What, Christmas is when???

There is an interesting phenomenon that has plagued me for several years. It took me a really long time to figure this out. Are you ready? Here it is.

Why does it feel like Christmas (and birthdays) sneak up on you? I mean, Christmas is on the same day every year!! You might be able to relate and you might have the same problem I had. Why did I not have enough money saved up to pay for all of the gifts I wanted to get? It used to be that I had to do some interesting financing to pay for it or put it on a credit card and pay for last year's Christmas until the next Christmas rolled around. That strategy added to my anxiety during the holidays.

So the question I pose to you is why do we not save money for such occasions? Why do we struggle to save money at all? I think there are several reasons why we are not able to do so. We will discuss a couple of reasons and give some remedies that will hopefully help you.

Reason

The Wall Street Journal did a study and found that 70% of americans are living paycheck to paycheck. That is across all classes; income, skin color, it doesn't matter. That means 7 out of 10 families in your neighborhood are struggling to keep up with the expenses they have. That also means all of their money is going to other places and they can’t put money into savings.

Remedy

What can you do if you have your money disappears each month? The first thing to do would be to create a budget. Put all of your expenses down on paper. This helps you see where your money is going. When we did our budget for the first time it was amazing to see where our money was going and what our spending habits were. Once you see where it goes you can make corrections and changes to how you spend your money. When we made changes to our budget and how we were spending it seemed like we got a pay raise. Tell your money where to go instead of watching it just slip away.

Reason

One of the top reasons for divorce in America is money fights. I will admit I was nervous talking to Kristen about our finances. For whatever reason she was the defacto family budgeter. I did not help her with it and when she worked on the bills she was not a happy person. Finances scared me for a long time.

Remedy

Figuring out how to budget was the first good step we took on our financial journey. To be honest it didn’t happen until we took Financial Peace University back in 2009. The principles we learned in that class really helped us. The first thing that we did was have a budget meeting together. We agreed that we both had to contribute to the budget meeting and we even made and signed a contract to do so. We sat down and made our budget and we got on the same page. I am not going to lie, it was uncomfortable at first but over time it became easy to work together. Once I saw what was going on I wasn't afraid to talk about it. Kristen was also relieved to not be carrying the burden all alone. We can now confidently relate together with money.

Now that we have a written plan our money does what we tell it to do. So this last Christmas we drew a line in the sand and we said "this is how much we have to spend and after it's gone, that's it!" and that was it. Kristen ran out of wrapping paper after the budget was spent and had to get creative with some tissue paper and masking tape and it worked!

We also want for this to be an interactive site so we can help each other. What things have you done to save money? any tips for the rest of us? We would love to hear from you. Also if you are struggling with a money issue we would love to help. We don't claim to know it all but we have learned a lot on this crazy journey. So comment below and let us know what you need or what you would like us to talk about.

PS- did anyone else have a naked from the waist down Christmas tree? The toddler stage, holy cow!

Starting Over Again

And again. And again. And one more time.... Okay, so this could go on forever. But I think you get my point. None of us are perfect, very rarely do we ever do something perfectly the first time and then keep hitting perfection each time.

Like my oldest daughter says "h space a space h space a" (10 year old sarcasm, heaven help us). Most of the time life is a series of high, low, high again, serious crash, repeat and repeat.

We started getting serious about getting out of debt way back in 2008. Nope you didn't read that wrong. We only had 3 kids, we were younger and we had less than half of the debt we're carrying now. So what happened between then and 2015? Why did we add a ton more to our load?

I already told you about grad school. We also made a couple more stupid choices along the way. So here we are again, we are blessed to have 5 kids and sadly, twice as much debt and we're following the same plan that we started on all those years ago.

What's different this time around? Why do we think it's going to work?

Well this time the kids are involved. When we started our oldest wasn't even in kindergarten and now we have 4 in elementary school. Greg and I talk about being in debt and the things that we're doing to get out of it. We've told them about the way that being in debt robs your freedom. Last week I drew a thermometer on construction paper. It's our debt tracker and it has numbers on each side. On the right is the total amount we have to pay back and on the left is the running total of what is done. It's pretty exciting to come into the kitchen and see them gathered around the paper seeing how much we have paid back.

One of the things that has made us so motivated is knowing that we have 5 kids headed on missions and to college in the not distant future. Somehow all of that has to be paid for and we don't want to be unable to help our children because we are still cleaning up our mistakes. That's a huge incentive.

I've shared with you how Greg and I are both committed to this plan but it bears repeating. We are on the same page. Totally. Sadly that hasn't always been true. After our fourth child was born in 2009 I just kinda went off the deep end. I lost touch with everything that mattered for a couple of years. That included our finances. Greg would try to encourage me to get back on track so that we could get rid of our debt but I wouldn't respond. We were making great money back then so technically this debt could be gone by now but because I was just barely surviving I couldn't do it. We lost those few years but now we're back. Everyone is mentally and physically healthy and we can devote our resources to this massive goal.

Am I certain that this time around is going to be different? Well, no. I occasionally worry but I'm not focused on the fear of failure. Instead we keep working and praying and talking about what we are doing. We're planning a celebration trip for when this debt is gone. The kids have decided where they want to go (Nashville, Disney World and a cruise, oh my) and Greg has printed out pictures of a cruise ship and a Disney World map for us to drool over. Every morning after family prayer we practice our debt free scream (WE'RE DEBT FREE!!!) and we just keep following our plan. I don't know what's coming next but I do know that we paid off one of our little debts just yesterday and man, that feels good.

He says, She says

Sometimes there's a difference of opinion around the Miles' house. Occasionally one of us will convince the other that they're right. Once in a while we will both be wrong. And then there are other times. That's what we tactfully call, "agreeing to disagree".

So would you like to hear about one of those times?

When I wrote my series on surviving unemployment, I used the word "unemployment" over and over again because, hey, we didn't have a job with health insurance and a retirement plan. Yes, there were 2 part time jobs that made a huge difference but as far as I was concerned Greg was out of work.

Then the other day Greg wrote about the Baby Steps and he talked about "underemployment". See those part time jobs meant that we were getting money and our mortgage was being paid. They weren't ideal jobs and they were just temporary plugs to hold back the dam while we found full time employment.

So who's right? Me? Him? Does it matter?

Nah, not really. I still consider us to have gone through a defining time of unemployment. Greg believes that we were changed by our time in underemployment. 

What's most important is that whatever word you use, it was a challenging experience in our family but it didn't tear us apart. It made us better people and it made our relationship deeper and stronger.

Even if we still disagree on things. Like the correct flavor of a milkshake.

It's mint Oreo in case you're wondering.

I should get an A

A new semester started yesterday. I always love the beginning of each set of classes (fresh start and all that) but this one is super exciting because I am done with generals and now I get to move on to classes for my major. I feel like a real live grown up with a life plan... or something like that.

Anyhow one of my classes is Personal Finance and I just had to laugh when I saw the syllabus. The course objectives are as follows (direct copy and paste):

1. The student will demonstrate management of their personal finances including budgeting, bank services, insurance, home ownership, investments, and retirement planning. Each student’s management style will embody elements of uniqueness of problem solving strategies and goal selection.

2. The student will demonstrate an understanding of the importance of personal financial planning in their personal and family lives. Students will show evidence that their financial decisions will impact both their family and society.

3. The student will demonstrate awareness of the financial services markets and recognize the connections relative to access to financial services, credit score, interest rates, income and individual financial opportunity.

4. Students will be aware of critical personal financial literature including classic and contemporary thought.

Budgeting, I've got that. 

Problem solving strategies, have you seen my life?! 

Personal financial planning in family lives, hah, in my sleep. 

Interest rates, you want to talk interest, let's talk about student loan interest. 

Critical personal financial literature? You should see my nightstand.

I'll give you a full report at the end of the semester but based on the course objectives I'd better get an A in this class because people, I am LIVING this class!

Houston, We Have a Problem

Greg is writing today. It's good to hear his perspective. So Greg, take it away!

Do you remember Apollo 13? NASA had a huge problem bringing three astronauts home after a freak accident to their spacecraft. It appeared to be insurmountable and impossible. 

With underemployment starting at the beginning of 2014 WE HAD A SERIOUS PROBLEM! What were we going to do to fix this huge problem? There was underemployment, student loans coming out of deferment and the other debt we already had. Talk about a big weight that seems to be crushing you all at once.

The group on the ground at Houston and on the spacecraft, Apollo 13 worked together to solve their problem and get the astronauts back home. They had plans and procedures that helped them to resolve their issue which resulted in the best outcome possible. We also needed a plan to get out of the mess we were in, especially one that made sense to our family. 

It is really difficult to come up with something quickly that makes sense and gives you direction. I am not the smartest person in the world so we needed some help coming up with our plan. Luckily we had taken a class through Dave Ramsey several years ago called Financial Peace University. This class taught us the principles we used to keep our heads (barely) above water. The things we learned in that class became our plan. 

So what is this plan and who is this Dave Ramsey guy? If you want more information on Dave go here but I'll give you the five line version: he went bankrupt at age 28 and since then he has been on a crusade to help others be more financially solid. The plan he teaches contains 7 steps. These are not the gigantic "I am trying to walk in my dads steps". These are baby steps, think wobbly new baby. Here they are in order: 


Baby Step 1- $1,000 to start an Emergency Fund 

An emergency fund is for those unexpected events in life that you can't plan for: the loss of a job, an unexpected pregnancy, a faulty car transmission, the list goes on and on. It’s not a matter of if these events will happen it's more like when. This should be completed very quickly. 

Baby Step 2-  Pay off all debt using the Debt Snowball 

List your debts, except the house, in order smallest to largest. The smallest balance should be your starting point, pay minimum payments for the rest. Don't worry about interest rates unless two debts have similar payoffs. You're going for quick wins here. But if 2 debts are similar, then list the higher interest rate debt first. Once the smallest is payed off, take all of the money you were paying on that one and add it to the payment of the next one on the list. Then repeat until all the debts are taken care of. 

Baby Step 3 A fully funded emergency fund

Once you complete the first two baby steps, you will have built serious momentum. But don't start throwing all your “extra” money into investments or going back to spending everything quite yet. It’s time to build your full emergency fund. This should be 3 to 6 months of expenses. Make sure you have this so that when unemployment or another emergency happens you will be prepared. 

Baby Step 4 Invest 15% of household income into Roth IRAs and pre-tax retirement 
When you reach this step, you'll have no payments—except the house—and a fully funded emergency fund (can you imagine that)! Now it’s time to get serious about building wealth for your retirement. Don't think you can count on Social Security because if there's one thing the government is known for it's improper money management!  

Baby Step 5 College funding for children 

If you or your kids are looking at college you need to start saving. Helping your children graduate from college debt- free would be an incredible way to start their adult lives. 

Baby Step 6 Pay off home early 

Now it’s time to begin throwing all of your extra money toward the mortgage. You are getting closer to realizing the dream of a life with no house payments. 

Baby Step 7 Build wealth and give! 

It’s time to build wealth and give like never before. Leave an inheritance for future generations, and bless others now with your excess. That's a pretty great way to live!

Download Baby Steps 

Those are the steps to our plan. We have a written budget that we religiously follow and right now we are on Baby Step 2. I am the first to tell you that it is not easy to complete (just read our other posts). But just like that wobbly baby learning how to walk, it gets easier with time and practice. 

The geniuses at NASA had a plan for getting Apollo 13 back home. They followed the steps, they got creative when necessary and above all they never gave up. Kristen and I have a plan for getting out of debt. We're following the steps and working towards our goal. There are lots of long days and a long payback period ahead of us but we are optimistic. It was much worse when we didn't have a plan and just expected to be in debt forever. Now we know there's hope.

What are we doing here?

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Objective number 1: help you. Too many of us are in debt and confused about where we are going. We (meaning you and I) weren't taught how to manage our money. We (again, you and I) made choices based on incomplete or incorrect information and now we're paying the price. I want you to have hope that you're going to make it through this rough time.

I was certain that everyone else had their stuff all together and that we were probably the only ones struggling. Clicking publish on my first post was really scary but guess what? There are lots of you in this same crappy boat, I just didn't know where to find you. Being honest with you about our challenges has also made it easier for us to face them, there's something to be said for strength in numbers.

Objective number 2: earn enough money from blogging and speaking and writing so that Greg can be home with us in the evenings. We miss eating dinner with him. Bedtime is way more fun when Daddy is home and I miss hanging out on the couch with him after-hours. He's my favorite person and I'd really like to spend more time with the guy I love.

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I'm pretty sure I just broke a major blogging rule by telling you that I want this to be a profitable venture. I think that if you're fortunate and hardworking and dedicated enough to make money from your blog then you're supposed to act surprised.

But here's the truth, I'm transparent kind of girl. I won't say one thing and mean something else. You should know that whatever I say or write or do is honest and accurate.

I want to contribute more to my family's income and this is one way that I can do that. It means something every time you read what I write, every time you share, like, comment or follow. It makes a big difference. Not only does it help us reach our financial goals but it also shares our story with someone who might need to hear our version.

That's pretty amazing.

Surviving Unemployment: Part Two- The Parents

Here's part two in our series about surviving unemployment. The small company where Greg had been working decided that his position needed to be changed. Unfortunately he wasn't the right fit for the new position. This was actually okay because he had been passively looking for a new direction and was thinking that a change would be nice. We just hadn't been very serious about finding a new job until we were forced into that situation.

We immediately started shoveling everything into savings and just cut back in every way possible. When the first day of being unemployed came it was pretty scary but the experience was also not as bad as it could have been. And don't forget, I'm writing this based largely on my journal entries from that time so this isn't some looking back and forgetting the hellish details kind of list, this is real time reporting, sort of. Well, you know what I mean. On to the good stuff.

Oh, I should give you fair warning, this list is going to read like a motivational speech. I'm almost embarrassed to share but it's true, it's a pretty fool- proof plan.

So here we go. This is how we made surviving unemployment, well, survivable.

• Be grateful. We had a home. There was food in the fridge. Our kids were healthy. We still had each other. The list went on and on and the more we tried to be grateful, the more we had to be grateful for.
• Have some perspective. Yep we were out of a job. That sucked. But you know what's really awful? Being familiar with your local children's hospital. That's on a completely different level of awful. Stepping back and saying "yes, this is hard but the things that really matter (our children, our marriage, our faith), those are okay.
• But also accept that the situation is pretty awful. Our children were healthy, our marriage was solid and our faith had never been stronger but we were still really worried. Giving yourself permission to feel bad about your situation is okay.
• Cut back. We didn't eat out. We didn't buy new clothes. There were serious conversations about needs versus wants. Most things got classified as a want. We actually kept a running list titled "When Greg Gets a Job". All of those things that we didn't do or buy we would put on the list. I was looking at it the other day and it's pretty funny. We had put things on the list like dish towels and socks. New socks are nice but feeding your babies, that's better. 
• All work is worthy. As long as it's legal of course. What I mean is that sometimes we start to think that certain jobs are beneath us but I'm here to tell you that your mortgage company accepts your money whether it came from a full time job with benefits or stocking shelves overnight at the grocery store. While you're looking for work don't be afraid to take a temporary position to make ends meet.
• Pray. A lot. Before the loss we were very active in our church. We both held positions as teachers and leaders and we always tried to do our best. Our religion wasn't a Sunday only kind of thing but when all that we could do was turn everything over to God and ask for His help, well that took us to a whole different place in our spiritual life. I'm not saying that we're perfect saints now (ha, so far from it) but we have a deeper understanding of the mercy and goodness of God and His Son. 
• Accept when people want to help. Greg and I had prided ourselves on being people that gave instead of taking. People that we loved would offer to help and it was really hard to just say thank you and accept their offering. Being in a position of need forces you to learn humility and gratitude.
• Cling to each other. It wasn't Greg's fault that he lost his job. It wasn't mine that I couldn't make up the difference in our income. What was, was. Blaming each other would have been so destructive. There was never a time when we needed each other's love and support more. Our marriage is rock solid in a way that we never knew was possible.

As we went through our time of unemployment we would say to each other "I'm so glad that this happened". That's because it was a time for us to learn what was most important. We understand in a little deeper way how much we mean to each other. We know just how little we need to be happy. Our faith and our family and our marriage are different because of this experience. We needed something serious to wake us up to the reality of what we had. My hope as we go forward is that I won't ever lose that conviction of what matters most.