by Claire
I didn’t arrive as the blogger on this blog totally and completely committed to getting out of debt…sure, I wanted to and I still do want to…but I never told anyone (including the blog owner) that I was ready for this to happen NOW without setbacks or that I was ready to give up the lifestyle I created with debt NOW. In fact, I was very, very early in my recovery process when I found out they were looking for a new blogger! The timing of that was no accident (my belief is it was God’s hand getting me to where I needed to be to have any hope of undoing my debt) but I want to be clear that I had not been on some debt reduction course for weeks or months before showing up to blog. As of December 31, 2011 I was STILL adding to the debt and not caring too much that I was doing so!
As a result of where I am at in my recovery, my readers will have to put up with my popping off with what I WANT to do NOW or what I WANT to get NOW. Will you want to shake your monitor to get me to stop my crazy thoughts?! Yep. Will I disappoint you when I report that I DID do something I probably shouldn’t have? You betcha! Will you think I’m a complete lunatic with decisions I consider and maybe eventually make? Without a doubt. But, I’ll continue to open myself up to the risk because that’s why I am here.
It is a process and a very difficult one at that! An advance thank you to everyone who tolerates my whining and responds kindly, yet sternly. I’m like a drunk really…and when a drunk announces they’re really craving a drink but they are stopping to think before they partake, I’m pretty sure saying “YOU JUST DON’T GET IT, DO YOU DRUNK? YOU DON’T SEE THAT ALCOHOL IS RUINING YOU AND YOU’VE DONE NOTHING FOR YOUR FUTURE OR YOUR KIDS’ FUTURE. YOU FEEL JUSTIFIED IN DRINKING SO YOU WILL FEEL GOOD” would not fall in the “Top Ten Things to Say to a Recovering Drunk.” If I didn’t have a good head on my shoulders I might have gone on a binge last night and hired 3 housekeepers! 🙂
Born and raised in Texas. I’ve at least driven through every state in the US courtesy of a roadtrip loving Dad.
I’m single with two children and a good parenting relationship with their father.
I am a “life is just half full of funny” kinda gal. Humor is my saving grace and I am thankful for it every single day. I have a strong Catholic faith and am thankful for that foundation.
I read a lot for a living but still enjoy a good book. I love biographies but in recent years have found the need for fun fictional books–sadly, for a long time I just didn’t enjoy fiction!
I love live theatre of any kind–from local productions to Broadway.
I love to scrapbook and pride myself in my kids’ albums.
I love being a mom but also love my career. I’m blessed to have found a balance allowing me to be at everything my kids need and want me to be at–while also having a career.
Favorite Quotes: Well behaved women rarely make history.
Behold the turtle. He makes progress only when he sticks his neck out. -James Bryant Conant
for what it’s worth, I’ve noticed since I moved to Texas 2 years ago, the 2 things that people here just can’t seem to do without, are housekeepers and new cars. It seems like for now you’ve foregone the housekeeper. The commenters haven’t yet convinced you to sell your cars.
It’s weird. These 2 things were not NEARLY as prevalent in the Midwest when I lived there. I think I knew one family back home that hired a maid, and they quit after a few years.
The other thing everyone in TX seems to think is a must have is a nanny.
I love Texas but some of the things about the South haven’t taken root in me yet.
I say all this so other readers can see that it may be a cultural thing that’s driving the housekeeping tension as much as a personal thing. I also say it so that Claire can see where some of the commenters are coming from, especially the ones not from TX. A housekeeper and all the new cars could seem extremely frivolous to people from certain parts of the country/world.
and for the record, I agree with the commenters pointing out how deep of a hole you are in.
but it’s more for the long view. It’s not the $90K in debt, which is bad. But it’s the lack of retirement savings.
Claire, my parents were on the fast track, both gainfully employed in jobs that assured their financial future, until they got into a messy divorce when they were in their 40s.
It ruined both of them. They have worked so hard their entire lives, and at the end of their careers, they have nothing to show for it besides a string of bankruptcies between the two families and at least 2 foreclosures. The divorce wasn’t the only obstacle of course, but it was the initial derailment.
It sounds like your family is back on the tracks but your retirement savings are way behind. To retire with the lifestyle you prefer, you’d probably need $750K-ish in your plan by this point. This is why your situation is an emergency.
The budgeting efforts are great and I think the debt reduction is a worthy goal in itself, independent of retirement. But while you’re working down your debt, put some time into studying up on your retirement options. Hopefully your employer(s) has/have a defined benefit program, or you could be in for some real headaches. Your employer probably also offers referrals to financial planners who can look into your situation and help you with a plan.
I don’t mean to be harsh here, but I do want to suggest that it’s much more difficult to take the long view financially and realize exactly what it takes to retire comfortably (the answer: millions of dollars). My encouragement is that you start making a retirement plan stat, or trust me, housekeepers and new cars won’t even be on the radar in your golden years.
$750,000 in her retirement savings by age 40?? While I’m sure there are a few out there that have achieved this, that is not attainable by most.
This is the second time in a week I’ve seen or heard references to needing millions in retirement. While sure, it would be great to live a life of guiltless luxury in the golden years, if your house is paid off and you have a health plan/Medicare and are able to do some traveling , enjoy hobbies, etc why would you need the same amount to live on as you did when you were younger with kids to raise, hefty bills to pay etc?
I think it’s amazing that Claire has the retirement savings that she does at this point with that high of credit card debt. Most people who run it up that high are completely incapable of saving anything.
This was my question for Adam too Cathy. My husband and I just had this conversation. My parents and his mom illustrate to extreme ends of the spectrum. My parents have chosen to stay in their too big and too expensive to maintain, but paid off, home while his mom chooses to live in an extremely small (600 sq ft or so) for $500/month. They all have health insurance and otherwise no debt. Their paid off cars do the job and they aren’t driving a ton anyway. We see ourselves somewhere in the middle. Without credit card debt and the expense of raising kids…I just do not see why I would need anywhere near the amount of income I have now. Adam–help me understand! And this is not an excuse to not save for the future…I am really trying to understand. I don’t want the lifestyle I have now when I am 60! I want to downsize (the reason we didn’t buy a big house…for fear of being stuck with a big house!) and minimize as the years go by!
Also Cathy–you mention travel. As I dissect the credit card debt I accumulated, I can say that a good 25% of that was related to travel in some way. I have traveled extensively–domestic and overseas–and I can’t say that I regret doing so. I don’t want to be financially able to do something (b/c I waited until retirement to travel) but physically limited in what I can do! I honestly would rather be paying for those trips now and looking back at all that I was able to do because I was young and healthy.
I do disagree partially with your idea of soending the mkney now for vacations overseas now instead of later. I think there is a balance everyone should find – what to spend money o now vs later. One of my dear friends always says “I couldndie tomrrow ” when explaining away his spending (he spends his money on cars and electronics and clothes, and to be ho est I would rather see hkm spend it on vacatitions b/c you cannot buy memories) my excuse to him for my saving is that I probably won’t die tomorrow. I will probably and hopefully live i to retirement and I want to be able to afford it as there are no loans for retirement 🙂
With that said, I agree with you about how difficult it canbe to reach that target retirement amount especially with a family to support for a large chunk of your income years. It is just my husband and I and we won’t be having children so money -wise we can save for retirement sooner and more aggressively. Also, we have only my student loan debt for now.
I hope you are able to pay off your debt and then start saving big bucks for your retirement because you owe to yourself to enjoy worry -free retirement. Hopefully there is a balance where you can travel and save, retire and continue to travel! I really want to encourage you to have it all and I am sending good thouhts your way.
Well it truly is impossible to tell for sure. But I can tell you that all of my parents are partially supporting my siblings, and even assisting some of their kids. It sounds like your brood is well-adjusted, but you never know who might need some help. Additionally, what if you are supporting your parents? What if your medical expenses go up – Uncle Sam doesn’t pay for ALL our prescriptions. Will you still be paying for your kids’ college at that point?
Also, given improved life expectancy, many more retirees are less than enthusiastic about sitting around at home doing nothing – lately the retirement advice-givers I’ve been reading say that your spending might actually go UP during retirement because you want to travel and spend on experiences and also on your kids. Do you and your husband golf? Go out to eat? Have hobbies?
Even if your home is paid off (and is that a big if?) there is still maintenance, insurance, and Texas property tax that goes up every year even while your retirement income stays fixed.
So with all that, just be careful about making assumptions that your spending will go way down when you retire. Most planners estimate that you’ll need between 70-80% of your pre-retirement income in retirement. I don’t know what your current income is but I think $200,000 is lowballing it. That’s about $10K/month after taxes. 80% of that would be $8k/month, or $96000/yr. If you draw $3k/month from social security, then that leaves $5k/month from your retirement. That’s $60k/yr.
If your retirement lasts 25 years, that means you
can draw down 4% of your retirement account per year (25 yrs x 4% = 100%). $60K = 4% of $1.5M. You need $1.5M in your retirement to have $5K/month in income on top of your Social Security. Start to look at some investment calculators to see what it takes to save $1.5M from now until you are 65 and you’ll see why I call this an emergency. (Can’t remember your age but even if you are still in your 30s this can be a tough task). And that’s assuming you’ll drop dead on your 90th birthday and will have nothing left to pass on to your kids or pay for your funerals.
One article I read recently says that even calculating using this standard method is a fallacy. If the AVERAGE retirement is 25 years, then we must PLAN for quite a bit more in case you happen to live longer than average. The method I went through would leave you penniless if you lived a minute longer than average. At that point at least Medicare would kick in. But if you want to pay your own way, best to assume you’ll only draw down 3% of your account each year, that gives you a 33.3 year cushion. That means you’ll need $2M to be safe.
Sure, you might get some investment gains during your retirement years that offsets some of that drawdown, but remember that planners generally recommend that most of your assets be in bonds that don’t generate much interest, so you can be protected from the swings of the market.
So that’s how I come up with the answer of “millions of dollars.” Shocking, isn’t it? Obviously there are lots of games you can play with the math, and you should be able to survive if your accounts are much more modest, but you may end up being dependent on government programs or on your kids to help. Elderly parents hate that, though.
So you can do math. You can determine your own magic number. But in my experience, it’s generally much higher than most people assume it will be.
not to mention your retirement accounts, if you contributed tax-free, will be taxed upon withdrawal. the way things are going, tax rates will be much higher than they are now.
and one more thing, fixed income is a b****. if your retirement income stays steady for 20-30 years, that $60K will buy less and less every year. the investment gains i mentioned before will probably cover inflation, but not much else.
I’ll attest to the importance of dying at 90 and living your retirement during a period of low inflation. My uncle retired from a job as a mechanic with a municipal government pension at age 65. And lived into his 90s. His wife is alive still (turns 100 this fall.)
Through his life they lived very frugally. He had a second job as a wedding photographer. They bought a couple of small houses and rented those. At one point they had a travel trailer, a Caddy, and a 36′ cabin cruiser, but this was in the 70s and the trailer and boat were from the 50’s and the Caddy had pretty big wings so was probably early 60s.
Eventually all those were sold and he had a used police car for his car, an 800 sq foot cottage in a few blocks from Lake Erie for his summer home and a trailer in a park in Florida for his winter home.
I noted his trousers he wore to his mother’s funeral were mended but he couldn’t afford new because by age 80, 15 years into his retirement, money was insanely tight – inflation had been high and his pension had not kept up.
By the time of his death he was thankful for all the social safety nets we have in Canada. He was never bitter but gave up comfort that I would consider non-negotiable in order to make ends meet.
He retired debt free, with a guaranteed (but not fully inflation indexed) pension, but there was no way he was prepared to fund a 30+ year retirement. That’s expensive.
Our retirement includes funding our chosen lifestyle up until 90 and a reasonable sized estate left to the kids. If we don’t die (highly unlikely, dh’s parents died at 72 and my mom was 80, dad was 87), we’ll have something left to live on but won’t leave an estate to the kids.
If it makes you feel any better, I really want a new car right now. Even though my old one works just fine. Even though I’m less than 100 days of paying off the very last of my credit card and student loan debt. You would think by this point and nearly 15k in debt paid down I wouldn’t be so eager to sign away on a new loan.
But it’s okay. I can want and lust after things I know I shouldn’t have. I can talk about these things and challenge others to convince me it is a bad idea. I know that if I save up for a year at the pace that I paid down debt, I can buy my car outright.
And I will probably do this the right way. But sheesh, a girl can still want things she knows she won’t purchase, right?
Get a darn maid! In SA they’re not as expensive as in other parts of the country. Let them judge! getting a person to come and clean 2x a month is not going to “add” to your debt unless you don’t make up for it somewhere else. I’m not saying to forget the budget, I’m saying that every house has their luxuries and if they don’t they may be a bit obsessive and/or very bitter.
Anyone that tells you that they didn’t lust after things they probably shouldn’t buy or didn’t make a single mistake in their debt payoff journey is lying. 🙂
We are human, we have wants and make mistakes. If we could control every impulse, nobody would have a debt problem in the first place! You have made great strides already this year, and there will be setbacks, but the important thing is that you are very carefully considering your choices and where your money is spent before taking the plunge. That’s a big first step!
I do agree with alot of comments on here regarding budget behavior, etc, etc,.
At the same time, i’m in the exact position as Claire (granted my debt is around $7,000 and i’m in my early thirties and my retirement funds are quite good for my age)….in that I am a recovering “addict”.. there have been and will be times that i have fallen off and would fall off.. but at least i’m trying my hardest to say no to myself.. just like Claire is. We’re not super humans.
It’s going to be a slow process but i know we both can do it, Claire! Don’t take what people say too personally but know that most of them mean it in a good way.
And hence the reason you are the ideal blogger for this site… Because you will meet your goals, and along the way you will be honest and real. Who wants to read about someone that never messes up and always walks the financial straight-and-narrow? Nobody. Can’t learn much from them either.
Keep at it Claire. You’re doing great and I’m loving reading about it 🙂
Amen! I am not into deprivation, because I will binge later. So, I don’t have a housecleaner, because I am willing to zoom thru the house for 2 hours early Saturdays and clean. But I am not willing to give up cable.
My mental trick is to calculate the annual cost is and then decide if it is worth it. So, housecleaner in our area would be about $3k a year for 2x a month, cable $1.5k. Hello HGTV!
Thanks Nicole!
As I said weeks ago, your debt is an emergency. Your spending is somewhat like an alcoholic’s drinking. You think everything’s ok, what’s the harm, it’s helping you get the family through a tough tome. You know you need to change, but you are not to the point you can stop the drinking/spending. If you are not “ready to give up the lifestyle…created with debt” then you will fail.
The reality is you are living way beyond your means. How many paychecks could you miss and not be in a lot of trouble? A job loss, a disability, or some other income reducing crisis will put you in default and possibly bankruptcy. The debt has the potential to destroy your marriage and harm your children.
You WILL fail at some point if you don’t change your sense of lifestyle entitlement. Then you will be like the alcoholic that finally hits bottom. Do you really want to wait until that happens?
In my view, you will really be on the road to recovery when those debt numbers start declining by multiple thousands of dollars every month and you fund a reasonable emergency fund. This won’t happen until you cut your spending dramatically and throw all the savings at the debt. Debt is your enemy, it can and will destroy you.
What about your church? The evangelicals have Dave Ramsey, does your diocese have any classes or counseling about getting out of debt and financial planning? Maybe if you participated in a local group and had an accountability partner with a similar background, you could work through this mess together. Some of the advice and comments here are useful, but having someone to call when you want to stop for fast food will help you more.
I’m sure a lot of people won’t agree with me but I think you should get a maid periodically. There needs to be some reward for all your hard work. I think that this blogging takes a lot of time and so does all the work you are doing on your debt. Maybe have a deep cleaning for every milestone you hit with your debt. Maybe for every $5k you pay off, get a deep clean. That would probably be every few months. Use it as a treat now and then later, maybe make it a regular thing.
Or, maybe research how much it would cost and report back to us.
That sounds like a great idea! It’s a compromise that lets you have some necessary help at home, but without committing another regular expense to the Weekly Budget.
It is really hard when you are doing “double-time” trying to work and keep the house afloat! (let alone with 4 kids…!)
As a person still sailing my boat down the river “denile” I always read your blogg and nod in agreement with many of the things you and others say. Your openess and ability to write allow me the luxury of knowing that I am not the only person stearing this course but more importantly you allow me the knowledge that I can and will get off this boat eventually
We’re on the same journey but with more debt and less income. I still feel that tug and pull of trying to figure out how to balance real life (I want xyz) with getting out of debt. Five years ago when we started the journey we were much more likely to go ahead and add more debt if we thought it was worth it. Now when we add debt we groan and calculate how many more years we’ll be slaves. Debt really is slavery and I look forward to the day we’re free of it, but like you, I know we’re making lots of mistakes along the way. I’m eager to read your entries and follow a journey that sounds similar to ours.
Our latest frustrating situation is trying to get a fence in our backyard! We live on the corner of two busy streets and have two small children. We got a quote from a home improvement store yesterday and they wanted to charge us $6,500 for the fence and install. We have $0 to put toward the fence and will have to borrow, but thankfully at this point, even though I really really really just want to call them and say “give me that credit card and come install that fence tomorrow!” we know it’s the wrong answer and will have to find another solution.
All that to say…you are not alone!!
A budget no matter what your position is personal, it is just like parenting, it is personal. You and your spouse need to decide what is important and what is not. I think you are doing good on your new journey and i look forward to your articles, you are very honest and help me remember why i am on the same journey to debt freedom. Good Job!!
I am beginning to feel that you are only playing around with the idea of reducing your debts? The small credit card amounts should be got rid of immediately. Bite on the bullet and look at your monthly expenses. For at least 1 month write down every penny you use. I suspect that you may have $100s which could be put to debt reduction.
At this point getting a maid or housekeeper is ludicrous I’m afraid.
I am wondering why you were chosen for this blog site? It is getting truly hard to get on to your wavelength. My husband and I have “been there, done that” and you make excuses for yourself still.
Retirement savings are a luxury at this point. GET RID OF YOUR DEBTS. I can’t stress this enough.
I wish you all the luck in the world but probably won’t go on reading this blog.
Keep going girl!!! I’m enjoying this blog a lot. I feel like I have much in common and appreciate your honesty. I am excited to see you be successful!
I like this BLOG!! So exciting! By the way Im about 2 months away from paying 10 G’s of credit debt and I want to buy a new car. I truely believe its an addiction now.
I also live in Texas, so let me just offer a counterpoint to some of Adam’s observations:
– I only can think of one person I know that has had regular maid service.
– I have never bought a new car and don’t plan to. My 2005 just rolled over 80K miles. My wife’s 2004 minivan is 120K and both are still going strong. Both paid for.
– I own one primary home and one investment home. My property taxes (and appraisals) have gone up and down each year, not up constantly.
I agree that Clarie may be rationalizing some recent purchases (cars, vacations), but I think that people yelling at her about it isn’t going to change anything either. I think some of her thinking out loud is also her working through her issues and recalibrating herself and not displaying warning signs of reverting to prior destructive behavior.
I think I’m a pretty good saver, but I have nowhere near $750K in retirement at 40. Maybe that figure was just to indicate that “maintaining a retirement lifestyle at a certain level” wasn’t realistic.
I’m proud of you Claire and I encourage you to keep reevaluating needs vs. justified wants.
And I’m guessing you made zero mistakes during your debt elimination period, right? And eliminated thousands monthly from day 1? Come off it.
@GimmeABreak, you appeared to have replied to my comment, but I’m not sure whether you’re addressing me or not. I don’t think I implied that I didn’t make any mistakes.
It’s certainly a process and like any skill, you get better at it the more you work at it. It took my wife and me a few months to get on the same page.
Personally, I am glad to see a more realistic approach to becoming debt-free. Just like with dieting, making gradual lifestyle changes is easier to maintain than a ‘stop all the bad behavior instantly and never eat another bite of sweets again’ mentality.
It is refreshing to see someone who is more like most of us probably are where you admit to making occasional bad choices along the way. I’m not willing to give up everything, cable, travel, etc., on the road to becoming debt-free either. We’re not guaranteed a tomorrow, and some travel opportunities won’t be around forever. We sacrifice in other areas to be able to travel with our five year old to Disney while he is young enough to really be into the magic of it all. We pack lunches, go at off-peak times, and scour the internet for bargains, but we do go because it won’t be long until he has no interest in traveling with Mom & Dad.
A side note, I’m in Alabama and I think I am the only one in my neighborhood without a housekeeper right now. We did have one for a couple of years after my son was born, but gave that up in exchange for putting him in a much better (and more expensive) preschool. I am hoping to get one again when he starts public school in the fall.
I think you’re doing an awesome job at blogging your way through this. This is just the start of your debt-free journey and I can’t wait to see the highs and lows of your story towards paying back all that money.
The beginning of the debt free journey is often the hardest. At least for us it was. We had some false starts before we really got on the road. In fact we only got serious when I got pregnant with our third and very ill with this pregnancy. We had hit rock bottom before and started the journey but now we are really trying to cut back on everything and have a real budget instead of a fake one.
I think your blog appeals to me because you are so forthcoming and honest. It is a daily struggle to make the right choices. Plus it is a very personal journey that will differ with every traveler.
I look forward to the ride and it is reassuring to know that I am not the only one on this set road. 🙂 Keep on blogging!
Claire,
Most of the time when I read you the first thought that comes to my mind is “she is not going to make it”…..
Stop worrying to much about doing and what everybody will think about this, just take real decisions that will change your life and don´t sweat the small stuff.
I’ve never been this open about my debt so it is a process. I am sure I will get better at not worrying. I’ll make it though…with or without those readers…I’ll make it.
Yes, you can make it.
You have to decide one very important thing: how do you want to feel?
Do you want your readers to love you because you write what they want to read? or do you want to feel good because you have taken the best decision for you?
While I was getting out of debt I received a lot of nasty comments , because what I was doing was creating a emotional shock in others (how come you will live without cable or new clothes? That´s insane ). Now I am debt free , I receive a lot of requests to share my “recipe” …
Anyways, just go your own way …
Keep strong!