I’ve been feeling lately like I’m back in the first years of my relationship with Tim when I was constantly contending with debt. Which seems ridiculous because right now we only have the mortgage.
But we have this huge bill looming. And it’s been looming for seven years now. Really, it’s debt that just hasn’t gotten here yet.
Thanks to that, it feels like we haven’t made any progress since paying off our (non-mortgage) debt four years ago.
Yes, we’ve put away money (and taken it out and put it back in). But with that expense hanging over us, it never felt like we were saving money so much as just prepaying the debt.
Every dollar we put in just lessened how much we would owe later. Conversely and far more excruciatingly, every dollar we took out just added to the impending deficit.
When most people have $11,025 in their account (our current total thanks to the IRS refund) they feel proud, satisfied or at least like they’ve accomplished a lot.
I look at it and see -$14,000.
It’s a unique sort of hell when you realize that saving around $20,000 in a year will put you squarely at the zero mark next year. It’s even worse when you know that no matter how much you put in savings, you can’t seem to get ahead.
Lest you think I’m being overly maudlin, I did some math.
In 2014, we put $12,400 into the main savings account and $6,400 into the car and IRA funds.
We took out $9,900 over the course of the year thanks to our painful 2014 expenses. And that doesn’t count the Honda, which emptied the car fund and took about $2,000 out of savings.
This year hasn’t been much better.
Thanks to my substantial yearly bonus (thank you, Best Boss Ever), we’ve put $10,800 into savings and $1,600 in the car and IRA funds. But we’ve spent $7,250 on the masonry wall, fence doors, HVAC unit, new toilet and fans.
No wonder I never feel financially secure.
And if we’re lucky, we’ll start next year with our emergency fund intact and a depleted savings account. If we’re not lucky, we’ll still owe money.
So what’s a gal to do? Well, I try to shush the screaming in my head. Once that’s done, all I can do is… realize that I’m doing all I can.
Normal personal finance wisdom says that the first step is to pay off anything like bad credit car loans and deal with any ridiculously high-interest home loan. But our car is paid off, and our mortgage rate is great. So I’m trying to find reasonable ways to trim. I’m switching us to Ooma, and Nadine has been nice enough to cook a few meals for us already.
Otherwise, it’s just a matter of staying the course and having cautious optimism for 2016.
It’s entirely possible that we can actually be productive once this monstrous bill is behind us. (Or something new will explode. Hopefully, in the form of an adorable, squalling tax deduction.) Either way, I’m hoping that we can make headway on little things like retirement and maybe putting a little extra to the house payments.
And of course, build up a real savings account. One that isn’t already spoken for. One where we are putting money in, not just avoiding debt.
Have you ever looked at a healthy account balance and still felt like you’re in debt?
I think you hit the nail on the head with staying on track and being optimistic for next year. When you’re doing everything right financially, I think sometimes it’s just a matter of waiting out the more expensive times, staying on track, and hoping for cheaper times ahead.
Mrs. Frugalwoods recently posted…Frugal Hound Sniffs: Sustainable Life Blog
Given your long-term project of a homestead, I’m sure you’re well-versed in doing everything you can and patiently waiting for the payout.
I’m just fighting my natural instinct, which is to be super-stressed out and obsessing over it, despite knowing that there’s nothing more we can really do. At least I’m getting better at the fight.
I feel that way about my quarterly taxes sometimes, although probably to a lesser extent. At any given time, a third of what is sitting in there has to be paid to the government =(
I have no doubts that you’ll rebound after this huge expense! It sounds like it’s weighing heavily on your shoulders. Once it’s over, it should be a relief! =)
Holly@ClubThrifty recently posted…5 Reasons It’s Okay to Give Money to Homeless People
Let’s hope you’re right! We just have bad overall luck with expenses cropping up. Here’s hoping 2016 turns that around — or that the expenses are tied in with a wee one.
And yeah, I feel that way about taxes too, I suppose. Whenever I look at our bank balance, I have to mentally subtract that (and the car insurance fund) from the total.
Have I every looked at a healthy account balance and still felt like I was in debt? Just about every day of my adult life.
And you do have the Best Boss Ever, for sure! I worked for one now defunct company for 23 years (may it burn in Hell) and never got a bonus. Not that I’m bitter about it or anything. ;o)
Yeah, they’re increasingly rare, so this just proves his awesomeness once again. I’m hoping that any bonus we get this year will help cover whatever we’re not able to save in time.
And it’s good to know I’m not alone on the debt-perception front. It feels defeatist, but I can’t get around it.
I’m sure that has to feel really frustrating, to know that you have saved this amount only to have it go with a big expense. 🙁
Tonya@Budget and the Beach recently posted…What Acting Class Taught Me About Freelancing
Yeah, it’s disheartening. Especially when I realize that $25k is nearly 1/3 of our (admittedly very small) mortgage. On the other hand, I’m hoping that after all this grief, it’ll be easy to do the more productive stuff. Like huge amounts in an IRA.
I think that realizing you’re doing the best you can do in this situation is really all that you can ask of yourself 🙂 That’s a great way to continue to stay positive!
Christina @ Embracing Simple recently posted…Enjoying The Season of Life You’re In
Yeah, it’s keeping me calm(er) in the times my panic flares. But I am trying to just remember that there really isn’t much to be done except the once a month when it’s time to allocate the paycheck. So worrying in the interim accomplishes nothing.
“I’m hoping that after all this grief, it’ll be easy to do the more productive stuff. Like huge amounts in an IRA.”
This! Once the dental work is said and done, you’ll be so well-versed in setting aside money that your retirement plans will begin to leap upwards.
Not much comfort now, I know, except in the abstract. At least you won’t be financing $25k through the dentist (or, heaven forbid, on a credit card).
Donna Freedman recently posted…Pulitzer tip: ‘Drink beer and read.’
Good point. The thing about prepaying debt is that you’re not actually suffering through the real thing.
I have definitely gone through periods like this. And I swear stuff in my life breaks when it senses we are finally getting a bit ahead. We have been trying to pay for a new-to-us vehicle and I was feeling frustrated that we just weren’t getting to that goal… Then I tallied up all of the expensive repairs we’ve had and unexpected emergencies and realized that we HAD enough money for a new car… it just ended up being used elsewhere. Knowing that, I try to remind me of the discipline to save that I have developed. I try to remind myself of how much worse off we would be if I didn’t save. Then I just keep on keeping on.
Yeah, life really does like to kick you when you’re down. At least financially. And it’s frustrating to realize that the money was there. It just got sucked away with other things. On the other hand, it means you *did* save the money. Which I guess is something.
I’m sure it is frustrating to have such huge savings spoken for, but you are so wise to “pre-pay” this debt instead of trying to recover from it for years on end afterward. I realized at some point in college after unexpected car expenses came up that money isn’t really for accumulating big savings accounts. First and foremost it is for meeting real needs. After that it’s great to save, invest, enjoy, and give. This is also why I think the financial freedom movement is a bit of a misnomer. Unless you have a huge nest egg paying solid returns, no one is really free from needing and worrying about money sometimes. It’s more important to be grateful and content with what we have than to have the ideal financial situation. Avoiding debt is a real accomplishment you should feel good about!
Kalie Brooks recently posted…Ramsey vs. Alcorn Throw Down
Well put. These day, most people are covered, but sudden medical problems used to put even those with big nest eggs in danger of losing it all.
I suppose you’re right that few people have “real” savings, so much as “so we can handle life’s surprises” accounts.
New reader here, hello. 🙂 Ugh, prepaying debt sure is frustrating!
I have a question, and I hope it comes across in a polite way, because I’m genuinely just curious as I’m guessing you have one or several reasons. And of course, feel free to decline to answer if you don’t want to. Your house (like many houses) seems to be quite the money pit, with renovations, appliances going out and so forth. Knowing money would be tight, I’m just wondering why you chose a house and not a lower-maintenance apartment for example?
Maria
Welcome! It’s actually a fair question.
First of all, most affordable apartments here in Phoenix have a problem with roaches. Even if you let them fumigate your place, the bugs just go hide in the next apartment over and come back within a couple of days. Tim didn’t feel comfortable eating anything that had been out of the fridge for more than a couple of minutes.
The nicer apartments might have been better (though I can’t imagine why that would be) and certainly would have had better management. But our mortgage is $567, so even with utilities we pay less than $1,000. Plus we can better control the roach situation with a self-contained house.
So at some point, it’s silly to keep paying rent forever when you can deal with some initial (if frustrating) costs and eventually pay almost nothing for your housing. Plus each thing we fix should last for at least 10 years if not significantly more. So things will eventually level out. And by the time they start breaking again, we’ll only be paying for taxes and insurance (about $1,800 currently).
The other major reason was actually my in-laws’ situation. They were going to lose their house. They were living on my MIL’s disability income ($1,100), so they wouldn’t have been able to afford their own place without the state of Washington intervening. And the wait list for discounted apartments were 1-2 years *before* the economy imploded.
So we moved them down here. But like us, they’re home all day every day. And like to watch 2 different TVs. Loudly.
Even if I, as an only child, could have handled three extra people at home, it wouldn’t have been tenable as as work environment.
Instead, we looked for a place with a guest house. We rushed a little, which is why we had to go for a place with issues/older appliance.
But as I said, we’re slowly getting to a place where things won’t be falling apart on us (as often) and our desired upgrades will be done slowly over time. In the long-term, it just makes better sense — for ourselves and Tim’s parents.
I think one of my biggest sources of money anxiety is that I see pretty much all savings as prepaying something.
Most of my savings accounts are various ‘oh sh!t’ accounts- appliances, cars (though that one we can relax a little on, since we just replaced my car), house, if I get sick and can’t work, health emergencies, etc.
Even my long term savings- IRA, 401, money market? They are prepaying for a time when I won’t be able to work at all. They’re prepaying the debt of living during that time. Same with my insurance policies- I’m prepaying to have protection against situations causing debt.
It becomes this very hard thing to face- knowing there are these increased costs sparks a drive to work more, to push myself so I’m able to put more away for these things. The problem with that is pushing myself means I’m risking bringing those eventualities forward. If I stress my system, my bill becomes due faster, and with much higher interest, than normal. Which can really get me pissed off- I’ve never touched a drug, tobacco, or a drop of alcohol. My biggest vice is caffeine (sugar no longer being considered a vice due to dietary requirements). I’ve never so much as crash dieted (saw what it did to my mother, didn’t want to go there). All that means, apparently, nothing- because if I get a cold, or work too many hours, or even have my hormones shift? Hello blinding pain, and a good chance my kidneys decide to go on strike. So, no… I don’t think I’ll ever feel secure. Money is a symptom of that, and a big symptom- but it’s caused by something bigger.
True, most things we all save for are prepaying. We have the washer/dryer fund, for example. We put away money each month for the yearly car insurance bill. And so on.
And I suppose retirement accounts are the ultimate pre-pay.
While stressing myself out doesn’t risk as many catastrophic physical issues as you, I definitely struggle with the desire to earn more (to make more progress/insulate ourselves) and realizing that doing so has its own problems.
I guess we both need to remember that money is important, but we also need to enjoy the life we’re trying to pay for. Even if that’s in between worrying.
I look at your situation differently. I know that it’s so stressful having to pay for all of this but I am thinking of all of the hard work that you’ve done getting debt free. And how amazing that is! I think of how your mortgage is going down and I’m hoping your home value is going up. I’m thinking of the blessing of working a job that provides you with income and a nice bonus. And, I’m thinking how awesome is it that you have money available to you to take care of your beloved husband. You two are making good things happen and I hope you stay focused on all that you’ve achieved. What if you hadn’t done all of those things? Taking care of your home is part of the pain of home ownership. But, because you have your home you’re able to house your in-laws. I find you very inspiring, a wonderful spouse and partner, and just think you’re kicking a@@. I hope I have a daughter-in-law like you in the future.
Michelle recently posted…Freelancing Income Update: And My $5000 Goal For May
Thanks for your kind words. And yeah, when I sit back and look at the big picture I’m reminded just how much we’ve overcome. With plenty of our own advantages, mind you, but still some sizable hurdles.
And when I look at the big picture I realize that we’ve done some pretty amazing stuff, partially because of the generosity of The Best Boss Ever.
I’m also reminded that a) this too shall pass, b) more crap will probably come up but c) probably nothing quite this epic for awhile. So… just get through this year.
It’s keeping me sane in the moments that I succumb to panic.
Is there a reason why Tim needs the teeth done by a certain time?? Could you maybe postpone 6 months to allow a little extra savings in the bank when you pay that big bill.
I say this because Murphy’s Law follows me. Just when I think the savings is going up Something happens to lower the balance.
Also I would pay as much as could on points credit cards as you would pay these cards off as soon as the bill comes in. Might as well get some gift cards for future use
Yeah, we’ve bandied that thought around a bit. But we’ve finally found the people we like and, our luck, one of them would retire or move or something that would start the whole process again. Or prices could go up.
Or other life events (like hopefully a kid) would delay it further. Not just for financial reasons but because the hectic schedule/lack of sleep.
But it’s still something I’m considering. I’m going to see how I feel after the next check. Also, I need to find out how much things would be delayed if one of the posts fails. Depending on that answer, we will either need to start sooner or at the beginning of next year.
Not to play devil’s advocate, but there are some big reasons to get Tim’s teeth fixed sooner rather than later.
One of the biggest (if not the biggest) would be his health. A lot of chronic conditions can be aggravated if you’re having problems with your teeth. It can also lead to higher heart health risks, and worse jaw problems down the line.
Now, I can completely understand needing to figure out paying for the fixes (dental costs being INSANE), and dental insurance doesn’t really help much with hardcore dental work (Cigna being the best I’ve found for this). In addition, Tim being comfortable with the professional who’s about to install what amounts to a new car’s worth of work into his mouth is important. It can even effect the work, since he may clench his teeth during impressions- which can throw off the bite. Speaking as a dentalphobe who had to get major work done (there is not a naked natural tooth in my mouth- they’re all capped, and the majority have root canals- don’t clench your teeth kids!), I can tell you it’s going to be huge for him. I didn’t even realize how much I did to avoid letting people see my teeth, or how carefully I was when eating- realizing I didn’t have to do that anymore was… mind blowing. People who have known me for years comment that it’s good to see me smile again. Yes, it’s a lot of money… it’s also something that has a profound impact.
Yeah, feeling comfortable with the practitioner is huge. And while he does have plenty of gum bone apparently, I’d rather act while that’s true. A year really won’t make a difference but…
Also, dentures keep him from eating certain things. And certainly from tasting quite a bit. I tease him that he’s going to gain weight once this is all over.
His dentures were the first time he’d had a nice smile since early high school, which is difficult to imagine. He smiled a lot more once he got those.
As much as I start to get ahead, there are always those things that come up that make me feel financially stressed thin again. Hoping it won’t last forever.
Stefanie @ The Broke and Beautiful Life recently posted…Understanding Millennials and their Money
Me too!
Your husband’s dental work is an investment in the future. It will last for many years, if not the rest of his life. So to me it’s not like debt where you are paying for the past. In this case, you’re doing something for the present and the future.
That’s a good way to look at it. And not just paying, but avoiding far more expenses in the future. If he waits too long, he could develop bone spurs, making dentures painful. And would need a bone graft. (Ick.)
To be honest, it’s taken me a decade to shake off the worst of that anxiety hamster wheeling. I suspect a form of that was what had me looking at travel: I need to do SOMETHING active or I start worrying over things I can’t really do much about.
I know it’s hard to think of it this way but you are honestly getting ahead by saving to spend. You’re preventing actual debt and sparing yourselves the extra costs: interest, late fees, the dogpile of other fees that comes with debt. It’s not the same as saving to SAVE, but saving to save is just a really long term version of the same, right? We’re not saving to keep that money forever and a day, it’s going to be spent further down the road.
I know, it doesn’t help that feeling when you have to spend it down. But on the plus side, you’re gonna be SO good at saving when you’re done with paying off those things! /feeble attempt to shine light on the good.
Revanche recently posted…Net Worth & Money News: April 2015
I also keep finding things to distract myself when worry gets bad. Sometimes that means indulging in running next month’s numbers, but I try to keep that to a minimum. Mainly, I try to read or watch TV or something else diverting.
And yeah, we’re gonna be old hands at careful finance toward goals. At the very least, this got us to tighten up a bit. We had gotten a little lax.
Anxiety Hamster Wheeling is going to be the name of my next rock band. 🙂
Donna Freedman recently posted…Pulitzer tip: ‘Drink beer and read.’
I always feel funny commenting on a website or blog because I always feel I come off sounding like an idiot but here goes. I am new to your blog but I must say, yours is one that I read as soon as I can. It is comforting to know that I am not the only person that life slaps up the side of the head once in awhile. I tell people that when things have been going along smoothly for an extended period of time, I start to get nervous. I expect to walk out to the garage and see the engine of my truck sitting on the floor. But on to the subject of dental work, way back at the back of my mind (I am 62 and my memory gets a little fuzzy sometimes) I remember someone telling me that a member of my very extended family had to have an expensive dental procedure done and they applied for a grant to help pay for it. I asked my sister if I had the facts straight – they actually got a grant of some sort – and she said she remembers the grant part but not who it actually was. Since I am new, I have absolutely no idea just what Tim has to have done, but is a grant a possibility?
I think we make too much money to be eligible for a grant. It’s probably best left to people who truly need the money. (We want it, but we can find it in our budget.) But that’s interesting to know. I’d never heard of that before.
Thanks for reading, even if it’s just to feel kinship for bad luck. Seems like we should start making t-shirts. Or at least get some cards.
As for what Tim needs done, he needs dental implants. He’ll be getting four on top and four on the bottom. He inherited a calcium deficiency from his mom. It was exacerbated by years of intense steroid medications for his asthma and eczema. Most of his teeth were pulled or broken by the time we met. So we got his remaining teeth pulled and got dentures shortly before our marriage. We’re a medley of health problems, he and I.
I like it best when our disciplined approach to finances results in a huge debt repayment. The very same discipline can result in a number of different ways: It can mean we’ve saved some more for a big, upcoming expense; it can mean we manage to hold steady; it can mean we exceed our goals in saving. It’s hard to take on the attitude that any one of these results means success has been achieved – but of course, that is the case. I hope that you find you can meet this big expense in full when the time comes. All the best!
Prudence Debtfree recently posted…Author’s Visit Sparks Insight on Motivation for Debt-Reduction
Thanks!
I don’t think you’re alone. It sometimes can be tough to think about the years of debt payments we have ahead of us (thank you student loans and mortgage), but I do try to think of it as if it’s a “financial statement.” If you have $300k in assets and $150k in debt, you really have $150k of assets. It’s no different (imo) than having $150k in assets and $0 of debt. Of course emotions come into play, but the more you can remove emotions from the equation the better.
DC @ Young Adult Money recently posted…The Mentality Around Student Loan Debt: What’s the Rush?
Ah yes, student loans and mortgage: the ole one-two punch. Although we’re lucky to live in a cheap area and bought towards the bottom of the market. Alas, I’m not great at separating emotion from finance. I’m getting better, though. This next year, I’ll focus on retirement rather than rapidly paying off the mortgage. That goes against my knee-jerk response that just wants this mortgage gone.
Lately it seems like there are constantly emergencies come up that drain our savings account. Just happy that we have the money to pay cash and not go in debt.
Tre recently posted…Monthly Update – April 2015
Yeah, the one upshot of this is that we’ll have to take out either a very small or no loan. And it’ll be paid within 3-4 months.
Life can be so expensive sometimes. I’m a naturally stressed-out worrier type myself, and I have definitely had the feeling before that pretty much all of the money we’d worked so hard to save was already spoken for. But it’s certainly better to prepay a debt than finance it and pay interest. I think you’re doing great. And wow for having such a small mortgage! That really puts you ahead. You could pay that off quickly later if you decide to, even if you do direct more money toward retirement after paying for this expense.
Jennifer recently posted…Trip Recap: Charming York, England
Yeah, we are fortunate to have bought a foreclosure in Phoenix a year or so before the housing market started rebounding in earnest. We’d have an even smaller mortgage, but we only put down 3%.
And yeah, retirement is the focus for 2016 (with a slightly increased mortgage payment) and then the year after see if we can significantly boost the mortgage payment too.
Whenever I have a large unexpected expense that I’m annoyed about (car repair, plumbing etc) I remind myself that I’m very fortunate that I can pay for it.
Yes, we are definitely fortunate to be in a position to pay for this work. It’s not something we could have done even 5 years ago. Well, we could have, but it would have taken years upon years to pay off.
“Have you ever looked at a healthy account balance and still felt like you’re in debt?”
Moan!!! All the time!!
I was so tickled to get three grand back from the IRS. Narf! Shouldv’e known better:
A thousand bucks for the new water heater…and the car that soon is going to fall apart like the Minister’s One-Hoss Shay is parked right next to the thing. Money flows in and flows out at about the same rate, no matter what.
But I’m with Kat: getting Tim’s teeth fixed should be the top priority. It will make a huge difference in his health and well-being now and in the future. Dental problems can do bad things for your body, in ways that take a long time to play out. Meanwhile, you two manage money exceptionally well. It seems frustrating now, but that part is something you’ll get past; the dental improvements are something that will last for a lifetime.
Funny about Money recently posted…How Old Does a Computer Think You Are?
Yeah, it is definitely the right priority. A frustrating one but…
Sorry to hear about your string of bad luck. We’re hoping to have better luck with the Civic, given that we’re now on our third car in 5 years.