Tag: finance

Today was a Good Day

Dave Johnson1 Comment

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We’ve learned many lessons this year, among them how to actually appreciate and value the things we purchase. It has made us a stronger family unit, and it has helped to instill values in our children that will hopefully help them in life for many decades to come.

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At the beginning of 2019, my wife and I were in a really bad spot. We owed an insane amount of money on credit cards (6 figures), and we were making $3600 a month less than what we needed to pay our bills. We had no savings, we had very little in our 401k, and we were almost certainly going to lose the house we had bought just 6 months prior.

We committed to solving our debt crisis once and for all, and we knew that part of doing that meant we had to set some really large stretch goals to keep us honest and aggressive in our efforts.

I told my wife, “We need to set a big number in terms of the debt we want to pay off this year, and it needs to be large enough to frankly make us uncomfortable.”

We set our golden number for the year at $50,000.00. Fifty-thousand. A FIVE, AND THEN A BUNCH OF ZEROS. That was a stupid number, and there was probably no way we would come close, but damn if we weren’t going to try!

When I have set similar lofty goals in the past, it has rarely worked out well…

Dave at age 10:
Goal: “I bet I can jump this canal on my bicycle!”
Result: Broken bike, broken bones.

Dave at age 22:
Goal: “I bet I can beer bong this entire 5th of whiskey!”
Result: Waking up in that same canal, wondering what happened to my pants.

Dave at age 35:
Goal: “I bet I can put a flat screen TV in each room of my house!”
Result: See paragraph 1 of this post.

So needless to say, I was somewhat pessimistic about the financial goal I had set for us to achieve, and I had a lifetime of results (or lack thereof) to back that pessimism up.

And yet today, a month and a half early in fact, we hit our goal.Read More »

Putting Our Money Where Our Mouth Is

Dave Johnson2 Comments

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I hope you get some ideas from this post that help you tackle your finances. This blog has been beyond cathartic for me, and I hope it’s helped a few of you. If you’re in a situation like we were (are), get serious about finding ways to fix your problem. Everyone’s situation is different, but I can almost guarantee you can find at least something in your spending habits that will help!

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We all have those friends who make proclamations that we can tell are destined to fail from the moment we witness said friend’s plan of execution. Here are a few of the more common ones I’ve encountered:

Musician

The Proclamation: “I’m going to get serious about pursuing a career in music, and be a Lead Guitarist for a metal band!”

The Execution: Purchasing of “the 100 easiest riffs in rock history” book from the used bookstore and practicing for 30 minutes a week in the garage.

The Result: Lead Line Cook at Chili’s.

Weight Loss

The Proclamation: “I’m going to dedicate to finally shedding these extra pounds and getting my summer body back!”

The Execution: Cookies.

The Result: Beaches are overrated anyway.

Acting

The Proclamation: “I’m going to make a legitimate run at finally being a serious actor.”

The Execution: Booking a commercial for a local Kia dealership in your hometown… in Iowa.

The Result: Iowa.

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There are lots of examples like this, but you get the idea.

So, when my wife and I decided to make the proclamation that we were going to do away with our debt and seek true financial independence once and for all, I was deeply concerned that we would fall into a situation like this where our intentions were pure, but our executions left much to be desired, and thus we’d be in the same mess two years from now.

As of this past Friday however, I’m now convinced we will achieve our goals. Trading in a car that I loved and put so much of my identity into (right or wrong) on a used economy vehicle has helped me prove to myself just how serious I actually am.

While this was the decision that ultimately convinced me, I thought it might be beneficial for some of you in similar situations to see what we’ve done since January of this year (2019 for those who might read this in the future) right up until now:

Credit Cards
When we started this journey, we had 12 (!) credit card and student loan accounts. Here is the breakdown of how we’ve tackled each:

  1. Toys R Us (29.99% interest) – CLOSED – Paid off. GONE!
  2. Bank of America (23.99%) – CLOSED – Paid off. GONE!
  3. Lowe’s (23.99%) – CLOSED – Paid off. GONE!
  4. Furniture Store (23.99%) – CLOSED – Paid off. GONE!
  5. Wells Fargo Loan (17.49%) – CLOSED – Scheduled payoff is September 2019.
  6. Care Credit (29.99%) – CLOSED – Scheduled payoff is September 2019.
  7. Macy’s AMEX (27.99%) – CLOSED – Consolidated to 12% Marcus account.
  8. Macy’s Store (27.99%) – CLOSED – Not a typo… we had 2! Consolidated to Marcus.
  9. Discover (14.99%) – CLOSED – Scheduled payoff 2020.
  10. First Tech PLOC (13.99%) – ACTIVE – No charges since January.
  11. Navient Private (7.5%) – NOT ACTIVE – Scheduled payoff is sometime before I’m 80.
  12. Navient Federal (4%) – NOT ACTIVE – Scheduled pay off is sometime before I die.
  13. Marcus (12%) – NOT ACTIVE – Not a revolving line. Scheduled payoff 2020.

In total, we have closed all of our accounts but 1, which is the lowest interest rate and has a very low credit limit, allowing us a safety net while we build savings. Of the closed cards, we have paid off 4, and will close out two more before the end of the year. We are going to work as hard as we can to have all of them eliminated by the end of 2021, or 2022 at the VERY latest. By the end of the year alone, we will have paid off close to $50,000 in credit card and student loan debt!

Not bad! So how did we do it? Keep reading!Read More »

Friday Five: The First 5 Things You Should Do if You Are in Debt

Dave Johnson4 Comments

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The “Friday Five” are five items to help you in your journey to financial freedom. They might be 5 tips, they might be 5 tricks, or they might just be 5 items of thoughts. In any case, it’s Friday, and I’ve got 5 “things” for you, so here we go!

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As you can see, I’m trying something new with the Friday posts here. I like having some themes that I can dock to, such as the “Thursday Think Tank,” and the “Tuesday Tip Jar.” On top of this, I feel like you kind of don’t want a long post getting in your way on a Friday, and would prefer just to get out there and enjoy your weekend.

So these “Friday Five” posts will be a bit shorter, and get right to the heart of the matter, of hopefully providing you with 5 items you can use to help with your financial health and success.

So here goes! We’re going to kick the first one off with the first 5 things you should do if you find yourself in debt.

Back in January, my wife and I found ourselves in a buttload of debt. If you aren’t familiar with some of these fancy financial terms such as “buttload,” just know that it was a LOT. If you check that fancy little diagram/chart in the right column of this site, you can see we were just north of $126,000 in Credit Card and Student Loan debt.

Even though it took us years to get into this position, it was a smack in the face once we took a hard look, put it all together, and realized just how bad off we were. We didn’t really know what to do first, and just felt an initial sense of helplessness.

Debt can be super-scary, and you may not know where to begin. So let me give you 5 good initial areas to focus on if you find yourself in a similar situation:Read More »

Having Tea with a Gorilla in a Dress

Dave JohnsonLeave a comment

The analogy I use is this: Let’s say you’ve gone and purchased yourself a pet gorilla… as people often do. Years of work have gotten you to a point where the gorilla will even let you put a pink dress on it and have pretend tea parties together...

Starting Credit Card Debt (01.01.19): $126,310.77
Current Credit Card Debt: $108,870.87
Total Paid Off: $17,439.90
Income Going to Savings: 2%

Being in debt has been incredibly stressful on me and my family. Not a day goes by that I don’t think about my debt, and frankly there are times when it crosses my mind several times per hour.

I’ve mentioned it in previous posts, but it’s all I can do to keep exercising and meditating daily just to keep my heart from exploding clean out of my chest at times!

The stress has lifted a bit now that we’ve regained some control and have our monthly bills covered. [Note: We started close to $4,000 upside down every month!] I’ve also got everything set up to auto-pay now, so nothing is late and no late charges are assessed and for the most part we can cover everything each month.

The problem is that it leaves us with almost nothing to put aside. On some months I can spare a couple hundred bucks to toss into savings, but until we get some things paid off later in the year with a bonus and some vesting stock, we’re in a literal paycheck-to-paycheck cycle right now.

The analogy I use is this: Let’s say you’ve gone and purchased yourself a pet gorilla… as people often do. Years of work have gotten you to a point where the gorilla will even let you put a pink dress on it and have pretend tea parties together.Read More »