Mama bear is proud

Monday, November 16, 2009

I'll warn you right now, this is going to be a "my little girl is such a great kid" kind of post. :-)

We just finished Operation Christmas Child at church. As a family, we've done OCC (you know, those shoeboxes filled with goodies) for a number of years. In Novembers past, I've gathered the kids around my computer and showed them the videos that can be seen on the Samaritans Purse website. We would head over to Zellers and the dollar store to fill up shoeboxes with all manner of exciting things (exciting, because we knew they would be going to some little one who likely owned nothing like any of our bounty). I was always really pleased with the effect on my kids and felt it was building a great sense of compassion and sacrifice in them. It's hard for 2 and 3 year olds to pick things out of a store and not get to keep them!

Well, last year and this, mom and I brought OCC to the MountainKids. I won't get into how it went here and now, but instead I wanted to tell you about something Honour did.

2 or 3 weekends ago, we were over at my parents house on a Sunday afternoon, a common ritual. Sometime in the afternoon, Honour started talking about a ballet show she wanted to put on for all of us. This is also a common ritual in our family, although she'd never done it at my moms, in front of all the family.
So she schemed and planned all afternoon and once in a while I heard rumblings that she was going to be asking us all to pay to see the show. I didn't give this alot of attention--I'm usually trying to catch up on MountainKids planning on Sunday afternoons.

Sure enough, after supper she finagled the menfolk to move the furniture in the living room aside and tada! Her dance floor was ready. As everyone came in and found a place to sit, she tripped about the room, flashing her pearlies and holding out her hand for "donations". She asked for a minimum of a dime. Of course everyone dug deep and acquiesced.

And then, as I tootled some made-up tune (at her request), she waltzed about the room and performed, to the best of her memory, some of what she learned at a 10 week ballet class over a year ago. She was, of course, adorable.

After a grand total of 4 minutes, the show was done and we all clapped enthusiastically. When she had me help her count her proceeds, I was surprised that she had raised nearly 2$.

It was then that she told me that "Now she had enough to buy something for the kids who only get one egg for breakfast!". I was SO touched and pleased at this. I had been a little concerned at her "hornswaggling" this money off my parents and siblings, but to hear what her little heart had been just made my heart melt.

You might be wondering what in the world the one egg for breakfast thing is....

A couple months ago, I read this blog about a remarkable young woman who is making a difference in the world in a way most of us only dream of. You can read about her here.

One story she tells is about how she provides breakfast for about 200 needy kids in Uganda--a hard boiled egg. Now, truthfully, she might give them more than just one egg, but one day when I was trying to help my daughters understand how wasteful it was not to finish the food on their plate, I told them about Katie, and these children she provides for. I told them that these poor kids only got 1 egg for breakfast and that was a word picture that really stuck in their heads.

Honour had decided that these kids who only get one egg for breakfast were one and the same as those we were packing shoeboxes for. And who knows, they just might be.

So a few days after the ballet for charity show, I took her and Verity over to the dollar store and she picked out 2 items to go in her OCC box.

I won't pretend she was still single-mindedly committed to buying this stuff for her box...I had to keep her on track a couple times. But in the end, the items were bought, and she was ready to pack them in the shoebox and see them go off to a child who would appreciate them--in the end---more than she.

One of those...maybe-we-are-doing-a-half-decent-parenting-job-after-all moments....

We've been Dave Ramsey-fied

Wednesday, November 4, 2009

So here's an update on our Mvelopes/Dave Ramsey journey.

It's started quite a while ago really. I think we've just passed the 3 year mark for using Mvelopes. I first talked about it on my blog here and here. I'm still a huge fan of the service. I'm even considering a new offer they're advertising about a life-long membership for a reasonable price. I really do think I'll be using this for a looong time...or at least as long as it would take to spend the same amount yearly as I would in one shot for the lifetime membership.

Crown, where I first learned of Mvelopes through their Money Matters radio show, (it may be called something different--I haven't been able to listen to WDCX for months, ever since some dumb station from Kitchener horned in on their signal) and Dave Ramsey have alot in common. Crown has their Money Map with it's 6 or 7 steps to managing your money; Dave has his Baby Steps. Crown has the Debt Rollover. Dave has his Debt Snowball. The two mesh nicely and rarely does one contradict the other. I also pay attention to Mary Hunt. I read one of her books a few years ago; I think it was the Financially Confident Woman. I was impressed with her story of working her way out of massive credit and consumer debt, but I've been just slightly less impressed with some of her philosophies. Plus I thought when I read it that she was an outspoken Christian, but none of her emails or stuff I read now seems to indicate that at all. Not that I wouldn't listen to her if she wasn't a Christian...good money sense is good money sense no matter where it comes from.

But Dave Ramsey and I just click. I love listening to his show. I love his dry, sarcastic humour and his southern drawl; how he can get away with calling the ladies 'darlin'. I love the simple, straightforward common sense way he has about him. I don't doubt that he understands the ins and outs of real estate, investing, economics and all that, but he 'puts the cookies on the bottom shelf'. I said in one of the previous posts (now a few years ago) that I first read his Total Money Makeover about 5-6 years ago. We were living in Brantford and I think it was part of our big wake-up call that we had been completely botching our finances. I borrowed books from all over and I believe that one came from my parents' shelves.

It was a good book, really liked the ideas and principles. Talked to James about it, read him parts of the book. He agreed and so we decided to go for it. We were going to start the Baby Steps. I think they're fairly well known, so I'll list them here:

1. Save $1000 quickly for an emergency fund.

2. Get out of debt, except for your house, using the Debt Snowball

3. Save a larger emergency fund: 3-6 months of expenses

4. Start contributing to your retirement

5. Start contributing to kids college fund, you if have kids

6. Pay off your house

7. Enjoy and give away your wealth!

This is where we're at!

So back to our first try: It was pretty much a complete bust. A combination of things I was that we didn't follow the steps. We thought we were, but really, we didn't and so it didn't work. We didn't think we could save the $1000 bucks, that seemed unreasonable and unnecessary and so we...shhhh...skipped that one. Number two was that James was with me on it, but he wasn't with me on it. Dave talks about getting mad and zealous about getting rid of your debt--gazelle intensity he calls it. We didn't get that. So it petered out.

Jump ahead to our move to Hamilton and the discovery of Mvelopes. I wouldn't say that Dave Ramsey's material was completely ineffective in our lives. I think alot of the principles and ideas permeated our thoughts and beliefs and slowly we became more mad at our debt and more serious about doing something to get rid of it.

The Mvelopes was a great step. For the first time, we had a way to follow up on our budget and really track where everything was going. It's one thing to sit down and make a budget and say, "OK, we're going to spend 40$ on milk and bread for the next two weeks". But how do you make sure you do that? 5 trips to the variety store later, you've spent more than $40 bucks. But you need the bread and milk, right? It's that follow up step that most people lose out on when they live on a budget. You can get really fastidious and keep every receipt and go back to your budget sheet and subtract each one, keeping a running total. I did that for a while...back when I was still doing everything on paper with a pencil. But Mvelopes makes all that nice and streamlined.

The Mvelopes was working really nicely for us, but it hadn't solved all our problems. The beginning of this year rolled around and I sat down to run some reports (another nice Mvelopes feature) to see how we'd done over the previous year. The most valuable part of this is I can see accurately how much is actually getting spent in each category. We might budget $180 for groceries every two weeks, but what do we really spend? Do we go over and pull from other envelopes, or let the envelope sit in the negative until payday and fill it up with overtime? Then I have a goal to aim for. One of my little money goals is to be able to fill each envelope with the actual amount we spend. It gets awfully tiresome to always be putting the bare minimum into, let's say, the food envelope and than overspending it much of the time because it's simply not enough money to feed my family. Then I might actually get to the point of having money left over in an envelope and be able to 'sweep' it into a savings envelope at the end of the month.

My financial assessment, as it usually is, was not pretty. We were just consistently overspending, relying on a cushion in the account to take the fall. Well, the cushion had sprung a leak and now it was flat and useless. Gone, in fact.

I actually had to reset the Mvelopes system. We had so many negatives that it was like being in the middle of an endless maze. It was a depressing and pride-busting day.

We decided that we needed to do something more. We needed more help, more information....more something. So I started looking at Dave Ramseys material again on his website. His Financial Peace University looked like just what we needed.

I'll boil this down so as not to make this too long (too late!). We found an FPU class in the area and started attending. It was awesome. It totally kickstarted us on the path to our financial hopes. Within a month we had our 'baby' emergency fund. I really think that the only way we were able to do it was using the Mvelopes. Let me expand a little.

Have you ever had a time where you knew you'd be saving money on something in particular? Or maybe some extra money came in for something. For instance, when we first read DR, we decided that instead of James getting a second job, we were going to take all his overtime and put that towards the Baby Steps. Every pay, I saw that overtime come in but do you think it actually went towards the Steps? No way. It frittered away into nothing.

With using Mvelopes, we were able to see any extra money in black and white, and immediately put it towards our goal. When the gas bill arrived, $26 less than the usual equal payment amount (we're on equal installments for all our bills that offer it), that $26 went right into the Emergency Fund envelope and then transferred to our ING account soon after. I regularly sat down and went through the envelopes, scraping off amounts as few as 4 cents, transferring it to the EF envelope. The night we got to $1000, we celebrated with a bottle of sparkling juice that we had bought for Valentines day and not used. It was Jamie's birthday too! It was such an amazing feeling. We'd never saved that much money in our whole lives.

Onward to Step 2. I guess it wouldn't be kosher to say how much we were in debt. But I'll say that we had about 3 debts that were all around the same size. And they seemed pretty big to us. I knew it was going to take us quite a bit longer than one month to get it taken care of, snowball or not.

Just in case you're not familiar with the Snowball concept, here's a quick lesson: You list all your debts from smallest to largest. Include in this list who it's to, what your monthly payment is, what your interest rate is and the total amount owed. Since this is Baby Step #2, you're likely already in search-under-the-couch-cushions-for-extra-money mode, so keep that up and start applying ANY extra money towards debt #1. Keep paying the minimums on all the rest. Do crazy things like work extra jobs delivering pizzas or something to get extra money--remember, it's only for a short time. As Dave says constantly, Live like no one that later you can live like no one else. Then when you've got debt #1 paid off (celebrate!) and move on to #2, applying the minimum from #1 to #2...and keep scraping and delivering those pies.

This is again where the Mvelopes were indispensable. This is again, where we failed when we tried the first time. Because we didn't have a plan for how each household paycheque was used, there was no way to put our hands on that minimum from debt #1 in a consistent way. With Mvelopes, when a paycheque comes in, a 'profile' is applied to it: a list of all the financial obligations that we've pre-determined will always come out of it. For instance, my paycheque from one of my choirs pays for:
Phone bill
Gas bill
Some groceries

In the Mvelopes program, the deposit from this paycheque comes through automatically (Mvelopes connects with your bank and downloads all your recent transactions). I click on it and drag it to the Income Cash Pool (the screen where you decide what envelopes it will be dispersed to). I found it easiest to use their profiling option which with one click, fills in the amounts for me.
So when Debt#1 got paid off, when I clicked on 'profile', however much we were paying towards it was filled in....but now it didn't need to be there! I could very happily delete that box and clearly see from my totals at the bottom of the screen that we now had $X to apply to somewhere else. So I put it in the envelope for Debt #2. Small victory...but felt great.

Since the spring when we finished FPU, we were able, through the blessings and grace of God, to finish Baby Step #2, and as you can see from my ticker, get about halfway through step #3. It's an amazing feeling! Especially when I think back to the frustration and despondency of our first attempt 5-6 years ago. I never thought we'd make it this far!---and maybe that was part of the problem.

So that's my, um, update. I hope maybe there was something informative or inspiring for you!