Wednesday, September 30, 2015

Snapshot Update

Previously, I mentioned that I am using Progressive's Snapshot program to try to save money on my car insurance. See my updated details below.



As you can see - I had a brutal day Tuesday with a total of FOUR hard brakes. Bunch of animals in this town! Anyway, note that my daily averages look good and I am only driving 14 miles per day on average. Given that Progressive wants this number under 30 miles a day, I am a serious low mileage driver. The only question - how bad am I going to get dinged on the hard braking?

Trust me. It is NOTHING like this.

Shouldn't be too long and I will receive my updated quote. We will all find out just how much braking is a factor in this gig.

Have you tried Progressive's Snapshot? Leave your questions or comments below or send them to disindebted@gmail.com.






Tuesday, September 29, 2015

Bliss on a Budget - Camping Our Way to DisIndebtification

Both Mrs. DisIndebted and I have high pressure, demanding professional jobs. She is often required to stay late hours for client meetings. I seldom have such obligations, but face frequent deadlines with major consequences. Thus, I am guilty of taking it home with me and working on my phone late into the night and over the weekend. I actually just checked my work email at 8:34 PM.

Hey Hamster, keep humping that
American Dream, You got this, baby!
The reality is it is never ending. Sometimes it feels like we are on a hamster wheel - just going round and round: every week is the same. Every day we deal with new issues, new clients, new people and their issues. Every day we look forward to our evening. Every week we look forward to our weekend. And, unsurprisingly, every weekend we do not look forward to Monday. It all adds up to a lot of stress.

I have yet to find the secret to avoiding the hamster wheel - but I have found ways to soothe the stress. The gym is great. So is cooking. Of course, our pets are always there for us even when we may not want them. Despite the many ways we can de-stress in our daily lives, sometimes we need a longer break to reset your brain. That is what vacations are for. There is something so wonderful about spending a night or more away from the chaos and constant chatter of everyday living.  Of course we love travel and someday hope to do quite a bit more, but we cannot afford to take exciting trips and aggressively pay our debts at the same time.

Bliss on a budget.
Never fear, we have camping!

I grew up on camping. I spent many years in Boy Scouts, not to learn skills or advance to Eagle, but to go on the monthly camp-outs. Then in high-school, I talked my folks into sending me to some backpacking camps. When I finished the bar exam, the first thing I did was hike a four day section of the Appalachian Trail (some beverages may have been consumed between the test and the trail). After all the years I have a decent collection of tents, lamps, and other gear and I am ready to set up camp at a moment's notice.

Mrs. DisIndebted, however, did not grow up on the stuff and in our relationship up until now we have always stayed in hotels or cabins. Nonetheless, shortly after heading down the path to debt freedom we decided to take a trip. The obvious economical choice was to camp out. We decided we didn't want to drive far, so we chose a state park nearby and reserved two nights at a non-electric (primitive) campground. We knew that for the cost of a campsite and a few other items, we could enjoy a full weekend of relaxation.

How much did our camping adventure cost us? Really, not much. We spent $18 a night on the campground = $36. The burgers, beers, pancake batter and other grub was already paid for and in the pantry = free. We needed the beers = $20. We also needed the soft serve from the little place in the nearby town = $5. We needed about 1/4 tank of gas to drive us there and back = $8. The reality is we would spend a lot of this on normal weekend activities.

Campground Fees$36
Food$0
Beer$20
Ice Cream$5
Firewood$50
Gas (1/4 tank)$8
TOTAL$119

Of course, I've omitted the most expensive line item; firewood. We spent $50 on firewood!

Wood for burninating.
We do like our fires! That said, we could have spent a TON less on this luxury. The reality is that we didn't plan ahead and buy firewood before we got there. Instead, we paid campground prices of $5 a bundle. Yes, we went through ten bundles of wood. Yes, we murdered a bunch of trees. No, we do not feel guilty.

Had we planned ahead, we could have picked the wood up much more cheaply. I just checked Craigslist found people selling it for 1/3 or more of what we paid. That said, it is (in my book) a must for camping so we decided we would splurge. And splurge, we did. It isn't that we have money to burn, but calculated the cost we went ahead and set it on fire anyway. Lesson learned. Next time we will plan the firewood in advance. Maybe we can hire a den of industrious friendly beavers to fell a full-grown tree in anticipation of our arrival. Don't judge... It could happen.

So what did we do other than burninate overpriced wood like so many thatched roof cottages? We did some hiking with the dog. We took a trip into town and enjoyed the local ice cream (obviously). We watched the stars and enjoyed deep conversations. We ate and drank like king and queen - and, like true royals we were entertained! There was a birthday party going on and thirty or so kids were all running around with swords and horns in some sort of loosely organized live action role play. It isn't every day you witness a legion of little LARPers LARPing in the park. All this and more for a very affordable price. In my book $119 for two nights at a relaxing wooded retreat with scenic views and live entertainment is a real bargain. Next time, I think we can do it for under $100.

Will there be a next time? You bet there will! We are already planning for our next camp-out. Despite not having camped in over ten years, Mrs. DisIndebted loved it so much that she is sold for life! And, after only two days back in the hamster wheel we are both ready for another getaway.

Tell us about your budget camping tips and other cheap vacation ideas below or at disindebted@gmail.com.










Tuesday, September 22, 2015

We Saved $552 a Year on Car Insurance and I Hope to Save EVEN MORE!

We shook up our car insurance and saved $552 a year. I know this sounds like a lame commercial. Queue the gecko. But seriously, shortly after Mrs. DisIndebted and I got married we made some simple changes to our car insurance that saved us $552 a year / $46 a month. I'm hoping to save us even more!

In the spring before we got hitched, we were spending a combined $2,064 per year on car insurance - $172 a month. We both had insurance through Progressive, me for four years, her for five. So we decided it would be best to bundle up on her policy since she had the longer customer history. Then one Sunday in July we gave Progressive a call and combined our policies. We were shocked at the savings for going to a joint plan. Suddenly, we were paying $1,680 a year; $384 less than before (19%). The customer service rep let us know that I had a speeding ticket that could come off in August. I called back in August and our rate dropped again, this time to $1,512 a year; $552 less than we were paying separately.

That's it. It was that easy to save 27% on our insurance. But I think we are going to save even more.

I am a light driver. My office is around 4 miles from my apartment, so I have a total round trip of around 8 miles a day. Because of this, I feel I am a good candidate for Progressive's "Snapshot" program*. Progressive advertises it can save me up to 30% based on my good driving. The plan varies from state to state, but according to Progressive, here is what they track in my state (Ohio):
  • Mileage— Total distance of trips. To earn a discount, try to minimize your time behind the wheel by combining trips, carpooling or using public transportation. [DisIndebted Note: Elsewhere, this is quantified as 30 miles per day on average]
  • Time and day—The number of minutes you spend driving during higher risk hours—the highest risk are between midnight and 4 a.m.

  • Hard braking—Hard brakes are decreases in speed of seven mph per second or greater. Your Snapshot device will “beep” when you brake hard. Minimize hard braking to work toward a discount.

MILEAGE:
As you can see, I don't drive that much on a daily basis. In fact, what you are looking at most weekdays is a trip to the office, home for lunch, back to work, and home in the evening. 

Debt Free Dog
I could cut the mileage further if I stayed at the office through lunch. That said, I my lunch at home is a short bit of sanity in what is typically an incredibly insane work day. Plus - I get to see the dog!
That said - now that I'm thinking about it, we are talking about 8 miles a day, five days a week. I get roughly 20 mpg, so that's two gallons of gas weekly. Today fuel was $2.39. That's $4.88 a week for me to eat lunch at home. That's $254 a year.

In the end, $254 a year is a small price to pay for sanity. Plus - look at that fluff-ball dog!

So anywho, back to this whole Snapshot gig. As I noted above, they are tracking three key performance indicators:

Obviously, I am driving on average far below 30 miles a day. Score one point for Mr. DisIndebted. 

TIME AND DAY:
On top of a short commute, I am in bed by 10 most nights and rarely leave before 7:30 AM. I do not drive between midnight and 4 a.m. Nothing more to say. Two points! 

HARD BRAKING:
The big unknown here is the hard braking. First of all, I don't know what they mean by minimized. Is one hard brake every five miles acceptable - or is one ever fifty what I should be aiming for? Does it matter that I spend more time on surface streets than highways? There are just too many variables involved and there is no clearly defined metric for this factor.

I've been at it for 12 days so far and I have to say this braking thing is the most annoying piece of crap I have ever encountered. I drive very safe. I am cautious - but not overly cautious. I keep a solid following distance. I signal every turn and lane change. But somehow I keep getting dinged on the hard braking. Progressive calculates a hard brake as a decrease in speed of seven mph per second or greater. I swear a) the system is way more sensitive than that, and b) this calculation is crap. I can come to the smoothest cleanest stop and think, "yeah, I got this!" That's the moment the stupid Snapshot box gives me a disapproving chirp, which moment is quickly followed by me uttering some particularly choice words. 

Here is my recent performance:


The hard brakes are a wildcard but let's see if we can make some sense of it. I drove rounded a total of 122 miles and made 11 hard brakes in those miles. That means I made one hard brake every 11 miles on average. Is that enough to get me a 30% discount? Only time will tell. 

What would a 30% discount mean? Assuming my vehicle is 50% of the insurance cost, then a 30% reduction based on my driving would yield a 15% reduction on our overall premium. This would be an annual cost of $1,285; $779 less than our separate premium costs - or a total savings of 38% over where we were in the spring. 

This would take monthly auto insurance cost from an original $172 to $107 and save us $65 a month. That's a lot of dough. HOLD ON TO YOUR BUTTS! Mr. DisIndebted is driving like Grandpa.

I'll keep you posted on the Snapshot progress and let you know what it ultimately does to our rates.

Have you used Snapshot? What did it save you? What else have you done to lower your car insurance premiums? Share your secrets with us below or at disindebted@gmail.com.



*Disclaimer: Mrs. DisIndebted is not participating in the Snapshot program. Without doing any thing to impeach her driving abilities, let's just say that we aren't confident her participation will not actually increase our rates.





Monday, September 21, 2015

Eating Our Way Out of Debt

As I said in my previous post there are two ways you can increase the amount of money available for your goal. 1) You can make more money, or 2) You can spend less money. It is that simple and I recommend doing both. This time we are going to focus on the second way; spending less. 

Magic me a burger, magic man.
You don't need a mathemagician to tell you it is cheaper to buy food and cook it at home than it is to eat out. What surprised Mrs. DisIndebted and me was just how much cash we could keep in our pockets by curbing the meals out. I am here to tell you just how much - a lot.

We were fairly hedonistic a year or more ago and would eat out around five times a week. On top of that, I would eat lunch out with coworkers almost daily. Coffee shops, drive-through cravings, ice-cream weekend trips, celebration dinners for any and all occasion for cheer; Adding it all up, we were an average of $550 a month on restaurants! That is on top of an out of control grocery bill of over $500 a month.  That is $12,600 a year, $242 a week, or  $35 a day. That's nearly $1.50 an hour, every hour, 24 / 7 / 365.

That is ridiculous.

We decided long before we made the choice to disindebtify that we would eat healthier and save money by cooking more meals at home. It has been over a year since then and we have made (and continue to make) huge cuts in our food budget. The best thing is - we are happier and healthier with this lifestyle than we ever were eating out.

Today our food budget is 55% of where it was. We allow ourselves up to $92 a week in groceries and $42 a week at restaurants (we find budgeting easier on a weekly basis - more on that another day). That said, while our budget allows this amount, we are actually spending even less. Last week, we spent $70 on groceries and $23 dining out. That is less than half of what we would have spent in a week last year!

Let me tell you about five ways we are eating our way to disindebtedness.

Every Sunday
1) We Save a Ton by Having Meal Prep Days.
This sounds like a chore - but it's really a time saver (and a huge money saver). Every Sunday we whip up a batch of something big enough to feed a Mongol horde. This week it is Taco Chicken and Rice. Chicken, rice, beans, peppers, onions, taco seasoning, and salsa. It's darn tasty! We have done this with ground beef, but opted for chicken... and specifically thighs, since they were on sale for $0.99 a pound this week. We bought 12 pounds. Once we cooked everything, we parceled it into roughly even portions in re-usable seal-able plastic containers. We made 18 meals. The ingredients cost us $13.50. That's $0.75 a meal. Next week - more chicken thighs will be consumed (because why waste a great sale?) with pasta in the form of chicken Parmesan. Again, for a shockingly low price under $1 per meal.

Chicken Parm on standby

This is how we eat. Aside from the savings, it is super convenient because we have easy to microwave meals ready for lunches and dinner all week. Usually we will have more than enough - which leaves us with a freezer full of stockpile for the next [name your catastrophe]. Plus, we do get tired of the same old same old all the time, so we can always grab last month's Thai Peanut Chicken from the freezer and mix it up. It's simple. It's cheap. And our friends are always envious of our meals.

Check out some great recipes at Food vs. Face! With the fall chill on its way, I'm looking forward to making a big old batch of Chicken and Noodles. Yum.

Get in my belly.
2) We Reduce Costs by Making our Own Convenience Packaging
We love cheeseburgers. That said, we also want to watch our waistline so we started buying extra lean 90% ground sirloin instead of chuck or other ground beef. We also love convenience. Early in the summer we discovered that Laura's Lean sold preformed 1/4 pound patties in the freezer section. These go for $15 a box full price; about $1.88 a patty. It's so convenient - but that convenience comes at a price. Overpaying is a bunch of bull.

Kroger sells ground sirloin for $5.19 a pound, which means I can make 1/4 pound patties for $1.30 each. I'm saving 30% by making the patties myself and putting them in freezer bags. When I can combine it with a sale - I do even better! Last week, Groupon's Snap (see below) application was giving a $1 rebate for the purchase of lean ground beef. The burger patties in my freezer right now cost about $1.05 a piece... That's almost 45% off the convenience price.

We do this with other items. I love having frozen peppers and onions on hand to throw into a soup or a batch of eggs. We used to buy the frozen bag Kroger. Now we chop up our own and freeze. Cheap and easy. Oatmeal. Who needs packets? Not the DisIndebteds! This stuff isn't rocket science.

3) We Avoid the Doctor and Lower our Healthcare Costs
Less salt, fat, and preservatives mean less health issues for the DisIndebteds. I don't know how to calculate this - but at a minimum we are saving trips to the doctor later in life. Potentially we are extending our years and eating our way to a longer life together. This is priceless. I have nothing more to say.

Give yourself a Raise!
4) We Use Sales to Lower the Cost of the Food we Buy and Apps to Put Money Back In Our Pockets
This is really two topics. We make our food less expensive so we pay less at the checkout. We also
exploit rebates to get cash back down the road.

My favorite way to cut costs is to take advantage of mega sales. This weekend, Kroger Private Selection bread was on sale for $1.99 a loaf (regularly $2.99), plus they had a mega sale where you get $1 off per loaf when you buy four. We bought four loaves of bread for $3.96; $0.99 a loaf. Not too shabby.

BUT, we also used a Kroger card I bought on Raise to purchase it. If you aren't familiar with Raise, it is a marketplace for buying and selling gift cards. If you have a card you don't want, you can sell it at a discounted price to someone who wants it. I regularly pick up Kroger gift cards on there for around 2.5% of the face value. Thus, I can buy $100 worth of food for $97.50. At 2.5% off, my bread cost about $0.97 cents a loaf. Not too shabby.

On top of that - we use apps like Ibotta, Snap, and Checkout 51 to get rebates on the stuff we buy. Ibotta will regularly have savings on generic stuff you buy every day - such as bread. Last week it had a $0.20 rebate on the purchase of any loaf of bread. You only get one - but that's still an extra 5 cents off each loaf, for a grand total of $0.92 per loaf.

Now I have enough bread to last the DisIndebteds two months and we paid $3.68. That's 70% off the regular price for four loaves.

I have been using these apps for two months and reaped an impressive $6.25 on Snap, $7.75 on Checkout 51, and $46.00 on Ibotta rebates. That's $60.00 in two months!

5) We Save Time
Time is money right? I can't tell you how many hours we have wasted on restaurants. Think of all the steps involved: 1) get in the car, 2) drive to the restaurant, 3) wait for a table, 4) wait for waitstaff, 5) order drinks, 6) wait for waitstaff to return, 7) wait for food, 8) wait for the bill, 9) wait for change, and 10) drive home. That is lot of process for one meal! With our prepared meals and homemade convenience items we average no more than a few minutes preparing a meal on a given night. When we go out, we can easily spend 90 minutes or more. When we eat in, dinner can be as short as 15 minutes. That's over an hour of time that Mrs. DisIndebted and I get to enjoy together. With both of us working and the constant intrusions from other areas of our lives - an hour together is huge.

Like our health, it's hard to put a price tag on this - but how much would you be willing to pay for happiness?


How are you saving on the food bill? Share your secrets with us below or at disindebted@gmail.com.







Wednesday, September 16, 2015

De-Clutter. Make Money!

Whether you are trying to pay off debts or build your savings, there are two ways you can increase the amount of money available for your goal. 1) You can make more money, or 2) You can spend less money. It is that simple and I recommend doing both.

This is my crap closet
(aka quasi hoarder stash)
One way the DisIndebteds are making more money is by using eBay to sell all the crap we don't want, need, or use anymore.

It all began with Mrs. DisIndebted's desire to de-clutter our lives. We had so much crap sitting around collecting dust and it was driving her crazy. I, having grown up with borderline hoarders, was accustomed to the clutter.

To be fair, my parents are not hoarders in the sense that they have decades worth of newspapers, twine, and pizza boxes stacked floor to ceiling throughout the house or a weird room stuffed to the gills with rare rubber balls, but they certainly have a hard time letting go of anything. My mother particularly will find sentimental value in the most mundane everyday objects. Everything is a "keepsake," which to me means that you keep it for the sake of keeping it. (Mom, if you're reading this, I love you.)

Perhaps I should seek therapy.

Anyway, while Mrs. DisIndebted found it easy to de-clutter, I struggled with the deed. But with her help I was soon able to work through a drawer; eventually a whole dresser. Today I am almost completely cured and I'm happy to report that last night I sua sponte packed up a box of clothes and crap to drop off at Goodwill.

Back to eBay... As I became more comfortable letting things go, I began to realize how little I need all the crap I've been collecting over the years. I've been working through the crap closet and am happy to report that I've earned a hefty sum selling items on eBay. In the last 60 days we made $2,343.92 on eBay selling crap we don't want, need, or use.


60-DAY EBAY SALES RESULTS
Sale PriceShipping / eBay & PayPal FeesNet ProfitProfit Margin
VCR / DVD Recorder$242.50$51.89$190.6178.60%
Digital Camera$31.95$10.78$21.1766.26%
Blu-Ray Player$25.00$18.88$6.1224.48%
Home Audio Speakers$142.50$58.68$83.8258.82%
Electric Guitar$202.50$66.42$136.0867.20%
2009 MacBook Pro$400.00$68.48$331.5282.88%
2012 MacBook Pro$825.00$131.97$693.0384.00%
Yairi Acoustic Guitar$1,125.00$244.43$880.5778.27%
TOTAL$2,994.45$651.53$2,342.9278.24%

To top that off, I sold a TV that we haven't used in two years on Craigslist for $125 the same day I listed it - and that was 100% profit!

Yes, I am selling high-end expensive stuff. I went for the biggest items first to make some progress toward the high interest credit cards. It's also worth pointing out that Mrs. DisIndebted and I each had a MacBook Pro. We realized that they were both still quite valuable so we sold both and are now sharing an old Dell Latitude that was hiding in the crap closet.

Your days are numbered, cat.
After Mrs. DisIndebted's nearly four year old MacBook Pro went for $800, I have her in on the auction action too. We are constantly re-evaluating what we have, whether it is worth money, and if we would be better off with the crap or the money. Obviously, we'll keep some things (the dog), but we may choose to part with others (the cat).

The fun doesn't stop here. Right now I have five items up for sale on eBay and I am experimenting with three other ideas:

1 - Increase My Profit Margins
I want to improve my profit margin. In my case, eBay ate an unbelievable 10% of every dollar I took in ). Then PayPal takes another 3% to 4% from the total sale value - not from the net sale after eBay fees. It's the most expensive garage sale I've ever participated in - but it's still the most widely used and most convenient. The rest of the margin hit came because I sold primarily large, heavy items, costing me a ton in shipping charges.

I don't think I'm going to find margins in the PayPal cut. And, while eBay's fee structure does have lower fees for certain items, including "Select Computers," the two I sold were apparently not of the "Select" variety and I got hit with the whole 10%. Thus, eBay's fees are too unpredictable and too vaguely stated for me to consciously try to increase margin. That only leaves shipping charges.

If I can reduce the amount of heavy crap and ship lighter crap, I can definitely save. Note the two laptops with margins up to 84%. That's what I'm talking about! They had shipping fees under $25 (3% to 5% of the sale price) - whereas the electric guitar had a $35 shipping fee (17% of the sale price).

The biggest factors in determining shipping costs are distance, size, and weight. I am only selling in the continental U.S. I don't want to further limit my market and miss out on great eBuyers. But if I can sell smaller / lighter stuff and avoid high shipping fees, I will. Note that the five items currently up for sale are much lighter weight - as you will read below.

Unfortunately, the cat is heavy and I would probably lose money shipping him.

2 - Sell Garage Sale Items
If eBay is the most expensive garage sale I've ever participated in, there are cheaper garage sales to be plundered. A few weeks ago, Mrs. DisIndebted and I popped into a real garage sale in our neighborhood. We quickly found a beautiful leather purse in great condition for $10 and a classic (read: retro and vintage) Bengals Football jacket (Who Dey!). The jacket didn't have a price so I asked. The woman selling it said it was $2 (I would have paid more). Turns out we had $10 on us in cash, so I offered her $10 for both the purse and the jacket. She accepted and we walked away happy. We think the purse should fetch around $30 on eBay and I'm thinking at least $50 for the jacket. I'll let you know what we get when they sell.

3 - Sell Coupons
This is a gig I've read about, and have verified personally. eBay has a marketplace for coupons where you can list a coupon for sale and someone will come along and pay cash for your coupon. It seems crazy - but then some coupons can be very valuable. If I'm buying a $500 appliance and you have a 20% off coupon, your coupon could save me $100. Assuming you have no need for appliances, you might part with the coupon. Even if I pay $25 for your coupon, I still save 15% on my appliance... while you pocket $25. The other day I received two coupons in the mail, each worth 20% off your entire purchase at a well-respected shoe store.  It's easy to spend several hundred dollars in this store - and I'm hoping maybe someone wants to buy a lot of shoes! PLEASE, SOMEBODY BUY MY COUPON AND THEN BUY A BUTTLOAD OF SHOES! To make this hustle even better, it's worth noting that "shipping" of a coupon entails an envelope and a $0.49 USPS First Class stamp (see #1).

I think you get the point. If you have crap laying around that you don't want, need, or use: sell it. You will de-clutter your life and make a little money on the side. And, who knows; maybe you'll stumble onto a great side business converting some hoarder's collection of rare rubber balls into eBay dollars.

I will keep you posted on our progress. Feel free to share your eBay wins, tips, and secrets with me below or at disindebted@gmail.com.








Friday, September 11, 2015

Debt reduction Calculator

In my last post 1,827 Days, I gave you a 50,000 foot view of where we are and where we are going. I also painted the plan in broad strokes, but didn't give any fine detail. 

The first detail to cover is how we arrived at our 5 year plan. The first step was to amass a list of all our debts, corresponding interest rates, and monthly minimum payments. It is important to point out that we did this together. Marriage means many forms of commitments and one of those is a financial commitment to one another. We then determined how much we could afford to pay an extra amount toward our debt each month; a "snowball."

If you have never heard of a snowball approach to debt payment, it is straightforward, effective, and I highly recommend it. As a snowball rolling down a hill collects more snow and grows larger, so a snowball debt payment grows. You begin by throwing the snowball at Creditor 1. When Creditor 1 is completely paid off, you take the initial snowball amount plus whatever minimum payment you previously had to pay to Creditor 1 and apply it to Creditor 2. As each Creditor is made whole, the respective monthly minimum payment for that creditor is added to the snowball.

For instance, if I have Creditor 1 with a monthly minimum of $100, Creditor 2 with a  monthly minimum of $250, and Creditor 3 with a monthly minimum of $150. I have an initial snowball of $1000 and I start throwing that at Creditor 1 on top of Creditor 1's monthly minimum of $100. Once I have satisfied my debt to Creditor 1, my snowball absorbs Creditor 1's monthly minimum of $100 and becomes a $1,100 snowball. By the time I have paid my debts to Creditor 2 and 3, I am working with a $1,500 snowball to throw at Creditor 4, and so on. It is simple. It is effective. And, I never pay more per month than what I plan to pay today.

That said, the effectiveness of the snowball was not compelling to us until we saw what it could do for us. To figure out how a snowball would help disindebtifyTM our lives, we turned to spreadsheets. We love spreadsheets and use them for just about everything (more on that another day) so we went in search of a good spreadsheet template to help us out. We discovered Vertex42. Vertex42 has some of the most powerful and user-friendly debt reduction and money management tools you can find. Best of all - many of them are free! 

The calculator we used is Vertex42's Debt Reduction Calculator. I daresay it was almost a fun activity because this spreadsheet allows you to look at "what if" scenarios. For example, "What if we apply 100% of next year's bonus to debt?". That specific scenario changed our outcome of disindebtification by several months. By plugging our information into this calculator, we were able to come up with a plan to attack our debt. As you can see, it is fairly straightforward and self-explanatory. But allow me to walk you through it and add some of the tips I've discovered after using this tool for several months. 


Step One: Enter your debts into the Creditor Information Table. Note that while the free version has room for ten creditors, an Extended Version is available for $9.95 and allows you to enter up to forty creditors. The DisIndebteds needed this amped-up version for our debt monster. It was well worth the price.

Step Two: Determine the maximum monthly payment you are able to make against your debt. This should exceed your monthly minimum debt payment. We went with $3,900. Given our monthly minimum debt payment of $2,900, this calculated an initial snowball payment of $1,000.

I know I said we were going to pay $3,000 extra each month in order to meet our goal. I'll explain that later.

Step Three: Determine your strategy. Here's where things get interesting. You can use a simple drop-down menu to quickly alter your entire debt payment strategy. This gives you a quick summary of what total interest you will pay and a date when you will be disindebtified. I ultimately went with a custom approach, but it is based on the avalanche strategy. One nuance to the traditional snowball strategy is that you pay your debts in a smallest to largest order. This is great because you can quickly remove creditors and grow your snowball. If you are the type of person that needs to witness immediate results, I would recommend this approach. For the DisIndebteds, the avalanche strategy works best. This works by paying the highest interest rates off first. If you have a mix of high and low interest debts, this may be a preferable plan and will save you a lot in total interest.

That's it! Now all you have to do is follow the plan and make the payments. 

But as I said, there is more. The second tab of the worksheet provides a full payment schedule. In this tab, you can see the specific details of each creditor along with the exact payment you should make to that creditor each month. 


However, it also includes a very cool feature in Column D; the "Snowflake" as Vertex42 calls it. This allows you to specify one-time extra payments that you make above and beyond the normal monthly payments. 

The DisIndebteds prefer to think of these snowflakes as snowstorms. We take every extra dollar we have above and beyond our $1,000 initial snowball and hurl it at the debt as often as possible. Cash wedding gifts? Stuff we sold on eBay? Refunds on beer purchases? We threw it all at the debt. 

We throw every extra dime we have at our debt.

This is where we find much of our average $3,000 a month. 

Some months have three paychecks instead of two. Employer bonuses come out in January. Tax refunds come back in the spring. All of this adds up to a constant snowstorm on top of the avalanche debt payment. The best thing is, the longer we have done this the better we get at finding extra money. And we get more and more excited as we go along and watch our plan in action. 

In my next post I'll talk more about how and where we are finding extra money each month.









Thursday, September 10, 2015

1,827 Days

Mrs. DisIndebted and I are looking forward to a date in the future. September 10, 2020.

We will be debt free in 1,980 days. That is 5 years and 6 months from today.

Scratch that. We will be debt free in 1,827 days. That is 5 years from today.

We have a 5 1/2 year plan, but we truly believe we can do it in 5 years! Thus, we are looking at September 10, 2020 as our date of total disindebtificationTM!

As I mentioned in my previous post, we currently owe $351,585 in debt. This is $6,814 less than we owed in June. We did this by paying more than the monthly minimum payments on our debt.

Paying only the minimum payments towards our debt has gone on for too long and we will not do it any longer. If we continue paying only the minimum (as we did formerly as Mr. Indebted and Miss Indebted), we would be debt free in 15 years and 4 months. That is WAY too long to continue to toil under the burden of debt. Furthermore, it would cost us an additional $125,786 to service the debt interest over those additional years. No thanks!

How are we going to do it? Very intentionally. One day, one week, one month, one year at a time.

In the next twelve months, we will pay at least $36,000 against our debt. That's $3,000 per month, or $692 per week. This is IN ADDITION to our monthly minimum payments on our debt.

Of course these are average numbers. The reality is we will not be paying exactly $3,000 extra every single month. Some months we will pay more; others less. But the goal at the end of the year is to pay $36,000 or more against our debt, over and above what we are required to pay.

Now the REAL question - HOW are we going to pay an extra $36,000 over the next year? That's a LOT of money!

We take home a nice $8,250 per month. We pay an ugly $2900 total in minimum monthly debt payments. So you're saying, "Sure! Mr. DisIndebted - you should have no problem paying an extra $3,000 a month!" But the $2900 is only the minimum debt payment. Before we started down this road, we had the following monthly expenditures:
  • Housing: $1,105 (rent plus utilities and insurance)
  • Transportation: $825 (two leases plus insurance and fuel)
  • Grocery and Household: $800 (at least $500 groceries)
  • Dining Out: $550
  • Entertainment and Other: $650 
  • Plus I was spending almost $50 a week on lunches with my boss - another $200!
That's an extra $4,130. Added to the $2,900 minimum monthly debt payment, we were spending $7,030. So we had an extra $1,220 in our budget to throw at debt. The worst part is, the extra $1,220 seemed to vanish every month (no doubt in other non-tracked spending areas). Our budgeting was terrible and our tracking method was ineffective.

Up until June 2015, we were living paycheck-to-paycheck, making only minimum payments against the debt, and spending like crazy. When we chose to disindebtify our life, we made some small changes in our lives that have had a BIG impact. Stay tuned and over time Mrs. DisIndebted and I will share with you the ways we "found" cash and are disindebtifying by simplifying our lives.



Wednesday, September 9, 2015

New Beginnings

Shortly before I got married my lovely bride told me a secret desire. She said "I want to save some money, quit our jobs, and vagabond around the world." It was a beautiful idea - and I, loving travel as much as she, wished so bad that we could go on a vagabonding adventure. Nonetheless, the realist (killjoy) in me spoke up. I looked at her and said "I think we need to pay our debts first."

That night we sat down to look at the total picture of our finances - together - for the first time as a couple. We were HORRIFIED by what we saw. We owed $358,399 in debt (mostly from our student loans). The largest chunk was from my law school education - but I still owed plenty for my undergrad. She, too, had a hefty sum of undergrad loans. The remaining portion was around $17,000 in credit card debt. On top of all that - we were still racking up new debt to fund our upcoming wedding.

It wasn't an easy night - but we decided to hold on to our travel dream. We resolved then and there to get out of debt 100% and live debt free.

That was June 1, 2015.

Today, September 9, 2015, we owe $351,585. It is still a lot, but I want to kick off this blog by sharing a victory. We paid for our wedding and smashed $6,814 of credit card debt in just over 3 months!

In this short time we have made life decisions, changed our thinking, and paid off 2% of our debt. We are on a path to becoming financially free - a journey to "disindebtification." And when we finally dig out, we will save some money, quit our jobs, and vagabond around the world.

I hope you will join us on our adventure!