The lesson in change

Hi LITTOF readers!

I completed the 7-day Spare Change Challenge. Go to ChicagoNow to read my post "The Lesson in Change" about see how I did.

Thanks!

Stephanie

the goals we carry in our wallets

"As long as we have hope, we have direction, the energy to move and the map to move by, we have a hundred alternatives, a thousand paths and an infinity of dreams." - author unknown

This is the quote that welcomed me into the online "Pre-Discharge Bankruptcy Class" called Money In Motion. I scoffed at first. Because it was 6PM on a Sunday and I really, really did not want to take a 2-hour online course that would just remind me of how much a failure I am financially. So, yes, I scoffed. At first.

Then I realized that that quote is just another way of saying what I've been saying all along... happiness has nothing to do with the circumstances. I have hope. Like our President. I hope. But hope alone doesn't inspire change. It must be backed up by action. This pre-discharge bankruptcy class is one action.

Here I am facing my computer on a Sunday evening because something clearly needs to change. This online course isn't a reflection or a reminder of my failure. It's feedback. It's acknowledgment that I need a little help to change. A change in thinking. New tools.

So I make the choice to dive in and read everything in this 2-hour online course. I won't skim. I'll really read it and even take notes. Because I'm here for a reason, after all.

The first thing this Money In Motion course addresses is GOALS. Goals are the basis for any budget, it tells me. Your goals should be flexible and specific. It asks me to write down three goals on an index card. One short term, one mid term and one long term goal.

My pen hovers over the index card.

I write "My Goals" at the top.

Then think. Hmmmm.... why is this so hard?

For an entire year I have been training myself to NOT want anything, that's why. I've been training myself to avoid magazines, zappos.com, stores of any kind. I've been re-conditioning myself to be able to walk into a store and walk out feeling BETTER about having NOT bought something than having spent money just to spend money. I've been learning how to be creative and "shop my closet" as a way to find new outfits and combinations of clothes I've never tried before. New clothes without spending a dime. Trading. Selling and buying used. Wanting less. Wanting nothing except what I have and being grateful. Satisfied. And I am.

Thankfully. Gratefully.

So this is hard. I'm finding it hard to write something on the card. Something that doesn't feel completely arbitrary or simply "pie-in-the-sky." But Money In Motion (MIM) is telling me to. Is saying: GOALS ARE THE BASIS FOR ANY BUDGET. They must be specific & flexible. Okay, so they can change. Fine.

Okay, a new pair running shoes. I actually do need those. Mine are old and worn through and given my propensity towards injuries, running on old shoes is a very bad idea. So that one's easy.

Next one has to be between $500 and $2000. Harder. Even when we do earn money, we don't want to just spend it on things. But experiences. The goal: acquire experiences, not things. Remember? Right. So... well, why not? A vacation. A romantic vacation. A fabulous vacation. I can commit to that goal. At the present the only vacation we have on the books is a one night camping trip to Lake Geneva, WI where we were married 6 years ago. We haven't been back since. So... I write it down. A fabulous vacation with Bob.

Third goal. More than $5,000. Well, since our goal is to spend nothing acquiring furniture for the house on the island I'm not going to write down furniture. What else? Savings. That counts, right? Why not go large. $10,000 in savings. The idea of saving is much sexier to me now than a new car or even a new wardrobe. So savings it is.

MIM suggests I carry my goal card in my wallet where I can see it each time I go to spend money on something. And I haven't done that yet. Why? I don't know. Perhaps I'm still relating to it as "pie in the sky." Or perhaps I'm avoiding something. That's more likely. Avoiding being limited? Perhaps.

So, guess what. I'm doing it now. Right now. Putting the goal card in my wallet. Done. It's now there. My reminder. A little gift from MIM.

I have a challenge for you.

Grab an index card and write down 3 goals. 0-$500, $500-$2,000 and over $5,000. What are yours? I think we can learn from each other. Once you've written your goals, take a picture, upload it & post the link in the comment section. Or... just write them out in the comments if you don't want to go thru the whole taking the pic and uploading it business.

Either way you can join in. I just want to know, what goals would you carry in your wallet?

13 Personal Money Management Tips From LITTOF Readers

It’s been one week since my “B is for…” post where I wrote about the fact that Bob & I have filed for bankruptcy. I also asked for tips from readers on how you manage your money. I have loved reading your comments and getting your suggestions and thought I’d put them into a post because I have a feeling that the comments sometimes get overlooked. And there are some gems here. I found them to be on the whole practical, exciting, charming, specific, unusual and thought-provoking.

I'm not posting all of the comments in their entirety as some reiterate previous tips. (If you'd like to read all the comments as posted by readers, you can do that here.)

Without further ado, here are YOUR tips around making personal finance management easy (easier):

1. General Budget & Finance Check –
I stick to a general budget. I have a rough idea of how much I want to save each month, knowing that things happen and it's not always possible. I do a "finance" check once every month to see what I'm spending on. It hasn't changed much over the past couple years so I'm not as uptight as I used to be :) – Kim

2. Cash Envelope System—
We write out a budget each month, all of our expenses are listed with amounts and we calculate our income for the month. We have $$ budgeted for food/household/hygiene and that amount is set aside in cash at the beginning of the month. I can go over budget in this category so I use the cash envelope system and divide the cash into weekly amounts. Once the $ for that week is spent then that’s it – no borrowing from the next week or using a credit card. It’s made me make smarter decisions knowing I have limited amount of cash for the week – and since spending cash hurts more than a credit card, cash has helped me to carefully consider my purchases. -Holly (Anchorage, Alaska)


3. The RUDE little Post-It Note–
I give myself an allowance every week and when the credit card bill looks like its going over my self-imposed limit I put a post-it on the card with some rude little comment to myself to remind me to rethink my purchase. -mri

4. Dave Ramsey, Dave Ramsey, Dave Ramsey!
My Hub and I follow Dave Ramsey, my in-laws follow him, my sister Lindsey and her Hub follow him, and some of my friends as well. He knows his stuff and he obviously comes highly recommended from MANY people. By following his ideas last year we paid off 5 of our bills and we hope to add more to that this year. –Maxson trio

5. Detailed Budgeting & Quicken-
I have a very detailed budget, but often find myself overspending in some categories (usually in the "household" category!). I track all my money with Quicken. I've been using it since like '97. Seeing WHERE your money goes makes it really easy to change your ways and stop spending as foolishly. I'm also big on electronic banking and automatic payments. Make life simple, and make your money work for you. - Jessica

6. Write it down!-
I write down everything I spend on a spreadsheet and do a monthly spending plan balancing what's coming in and going out. If it comes up short, I cut entertainment, clothes and eating out OR see if there is a way to generate more income. I give very modest gifts for birthdays and things like that.

Also, I do not have an open active credit card. You won’t believe how careful you are with your cash when you have no "emergency" card. Because there is ALWAYS an emergency - like gas or food. That has been the single best thing I have done. And yes, I have huge student loans and all sorts of things but I have never gone hungry and I have never been homeless. The peace of mind is the reward for not spending more than you earn. It's priceless. - Anonymous

7. The power of the mind-
Poverty is in the MIND. Wealth is in the MIND. Many people would pay all they had to have a great partner in life. You are rich, keep that in your mind and soon the outside will reflect the inside. - Anonymous

8. Mint.com-
I forget where I heard about it, but I've been using mint.com as a way to keep track of our spending, credit cards, loans, etc. It's not perfect, but it definitely helps me visualize what we're spending too much on, where we can save more, etc. And, it also allows you to create individual budgets, too. - Nicole

9. Nausea As a Repellent-
We don't set a budget, but I get nauseated when I spend money (thanks for the money issues, Dad!) so that's a decent de facto system. -Marta

10. Cut Out the Booze-
My advice for anyone who wants to save money is to cut out alcohol. While I am not a big drinker so this is easy for me, my husband and I estimate that we save several hundred a month by not drinking (as compared to our peers). It’s worth every penny. -Megan

11. Monthly Check-In & Hide Your Cash-
I use Quicken to track household finances. I used to use a cash envelope system, but my apartment was robbed during that time. As it turns out, renters' insurance doesn't cover cash at all! I'd recommend a debit card and Quicken as a great way to go. As someone else noticed, spending habits are fairly consistent over time, so monthly check-in is probably all you need after you get a handle on things. - Suzanne

12. The Colorful Money Jar-
Since I moved to Australia, I don't qualify with my visa status for an Aussie credit card, so I live an all cash life. I have auto payments set up for rent and utilities, then I take out a set amount on Sunday from the ATM and it is what I get to spend during the week. Anything left over gets put in my money jar, which I keep in the kitchen. If I run out early, I can take from the money jar but not from my bank account. The weekly allowance is generally more than I need for a normal week, so the jar fills up with brightly colored Aussie money (pink! purple!) and once several hundred has accrued, I take a long weekend visiting some part of the country I haven't visited yet. -Abby

13. Streamline Your Budget!
I recommend a ruthless streamlining of your budget every couple of months, till you're convinced you are where you want to be. The tool that helped us the most was to keep a spreadsheet of our categories of spending the money that was left over after bills (eating out, movies, post office, coffee, parking fees, hair/beauty, clothes/shoes, etc.). It was shocking in some cases to see how the actual dollar amount was nowhere near our general sense of what we were spending in a particular category. - Crystal

Thank you for sharing your tips, what works and what doesn't work. I'm learning so much through this process!

If you have a tip you have yet to share, what are you waiting for? Go ahead and comment below. I'll be reading.

Thanks!
-Stephanie

B is for...

I’ve been putting off this post.

I haven’t wanted to write about it. I mean, I’ve wanted to, but didn’t know quite how. Well, I’ve been afraid. Afraid of saying it out loud. Of seeing it online. Of documenting my ‘failure’ for all the world to see. Of opening myself up for potentially massive judgment and the harsh critics on the internets (as my friend Jackie would say.)

So I’ve procrastinated. Wrote about other things. Waited. Until now. Because the whole point of this blog is to tell it like it is. Right? Yes. The point is to tell it like it is in order to hopefully make a difference for someone else in a similar situation. To be open. Honest. To accurately document our experience in the housing crisis and the great economic recession. Our view has always been that we are not victims. And that our present hardship is the fertile soil of our rebirth. This is our chance to be born again, so to speak. Our new savior? Simplicity. Financial responsibility.

Tell it like it is, Stephanie. Just own it. Do it.

Okay. But how? Well, just stick to the facts. In March I wrote a post about the facts that make up our lives and how we found freedom in relating to them as just the facts. Without adding anything.

So, to take a lesson from that post...

At this moment in time, these are the facts:

-WE are ‘camping out’ in my mom and stepdad’s walk-out basement.
-WE are moving in October to the San Juan Islands where we will live for 2 years rent-free taking care of someone else’s house (that story is here.)
-WE are no longer homeowners.
-OUR credit score is 511
-WE have just filed bankruptcy

There it is. Ouch.

Did you miss it? Should I say it again?

We have just filed bankruptcy.

We are insolvent.

We are bankrupt. Lacking in a particular desirable attribute (money.)

The letter of the day is B. And B is for Bankruptcy.

I know.

I know. Please don’t look at me like that. Like that! Oh, you’re not? You just had something in your eye? Well, the thing is that I am making an effort to relate to these facts as just facts and nothing more, but I’m not there yet.

Why?

Well, I guess because I’m afraid of what you will think. I'm embarrassed! It’s hard to confront the overwhelming extent of our debt and how we got there let alone how everyone else will now categorize us.

Let me be clear:

This is NOT where we thought we’d end up.
This is not where we wanted to end up.
This IS where we have ended up.

In Bankruptcy.

The B-word.

There are a lot of facts that led to the fact that we’ve filed for bankruptcy. And we are using all the facts to learn, to grow. The challenge is to not use the facts to beat ourselves to bloody carcasses. What good would that do? I see no upside in that.

When we first met with our bankruptcy attorney he said, in so many words, be good to each other.

"If one of you drinks or eats or is short with the other, just know that it’s probably because of this. Bankruptcy. Because most people have a conversation in their heads that says, I’m a loser. Don’t listen. Just ignore it. It’s just a conversation."

He said all of this with extreme intensity. He wanted to make sure we heard what he had to say.

He said that bankruptcy is hard on marriages because, he pointed at Bob and said, “He wants to build you a castle," he then pointed at me, "and you want a home that’s safe."

He let that hang for a beat. Simple. But true. The truth of that simple statement hit us between the eyes. "And when that doesn’t happen," he continued... clear that he had our attention, "you think you failed. A lot of couples end up in divorce court next and I hate seeing that happen. It doesn’t have to be like that. Okay?" Okay. "Good. You're going to get through this."

And with that he handed us our marching orders. It was a relief. We were so afraid of that meeting. Of acknowledging that this is where we've actually landed. Of the embarrassment! But once we did, it wasn't so scary.

And we could have just gone about our business and never told a soul. Started fresh. No one would have to know. Except for the fact that I have this blog and I feel an obligation to be as truthful and vulnerable as possible. And our commitment to peeling back the curtains for the benefit of others. Which leads us here. To this moment. To me sitting in a coffee shop in my hometown on my day off work typing out the facts.


Photo Credit: Cookie Monster Wallpaper - deviantART by Elmhoe

Now that the cat is out of the bag, I’ll be writing a lot more about the process of going through bankruptcy and its effects on us and what we’re learning. I expect questions. Ask away. Please.

I have questions too.

First of all, do YOU live on a strict budget?

What tools do you use to track your spending?

Comment below or e-mail: loveinthetimeofforeclosure@gmail.com