Tuesday, April 29, 2014

They wanted me to spend my money and I said No No No

Aside from budgeting what else did we do to get out of debt? Well, first let me just say that we wanted to get out of debt more than anything in the world! That is actually key….because when you want something so bad you will do pretty much anything to get there.
In our case not only did we budget but here are some practical things we did:
* Dave Ramsey says that when you’re in debt and broke you should not see the inside of a restaurant unless you’re working there. Well, as you probably know Luis and I are no slim figure human beings….we like to eat!  So avoiding restaurants all together was HARD! So what we actually did was buy Groupons, order water instead of soft drinks or teas (you can easily save $7-$10 for two people here!). This was actually a great habit that stuck with me even when I could afford to buy tea J. Whenever possible buy a meal that can be shared or you can have some leftovers. That being said our budget for dining out was about $100 a month (for the two of us). We have yet to visit a fancy steak house for our anniversary!
* We went to the dollar movies. We fought the urge to see a movie when it just came out….instead, I kept a notepad listing all the movies that were coming out and we wanted to go see. Then we would wait for them to come to the dollar (really $1.50-$2) movies. We would eat before heading there to avoid the temptation to buy the million dollar bag of saturated fat….I mean butter popcorn. Because once you buy the $30 bag of popcorn….you have to buy the $20 soda to go with it in case you start chocking mid-way through the movie.
* When we needed clothes or wanted to buy clothes we would only shop off clearance racks! And by clearance I don’t mean 30% off…. I mean 75% off and more! If you go to my closet 80% of the stuff was bought off the clearance rack….that may explain to you why my colors are always a season behind.
This is me celebrating my bargain of the year! $44 outfit priced down to $4

* We found fun things to do that either required very little money or no money at all. Like the dollar movies….going to the mall (now we both have self-control and have learned to not be impulse buyers but if you don’t trust yourself just don’t take your wallet with you….I doubt the stores will trade you a pair of jeans for a blood or plasma!).
* I would say the most important exercise you can do is practice saying “no”. We learn this word as kids and have no problem saying it but for some reason it gets eradicated from our vocabulary as we get older and this can create a big mess! I know it sucks to turn down invitations all the time but trust me….when you meet your goal it will all be worth it! You can also get very creative…one time a friend of mine asked me if I wanted to meet her for lunch at the Plaza (which has a food court). I wanted to see my girl so I agreed but I told her I would be bringing my own lunch and I did! She went to corner bakery and I brought my homemade (actually my mother in law made it for us) chili….all I asked my friend was to bring me some crackers and a spoon.
* On Christmas we didn’t spurge money on each other….we actually got each other stuff we needed most of the time and a nice “want” gift. In fact, even now that we have Gracie we still didn’t go crazy last Christmas…we just bought her three toys that we had wanted to buy her since early on. Not only does she not need 100 million toys….we want to start setting a precedent that although it is nice to get gifts on Christmas…that is not the reason for the season and we want our children to know that. I don’t want them to be that person that throws a fit because her husband gave her perfume one Christmas when she had clearly stated “give me anything EXCEPT perfume”. I may or may not be this person.

* You know how hard it is to have a ridiculously gorgeous baby girl and not buy her every outfit out there? Yes! Super hard! But….same principle has applied to her….most outfits we have bought Gracie were either on sale (remember 75% or more) or used outfits from local facebook swap pages.  I also go on Zulily and add a million things on my cart and just let them sit there till they are no longer available….this kinda satisfies my urge to shop for cute clothes. When I was reading Smart Money Smart Kids there is a chapter where Rachel talks about watching her mom buy stuff only from the sale rack and growing up thinking that was the norm….and thinking how weird it was that people bought stuff for full retail price….that’s what I want Gracie to see!
Anyway…. we did more stuff  but bottom line is these are things we did during our journey to get out of debt but honestly they have now become a lifestyle for us and we are so excited to lead our Gracie and any future children this way.  

Sunday, April 13, 2014

The Nerd and Free Spirit unite...or do they???

Now many of you know that Luis and I are very different….let’s just say it, we’re complete opposite, even when it comes down to money. Using Dave’s terms I’m the nerd and he’s the free spirit. So achieving our goal to pay off debt was no easy task….so how did we do it?
The keyword is the “B” word….yes, the budget! The most dreaded thing for the free spirit and the most exciting thing for the nerd (yes….i consider reviewing and monitoring my budget a hobby…one of my leisures!).  Before we took financial peace university Luis and I had a “budget” but it was more of a very lax/flexible budget. If we were in the red, we would just make a note to use our credit card for the deficit. However, after taking FPU and having a goal in mind (get out of debt and build wealth) we had to treat our budget different and more seriously. So….ever since mid-2010 we’ve had a budget committee every first day of the month. In reality, we have two…one closer to the end of the month to see where we stand and set raw numbers for next month’s budget. Then on the first of the month we set the budget for the month (now….remember that I enjoy monitoring our budget so every weekend I take a couple of minutes to review and then talk to Luis if I think we’re going over or if we’re doing great!). Also, if there’s an emergency the budget committee chair will call for an unscheduled meeting (I’m the budget committee chair…we have elections at year end and I always win!)
Now….this sounds simple enough right? Every month you meet for a couple of minutes and set that month’s budget…that’s pretty straight forward…or is it? Not the case when we first started! I wanted to save it all and Luis wanted to expand our misc amount to the hundreds! I lost count the number of times I threatened to close our joint checking account and open my own account and just split the bills! However, we worked through it and we now rarely have money fights….now, is Luis still a spender? YES! Am I still the saver? YES! But we both have learned to work together towards a common goal. We both get spending money at the beginning of the month (I’ve saved most of mine and have about $850 and if you ask him at the end of the month he probably has about $10 left). The key has been communicating and both of us being discipline enough to stick to our budget….we tell our money where to go at the beginning at the month and then our budget tells us where our money should go as the month goes by.

I will warn you….the first couple of months is not easy! And you will make mistakes…you will underestimate the amount you spend in one category or overestimate. Luis is not necessarily a planner so the first intense fights were because of that….he would get birthday invitations and wanted to get everyone bday gifts but we only had budgeted $30 for the month and we had $5 left. Well, month after month we would both get frustrated because he was ruining my budget and I was ruining his social life! However, as we worked together I learned to be a little more flexible with the budget (I would move some money from one category to another one to allow for flexibility) and he started planning better. At our budget committee meetings he gets his phone out and looks at bdays for that month so we can budget for this properly.

 Pictures curtesy of DaveRamsey.com
Now that we have Gracie, although she has no idea what we’re doing yet we sit her in the office with us as we discuss this month’s expenses and this month’s savings goal. For us it’s important that she sees us doing that so that it becomes a natural thing for her to do as she starts her budget in her early teens.
Although budgeting is key to winning with money, it’s important to remember that everything worth fighting for will come at a price. So, for us to achieve our goal not only did we budget but we had to sacrifice a lot! What did we do? Stay tuned!
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Wednesday, April 9, 2014

Murphy and his 3 cousins moved in my spare bedroom!

So who is Murphy??? Anything that can go wrong….will go wrong! Now who are his three cousins? In Dave’s own words, his three cousins are broke, desperate and stupid!
End of July was here and it was time to clean out our apartment and move into our dream home. A two story home with beautiful high ceilings….with ONE AC UNIT! Now, that had no relevancy to us till we got our first electric bill. Since many of you know how unbearable Texas summers are, you can probably relate to the need to crank up that AC to 70…what you may not be able to relate to is the electric bill we got after only two weeks of moving in! By the third week of August we got our first electric bill not thinking much of it since I based my calculations off how much we were paying at our old apt. I figure that it would be about double or $200 for the month. Well, we were in for a ride because TXU billed us for two weeks and it was $400! I remember a tear rolling down my face when I saw that. Now here’s the funny thing….we had no idea that it was due to having one AC unit. We got an electrician to come and check all the outlets and ventilation in our attic…everything good. So October came around and there was no need for AC or heater and guess what? Our electric bill that month was for $100 or less….and that was how we figure out it was our AC unit!
Six months after we moved into the house…after we figure out what was driving our electric bill so high, Murphy made his presence known again! I was sitting in our office checking our budget and my needy puppy was hanging out with me. Since I could not trust him I kept turning back to check on him….then I see traces of wet paws everywhere in our office and I thought “that little stinker peed!” so I trace back the wet paws to see where it’s coming from and VOILA….our ceiling is leaking! Best part…there’s also a leak in our living room. Oh…but there’s nothing to worry, the previous owner paid for a year’s worth of home warranty so surely they will fix it…right? We call the home warranty people, the come over and dig a hole in our ceiling only to let us know they can’t fix the problem.
Now, neither of one of these problems have been permanently fixed….we have implemented temporarily fixes because they both require a significant amount of $$$ to fix. Now, if didn’t have debt and had a solid well-funded emergency fund, this would’ve been fixed. But since we bought the house while still in debt and are just now building are fully funded emergency fund, these are just sitting in the back burner for now.
Moral of the story people….buying a house while still in debt and with no emergency fund is not a good idea people! I know renting is not always fun but trust me….neither is being broke and when you buy a house when you’re broke, you just become broker!
 "Renting for a season shows patience and wisdom" Rachel Cruze  - Smart Money Smart Kids


P.S. our water heater recently just busted too….very conveniently it happened during one of the coldest weeks we had this winter. Thankfully, we were out of debt and had the money to replace it without going into debt….therefore, this was just an inconvenience rather than a crisis. But….when you don’t have money and are buried in debt anything that breaks becomes a crisis! Which reminds me of the next problem we need to tackle….cover up the hole in our roof where the squirrels are going in and out and then running wild in our attic! I think they're having a budget committee meeting and someone is not happy! Probably the free spirit :)

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Wednesday, April 2, 2014

Paying off....$97K

 Now, a lot of you know that Luis and I just recently became debt free (except for the house). However, what many of you don’t know is how much exactly we paid off. Well, here it goes…..ever since starting the Dave Ramsey plan Luis and I have paid off almost $97K in debt…..and no, that does not include our mortgage! So what did we pay off? Well, we were normal and financed almost everything so: sleep number bed, rooms to go furniture, laser hair removal, car, credit card, student loans, and medical bills that we cash flow and some we didn't etc. (please note this doesn't include stuff we financed early in our marriage that was paid off before getting on this.)
Now, when we go down to Tennessee you will hear that we paid $70K….that’s because even after going through FPU we both became “ill” with a disease called “ HOUSE FEVER!”. To me it didn’t make sense to “throw” away rent money every month and it really just made more sense to pay for something we would eventually own (I will talk more about all the hiccups we had after moving to our new house on my next blog….because for us Murphy and his three cousins really did move in!).
So here’s a quick timeline for you:
May 2010 – We start FPU for the next 12 weeks – we get excited about paying debt so we get our debt snowball going.
Early 2011 – We both became severely ill with house fever!
August 2011 – we buy our first home!
Mid Aug 2011 – we conclude that Dave is right…..a house when you’re broke and buried in debt is a CURSE! (it didn’t take long to figure that out!)
Sep 2011 – we decide to get gazelle intense and pay off debt!
February 2014 – We finally become debt free!
Now, between Sep 2011 and the time we became debt free my husband and I went through tough times as a couple (also subject for another blog) but we were both determined to get out of debt! We did derail from time to time but we would always re-convene and work as a team! And trust me that was not easy because I’m a NERD to the core and my husband is a FREE SPIRT to the core! For us though it was important that we changed our family tree and although we would’ve loved for our little Gracie to be born with us being debt free completely, we at least know that 1) she will grow up in a family that knows normal is broke  2) she will learn to handle money in a COMPLETELY different way from the way we were both taught or not taught! 
Stay tuned because this is what’s coming next:
Murphy moved in my spare bedroom!
The NERD and FS unite but not before threatening to kill each other (really the Nerd wanted to choke the FS).
Before we got here….we walked through what felt like HELL!
This is how we paid off almost $97k since 2010. 

Tuesday, April 1, 2014

Teach your kids how to handle money so they don't....

In honor of April Fool’s day I thought I would share some of the dumbest things I or we (as a couple with my husband) did with money. Now, in all honesty, this may have to be one of those blogs I have to write from time to time because it’s almost impossible to list every single dumb mistake we both made.
Well, when my mom had a stroke in 2004 and had to go to Guatemala to get physical and speech therapy, I very coincidentally got in the mail a pre-approval letter from Citi for a credit card that would help me earn miles. I was thrilled that I could earn miles on my credit card so that I could start getting free trips to Guatemala. Now, that was not the dumb part (yeah….I know!). The dumb part was that this is how I believed the program worked: since Guatemala is only about 2000 miles away from the US, then clearly that’s how many miles (or 4000 if it was round trip) I needed to accumulate to get a free trip! So, as soon as I got the card I started making purchases left and right…..so much that by 2005 when my husband and I got married, I had a $4K or $5K balance! As Dave would say….this was stupid on steroids! Now by the time I got to about 4,000 points I tried to redeem those for a free trip only to be very disappointed when I realized I only qualified for a one year magazine subscription to some random magazine I had no interest in reading.
Now….it’s my husband’s turn. When we got engaged (with a financed engagement ring….which was fully paid a year into our marriage…so you can say I contributed to paying for my engagement ring) one day he called me very excited! Well, he had gotten a “great deal”. He had a received notification in the mail that he had been selected to win two free tickets for a cruise  and get this….IT INCLUDED AIR FARE!!!! (yeah…you know where this is going). The whole thing was only going to cost us $1200. I was beyond excited….our first cruise together! Well, we were both in college and in the middle of our fall semester when we got married so we couldn’t take any long trips so we decided to wait till the summer to use our phenomenal trip. Once we were approaching summer we started looking into this fancy, dreamy, once in a lifetime trip he had given a $600 down payment for only to realize it was one of those timeshare deals! I can’ remember the details because this was almost 8 years ago but basically you had to listen to a sales pitch in order to get the trip…..we canceled the trip but were not refunded the $600. Luckily though we had received plenty of student loan money that year so we were able to go to sea world and get VIP seats to dine with Shamu!
Now….this is why it’s so important for our family to teach our children how to make wise financial decisions! The number of stupid things we have done with money is more than we can count (and therefore merit more than one post!) and although we are aware that our children will make their own mistakes, our hope is they can avoid making the same money mistakes!
Stay tuned for more stories on the dumbest money mistakes the #teamvasquezvielman have made!