Beating Broke

Personal Finance from the Broke Perspective

All Is Not Lost

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I can’t tell you the number of times that, in our seemingly never-ending struggle with debt, that I’ve seriously contemplated just giving up.  Just throwing in the towel and saying f-it.  You know it’s bad when you catch yourself fantasizing about it.  About how much easier your life would be without the struggle.  Just declaring bankruptcy, taking the hit on your credit score, and moving on with your life.

Even now, after having written about personal finance for over five years, I still find myself in that place occasionally.  We let our budgeting lapse, and inevitably our spending gets out of whack again.  Something happens, and the emergency fund just doesn’t seem to cover it all.  Or, worse, doesn’t seem to replenish itself as quickly as it should.

someecards.com - I can't believe I work this hard to be this poor.I can try and lay the blame somewhere.  That always helps, right?  If it isn’t my fault, then I can’t be blamed for it.  I can’t be the one that everyone points to as the failure.  I can deflect that attention to someone or something else.  That helps.  Until it doesn’t.

Every single time, it’s really me that deserves the blame.  It wasn’t the boss that refused to give me a raise.  It wasn’t the heater in the car that needed to be fixed.  And it certainly wasn’t the kids that needed to eat.  It was me.  Every.  Single. Time.

I failed to negotiate the raise.  I failed to have enough saved up to make that repair.  I failed to budget properly to make sure that we wouldn’t have to cut corners at the grocery store.  Me.  I did that.

I could just give up.  I could miss having to work harder to be paid appropriately.  I could miss having to pay attention to my budget to save money for car repairs, or to pay for groceries.  I could do that.  Giving up would be so easy.

Until it isn’t.

Need Money Quick? Have a Flash Savings Challenge

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The last few months have not been kind to my family.  As Dave Ramsey says, “Murphy came to visit.”  Within the last few months, I have had several medical tests run, my computer broke so I had to buy a new one, my husband’s pay was docked $750 for two months in a row because his employer didn’t take out enough taxes, and my husband had to pay $1,700 out of pocket for a conference for work and we are waiting for reimbursement.

IOU Piggy BankBecause we were trying to pay off as much as possible as quickly as possible on our debt, we had very little in emergency savings (only about $1,000).  All of our unexpected expenses cost much more than that, so we not only used most of our emergency fund, we also added to our credit card debt.

Because we had paid down our credit card debt for 10 straight months, having to add to it for the last two months was difficult.  Even though we didn’t come close to erasing all of our progress from the last year of gazelle intensity, we definitely knew we were moving in the wrong direction.

Righting Our Situation:  A Flash Savings Challenge

My natural urge, now that everything has settled down, was to once again try to throw as much on debt as possible.  While it might have made me feel better in the short term, I realize that the next time Murphy comes to visit (and I know he’ll be back some time), we would end up in the same situation.

Instead, my husband and I decided to focus on growing our emergency fund, and quickly, before hitting the debt hard again.

Paying the minimum on our debt for the next few months so we can grow our emergency fund is almost as difficult as watching our credit card balance increase the last two months, but we both know a healthy emergency fund is necessary.  Since I am self-employed and bring in 1/3 to 1/2 of our income and work can sometimes be sporadic, we decided not to follow Dave Ramsey’s advice of a $1,000 emergency fund (because clearly that was not enough last time); instead we are aiming for $5,000.

To get started, we challenged ourselves to have $3,000 in our emergency fund by December 9th.  We started with $611 in the emergency fund, so that meant we had to come up with $2,389 in 4 weeks.

How We Are Earning $2,389 Extra in 4 Weeks

We are only one week into the challenge, but here is what we have earned so far:

  • Sold my 8 year old breast pump: $60 (Yes, it has been sitting in the basement for 7 years.  Why didn’t I sell sooner?!)
  • Sold 2 window guards to protect kids from falling:  $40
  • Listed my kids outgrown clothes on eBay:  $124 so far, but the auctions won’t end for 2 more days, so I imagine it will be more
  • 3 unexpected jobs I got as a freelancer:  $64.67
  • Turned in our change in a jar:  $62.67
  • Returned unopened vitamins I didn’t need:  $32
  • Redeemed 10,000 Swagbucks for PayPal cash:  $100

Our total so far, one week in is $483.34

Over the next few weeks, we intend to do more things to raise the additional money:

  • Put my husband’s reimbursement check in savings
  • Cash out reward points from our credit card and use them as a credit card payment.  Put the same amount in our savings since we won’t have to pay that money on the credit card
  • Put more stuff on Craigslist and eBay (We have kids’ clothes, toys, and equipment to list as well as some of my husband’s tools he hasn’t used for years.)

Why  a Flash Savings Challenge Is Working for Us

I have known that I have a lot of stuff to sell around the house, but I just never got to it.  Now, because we have set a short goal of just 4 weeks and also an ambitious goal of over $2,300 to raise, I am motivated.  Yes, listing all of this stuff is time consuming, but it is nice to get some money in the emergency fund to make us feel more secure, and I also like getting rid of our “stuff”.

If you have extra stuff around the house, especially toys and holiday clothes, now is the perfect time to sell it and make some cash.

Have you had a flash savings challenge like this?  What were your results?

img credit:Images_of_Money, on Flickr

Early Morning Reality Check

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Early yesterday morning, I awoke to my wife jumping out of bed.  “Do you smell smoke?” She asked.  Let me tell you, there are few things that will pull you out of that just woke up groggy state than a question like that.  And, sure enough, I did.  A quick check told me that there was no visible fire or smoke in the upstairs portion of our house.  It wasn’t clear what the source of the smell was.  I quickly ran downstairs to check the rest of the house, fully expecting to find a smoldering spot somewhere.  Nothing.  Down to the basement.  Nothing.  Back upstairs.  Still nothing, but the smell is still there.  I went from room to room, floor to floor, sniffing the air trying to pinpoint where the smell was strongest.  The good news was that it wasn’t getting any stronger, but I still didn’t have  source for it. The only thing that I can find is that the furnace doesn’t seem to be working.

By this point, my wife has gotten the kids up, and is working on getting them dressed just in case we have to make a hasty exit from the house.  There isn’t any immediate danger, I don’t think, but you just never know.  It just so happens that a close friend is a member of the rural fire department here.  We’re in the city fire department district, but it doesn’t hurt to ask, so we called him for some quick advice.  I quickly fill him in, and he suggests that I call the city fire department and have them come check the house for carbon monoxide and also do a hotspot check with their thermal imager.  I certainly didn’t have to be told twice, so that’s exactly what I did.

A couple firefighters show up, give the house a quick once over and come to the same conclusion that I have.  The furnace has gone out.  And, for some reason, has filled the house with the smell that we awoke to.  They can find no hot spots, and the CO tester is not indicating any CO threat.  We cut the power to the furnace, and everyone agrees that there is no immediate threat.  We can go about our business.  Well, with the exception of calling the furnace repair folks in to figure out what’s wrong with the furnace.  Some of you might not think it’s a big deal, but we still haven’t seen 30 degrees in March.  The nightly lows are in the single digits.  In just the short time that the furnace has been out, the temperature in the house has dropped 10 degrees.

Gas Furnace Blower Motor -- IMG_9823I called the furnace repair company, and, to my surprise, they sent one out right away.  Luckily, I caught the guy as he was headed out the door for a call, so he could easily be rerouted to our house.  A couple hours later, and we had a working furnace again.  Turns out, the blower motor that pushes the air through the ductwork and into the house had stopped working.  It lost its bearings.  Literally.  The result was that it started to leak some lubricant oil and actually melted some of the electrical work in its housing which is what made the stink.  The company bills for the repair, so we only have an estimate as to what the cost of the repair will be.  The repairman thinks less than $200.

We’re lucky.  We’re lucky, because our house didn’t catch fire.  We’re lucky, because we aren’t trying to figure out how we can live out of a motel room until our fire damaged house can be repaired, or, worse, until we can find a new house to replace our destroyed house.  We’re lucky, because we aren’t trying to figure out how we’ll replace any of our belongings.  We’re lucky, because we’re safe.

But, to a lesser degree, we’re lucky, because we can afford the repair.  It wasn’t that long ago that an unexpected bill for $200 would have had us wondering if we were going to have to choose bills to go unpaid.  But, we took control of our finances.  We’ve got a long way to go, but, a $200 emergency doesn’t mean that a bill goes unpaid.  And, that makes us feel safe too.

photo credit: stevendepolo