else, so later, you can live like no one else.”

Now on to the “meat and potatoes” of this post; the numbers, the facts, the spreadsheets; pretty much Shaina’s worst nightmare. To help organize things a little bit and possibly keep Shaina’s eyes from rolling back in her head every time she sees a spreadsheet, I set out to find an online tool to help track our debt in one spot that was easy to use and also a little nicer to look at than the blinding white of an accountant’s spreadsheet, to which the most creative formatting you’ll find is bold headers. The site I found is called Undebt.it.  It’s a super duper simple website, used to track debt. The thing I like most about it is the fact that it’s still totally manual. No linking of four or five debt or bank accounts. As an accountant I like to be in control of my numbers, and this allows me that control. The tool will then organize the loans in a payoff order and will calculate how much I should pay towards each loan every month once our extra payments start. The philosophy is simple: pay minimum payments on all loans except one, making a larger extra payment on the first loan in the payoff list until it’s paid off. Next, the extra payment, along with the first loan’s minimum payment (which is now freed up by paying it off), is then applied to the second loan and so on, making the available funds to be applied to each loan greater and greater as we begin to pay each loan off. Hence the term “The Debt Snow Ball” Since it has been a few months of minimum payments since our last posts, I’ll give a quick update as to where our numbers are at. We had received a gracious gift of money that helped us get a jump start on our snowball as you can see from the loans with a zero balance. And even though the majority of it was a gift, it truly does feel great to pay off some of these loans. Again is wasn't a lot, but seeing the loan at a zero really does provide an emotional boost.

As you can see we are now at about $123,832 in debt, and minimum payments are still high at $1,429 a month. The feature of this site that really catches my attention is the paid off percentage meter next to each loan. Since I set this account up on Undebt.it we've only paid off 7.09% of our debt. 7.09%! That’s it! We were paying $1,518 a month for three months, added a gift of money to the mix (to which we were able to pay off four different loans, one of which was a private loan at 12% interest!) and only 7.09% done. That’s ridiculous! I can’t wait for this percentage to get larger, and a lot quicker at that. And I like that we can easily and quickly track our progress. I’m hoping it will keep our motivation strong.

In my next post I will to go over how we plan to budget during this project and how we will use this as a tool to come together as a team.

We got married!

 I apologize for not posting anything for over a month, but Nate and I were quite busy doing a little thing you call getting married! All of the hard work we put into planning our big day was so worth it. It was an amazing day filled with excitement, fun, and so much love. Here are a couple of our favorite pictures (taken by the very talented George Day).

 

We will get back to talking about dollars and cents very soon, but for now we are enjoying being Mr. and Mrs.

Confronting Reality

Holy smokes. Holy schnikeeez. Holy suffering cats. Holy catfish. Seeing those numbers on screen and out in the open is a gut-wrenching eye-opener. Of course Nate and I have talked about our debt many times, but it all becomes very real when its laid out like that in the handy dandy spreadsheet. It’s terrifying, actually. But that is why we are going to get rid of it. We don’t want to be slaves to interest or loans. We are going to come together as a couple to get rid of that burden in our lives. For richer or for poorer, right? Sacrificing now for a couple three, four years (Nate will get into that) will allow us to reach our goals in a way that will make us so much more appreciative. Remind me of this when we are knee-deep into hardcore budgeting and I hate dislike my life because we are so broke and can’t do anything we want to do. Here are some of my thoughts going into this process:

·      I hope other young couples can relate. I know there are many other couples out there with a large amount of debt. There have to be other couples too, then, that are trying to do the same thing we are. That’s one thing that I’ve struggled with a bit—Nate and I don’t really have anyone to talk to that is in our same situation. We know people who have student loans, we know people who are paying off student loans, and we know couples, but we don’t know any other couples who are trying to pay off a large amount of student loans in a short period of time. So, in this process, I hope to connect with other couples in the same boat.

·      One of the reasons that I was initially “afraid” of this process was because it makes me adjust my timeline of life events that I had planned out in my head. For as long as I can remember, I wanted to get married young, buy a perfect little house that’s on acreage so there can be gardens and a tree house (so idealized, I know), and start having kids young. All of my friends know this about me, even though some of them roll their eyes when I talk about it. I had always “planned” to have kids around the age of 25. But now, because of what we are doing here, that’s not going to happen. And to be honest, it really...I don’t know what the correct word is...pains me to not be able to do that. Nate obviously knows this, and it bothers him that I’m hurt by it. Motherhood has always been something that I’ve so been looking forward to. It’s such a beautiful and wondrous thing and I’m impatient to get to that point in my life. So in the time being, Nate and I will be able to build a firm foundation of our relationship, have those years to ourselves, and totally be ready for when the time is “right” (as “right” as it can ever be). But I know that when it happens, it will be all the more beautiful. We both want a house and kids, so it will be motivation for us. Plus, I have my niece, Sydnee, and nephew, Taylor, to fulfill my “I want a baby!” urges. They are the cutest kids. Ever.

·      I’m really going to depend on Nate throughout this process. He is the money man. He is the one who totally understands all of this money business. I only understand the basics because my brain just doesn’t work like that, it never has. I’m so grateful for him and his ability to know the numbers and make a realistic and informed plan. And I’m so grateful that he is patient enough to explain things to me in a way that I can understand. Well, sometimes.

·      I’m thinking that we are going to need to get real creative with how we spend our money. We are going to need to rethink all of our purchases in terms of entertainment, food, things/décor for around the apartment, etc. But secretly, I think both Nate and I are kind of excited for that. It will be something that we can do together. We can look around the cities for fun, free (or cheap!) entertainment, ways that we can cut costs on food, and can start doing DIY projects around the apartment. I think it will be a good opportunity to get out more and do things like go to nearby regional or state parks with the pup, for example. If we need to do these things in order to put as much money as we can toward our debt, might as well have a little bit of fun.

·      It will help us live a more simple life. In today’s world, a lot of emphasis is put on the possessions you have and the brands of those possessions. Of course I like nice things. But I also know that these things are totally unnecessary to be happy. Am I jealous of people who have designer clothing and accessories? Sure. Would those items make me have a higher quality of life? No. Going through this process will really show Nate and I what the important things in life are. Even though we won’t be able to buy fancy clothes or items, go to dinner every week, or spend lots of money on fun things to do, we will be able to spend time with family and friends, make dinner at home together, and go on lots of walk with the pupperz (yes, I call Mazi that—don’t judge me). Paying down debt and being on a strict budget will force us to realize what’s truly important in life and how little you actually need to be happy. And there’s real value in that.

            Let the adventure begin.

Pregame

Seeing that this blog will most likely be maintained by my beautiful bride-to-be, Shaina, I thought that I would get in my two cents right away before the opportunity escapes. When I first suggested that we start a blog, it was more a result of knowing that paying off debt, being constantly in the numbers, and knee deep in my infamous spreadsheets and formulas, isn’t as exciting or even tolerable to Shaina as it is for myself. With my accounting background and currently working as a corporate accountant for a large insurance company, I’ve seen my fair share of spreadsheets. The nerd in me will definitely come out during this process, as I will be the one disclosing the facts about the debt we are tackling and giving updates in regards to the numbers. I thought this could be a way to not only allow others to join in the journey with us and offer advice from our experiences on what is working and what isn’t, but also give her a way to journal her thoughts and feelings on how someone who wants to be debt free (but who could care less about diving into the numbers day in and day out) deals with all aspects of this journey. We hope that this will also help keep us accountable to our readers and followers, even if they are few.

To start I will talk about a few of our life’s goals to set a stage for why we are taking this project on. We will be married on October 5^th of this year (2013), so life goal #1 – check! Secondly, we want to have kids. Even though I think this is both the #2 goal for us, the complication is that a few things need to happen before that, thus the sub-goals. Goals:

                 

#1) Married – check! (well, almost)

#2) Kids

                  #2a) Homeowners

                  #2b) One-income family - Shaina wants to stay at home with the kids

These may not be what everyone thinks is necessary to have kids, and in all reality it isn’t really necessary, but is something that we both have discussed and decided upon. We want to own a home before we have kids— to raise them in an environment that we would feel most comfortable and stable for our kids to grow up in. Again this is our personal opinion and preference.

When talking with others about our thoughts on this issue we got a few different answers, but most fell into two categories:

1) You’re young; paying off debt is a good idea now when life’s responsibilities are few

2) The “YOLO” response. You only live once, so don’t let debt get in the way of doing what you want.

While many of these responses were from family and friends, whose opinion is very much appreciated and respected, the decision is ultimately up to us. As long as we decide things together, are on the same page, and are headed in a direction that we both feel is best for us and our future family, I think it's important that we don’t let the opinions of others force us to change our plan once it’s in motion. It’s hard and sometimes frustrating to hear others’ opinions of how you should plan your life, especially when they may or may not know all the facts, but in reality it’s also important to listen to everyone’s opinions and take their advice into consideration while first deciding on a plan that works best. Everyone’s opinion is built off of something, whether general knowledge or past experience. For this reason, totally disregarding someone’s opinion would be foolish. However, applying it to this specific situation may be the challenge.

“The irony of the Information Age is that it has given new respectability to uninformed opinion.” ― John Lawton

For those who do not know us, and also for those who do, I will set up our financial situation so that maybe our opinion and decision to pay off our debt will be better understood. I’m sorry if this gets a little boring for some of you, but stick with me. I know transforming into super-nerd won’t save the world from over-sized robots, but hopefully it will help you understand our view point.

            I’ll get right to that point. We have a lot of debt. For two young adults, trying to start their lives in the right direction, debt can be a huge burden. For those who have not had debt looming over their heads, that’s a true blessing and I’d be lying if I said I wasn’t a little jealous (okay, very jealous). For those who know how heavy debt can be, we feel your pain. Almost all of our debt is student loans. Ah, student loans, the American dream buzz-kill. Looking at the table below, you’ll see that most of this debt problem is my fault. One can’t really know how going to a different school would have impacted their lives. But for me it’s hard not to wonder about that sometimes. For now I need to accept that my choice to go to the smaller, private, more expensive Bethel University to receive my Bachelor’s degree in Accounting got me a good job but a whole lot of debt. Roughly 2/3 of the debt has my name on it. Bringing that much debt into our relationship doesn’t make me feel like a hero by any means, but it does motivate me to step up and do my best to get rid of it.

 

           Referring back to our goal of home ownership as well as Shaina wanting to be a wonderful stay at home mom, I knew two things: with over $1,500 in loan payments a month, either we won’t be able to afford the house we want and would have to settle for something a lot less, or with the large amount of loans, our debt-to-income ratio would simply get our loan application flat-out denied. The second option literally won’t get us anywhere, and with a purchase at the magnitude that a house is, settling isn’t something I would ever consider. Either option doesn’t sound too appealing or acceptable, especially knowing that even if we did buy a house at this point, Shaina’s dream of staying at home with our future children would be very tough. Seeing that our monthly loan payments were essentially the amount of a mortgage payment on a more than decent house, to me it was a no brainer. We need to pay off this debt if our dream of having a house and kids is to become a reality anytime soon. It’s not going to be easy, but with my future family depending on it, I know we have more than enough motivation to make it happen.

           I can’t speak for Shaina, but some of the topics I hope to cover in my future posts are:

            -     Pay off Plan

      o    Time frame

      o    Plan of action

            -     Benefits of paying off the debt in the long run

            -     How we budget

            -     How we cut costs

            -     Saving for a house down payment

      o    What banks look for

            -     Plan after being debt free

            -     How I personally am staying motivated throughout