Monthly Archives: January 2018

Crushing the Budget

Everyone knows its nice to have more money, but what you do with your money is just as important as having it. A budget is the best way to help you do that.

So today we’re going to talk more about budgets and how to manage them. If you missed my first post you can find it here.  I’m going to give you three examples of how I could be using our money and what that could lead to in terms of our financial goals.  This post is going to be a bit more visual heavy than usual. I’m going to make some visuals to really show you the difference between these three different levels of spending.

In the process maybe I’ll be able to kick my own butt into gear while lowering my financial independence date.  (DEC 2024 as of right now)

The Budgets

  1. AVERAGE American Family. Overpaying for services and things that we simply do not need. Spending money frivolously and without any thought for the ultimate future.  These individuals would be putting nothing towards their retirement or savings.  No investments. No financial plans for the future.
  2. The Middle Ground. At least 30% of the income coming into the house is going into savings. This is approximate to the recommendation put out by financial advisors today. Notably that most people are not following. There may be some savings, but likely there will still be debt and they will have a nest egg, but not the one that they like.
  3. Mustachian Savings. I am aspiring towards Mustachian levels of savings. The term comes from Mr. Money Mustache and his blog. He advises saving at least 60% of your income towards your savings. If you like his budget he has plenty of advice, most of which I’d highly recommend.

A few notes before we continue

  1. My rendition of a mustachian budget is not nearly as far as one could go. I suggest you check out this post if you want to see the yearly mustachian budget from the man himself. Just their basic living expenses are under 25k per year!
  2. The following example is to show you how powerful controlling your budget can be.
  3. The following budgets are based on things my family would buy and probably don’t include everything else that others might include on their list.

So let’s get to it. Below is a chart showing three different budgets.

Now you notice that in Budget one, there is little concern for paying off the debt in comparison to the other two options. Honestly, even putting that much extra is probably more than the average American family can put towards extra. They are spending more on food, gas, and well everything. They find a way to spend nearly all of their money on something. Their personal spending is high.

Budget 2 exemplifies something close to our current situation. I save a bit back each month (though I will likely change that soon).  I pay off a decent chunk of debt each month. We’ve curbed back how much we spend on sitters opting to use my homebound parents for shorter outings and sitters for prolonged absences. We don’t have the best insurances, but we have a little extra since we just paid off a car, which a mustachian would call a bad buy. We also make sure to turn off everything we aren’t using and we even keep somethings unplugged or have surge protectors turned off.

The third budget is cut the most. The cell phone is a small carrier, barely any babysitting time. They dry their clothes on the line to save electricity. They may even keep their heat and air conditioning lower than their peers during their respective seasons of use (I wish I could do this, silly medical problems). Less spending. Lowest coverage on the insurances. They probably don’t have cable at all, though they have internet and maybe Netflix or Sling. They save a lot of money to put towards debt and to later put away.

The Debt

So what does all that mean in terms of their debt?

Well, nearly every American has debt and many of us have it in spades. It seems inescapable. Most households are in the negative if you count their debt.  So let’s look at what would happen if you took all that extra money you saved each month and put it towards lowering your debt.

The following image is based on results from the debt calculator I shared.  It shows how much they paid toward their debt and how that affected the date they finished paying off the debt.

(Again based on my 80k debt)

We have four debts

  • Credit Card     3000
    • Monthly Payment: 100
  • Navient           5800
    • Monthly Payment: 100
  • Perkins            5700
    • Monthly Payment: 80
  • Fed Loan         64500

The first budget is looking at another 11 years to pay off that debt. I don’t even want to think about how much interest would be accrued and applied at that rate. The second budget will take another 6 years, over half that of the first. The final approach saves yet another three or so years.  The difference between the first and the third is over 8 years.

This alone should be enough to prompt you to put as much as you can towards your debt.

What about Interest?

Interest plays a large factor in how much you pay over the course of your loan. The longer you have to pay the more money they make off you.  So let’s take a look at how much each budget pays in interest over the course

Budgets:

  1. Around $36,300
  2. Around $17500
  3. A little over 9,000.

So not only do you get out of debt more quickly but the more you cut, the more you save in interest costs. If I could cut my budget this much, I could be saving 27k over the course of my loans.

That is mind-boggling to me. The massive amount of savings is enough to help me aspire to spend less and save more.

What would you be willing to do to save 27,000 dollars?

The point is, that we can bargain our future or save ourselves now. Why make just the minimum payment when we can take much larger chunks out of our debts? Paying off debt just makes sense.

The Next Step

Where do we go from here?

To the next step of course. But first, let’s take a step back and recap what we’ve talked about so far. We’ve:

  • Made a Budget
  • Started an Emergency Fund
  • Paid Off Our Debt

In the next post, I plan to continue with the theme of financial independence. I hope to cover the following:

  • Building the full emergency fund
  • Starting Your savings

Until next time, I hope you enjoy the links and have a wonderful day. Maybe some of the content here will lead you to financial peace.

Blessed Be.

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Financial Independence: Getting Started

Well, my grand plans to work on my teeth project has fallen through. I’m still waiting on the book. In the meantime, I want to talk to you about something else extremely important to you and your family…financial independence.

What is FI?

All of us want to be able to spend our money as we want. And none of us want debt or even bills. While it may be impossible to be free of all financial obligation we all can work towards freeing ourselves.  Financial independence is making the hard decisions now so that you can create a better future for yourself later.

It’s a journey I’ve been on for about a year now. And starting today I want to share my experiences with you.

My Journey So Far…

Long, long ago, in a city far away I took a course called Getting Ahead in a Getting By World. I learned a lot about communication, expectation, and how to begin pulling myself out of my slump. I had just had a baby, moved in with my parents, the father left. He was not mentally prepared for a child. While he loved her, he had asked me to give her up or abort her and we were on the outs.

I had no job. No prospects. I was lost.

The class was just an excuse to get out of the house.  It helped that I got a gift card that we could use for gas. My parents were paying for everything. I was on food stamps. I had a disastrous experience with TANF that will never allow me to recommend that program to anyone. On top of that, I was on WIC…a wonderful program that you should use if eligible.

I was going nowhere fast.

That class changed my life and got me a scholarship to do Dave Ramsey. Now, you might think that I’m about to tell you to go do the whole Ramsey thing, but honestly, Ramsey is a conservative way to start. Still great if you aren’t really to make a big leap.  It will give you the information and a general plan on how to fix your situation. But since I took that class nearly two years ago now, I’ve found bigger and better ways to fix my financial situation.

Baby Steps

What I do agree with Ramsey on is the idea of baby steps. And I do agree that his first couple of steps are beneficial, maybe even essential to what I’m about to tell you.

Step 1: The budget

My first suggestion is to figure out where you spend your money. Knowing where your money is going will tell you if that is in line with your goals and priorities. If it isn’t, then maybe you need to make a change.  When I started budgeting, I found out that we wasted a lot of money. I realized that my parents were underwater on our house, their bills, and they were in danger of losing it all. To the point that I ended up filing bankruptcy for them just to give us some breathing room to get us back on our feet.

Now I budget every month. I use Dave Ramsey’s free version of Every Dollar.  It’s a great and simple program. It lets me track my spending. It categorizes your budget into sections so that you can balance where you’re spending your money.

For example, for a rough estimate:

  1. 20% in housing
  2. 30% in bills/food, essentials
  3. 20% in lifestyle (food, gas, babysitting money, dad’s cigarettes, and our entertainment money)
  4. 30% debt or so.

These are all rough estimates. As I share my journey I hope to get a better idea of exactly where I spend everything while helping you determine where you may need to make some changes. All of this involves both of our incomes (my parents and mine) which total around 5k a month combined.

Our budget could be estimated to be close to this:

Parents: 

  1. Household (Rent, utilities, internet) 1800
  2. Other BIlls (insurances, cell, etc) 300
  3. LIfestyle and Entertainment (food, gas, household expenditures, and luxury). I plan on giving a better breakdown of this at the end of the month. 1150
  4. Debt: 180

My Income

  1. Savings/Investment (IRA/Index Fund) 200
  2. My spending 300
  3. My monthly payments 100
  4. Debt Reduction: EVERYTHING LEFT (approximately 900-1000 per month)

In addition, anything left in my spending also goes towards either small events I save up for or paying off more debt.

Step 2: Partial Emergency Fund

The first thing I learned in Dave Ramsey is that you need an emergency fund. I suggest at least 500-1000 to start. Just enough to keep you afloat is something goes wrong.  This is in following with his teachings as will most of the next step.

I urge you to do this.

Everyone needs to have just a little bit of money held back. I learned this lesson pretty quickly. Right after we got ours funded, the roof gave. While we did it ourselves, even with insurance paying us the money, we still needed $1,200. With that emergency fund, we only had to scramble for an additional 200 instead of the whole amount.

It was sad to give up that money right after finishing it for the first time, but it was amazing to not have to entirely freak out about how I was going to pay for that roof repair.

Now, if you look above at the prior section, you will see that I do save/invest some money each month. It is entirely up to you how stern you want to be with the rules here. Personally, I want to make sure I make my max contribution to my IRA each year and that requires me to not put quite as much towards debt. The sooner you begin to build your retirement fund the larger it will be. So keep that in mind when planning for your future.

Step 3: Debt Snowball

I completely agree with the idea of the debt snowball. However, I couldn’t do it exactly the way Ramsey suggested. Do what works for you. If you want immediate rewards to build your momentum, then do the debt snowball.

Ramsey suggested that you start with the lowest balance.  That is where I started and it served me well for at least the first year of my debt reduction. After a while, however, I became more interested in the interest I was paying. I realized that for me, at least, it was better to go from highest interest rate to lowest.

I would much rather pay off the debts that incur more debt (in the form of interest) than those who are creeping my numbers up.

My situation looks something like this

  1. Credit Card: ~3200
    1. Monthly Payment: 100
    2. Interest Rate: 11.99%
  2. Perkins Loan ~5500
    1. Monthly Payment: 75
    2. Interest Rate: ~8%
  3. Navient Loans: ~5700
    1. Monthly Payment: 100
    2. Interest Rate: 6.8%
  4. Fed Loans: ~65000
    1. Monthly Payment: 0  (It’s on an IBR and I’m putting it off for now)
    2. Interest Rates: Between 2.5% and 6.8%

Currently, we are putting between $600 and $1200 towards debts each month. Based on the debt reduction calculator I use I will have it paid off By December of 2024 unless I can find more money to put towards it.

I could, of course, stop saving that would change my date to October 2024, but two months isn’t enough of an incentive for me to stop saving for my IRA. A better solution would be to look at what you can cut. The more fat you can cut from your budget the easier it becomes to kill that debt before it can crush you.

A Friendly Reminder

I hope that my journey so far can help you find that freedom as well. In the past two years, I’ve eliminated 2 credit card debts and a car loan freeing up over $400 dollars. We were able to move which lowered some of our payments for insurance and utilities. I also managed to get paid more for working at home by moving to the Indy area and gained more hours.

None of these things would have likely happened if I hadn’t started on this journey.

Also, realize that as time goes on your family’s needs may change. I hoped by this point that I would also be putting all of that 400 or so towards paying off more debt. But that hasn’t happened.  Things have changed. While we have lowered many of our expenses, changes in health have caused some of that money to go towards other endeavors.

You wil have setbacks, but financial freedom is a journey not a destination. It takes time, patience, effort and persistence to make it through to your ultimate goals, whatever they may be.

Which Leads Us To…

The next post!

Next week we are going to focus on how to break down your budget and see where you are wasting money.  There are tons of things you can do to lower your costs by a little or a lot.  It won’t be easy, but I hope together, we can take a look at our finances and lead ourselves towards a better future.

I want my child to know that she doesn’t have to rely on credit cards. I want her to realize we can sacrifice now for a better future later. By changing my habits now, I can be a better financial example for her than my role models have been for me.

If you want more information on this topic…I recommend a number of blogs. Check out the main page to see which ones may help you find your way to financial freedom.

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Homeschool Idea: Feedback Needed

So I’ve been continuing to work on my homeschool idea for creating a curriculum that is easily accessible to parents and their kids.

Personally, I’ve been taking a lot of classes on Udemy and I’ve found them very useful. I’ve also found a lot of cute and potentially good courses for Freya to take when she is a bit older. With that in mind. Tell me what you think about using Udemy. I want to know if you believe this could be a good platform for pagan/homeschool cirriculum.

Until next time,

may your new year be amazing and full of fun and adventure.

Wyrd Mama

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Announcement: Delays

No article this week.

I wanted to start my study on teeth, but I’ve been delayed. I’m waiting on a few books from the library. In addition, the little one is struggling with my boyfriend moving out. No worries we are still together, he just couldn’t handle living with my parents.

This is not to mention the cpap issues as well as the plumbing issues. Between dealing with all these things I just can’t seem to get enough time to sit down and do more than this little announcement. I hope everyone has a great week and I’ll be back next week with more info….if not about teeth then about something else on my ever-growing list of topics to cover.

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Limits: What to talk about

Part 4 of our Limits discussion, and the last one….whoo!. I know it been a lot to get through but this final topic should help you pull together your plans for a chat.

If you are just joining us, check out the links for part 1, part 2, and part 3.

Today I’m going to share the things I have included in some of my talks with my parents. I’ve tried to think of every bump in the road we’ve encountered. I’m sure I’ve missed a few, but I’m hoping that I’ve at least caught the most important. Any of you who think of something I’ve missed, please message me below and I’ll get it added here for anyone who may need it. As always I want this to be a place of support with as many viewpoints and ideas as I can manage to get out there.

With that being said, let’s get to it!

Limits: What to talk about?

Personal Space-

This one continues to be a problem in our house. We all live together. You have to figure out what will work. Right now I have “office hours” or hours that are supposed to be my own. With my situation this only kind of works, but part of that is the toddler. Recently, we’ve been talking about me getting my own place and just having a room here for me and the Valkyrie. That way I have a place to stay if I need to stay the night for some reason. Or maybe you just need a room where you can have some time to yourself. Again think about what you want before you go talk to them.

Discuss feelings

Make sure that each thing you talk about is mutually beneficial. In my case, my parents live in the living room. It’s easier for mom to move around that way. However, they want time to talk as a couple. And they want time apart from each other. One of our recent discussions worked out how mom could get away from dad both in and out of the house with her limited mobility. We also had to have this discussion when my mom started receiving counseling in the home. In the end, we set her up in my little one’s room and no one goes back there. Simple enough.

What you will and will not do

I personally draw the line at wiping asses. Just saying. At one point I had a problem with giving a sponge bath. You’ll find over time that with necessity and acclimation your limits to such things will change. Recently, we started giving my mom showers. Even more recently, she decided that she wanted to be able to do as much of it by herself as she could. Since then we’ve started working on that.

On this one, I would also think about smaller things. One of my biggest pet peeves has always been being asked to do something that the person is perfectly capable of doing themselves. It’s one thing if its on occasion or while they are in the middle of something. However, it gets old really quick if someone takes advantage of it. Just an example.

Setting a schedule

I would make a plan for when things will be done. My parents know that I will always make breakfast. I have a list of chores that will get done each week. Mom knows what days I give her a shower and what times I work. We have a bit of trouble sometimes with the difference between my schedule and her sleep schedule, but that is a part of the reason we’ve considered me moving out. To create the boundary that helps her realize when I get to have a life and when I’m helping her.

I know this isn’t possible in all instances. If you have to provide 24-hour care, your boundaries may look a lot different. Or they may be different just depending on the needs of those you are caring for. Your boundaries may be that you get time to yourself while they have respite care. Or when a caregiver is in the house, if you aren’t the aide. Just keep these things in mind as you make your plans and have your discussions.

Maintaining a life

This is important. You have to make sure that those you take care of realize that you need time to yourself. No you cannot run off every night and party, but maybe you have a date night, gaming night, and a night on the weekend. I make it a priority to get out of the house at least two times a week just for me. It doesn’t always happen. And no, this does not include grocery shopping for the family. At least it doesn’t for me. These should be fun moments away to ease your mind.

This also includes other obligations. I run a group. I’m working on building my own businesses online. I have obligations to the little on with homeschool and everything else. I have to balance those things with what I do for my family. Eventually, this may mean me not being the aide. Actually, I kind of hope it leads to me not being the aide.

Extent of Care

Talk about the extent of the care. What will you be doing and when? Who else can help? What agencies can help you fill the gaps?

Who is financially responsible for what when applicable? That one is incredibly important and can get messy very quickly. My personal suggestion is to not blend the finances. It is way easier to keep two books than to blend the finances.

As I said before, these are just some things based on my own personal experience, that you should think about when having these discussions. Based on your own situation and those you are caring for you may have more or less. I would love to hear below if you have anything you had to discuss that went beyond the scope of this post. Something I hadn’t thought of or experiences that might benefit someone else. I will update this post if needed as well. My goal is to help other floundering or fledgling caregivers find their feet and avoid even a few of the mistakes I made along the way.

Blessed Be.

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Building Limits

The last two weeks we looked at the beginnings of building limits and boundaries. We did some exercises to determine where they lie and how to start forming them. However, we haven’t talked too much about why they are important. I was so focused on the realizations I’ve had the past couple of years that I nearly skipped it.

However, I’m glad we did the rest of that work. Honestly, as important as why is, it’s more important to start working on it. Many times we find ourselves already in a bind before we start making these changes. Hopefully, none of you got to that point, but if you do, remember you can always pull yourself back out.

Regardless, today we’re going to talk why and giving some further tips that may help you get everyone else in the house on-board with the changes you may be making in your life and theirs.

Boundaries and Limits: What happens when you don’t have them?

1. It can affect your relationship with the person.

All relationships rely on boundaries and limits. When you act as a caregiver it is very easy for those lines to get blurred. Where do you draw the line between your duties as a daughter/son and your duties as a caregiver or CNA?

As far as my company is concerned, I am a dedicated worker that goes above and beyond. There are things I do as a family member that other workers wouldn’t be able to. Or wouldn’t want to do for liability reasons.

For example, I make up the meds. I try to do it off shift to stay on the up and up, but that doesn’t always happen.

If you lean too far to the family side of that line, you can get yourself in trouble if you’re working for a company. If you veer too far in the other direction, you may not end up meeting all their needs or causing a personal rift between you. I’ve been on both ends of the spectrum. It’s hard to find that balance.

2. It can get very uncomfortable….very quickly

When you don’t set clear boundaries, those you deal with are going to seek out definition in their own ways. They will test regardless, but if you put no limits or rules in place, they will push to see how far they can go. People need to know what you are and are not willing to do for them.

When you don’t set clear boundaries you can end up doing things you probably shouldn’t be doing. I met a caregiving daughter once who bought her mom pot. While I don’t philosophically oppose the idea, it is currently illegal in most states and remains illegal on the federal level. Either way, this daughter was running errands for her mom, got caught and lost her job. Worse, her mom was without a caregiver for a couple of weeks until they could find a company willing to accept her. Worse, the daughter nearly ended up in jail time for petty possession.

It’s not worth it. And if you had asked her before she started caring for her mom…that would have been a hard limit for her. However, the lines got blurred due to lack of clear boundaries and concern for her mom. Concern is all well and good. I won’t condemn that. However, if she had put her foot down she may not have ended up in that predicament.

3. You can harm yourself or your loved ones

I’m just going straight for the personal example with this one. I’ve had back problems since about third grade. I was injured and my back has never quite worked the way its supposed to since. Disk and alignment problem. Yuck. And that’s in addition to the problems I have with my wrists due to my own youthful stupidity.

My mom isn’t a small lady. She currently weighs, as of this writing 233. Getting her in and out of the car and up and down the ramp is a bit difficult. I’ve hurt myself a few times. Now, this isn’t something I can change right now, but it is a part of the reason I’m working towards being able to scale back.

Someday it might not be a minor injury. Someday she could get hurt due to my lack of physical capability. I don’t’ want that. Nor do I want to be unable to work or care for my daughter.

My point

Boundaries protect both you and them. While I”m sure I could come up with more reasons, I think what I’ve already shared is more than ample reason to be concerned about boundaries and limits. These are just a few cautionary tales. Limits are important both mentally and physically. And we need to be looking out for everyone’s best interests, including our own. I know it’s easy to forget about what you need in all this or to just keep going. But think about them. Think about your future. Really think about what is best for everyone involved.

Now let’s get to those tips and tricks

How to build boundaries

We’ve already talked about how to determine limits in part 1 (add link) and we did some exercises in part 2 (add link).

Remember these are very personal questions with no right or wrong answers.

Once you have in mind what may need to change you are going to have to sit down with your family. This may just be the person you are caring for. Or it may include siblings and others who are willing to help.

A Needed Explanation

First, you need to explain why this is happening. Change is exceedingly scary, especially when you cannot care for yourself. If you are just taking over the care, you will need to do this as well. Many loved ones are resistant to giving up their independence. They may not even realize that they need your help. However, if they can no longer cook, clean themselves, or perform activities of daily living (ADL’s), then they need to understand that they need help if they want to remain as independent as possible.

If you’re having this conversation at the very beginning its easier, but I wouldn’t say its always easy. If you’re renegotiating, it will likely be much harder. They may be comfortable and remember change is hard. Your loved ones may not think you are serious depending on how much change you are suggesting. They may think that they can get you to compromise far more than you are willing to do. Either way, just remember that this is scary for them. They rely on you and anything you change affects them.

Compromise

On the note of compromise, yes, you might compromise some. However, you have to remember that you are balancing your life so that you can provide the best care for them. While you don’t want to be rigid in your expectations, you can’t be too flexible. Remember, if you can’t function doing x,y, and z or it hits one of those limits…you have to be ready to put your foot down.

I personally suggest having a list of the limits and boundaries you want to discuss. And keep it a discussion. Don’t let it turn into an argument. If it gets too heated be ready to walk away.

Biting off more than you can chew

And you never know, they may have things they want to talk to you about. Maybe there are some things they can take over. It’s also a tendency of a caregiver to take over things that they don’t necessarily need to take over. They may be too afraid to talk to you about it and this may give them the chance.

And realize, that in some instances, you may not be able to have this discussion. Depending on how incapable or capable they are, there may be a point where you are just making these decisions as if they are children. It hurts both you and them. It makes you feel like shit. I find this to be very true with my father who is diagnosed with Dementia. Sometimes, he just isn’t capable of having a discussion or making those decisions.

What’s Next?

You have to be prepared for that as well. However, hopefully, if you do this from the start or start early enough, you won’t have that problem. You will have already discussed what they want you to do so that you can make the best decision possible for both them and yourself.

That’s it for today. Tomorrow I’m going to post the last section in this series. I’ll share with you the topics I would put in my discussion and why.

Until then remember that you’re doing this because you love them and you love yourself. You do this job because you want to see them get the care they deserve from someone who loves them. Keep your chin up and keep trucking. I know its hard, but with a little bit of support, we can all make this uphill battle.

Blessed Be.

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