Wednesday, January 8, 2014

2014 is the Year to Uncover the Financial Cat Box

My freeloader family of barn swallows each spring - wonder how much I should be getting from them in rent?

This is the year I will uncover the financial mess I've been successfully covering for three decades.  Oh, so embarrassing!  But, I have a feeling I don't look that much different that many of you.  I listened to Dave Ramsey this week on the Katie Couric show....70% of Americans are living paycheck to paycheck.  55% of us are worried about it.  And there came the open question - who are the other 15%?  Why aren't they thinking about it?

My experience is that the other 15% have a spouse who worries for both of them.  Thus the case in our marriage.  I'm the one who (at least visibly) is thinking about our financial picture....alot.  Like when we drive through to fill up the tank and I am ticking through what I remember of the bank statement online to determine if this particular $40 might be the one to tip us into an overdraft charge.  Like when I wake up in the morning and my first thoughts are a quick scan of what day it is and whether or not the bills absolutely due by today have been taken care of, followed by a quick mental run down on what will be due next and when the next paycheck will arrive.  Everyday.  Several times a day.  And one quick review before I go to sleep.  This is what I am doing when I seem to be daydreaming.  Ha!  

So, here we go.  Mr Money Mustache followers - please help!

We live in a 1000 square foot home in rural Kansas.  Three bedroom, two bathrooms.  Full basement (which gives me another 1000 square foot for storage, family overnights and used to be/could be again side-income work space).  Plus a 500 square foot upstairs dormer type space which is where one of the bedrooms with bathroom are located.  Ten acres.  No neighbors.  Seventeen miles from any stores, gas stations, places for employment.  Quiet, clean and in good condition.  Nothing fancy.  I've always called it either my "little house on the prairie" or compared it to living in a nice cabin -but year around.  Most people who own cabins on the lake have one larger and nicer than this place but we are quite content with it.  We will stay here the rest of our lives somehow and the grown children plan to keep the property into the future as the homeplace.


Home - valued at about $100,000 just before the economic downturn.  Owe - about $30,000.  4.?% interest.  Only four more years until it's paid off.  We've lived here 28 years and made many improvements - always DIY.  That's the good news.

School loans - I got a degree that has never paid back for various reasons - most significantly the geographical problem of living too far from larger population areas.  So, twenty years of deferred payments and forbearance plus two small parent loans on behalf of the kids....and I currently owe $27,000 at 5.?%.  I've been making regular payments on this balance since 2008 but it only creeps down the balance.

Credit Card - only one, thank goodness.  But, I've been unemployed for three years now and we've had to keep relying on it to fill in the gaps.  It stands at $13,300 balance now - all charged within the past three years with my health crisis.  At a whopping 19% interest.  We are so called "great, long-term customers" with Discover but they always tell me that our rate is their best rate for great, preferred customers like me.  I suspect that means their stupidest customers -  like me.  (*#@*$^*(@

Doctors bills - just a few small balances that hang around like buzzy flies and I can't get them paid!  Total of $490 - all incurred in the past year.

IRS - This is the most recent kick in the gut.  I filed my 2011 taxes, owing $300.  Paid in $100.  Got several overdue letters.  Got depressed.  Didn't file my 2012 taxes because I knew we would be in the exact same boat - adding another $300 - $500 in balance due.  And now, we are preparing for another year of the same.  Except - the IRS got tired of waiting on me to get my act together and ordered my husband's withholdings to be upped $300 per month.  I know they need to be paid.  But, the $300 each month tips the apple cart for us.  We can't do it in our current situation - and as you know, we are doing it because that's the way these things work.  It's taken out before he gets his check.  This began last week - Jan 1.

Vehicles  We own two.  No debt.  Unless you want to count all the repairs that have been done using the credit card (above) over the past three years which is several thousand dollars of that balance.  A 1994 GM truck 4x4 with 250,000 miles on it.  And a 2001 Olds Bravada with 210,000 miles on it.  Both run well and are well suited for our needs, with the gravel roads and ability to haul things (trash, recycle, trips to Aldi's, grandchildren) and meet our commitments in bad weather.  

Income:   My husband is a highly skilled carpenter with 30 plus years experience.  He makes XXXXXX a year.  Rural Kansas, remember?  He is not suited for self-employment, at all, which is a shame because others have made good money by hiring him through the years.  I've suggested I manage jobs - no way he would agree to that.  The better news is that this current  wage comes with a full benefit package including a state agency pension plan (the good kind), good health insurance, paid time off, good working conditions for him as he ages, etc.  He plans to stay with this job, if possible, until he retires.  He started 13 years ago.  Before that, he earned $15,000 - $24,000 a year with absolutely no benefits.  Year after year.  We raised two children with no health insurance and no savings - sixteen years of it.  That was the original hole we dug.

My income.  Of all my working years, I have only had about six years of earning a good income.  I've tried multiple things.  And in 2010, I lost a good paying position due to the end of funding (federal grant ended). At the same time, I had a close brush with long-term scary illness, mental, physical, etc.  I've been unemployed for three years now and have my health back to a reasonable point but I cannot handle the level of responsibility and stress I carried before in employment.  Currently, I am working a writing contract for $500 a month, writing several book type projects that may be sellable, and making or picking up items to sell on ebay, etsy and amazon.

I have $12000 in an IRA plan.  And a tiny 403(B) plan that will pay approximately $600 a year (rest of my life) when I retire.

We are both 55 years old.  Our children are married and supporting their own families in great shape which is a total relief to us - knowing our grandchildren are well cared for with financial security.  We did one thing right!  It's time for Grandma and Grandpa to get this old debt mess cleaned up so we don't get left in the dust!

Is it hopeless?  It can't be.

UPDATE:  The forum members over at were very, very caring and helpful in looking at my budget details and pointing out what could be done.  Thank you!  

If you feel like you could use an honest evaluation of where you're at and where you're headed with your own family financial situation - I highly recommend using their forum.  They encourage you to follow the "Readers Case" template to organize your information.  People who are well ahead of the pack in gaining financial independence will offer valuable feedback and suggestions.  Again, I can't thank them enough!  We are better already and prepared for 2014.  

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