Six Figure Debt

We have finally funded our emergency fund %100.  With the economy still sluggish we have adopted the “cash is king” philosophy and have fully funded our emergency fund.  I have a 90 day payout in my current employment contract so we are fully funded for 6 months.  It wasn’t easy but my wife’s job and my employment have allowed us to get to this point.Our small business is still a struggling but we believe that the second quarter of 2010 will bring great rewards as we continue to build a future for our family.I will have a more complete update soon…

Now that Mrs Bad Spender and I are employed and in the process of debt reduction we have put together a budget to accomplish our goals.  Our goals are to be debt free in 12 months, start contributing to our children’s college funds again, save for a vacation and to begin rebuilding our wealth.  This budget is our first attempt to get our finances under control, we actually started budgeting last month but we needed a month to tweak it before we were ready to lock in our figures.So, this is our December budget and we have not strayed.  We even subtracted money from the “entertainment fund” because we really don’t go out that much anyway.  We used the money to purchase Christmas presents for the kids and added some to the Emergency fund.  The budget is a work in progress, we will continue to squeeze more and more money from it to repay debt, but we really need to get the Emergency fund fully funded.

After I wrote my last post, I received not one but two calls regarding potential employment.

I interviewed with job # 1 on Friday.  The position is within my field, not exactly what I am trained to do, but a position that certainly is within my skill set and one that I am qualified to do.  The interview went great and I am confident that I will get an offer from this company.

My situation is a little different because when I married and had kids I had a good job, a healthy 401k and equity in my house.  Through a series of poor decisions and  a major job loss I ended up with over $140k in secured and unsecured debt.  The normal signs of trouble weren’t there because almost half the debt is housing losses and business start-up capital that I used on my home equity line.

Many of us do however see the signs of financial trouble before they hit, and either ignore or don’t recognize them, here are 8 signs that you may be in financial trouble.

My wife and I are always on the lookout for ways to trim money out of our grocery budget.  The money we spend on food is one of the largest expenses in our budget every month, experts estimate that the average household spends 30% of it’s monthly budget on food.  I can across this article on Yahoo finance and it lists 7 ways that grocery stores rip you off.

The author suggests these 7 tips to save money on your grocery bill immediately. 

My wife and I have finally decided to look for another house to rent.  We can’t purchase a new home because we already own a home in another state, thank GOD it is rented or who knows where we would be financially.  The renters cover everything, including the taxes so the house is a break even proposition for us.  Without the renters we would be forced to short sale or worse, foreclose.

January proved to be a good month in our debt reduction quest.  As you can see from the graphs on the left, we made a significant dent in our debt.

Overall we reduced out outstanding debt by  $4261.38 in January alone.  We are using Dave Ramsey’s debt snowball and I am really encouraged by our progress.  I have a great spreadsheet that I downloaded and I pay the exact amount the spreadsheet says to pay every month, it is amazing how disciplined you can be when it is layed out for you.

Its been almost a year since I made the LAST payment on my car and it feels great.  I doubt I will ever own a new car in my life again unless I can pay cash for it.  I simply have no interest in having a car payment again, EVER.  I may continue to buy a newer used car for my wife, but we don’t want the cost of owning a car.  Think about the payment and insurance for a second.

The other day I was wandering Wal-Mart picking up a few things for my wife’s business when I came upon the iphone in the electronics department.  I need a new phone as my two year old Motorola Q for some reason isn’t downloading my e-mail anymore.  I really rely on my Q for business and personal e-mail so I started to think I should look for a new phone.  Wal-Mart started selling the Apple iphone for $197 this month so I figured I would take a look at the phone.  The one at Wal-Mart for $197 is a 4 gig, which is likely just fine for me, the 8 gig model is $297.

I ran across this article in a Detroit Newspaperand it actually echoed some of my feelings regarding the current economic situation. 

“Many years ago — long before anyone started talking about a credit crisis — my mother stopped borrowing money, telling anyone who would listen that credit cards should be used “only in an emergency.”