This is a quick note to say one of my 30 day challenge sites finally made $10.
Head over to My Thirty Day Challenge 3.0 to read the post and watch the TDC theme song video!
Finally making headway,
Sherri
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Debts Paid in Full:
Status Report:
Balance Report:
After Bankruptcy Projection:
Debt snowball:
- CFCU Visa: $4,402.81
- Chase HELOC: $5,021.64
- Capital One HELOC: $21,637.43
Debt Balance excluding co-signed student loans: $30,985
- Co-signed student loan approximate balance: $45,051 (need a complete audit on these accounts; not sure this balance is correct or even close)
Debt Balance including co-signed student loans: $76,037
First mortgage balance: $117,803
Discussion
I paid off two small debts that crept up on us: $140 to Professional Emergency Physicians from when my son needed stitches a few years ago, and One Hour Air Conditioning for last year’s cleaning and maintenance.
Since I haven’t received anymore notices from the student loan people, it’s possible the friend I co-signed for is paying them again. The bankruptcy trustee will likely require an audit of these accounts as part of my remaining obligations. If the trustee doesn’t, I’ll require one before I start making any payments. I don’t know what’s been paid or what is still owed. I won’t make any payments on these loans until I pay off my own debts. It’s the biggest balance debt anyway, so would come last in the debt snowball.
I didn’t pay anything on the debts I’m going to bankrupt. I don’t see the point of spending money on them when they will be gone about this time next month.
New Summer Income Source
I found a new tutoring opportunity after school is out. All public school students in the 4th and 8th grades must pass the Louisiana LEAP exam to progress to 5th and 9th grades. If they don’t pass in the spring they have a chance to take it again over the summer. Failing 4th grade LEAP isn’t too big a deal. Students who fail it often are on the young end of the age limit and need another trip through 4th grade if they don’t pass LEAP remediation in the summer.
But 8th graders who fail the LEAP are extremely stressed out to pass it over the summer so they can go to 9th grade with their friends. It’s a huge social issue with 8th graders who need remediation. Those parents are very motivated to help their kids succeed and will pay for tutoring on top of the school system’s program.
This test is a must-pass thing. Even if a student passed all classes in 4th or 8th grade, they fail if they didn’t pass the LEAP test.
I made a flier, I’m getting it copied tonight, and I’m distributing them starting Monday to the public middle schools to give out to students who failed the 8th grade LEAP test. A friend who works in the school system has several of the remediation workbooks and is lending me a set to use over the summer. I’ll have to make copies for my students, but that’s relatively cheap compared to what I’m charging. I should be able to start working with these students as soon as school is out, but may not get as much work until remediation begins the first week of June. The test will be administered again the first or second week of July.
I’m charging $25/hour. I’m not charging full price ($45/hr.) because these are public school students and the families may not have the money private school families have. That’s $6/hr. more than my tutoring company pays me. Another reason to only charge $25/hr. is I’ll be undercutting all the tutoring companies so I’ll get more students.
Depending on the amount of work I can score, I’ll deliver pizzas on my free afternoons and evenings. I’ll go up to full-time pizza delivery after LEAP test tutoring until mid-August when tutoring picks back up. Then I’ll go back down to part-time pizza delivery again.
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Debts Paid in Full:
Status Report:
Balance Report:
Income and Spending
I have a total of $1,862.39 income this month to pay for everything. This isn’t enough money to pay the essentials of food, utilities, gas in the car, the first mortgage on the house, and essential medical care (essential in that without it I won’t be making any money at all). Those total costs are $2,294.96. I’m short $432.57.
On top of that, I have the non-bankruptable debts of $572, I wanted to get out from under the at&t advertising and publishing bill of $440, and I needed to pay the rest of my creditors a little something, like a few dollars each along with a letter explaining (again) that I’m working on getting a new full-time job while working part-time and earning as much as I can. That comes to $61.
The total comes to $3,367. I covered the shortage of $1505 from my Traditional IRA and we counted up all our change and rolled it. I withdrew $1500 (plus taxes and 10% penalty, ouch!). The change amounted to about $35.
I spoke with my accountant and I’m getting a tax refund for 2006. I’ll probably get at least a small one for 2007. I’m not quite done with taxes for 2007, but plan to finish that up by the end of this week and turn it over to my accountant.
I’m also eligible for the federal tax credit, so I’ll get a check for single head of household with one child.
Temporary Game Plan
The tax refunds will go into a “hill and valley” fund so we’ll have enough to pay for essentials.
After this month, if I have enough money, the non-bankruptable debts will be paid the minimum payments before the bankruptable debts. Any debt that is bankruptable will be paid a minimum of a few dollars a month until my income increases if there is any money left.
I will not be working on my debt snowball until I start making enough money to pay for more than the essentials. There may be some progress because I put every debt in the debt snowball, including a large business loan and a large home equity loan.
We are having another yard sale, and any money we earn will either pay an essential bill or go into the savings account to cover essentials next month in case my income is still too low, depending on tax refunds.
February was a slim month tutoring. It was a short month, and in Louisiana, we had Mardi Gras week with no school, so I had many cancellations. I will make more in March because there are more school days. It still won’t be as high as it could be because spring break is in March and I’ll have a lot of cancellations for that week. April will be a full month with no breaks, and May will be lucrative because of final exams. I’ll get lots of extra sessions from my regular students and I’ll be able to pick up a few extra hours from students who just want exam review tutoring.
I’ll still need to sock some money away for summer (June and July) when tutoring hours are lean. I’ll also pick up another part-time job (pizza delivery) to cover expenses unless I land a good-paying job or get a business going like gangbusters.
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Debts Paid in Full Report:
Status Report:
Balance Report:
I checked all my math and the above numbers are correct. I’ll have to go back and correct my past numbers. They aren’t correct. This is what happens when things change nearly every month; changing interest rates, changing fees, sale of debts to other collectors, you name it.
Now that my business is closed, I am going to make a major change in what I report to include everything including my SBA loan and my HELOCs. I didn’t put those into the debt snowball because they aren’t bankrupt-able in my situation. I’ve talked to a bankruptcy attorney and I still don’t know if I will end up filing. I don’t know how this will end, but I’m going to fight it all the way down.
Here are my new debt snowball balances; the above balance of April 2007 plus the rest of my debts. Listed are original balance, current balance, total payments made since 4/2007 and payments this month. I won’t start comparing monthly balances until March 2008.
Status Report:
Balance Report:
All debt reports will be based on these numbers starting in March 2008. This is everything except the first mortgage on my house.
My Vocation
I’ve finally figured out what my vocation is:
I help people fight for economic and social justice to better their lives by assisting them to remove those barriers to their success.
Right now, I do that by tutoring, home-schooling and writing about these issues on my blogs. This blog is a specific story about my own experience of economic justice. In the past I volunteered, had hurricane evacuees stay in my home, helped friends with child custody and other divorce issues, and assisted my son’s school with donations to pay for books and supplies.
I haven’t written about the general topics as much as about specific experiences. I plan to add more about the general topics as my blogs grow, now that I’ve articulated my vocation. It’s sufficiently broad that I can do many things for a living and still fulfill it. It’s clear to me now that working in the chemical industry did not fulfill my vocation, and is probably why I always had a TGIF attitude.
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I’ve had a lot of comments on the My Total Money Makeover (MyTMMO) message boards and on this blog that ask me why I’m not taking personal responsibility for my debt situation. I’ve been more than a little defensive about it.
I’m taking responsibility or I’d have already gone bankrupt
I am taking full responsibility for my debt, and I’m living with the harassing phone calls, nasty letters, and law suits. I’m the one who got into debt over my head and I’m the one who is dealing with it. I’ve been working as much as I can and throwing money at the problem as fast as I can for the last 7 months and it’s not making much of a dent in my overall debt situation. The amount of money I can throw at the problem now isn’t anywhere near sufficient. Most people can make headway paying $1000/mo on their debts. That’s just a drop in the bucket in my current situation.
I’ve been feeling like I’m hitting my head against a brick wall trying to knock it down, and not only is the wall not falling, my head is figuratively bloody and it hurts, and the emotional toll is getting too high. I’m not getting traction. I’m getting more depressed.
As I’ve thought about this over and over every month since I started my debt snowball in April 2007, I know only one thing that will change my situation at the pace it needs changing. Making a hell of a lot more money than I’m making now. How am I going to make a lot more money? I’m working on that as hard and as fast as I can. But I’m feeling lost and misguided. I’m listening to other people that I don’t know with agendas of their own - Dave Ramsey, his fans and the MyTMMO members.
Peer pressure is just that - pressure from peers who want you to do things their way instead of listening and then making your own decisions based on all the information you have. I love what Dave Ramsey does and I think he has some of the best ideas out there right now. But the fans and members are way too into peer pressure. Some people need that to get them off the fence and doing the right things to win with money. I don’t. I’ve always been very self-motivated and independent, fiercely independent to a fault at times.
I’m also stubborn. Tell me to do something and I might not just to spite you. Tell me not to do something and I might for the same reason. Fortunately, I’ve never been very self-destructive about my rebellious behavior. Now that I’m grown up I mostly ignore the gauntlets that are thrown down in front of me. But sometimes it’s still a strong urge I have to wrestle with, especially when someone I don’t know preaches at me. I’m likely to get angry now and tell them where they can stick their opinion.
I listen to my close friends and family who are a lot more helpful and compassionate (thanks, y’all; I love you!). Getting a chance to spend some time reconnecting and talking with them recently has helped me a great deal. They know me and they know what I need a lot better than strangers on a member forum website.
But it comes down to me. The buck stops here. I have to find my way through this mess. I have to find a new career path. I have to make the final decisions about what will and won’t be done in my house with my money. I know me and my situation better than anyone. I can listen to the advice of others, but I’ve got to make up my own mind and make my own decisions, whether it’s popular with the fans or not. And it’s so not popular right now. But I no longer care. I know what I’ve got to do first.
First Duty
My first duty is to find a new career. I don’t need just another job; I need a new career path that pays well. I need that career to be early in the day so I’m still free for tutoring in the afternoons and evenings (because I love it and tutoring pays very well).
Future career options that I’ve thought of so far are:
When the urge hits me I write down more ideas for new careers. I keep a running brainstorming list just like I do for article ideas.
I’m still waiting on my copy of 48 Days to the Work You Love by Dan Miller. I love Amazon free shipping because it’s free. I hate Amazon free shipping because it takes so damn long for stuff to get here. I’m chomping at the bit to get going on a new career path. I’m researching the things I’ve thought of that I might want to do, but I feel like something is missing from the search. I feel like I’ve left out an important step in finding the best fit for my next career.
I’m not just going to jump into another career without proper research because I’ll stay out of misplaced loyalty. I’ve figured out I’ve got to be selfish about this because I won’t come up with something I really, truly love and that is right for me if I’m not. I’ll go off and do something because I’m supposed to get a job and I won’t quit when the time comes to do what I should really be doing.
What about my business?
I’ll be taking my business down to extremely part-time. I’ll only run it when someone calls for an appointment. Otherwise, I’m cutting the business’s costs to the bone, dropping all memberships and advertising as they expire this year, and keeping my registered investment adviser license. The only thing I’ll have to do this year to keep that is sit for and pass the NASD Series 65 exam. The RIA license is only $150/year. Any income I make from the business will be applied to the business’s debts, which I’m personally responsible for anyway. I can also continue to write off business debt interest on my taxes.
Blogging
I get a lot of flack for this, but I’m also going to continue writing on my blogs in my spare time and learning from Blog Mastermind. I’m going to write anyway so I may as well make some money at it. Blogging is like journaling used to be for me. I write to figure things out and to sort through my emotions. It’s one of the two creative things I do and I have to have a creative outlet. I’ll be a nut-case if I don’t have some motivating form of creative outlet. Making plastic key chains just isn’t creative enough.
Blogging fits the 80/20 rule of reward/effort. If you can put 20% of your time and effort into something that will yield an 80% reward, it’s definitely worth that time and effort. My biggest rewards for blogging are not monetary, but let’s look at it from a monetary viewpoint for just a moment. Even if my very part-time writing only brings in a few hundred dollars a month, that’s at least a minimum hourly wage with no attached costs, like uniforms or gas to drive to and from work or babysitting. At 2 hours per day 5 days per week with 4.3333 weeks in a month on average, that’s 43.33 hours a month. If I bring in just $300 that’s $6.92/hr. My blogging financial goal over the next 6-12 months is to earn substantially more than that working on my blogs the same two hours a day. If my income grows to $500 or $1000 per month, my blogging hourly wage goes up to $11.54 - $23.08. If it doesn’t bring in much money, I’ll still be blogging.
People who consistently write on their blogs, monetize them, and market them during that 10 hours per week grow their blogging income over time. It may never turn into a full-time income, but blogging isn’t about money for me. A blogging income is lagniappe.
Committed to which plan?
I get a whole lot of flack about not being committed to the plan, meaning The Total Money Makeover plan. I’m committed to the plan, but I’ve also got more important issues to sort through before the plan can work for me the way it’s supposed to. The plan assumes you have a full-time income that’s substantial enough to pay your debts off rapidly if you cut your budget dramatically. My income isn’t high enough, and adding part-time jobs and what-not just isn’t solving my debt problem as I discussed above. My budget has already been cut about as far as I can cut it.
I don’t fit the typical TMMO profile of someone who lives beyond their means on a consistent basis. I never bought the American debt lie. Having lived debt-free most of my life, I’m not the type of person who lives outside her means. I’ve always spent far less than I’ve made, bought good used cars and drove them a long time, and I don’t spend much money on clothes and shoes. We have what we need. The place where I’ve overspent to some extent has been on my son because I had the cash to buy him things after all the bills were paid and all the retirement and savings deposits had been made.
I had no debt except my first mortgage on my house until I opened my business. That’s when I did stupid with zeros on the end. I didn’t have the right advice. I picked the wrong people to advise me on what I should do and now I’m in a deep whole.
What this epiphany means for me is I have to step back from The Total Money Makeover and solve my career crisis first. I have to commit to finding my new career and do whatever it takes to get it going as soon as possible.
That doesn’t mean I’m stopping budgeting. The zero-balance budget has helped me immensely and I’ll continue to use it the rest of my life. I’ll also continue my debt snowball, but not by working lots of extra jobs to make a couple of hundred dollars to put toward the debt right now. I need that time and energy to go into my career, and my creditors are just going to have to wait. They’ve waited this long. I don’t believe a few more months will make much of a difference in the grand scheme of things.
First things have to come first. Allowing others with their own agendas that I don’t know and don’t know me to influence my priorities was weighing me down and keeping me stuck. I don’t feel stuck now.
Once I’m back on track with my new career I will be in a position to re-commit to The Total Money Makeover and do whatever it takes to get out of debt.
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This is the story of my
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Does everyone remember years ago how when we were at school if there was a party
going on, flyer's would be handed out in between classes or amongst a group of
friends? If not... you have seen the movies where people give out flyers about
a big party at Howie Lowenstein's place on Friday night! The classic "throw
the flyers" routine from the top of the stairs and everyone gets a copy magically
fall into their hands?
Or now, how many of us receive invitations to events through Facebook that
already have over 30 people RSVP to go.