Financial goodness - about time!

So, unemployment has finally decided I was available for work while I was unemployed. Almost 3 months after I lost my job, and two weeks after I started my new job. The money should be in our bank account by Wednesday.

I also got my first paycheck. This is the really big news: I assumed 20% of our income would be paid to taxes, to be sure that I wouldn't underestimate when budgeting. I was waaayyyy over . . . by over $600 / month. We've gone from being $100 / month short of covering our current expenses to having over $500 a month to pay into debt. Wow. Good thing I took every exemption that we qualify for! We still have a long haul to pay off our debts, but now we can actually start estimating a realistic end date.

The only bad news is that two nights ago, I again went through the exercise of summing up our debt. We are going to need a roof replacement, which we've already arranged for. I think we got a fair deal arranged for that, and we have 0% / 0 payments for one year financing so we won't get hit with a bad APR (I really think we can pay it off in that time), but still - it's another huge addition to the pile of debt. We have a small mountain ahead of us, and we were debt-free just last July. Even with these bits of good news, it's clear that we probably won't get out of debt as fast as we went into it. Unless, of course, DH gets a job.

Oh, one more good piece of news! DH's studies for his Network+ certification seem to be moving along nicely. I'm really impressed. He's going to start self-testing to see if he's ready this week, and then will either schedule his exam or settle down for another four weeks of winter . . . I mean, studying.

Anyone tried MagicJack?

I ran across a gadget that is supposed to allow you to have free phone service anywhere in the US for $40 for the first year, $20 for the second year. Yes, that's right. They bill by the year. It's called MagicJack.

It doesn't look like a scam at all. They were reviewed by PC Magazine, and orginally got an Editor's Choice. However, then PC magazine received complaints about MagicJack, looked into them, and updated their opinion. PC Magazine's end conclusion: "From a technology standpoint, the magicJack is a very interesting device. I like it very much and have no hesitation in recommending it—but only to tech-savvy users." Basically, the product can be difficult to set up if your system isn't perfect, can have problems at low bandwidths, and the tech support stinks.

We're thinking of getting the MagicJack to replace our AT&T VoIP. That's a cost of $10 in the first month over our current phone service, and savings of $30/month for the next year. We could then afford to keep the cell phone, using a pay-as-you-go plan, so that we have something when out of the house. But hearing from someone we know who has tried a MagicJack first would be nice. Is this really something we want for our primary phone?

Squeezin' the budget

Here is where I post our financial details. In public. Because I have no shame, and very few people I know read this anyways :-) I wrote this post in parallel with the last, so you might want to read that one first.

Our expenses are:

• food & groceries
  
• phones
  
• Internet
  
• Water/sewer
  
• Electricity
  
• Gas (PSE)
  
• Garbage
  
• Mortgage
  
• debt
  
• car insurance
  
• gas
  
• car maintenance
  
• health insurance
  
• taxes
  
• charity

Category-by-category, here is how we can trim:

• Groceries: I'm in charge of shopping and pre-prepping dinners. Our current strategy is to only buy at Cash 'n' Carry, excepting milk (which we need to buy a little more often), hygiene, and pet care stuff (the last two aren't at Cash 'N' Carry). Since we're planning on retiring the car for a bit (see below), we'll shop there about once a month with a shopping buddy (probably my MIL, as this will be mutually beneficial) who can help us out with a car - in return for help scouring ads or a frozen meal. I'm pretty good at combining low-$$ with high-nutrition, and handy enough with spices and sauces that things still taste good - so we will be going pretty cheap. I can't say how much this will save us - I have $400 budgeted for groceries (including personal hygiene & pet stuff) at the moment and that's been pretty accurate in the past, but it will take time to figure out how much lower this gets us. Savings: Unknown, hopefully $100 / month. Schedule: Already started.
  
  When we have a bit more time, we can night-potty-train the girls so we can quit buying diapers. They are pretty much ready, but we the parents need to be prepared to get them up in the middle of the night to go potty until the girls are prepared to handle that on their own. And handle the inevitable accidents that will happen until they can remember upon waking that they are no longer wearing diapers and need to go to the potty. Savings: $20 to $40 / month. Schedule: Need to discuss with DH; hopefully 1 month, April 17th
  
  
• Phones: We have two phones right now - a VoIP land line, and a cell phone. The VoIP line is just over $30 a month. THANK HEAVENS we were smart, and did a Pay-As-You-Go cell phone plan! Saving money on our phone bills was as simple as stopping automatic payments for it - no contract!!! In fact, we like it so much that we may switch to two pay-as-you-go cells and no land line. First, we need to figure out how much a cheap cell phone for me will cost. Then, we need to estimate how many minutes per month we use our landline for to be reasonably sure we'll actually pay less (Pay-as-you-go doesn't have free minutes) and guesstimate how long it will take to recoup the costs of the new phone. Finally, we can then continue to reduce our phone costs by reducing our minutes - by using alternate communication methods, like a public blog for friends and family (my family doesn't know about this blog, or I wouldn't post so much personal info . . . funny, huh?). Savings: Guessing $10 to $20 / month, after recouping costs of new cheap cell. Schedule: Start the process in one week - March 30th. Be done with it in two more weeks - April 13th, in time to go car-free.
  
  
• Internet: We may be able to switch to DSL with Verizon. We need to see if they have service in our area, and what the costs of quitting Comcast and starting with Verizon are. We might be able to negotiate on start-up fees or use a lower-cost option to negotiate with Comcast. Savings: $20 to $30 / month. Schedule: Start looking into this with the phones, and be done on the same timeline (March 30th to April 1st).
  
  
• Water / sewer: Water-saving will take a lot of effort and habit-building for us, as we are not extravagent users. It would take a lot of discipline to save $10. This isn't something we worry about until later. I think sewer is a flat fee, so no thoughts there. When we do get to water, some things to look at: Rain barrels, for yard care water. Washing dishes by filling up the sick. We could probably cut down water in the girls' baths, but not for DH and me - we're already pretty low-water for self-cleaning.
  
  
• Electricity has some of the same problems as water: It requires habit-building. This is slightly higher-priority than water, as there is more we could do with less effort: Turn off computers and monitors each night. Maybe do an inspection of our lightbulbs and see if we could switch to lower-energy bulbs. Get a night-light for the cats instead of leaving the garage light on all night (they weren't using the litter boxes when it was too dark in there, and the motion detectors don't pick them up).
  
  
• Gas (for heating & cooking): We've done most of what we can easily do here. The house gets heated to 70 degrees at 6 AM for people to wake up. It gets heated to 65 degrees or so at 7 PM for baths and bedtime. The rest of the time, it's allowed to cool down to . . . I think 50 degrees. Maybe 55. We could adjust by 5 degrees here or there, and may be able to use space heating - but this is lower-priority, between electricity and water. We're not gong to try and reduce cooking gas.
  
  
• Garbage: Someone mentioned being able to change size of containers and pickup frequency. Not sure if this is available to us. It's worth looking into once we've handled everything else not low-priority on this list as it is very simple. Savings: $5/month. Schedule: 5 weeks to start - April 27th. One more week to conclude - May 4th.
  
  
• Mortgage: We might benefit from some of the new programs being rolled out. A superficial check with our mortgage holder said that we will probably be eligible for both of the programs they are offering (but might need to pick one). I'm not counting on this, but it's helpful to keep in mind. It might also allow us to sell our house (probably upside-down on the mortgage due to dropping real estate values and no-down-payment mortgage right now), although DH and I have only considered that option in passing. I think DH would rather keep this house, and not sure if he is willing to give it up so that we can live off of his income when he returns to work. Obviously, we're making this pretty high-priority right now! Savings: Up to $650 (current mortgage - 38% of our income) under one plan, and not sure about the other. Schedule: ASAP, as fast as Countrywide or Bank of America (whoever owns the mortgage right then) will allow.
  
  
• Debt: Yeah, yeah, we know how to reduce this already. Dave Ramnsey, debt snowball, yadda yadda. Been there, done that, ready to do it again. We're starting with minimum payments on non-mortgage debt of around $200 ($40 for college, $160 for credit cards), and that will be going down to $0 as we pay off debt with all the money we're saving with all these changes we are making. Savings: Up to $200 in minimum fees, plus something like $150 / month in APR being added to our total. Schedule: ASAP, after 1 month's expenses and $1K savings in bank
  
  
• Vehicle costs (insurance, driving gas, maintenance): If we go "car free" (quit paying insurance and quit driving, leaving the car in the driveway and using it as outside storage) we can get rid of insurance, gasoline, and maintenance. Yes, we know what we are looking at in terms of effort; we've done this before. We have a P&R about 1 mile from our house, so we can still take trips into the world for the cost of bus fare. I'll have to research commuter / reduced car use incentives that may apply - we might be eligible for free bus passes, etc. The biggest change will be giving up Rosary Group, but I even have a plan for handling that (I am crafty!). I will probably send out an email later this week. Savings: $100 to $300. Schedule: In 3 weeks - April 13th - to give time for my new commute to settle down.
  
  
• Health insurance: We will be only insuring me with my employer; DH and the girls will instead join a larger-deductible individual plan that we found online. The girls may qualify for cheaper state insurance, but that will take a couple of months to get working - if so, we can change their and DH's insurance plans (without waiting for an enrollment period, or having coverage gaps!) and save about another $40 a month. Seriously, I had no idea individual insurance like this was out there. eHealthInsurance - if you want to check it out. Savings: $168 / month. Schedule: DH and the girls have already applied, and should be insured April 1st. I need to get my application in by tomorrow, and should be insured April 1st.
  
  
• Taxes: Right now I'm having an extra $15 a week withheld to cover taxes from my unemployment. But we should probably drop that, and focus on our current expenses. We're likely to be getting a small refund anyways, so paying extra probably doesn't make sense. I think I've taken all the deductions I can on my W-4, so that will help. And yes, we've already received this year's income tax refund.Savings: Well, not technically savings, but $15 / month right now instead of either a refund or payment at next year's tax time. Schedule: Ugh, should give this time to avoid paperwork snafu's. Let's say, 7weeks: May 11th
  
  
• Charity: This is new to our budget (because we are selfish, selfish people *shame*), but something we need to start planning for (and, to be honest, I promised God we'd do this once I got a job . . . before looking at our budget). Under these circumstances, understand that I am *not* mentioning this to brag, LOL. Rather, I'm putting it up here so that I will feel committed to it and will see it as part of our monthly "expenses". Since we are out of "treasure" right now, we will be donating time and talent - time will be proportional to my working hours. We are creating a schedule for this right now. I has me some fun ideas about how to "spend" this *grin*. Not sure if DH is willing to help with this beyond the support role, but he could also "spend" some of this time on a charitable cause he wishes to support. Savings: $0 (new to our budget). Schedule: Start immediately with planning, try to get in our "donation" of time for this week by EOD Saturday.

Anyways, these changes should help us move from a budget where expenses slightly exceed income to something that will allow us to pay off a couple hundred dollars of debt or more each month. If anyone sees something we missed that could save us money, please leave a comment!

As for clothing, gifts, etc. - not in the budget. Freecycle, trades, begging from friends, and other free methods only! Home repairs are a potential biggie not in the budget, and I know this. We'll be keeping one month's expenses plus $1K in our bank accounts once we build it up, but anything bigger will have to be handled with yet another loan. The best way to be secure against major repairs is probably to keep doing what we are doing, get rid of debt, and try to get 3 to 6 months' savings stored up. Health co-pays and other health costs fall into the same area. We might want to put bus passes or bus fare in the budget - need to examine this more, though, as we might just walk and bike everywhere if it's too expensive to bus. I'm not sure if we missed anything else that should be here. let me know if you see something!

One more section: Goals. These are all temporary, and will be modified as our situation changes (our long-term goals are still in flux, as DH may or may not become the sole income). But here is the current draft:

1) Save 1 month's expenses.
2) Save $1K emergency fund.
3) Pay off credit card No. 1.
4) Pay off credit card No. 2.
5) Pay off student loan.
6) Re-work budget - add in some expenses for the most difficult cuts (like maybe the car).
7) Save up month 2 & 3's expenses in savings.
8) Rework budget. Add in some expenses for the most difficult cuts (maybe increase groceries to include special treats).
9) Save up month 4 through 6's expenses in 3-month CD's.
10) Rework budget. Add in some expenses for the most difficult cuts.
11) Start retirement savings.
12) Start "life plans" savings for pre-retirement funds - children's college supplementary funds ('cuz I don't want to fully "pay their way") and "lose the day-job / start a home business" funds.

I like the idea of scheduling in the points where we can modify our budget - of course, major life changes would also get a modification. But this way it's like enrolling in health insurance: We've signed up, and we can only change things at the pre-determined times or something big changing our circumstances. Of course, DH still hasn't signed off on everything - so it's not 100% locked in yet.

Oopsie . . . haven't posted for a while.

I still haven't posted that I'm working again, and I'm already on Day 4 on the job! Well, here's what I've been doing since I found out - on Monday, 3/9/09, so less than 2 weeks ago - that I had a job:

• Bought $400 worth of groceries, and spent most of 2 days making 20 pizzas and about a dozen other frozen meals so DH doesn't have to "cook" and can focus on childcare and studying for his Network+ certification (he's also responsible for dishes & laundry since those really need daily maintenance, at least unless we get more organized). We think we'll just have to buy milk for about the next 6 weeks.
  
  
• Had our car break down again - a coolent leak caused the serpentine to slip. Leak has been fixed, belt replaced. On credit. Le sigh.
  
  
• Worked out a budget. We're scraping by right now on my new income (as in, whether or not we have savings will depend on how much I lose in taxes up front . . . expenses may exceed income! Eep!) and have over $7K in credit card debt. Yes, I'm posting our financial details online. That debt is mitigated by almost $5K expected in unemployment backpay (expected about March 30th), so not as dire as it sounds.
  
  
• Working out how to trim the budget. This deserves its own post, and will get it. In fact, I've already written the post. And it's LONG.
  
  
• Figuring out a "homeschooling" plan. We ended up buying a curriculum that comes with a schedule. Yes, I know. We can't afford it - but I don't think we can afford not to, either. DH was struggling to spend time with the kids (mostly due to lack of ideas and time organization) before. Now, he is also studying for a certification. Since the option is available, he needs and deserves to be handed a schedule, so that he can just do what he needs to do and can focus on his studies and caring for our children, instead of spending time and stress on "home management" stuff like planning the girl's day. And I just don't have time to plan for him right now. Much easier to "homeschool" that time.
  
  
• Ignoring my homeschooling blog. That is going on total hiatus for about a month, then coming part-way up for two weeks before getting all the way up again. I still want to see if I can make any money with it (plus I love the community). If I can make *any* money with a homeschooling blog, that bodes well for more income-oriented blogs that would be more time-consuming and maybe require buying some materials or equipment.
  
  
• Creating a schedule for (and with) DH both to try and find a workable structure for his day, and to determine if watching the kids, studying for his certification, and doing some housework was reasonable, timewise (it is - childcare and housework should leave 5 1/2 hours for study and time to himself). Along with this is dividing up household responsibilities, so we can both get into a schedule and hopefully get onto autopilot.
  
  
• Mostly DH did this, actually, but we worked on getting the laundry closer to caught-up. We didn't succeed in totally catching up, but DH has *voluntarily* continued to organize, fold, and put away clothing since I've started work. Very inspiring, for me!

I think that covers it. Either way, back to work. Lunch breaks are not eternal.