A Story About Paying Off Debt and the Obstacles Along the Way

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Winning, August 2018 Edition

Welcome to another edition of WINNING, a sometimes-monthly post in which I outline our financial (and other) achievements in an effort to stay sane and motivated on this long road to debt freedom! I almost forgot about it this month, but NOT TODAY SATAN. I'm determined to get this post out. That's why I'm writing it before work while my kid is chowing down on his toast and my cat is meowing at my feet. This is gonna happen, poor grammar be damned.

Wins are important because let's face it, paying off debt and getting your finances in order can be exhausting. And frustrating. And for some of us it takes foreverrrrr


While you're in the midst of this process, you have to keep a strong grip on the things that are going well.

With that, I present to you three wins for August of 2018:

(1) We met and exceeded our August savings goal! 

Our big goal this month was to sock at least $5000 into savings, using my extra paycheck (this was a three-paycheck month for me) and Fortysomething's final summer bonus. As of today, we've stashed $5500 into our emergency fund. We feel incredibly proud of ourselves for meeting this milestone because we've never had this much in savings before. It's a big deal. It means that if the shit hits the fan, we can clean it up without immediately resorting to credit cards.


As a preview to a post that I maybe plan to write next week, for now, we've decided to maintain our slow roll on debt repayment and keep adding to our savings. Stay tuned for the why.

(2) We made an extra medical bill payment! 

We're still paying off a few thousand dollars for the Kiddo's appendectomy back in March. Because our payment plan is interest-free and involves taking money directly from my HSA, I don't include this as part of our remaining debt (I probably should, but I don't want to, so... I'm not going to). Thanks to that extra August paycheck, I was able to make an additional, unscheduled payment to the hospital. This brings our total bill to approximately $3300. Another piece of great news: next month I'll receive a $500 incentive for the company wellness program I completed last year, so that, too, will go straight to the hospital bill. Progress!


(3) I did not make impetuous, personal finance-destroying decisions at work. 

To lay it all out there, this past month at my job has been grueling. First my boss quit without warning. Then my team was dismantled and restructured. Then, without asking me or preparing me in any way, they suddenly took me off a project I've been working on for months and put me onto another project that up to this point I've had nothing to do with. And that's not to mention the intense three-day business trip that took place mid-month and the numerous new initiatives that have been rolled out in a matter of weeks.

I feel like I have whiplash. This is my first corporate job and while I had heard many people talk of such shenanigans in offices like mine, I wasn't prepared for the actuality. My gut instinct every other day for the past few weeks has been to walk out. Circa-2006 me would have almost certainly handed in my resignation and left, but present-day me has decided to keep taking it a day at a time.

So I didn't leave. I didn't quit. I didn't walk away from my paycheck, health insurance, and 401K match. 

Do I cry at my desk every day? Yes. But I'm still here, giving myself time to figure things out. That, my friends, is an ENORMOUS win for me and my family.


Tell me! What are your wins - financial or otherwise - this month?

(I just discovered a bonus win: I went back and read our Winning post from August of last year. At the time we were feeling bored and like the whole debt repayment process was moving at a snail's pace. So... WIN: we didn't quit!)
Disease Called Debt
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State Of The Finances, Late Summer 2018

This summer has been a little disorienting from a financial standpoint. It started with our big win in June - paying off the credit cards - but since then our progress, at least with respect to debt reduction, has plateaued. In July, we used our disposable income for fun stuff (vacation, home supplies, a few pricy toiletries for me), and in August, we paid the minimums on our loans and threw the rest of our extra money into our savings account. We've made minor headway on the student loans, but we're talking a few hundred dollars.

We're not always going to move at lightning speed when it comes to paying off our debt. I accept that. This is a long process, and it's only natural that our pace will fluctuate. But after a year of intensive (more like obsessive) focus, it feels strange to take our feet off the gas.

While we're sitting here twiddling our thumbs, I thought it might be useful to take stock of our current financial situation. This is partly for our own benefit so that we can see how far we've come, but I'm doing it also so that anyone who's recently started reading this blog can get a sense of where we're at on our debt payoff journey. Keep in mind that 18 months ago we were >$76,000 in debt, didn't have a savings account, had almost no investments, and were living paycheck to paycheck. A lot has changed since then!

State of our finances, August 2018

Total debt: As of the beginning of August, our total debt stands at just over $49,000. That debt consists entirely of student loans (my balance totals just under $10K with a 7% interest rate; Fortysomething's balance is at $39K with an interest rate of 7.25%). We don't have a mortgage or a car payment, and we no longer have credit card debt. *stops typing to jump up and down because this never gets old* Since June of 2017, we've paid off $28,000 of our original debt load. That's major progress and we feel really proud of ourselves for getting this far.

Savings: By the end of August, we will have an emergency fund of $5200. In my entire adult life, I can't remember ever having this much cash in reserve. Crazy, right? I'm not going to lie: this savings account helps me sleep better at night. If our car (we're a one-car family) were to crap out, or if we were to get saddled with additional medical expenses, we'd be able to use our emergency fund to buy another used car (outright, ideally) and meet our out-of-pocket maximum. If we needed to travel across the country to see family, we could purchase plane tickets without disrupting our monthly budget. 

I also have a few hundred dollars in my HSA, to which I contribute $360 per month. However, because I'm still paying off medical bills from the Kiddo's appendectomy last spring, most of the HSA money drains out as quickly as it comes in. I keep enough in the account to cover the copay of a doctor's visit or eye exam.

Health insurance: We're covered through our employers. Fortysomething has full health insurance for himself through his work, while my employer's high deductible plan (with a maximum out-of-pocket limit of approximately $7500) covers me and the Kiddo. Having decent health insurance is a big deal to me, and it feels like an absolute luxury in a country where so many people either can't afford it at all or are paying big premiums for plans that offer, well, not much.

Investments: It's no secret that we don't have much in our retirement funds yet. True FIRE gurus would cringe at the total. I will say that Fortysomething and I both have a 401K through our employers (each with a 5-6% match), and we each have an IRA. I hear about people maxing out these funds each and every year and I'm like, #GOALSSSS. But we're not there yet. We won't be there for another few years.

Financial questions we're currently asking:

1. Should we save more before going all-out on student loans? Many people would argue in favor of going after the loans, given the fact that we're paying interest on them. However, in one of her recent case study posts, Mrs. Frugalwoods made a strong argument for squirreling away 3-6 months' worth of expenses before tackling student loans full on. I go back and forth on this conundrum pretty much every day. On one hand, if we commit ourselves to loan payoff, mine could be eliminated by February. On the other hand, having money in savings gives me a sense of security and breathing room that I haven't had in a long time. 

2. Should we purchase a house? I've shared that our current rent is borderline exorbitant: $2100/month. Granted, this sum is not unusual for our area, and services like water, sewer, and garbage are rolled into the rent. Plus, our location is as ideal as it could possibly get. Fortysomething can walk to work, we're a mere five-minute drive from our grocery store, and I can run to our local park. We're also aware that home upkeep is expensive and that many of our weekends would be spent on repairs and maintenance. 

On the other hand, we're committed to staying here, so purchasing a home makes sense in that respect. Even with a meager down payment, it's possible that a mortgage would be a few hundred dollars less per month than what we're currently shelling out in rent. It can't hurt to meet with a mortgage broker to see what kind of loans we're eligible for.

3. Should we refinance Fortysomething's loans? I think the answer is YES, given that a 7.25% interest rate is a few percentage points higher than it needs to be, but maybe the real question is, When will we get off our butts and refinance this loan? Good question. I'll let you know when we get there.

4. What about a college fund? If the FIRE fanatics were cringing before, this next point may make them cry: we don't have a college fund for the Kiddo. I know, I know, that's not good. But keep in mind that we didn't really have our finances together until about a year and a half ago, at which point we started throwing any disposable income at our credit card debt. And we still have debt, none of which I ever want to saddle my kid with. Thus, our focus is on making that debt go away.

I want my kid to make his own decisions after he graduates from high school, but I really hope to impart to him that (a) he does not need to go to college immediately, (b) he can work while he is in school to help cover part of tuition, and (c) he does not need to spend tens of thousands of dollars to get an education. Knowing him, I wouldn't be surprised at all if he wanted to work and travel for a few years before pursuing a degree. As someone who has spent more than a decade working in higher education, I think more students would benefit from taking some time away before going to college.

At the same time, I'd feel pretty bad if he was ready to go to college right after high school and we couldn't help him out at all. Thus, starting a college fund - albeit several years late - is something that is on my radar. 

So that's where we're at! And while plenty of questions remain, I still can't get over how much progress we've made in less than two years. It's been a challenging road, but it's also been incredibly rewarding because it's shown us what we are capable of accomplishing if we put in the effort. 
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When Your Mental Health Affects Your Financial Well-Being

Connecting mental and financial wellness

For a while now, I've been wanting to revisit a topic I've broached in a few previous posts: how my mental health impacts my financial well-being. For me, the two are closely connected. 

My dicey mental health is something that I've long struggled with, and I know I'm not alone. In fact, I'd bet a lot of money that most of us deal with mental health issues of some sort because let's face it: being human is really, really hard. Our minds are placed under enormous amounts of stress every day. We're all doing the best we can to cope. (That's something I tell myself a lot when I find myself getting annoyed at others... They're doing the best they can in the moment, as we all are, and we need to cut each other a little slack.)

While I'm not quite ready to parade out all of the diagnoses that therapists and doctors have assigned to me over the years (at some point I want to put it all out there and talk about it openly, because I think transparency and vulnerability are incredibly powerful), I will say that depression and anxiety are constants in my life. Usually they tag-team with one another: I'll come out of a depressive episode to find my anxiety ramping up, or my anxiety will settle down only for depression to tuck in for a long stay.

Other people have likened depression to a large dog that follows you everywhere and anxiety to a monkey that crashes around in your mind. Both are apt analogies. I've been dealing with the dog and the monkey for such a long time that they're veritably woven into the fabric of my daily experience. Just as a fish doesn't swim around thinking about how wet the water is, I don't always go through my life with a conscious awareness of my depression, anxiety, and other idiosyncrasies because that's the mental environment in which I live (and even occasionally thrive). Sometimes I'm very good at operating as if the big dog isn't right under foot and the monkey isn't playing heavy metal in my prefrontal cortex. Sometimes, for a short while, I can even let myself think they're not there at all. I can convince myself that I've got it all under control.

So what's often tough to admit is the extent to which my mental health has affected my finances and career. There's no doubt it has had, and is having, an impact, but I have to be careful about how much I allow myself to analyze the consequences of a situation I can't always control (even though I feel like I should be able to, always). Writing about this is challenging for me because it means looking at some hard truths.

Impact #1: Sometimes I've spent lots and lots of money (even money I didn't have) for the opportunity to feel better. 

I don't often do this now, but in the past, whenever I felt truly awful, I'd bust out my wallet in a desperate effort to shake off the unbearable feelings. Personally, I've never been that enticed by things. New clothes and fresh home decor have rarely dragged me out of a slump and usually made me feel worse in the long run. But what did always seem to help was travel. Particularly when I was in my twenties, I'd think nothing of spending hundreds or even thousands of dollars on spur-of-the-moment vacations and adventures. Cruises, expensive resort stays, even a semester-long adventure course in Europe - all of them were attempts to extricate myself from the giant tar pit in my brain.

And honestly, it almost always worked. These escapades helped me un-stick myself, introduced me to people and cultures that I might not have otherwise known, and built my self-confidence. Despite the damage that traveling did to my credit card balance, I look back at it with barely a shred of regret.

 If I were wealthy, I might still be using this coping technique on a regular basis. And you know, if things got bad enough, I think I'd still be willing to throw much of my savings at a plane ticket if it meant feeling better.

Impact #2: I've had a hard time staying in any one place for an extended period of time. 

Not only have we physically moved multiple times in the past 15 years, I've regularly changed jobs, too. I'm not a psychotherapist so I won't pretend to understand the psychological nitty-gritty of why this happens, but I know that people with certain types of mental illnesses often get into a cycle of starting over. Each time, things go well for a while. Then something bad happens. They blame themselves. The atmosphere - for them - changes, and the situation becomes disorienting. Suddenly, the experience starts to crumble, and their instinct is to flee. So they leave and begin somewhere or something new. Lather, rinse, and of course repeat, because problematically, no matter where you go, there you are.

Hey, you're thinking, just stick around! Take it day by day! Give it time! It'll get better! All good instincts, but trust me when I say that it isn't that simple. In the mind of the person who's wired in this fashion, it's a Code Red fight or flight scenario each and every time. Taking a few deep breaths and a mental health day won't solve the problem.

Moving is expensive. Changing jobs and careers is very, very expensive: think of the lost bonuses, raises, and promotions. While I haven't crunched the numbers to see what I've missed out on, I know that my peripatetic lifestyle has definitely cost me.

To some extent, I've successfully modified my tendency to up and leave. We love where we live now, and my partner and I have basically agreed that every choice we make needs to accommodate our commitment to staying here. As for work, I promise myself that I will stay in every job for at least a year, which is a timeline I can hold myself to without panicking or feeling suffocated.

But this area continues to be a challenge for me. Usually, my mental illness and traditional work environments/expectations don't mesh that well, and that's something I'm still trying to figure out.

Impact #3: Little desire to invest in the future

For a very, very long time, I struggled to picture myself in a year, much less 10 or 30 years down the road. This common phenomenon is known as "present bias," and it is not limited to those who deal with mental illness. But I think that particularly when you are grappling with any kind of condition that causes a great deal of pain - physical or mental - the future can seem so nebulous and incomprehensible that spending any time thinking about it or planning for it seems like a giant waste of time.

That's how it felt to me, and that's why I didn't invest in it. Especially when I was in my 20s and early 30s, when I was still figuring out how to cope with my mental health issues, I didn't want to put money into the future. The present was demanding enough, and it was there that I spent my time, energy, and money.

To me, people telling me to invest was like telling me, "Hey, civilization might live on Mars one day, so you might want to start packing your bags." Okay. Sure.

As a result, I didn't save or invest much, and obviously that has an impact now that I'm in the future that younger me couldn't imagine. That's why I'm so in awe of my friends who are just out of college and already shoveling more than half of each paycheck into their retirement funds: they have a concept of the future that I just didn't. 

Doing the best I can with what I've got, and being okay with that

While I think anybody can improve their situation, I also think that mental health is likely to be a lifelong struggle for me. It's just how I'm wired and how my brain handles stimuli from this go-go-go world in which we live. My brain hits its limits on a fairly regular basis. I can't always do what other people do easily.

But the way I respond to these challenges has changed for the better - mostly in the sense that I act less impulsively now - and as a result, I have a much better handle on my personal finances than I used to. I'm very proud of that. Do I think it's going to all go perfectly from here on out? Nope. The goal is to simply do my best with the quirky mind I've got, consider the long-term effects of the decisions I make, and let go of non-ideal choices made when things get difficult.

If you're struggling with depression, anxiety, or mental illness of any kind, know that you are not alone, and give yourself as much credit as you can for fighting a hard battle every day to the best of your ability. And if you feel safe sharing your own experiences here, I'd love to hear them.

Disease Called Debt
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Approaching Big Life Moments With Manageable Short-Term Goals

A pivotal year (whether I like it or not)

The beginning of August has put me in a contemplative mood. Maybe it's because my kid has started middle school, which seems bonkers to me because how is he suddenly in sixth grade? Maybe it's because of recent upheaval at work. Maybe it's because I've been spending long hours running on the trail, accompanied only by my busy, worried mind.

Or maybe it's because I've reached that watershed life moment: I'm turning 40 in a few months.

When I turned 30, a bit of dialogue from When Harry Met Sally lodged itself in my brain:

I'm gonna be 40!

Yeah... in 10 years.

I repeated it every birthday like a mantra of reassurance: I'm gonna be 40! ...Yeah, in 8 years. In 7 years. In 3 years.

...This year.


I always told myself that I wouldn't make a big deal of this birthday. After all, age is just a number; on the path of life, there's no sign at mile 40 that says, "You have now reached OLD." Whatever old is, I don't feel it; the only difference between 39-year-old me and 25-year-old me is some stretch marks and a few natural silver highlights. Come at me, twentysomething me. I don't believe in old.

That's why I've always (discreetly) rolled my eyes at friends who, upon reaching the four decade mark, suddenly start talking about creaky joints and earlier bedtimes and how it's all downhill from here, and not in a good way. This idea that age dictates how I should feel? Yeah, no. I'm not buying that. YOU'RE NOT ANYTHING SPECIAL, 40, AND TO PROVE IT I'M GONNA GO RUN 50 MILES IN THE DESERT.


As hard as I try to avoid it, I can't shake the feeling that it IS a big deal, that it IS noteworthy. I find myself both dreading and anticipating this birthday because dammit, despite my resistance, it appears to mean something to me. I'm suddenly observing the arc of the last 10 years, critiquing the winding path I've taken so far, and asking some unsettling questions: Is my approach working for me, and if not, how do I adjust? What's next? The need to reflect feels as natural and inevitable as anything else that's programmed into my DNA.

I'm not going to try to answer those questions in this blog post, in case you're wondering. But they're on my mind and I'm probably going to use this personal finance-focused space to explore them further in the coming months. While my mini-midlife-crisis may seem to have nothing to do with money, it actually has everything to do with money, because money gives you the freedom to explore different options and to select a new path if the one you're on isn't working out.

(Sidenote: Tenacious Feminist just wrote a blog post about goals and 40, too, so check it out!)


August goals

I don't have all the answers. Or any answers. That's okay. I don't need them right now. Nascent big dreams and long-term goals will undoubtedly become clearer with time. What I've found is that when the future seems like a big question mark, I can ground myself with some well-defined short-term goals.

So here's what I've got for August:

1. Stick with my running plan. I have my two "I'm turning 40 and I've still got it" races coming up in September and November, and I'm trying my darnedest to keep up with my training schedule so that I'm as prepared as possible. At this point I'm running five days a week: three shorter runs, a really long run, and a medium-longish run (the long run is followed the day after by the medium-longish run, the idea being that it'll train me keep going even when my legs are tired). I love running, but I'll admit that this plan is extremely time-consuming, and I don't always feel like doing it (like this morning, when I got up at 5:30 AM so that I had time to get my workout in before walking the Kiddo to school and starting work).

But I can do it. I've got this. And when I show myself that I'm capable of sticking to this goal, it'll make me feel more confident about meeting my other goals, too.

2. Save $5000 in emergency fund. I discussed this in a previous post so I won't rehash it all here, but we're getting close to the finish line on this one. I just need to put 1/3 of each remaining August paycheck into the savings account. It's a relief to have a thicker financial cushion, despite the fact that we receive peanuts in interest. Not even peanuts. Maybe peanut shells, or crumbs of peanut shells. But still.

3. Write six blog posts. I love this blog. I enjoy writing about our financial journey, but more that that, I just enjoy creating. It's fun (also sometimes frustrating) to sit down and see what actually ends up on the page. Crafting these posts gives me a sense of focus, flow, and challenge. So from here on out, I'm going to make every effort to create six original posts per month. I did it last month. I can do it in August, too.

4. Identify 3 things I'd like to change or add to my life in Year 40. If 40 is going to insist on being a big deal, then fine. I'm going to make the most of it. Lately I've been journaling more, recording what I value and the things I value less, noting where I feel in my element and what energizes me. Throughout August, I'll continue reflecting, and hopefully I'll be able to set some longer-term goals (somewhat randomly, I've elected to make three goals). I figure I don't need to know how I'm going to achieve them. The logistics can wait. But I'll allow myself to acknowledge them.

Does any of this resonate? What about you? what are your current goals, whether short- or long-term?
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Why We're Prioritizing Our Emergency Fund Over Student Loan Repayment

Our temporarily relaxed budget and a vacation to the mountains made July a fun month. It was refreshing to leave town and my office, and it felt luxurious/weird to splurge on things that are clearly more in the category of wants (e.g., condo rental, kitchen gadgets, beauty products, overpriced sightseeing activities) rather than needs. July was our opportunity to take a break from the grind, and it was completely worth it.

But now it's August, and it's time to get back to business. Fortysomething will be returning to work, the Kiddo will be returning to school, and we'll all be returning to our budget and the pursuit of our long-term financial goals.

Do I feel ready?


Are we all going to buck up and do it anyway?

Ummm, yeah. Sure.


Making a choice

Our August started off with a key decision. You may recall that after we paid off our credit card at the beginning of July, we were trying to figure out the best way to deploy the last of our 2018 bonus money. We knew we didn't want to just fritter it away, but we were also a little overwhelmed by the plethora of financially smart possibilities: Emergency savings? Student loans? Investments? Down payment for a house?

After much discussion, we realized that our two top priorities at the moment are paying off our student loan debt and socking more money into savings. We identified three main options:

Option 1: Attack the student loans. In this scenario, we'd use all bonus money + third August paycheck + $2000/month (the $2000 represents all of the "extra" money that we have available for pursuing our financial goals each month) to pay off a significant chunk of my student loan. The bonus money and extra paycheck alone would reduce my loan balance from ~$10K to about $6K, leaving us with a total loan balance of $46K.

Option 2: Beef up the emergency fund. This option would involve putting all bonus money + third August paycheck + part of disposable income into our little emergency fund. For the past few months, our e-fund has hovered somewhere between $1K and $1.5K, the amount that debt repayment guru Dave Ramsey recommends keeping in savings until all debt is paid off. Adding our bonus cash to the pot would bring the balance to $5K and give us a little more financial security in the face of an unexpected and expensive crisis.

Option 3: Split the difference. Allocate part of the bonus money + third August paycheck to emergency savings, and part of it to student loan repayment.

We eliminated Option 3 almost immediately because I'm a very all-or-nothing, go-big-or-go-home type who has trouble doing anything halfway. Divvying up the money and spreading it thinly over loans and savings didn't feel satisfying to me. Should we base our financial decisions on our feelings? Well, no, but for the sake of motivation, sometimes you have to take your feelings, inclinations, and gut instincts into account.

My gut tells me that I need to see big gains - one way or another - to stay motivated.

When I posted our dilemma on Twitter and asked for advice from the personal finance gurus of the Twitterverse, almost all of the respondents told us to choose Option 1: go all out on those student loans. Make a big dent ASAP. Accelerate our payoff plan.


And I have to say that for most of July, both Fortysomething and I were completely on board with that because it meant we'd be truly putting our money to work rather than letting it idle in our low-interest savings account. Plus, going all-out on the loans would allow us to pay off our student loans in less than two years. And that sounded really, really good - the sexiest option of the three.

But then some realizations set in.

Why we have to prioritize our savings

First, we need enough money in savings to cover at least the $2700 family deductible of my high deductible health plan, if not the $7500 out-of-pocket maximum. The Kiddo's emergency surgery back in March should have burned this lesson into our brains. We're still in the process of paying the $4000 hospital bill (I use my HSA to make monthly payments of $400), and I don't want to add to that total if we have another big medical expense.

(Sidenote: why, you may ask, did you select the HDHP when there's a low-deductible plan available? And the answer is that (1) the premiums for the traditional plan have skyrocketed, so it's not that appealing even if the deductible is lower, (2) if for some reason I lost my job, I'd never be able to afford the COBRA premiums for the traditional plan, and (3) with my HDHP, my company makes regular contributions to my HSA. FREE MONEY, people. I can't pass that up!)

Second, recent developments at work make me feel less secure than I did a month ago. I don't think I'm on the verge of losing my job, but over the past week I've been learning some hard lessons about corporate America: one, everyone is expendable, and two, companies don't feel bad about replacing people or erasing their positions literally overnight. These may sound like obvious truths to some of you, but before my current gig I spent years in academia where the wheels of bureaucracy generally turn much, much more slowly. If you don't get tenure, or your contract doesn't get renewed, usually you still have some time to look for another job and squirrel away some cash before losing your paycheck entirely. You have to do something truly awful/criminal to come in one morning and find that the locks on your office door have been changed.

But big corporate companies? Nah, they're apparently cool with it.

Bottom line: it's clear that the smart move is to save up some money so that if I'm suddenly jobless, we can still pay the rent.

At the moment, our savings goal is $5000. We may increase that just a bit more: $6000 would cover our rent for three months. Assuming that at least one of us is employed at any given time, we would then have several months' worth of financial runway. That'll help me sleep better at night.

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