And there ends my list of nice things I have to say about it.

Those who have been long-time readers of the blog know that we have a long list of problems we’ve had with the car in the past three years. There’s the fact that it is impossible to keep in alignment and therefore eats tires. There’s the time the engine self destructed. There’s the time we had to abandon it 200 miles into an 800 mile trip when it kept shutting itself off and rent a car to finish the trip. And so on.

Why do we still have the car? Because we’re dumb. Well, that’s debatable, but the fact of the matter is, I want to be out of debt so badly that I decided it’d be better to keep the devil we know instead of taking out a loan to get a different car. The wisdom of that is, as I said, highly debatable.

Among the list of small (and not so small) crises the car has contributed to was the time we were stranded at one of my son’s soccer practices because we couldn’t get the key to turn in the ignition. That required a locksmith to repair and actually, all told, wasn’t so bad after all from a financial perspective. However - two years later, and the problem has returned. Yesterday, when preparing to drive to my son’s bus stop to pick him up (he goes to school in a different district than the one we live so his bus stop is a few miles away) I couldn’t turn the key. Eventually I did manage to get the car started and got there just in time to meet the bus (I followed the bus in, in fact) but the fact remains - the car has decided to drive me crazy yet again.

So another locksmith visit, another round of staring at the Saturn in my garage thinking - what price am I willing to pay for reliability? At what cost does dependability come, and even if I did decide to replace it, how do I know I won’t end up with another stupid lemon that claims it isn’t technically a lemon? All this is starting to make me want a brand new car with a warranty. Must. Resist. Stupid. Car. Ugh.

What I wouldn’t do for my little GEO Tracker back. That car was 14 years old when we replaced it with the Saturn and in those 14 years I owned it, I spent less on it in maintenance than I have in the 5 years I’ve owned the Saturn.

Bah.

Ah, computer technology. How you thwart me so.

Luckily, I found paying down my student loan this month not as complex. After starting with four debts 2 years ago - a credit card, a car loan, and two student loans (one for me and one for my spouse), we’re down to just my student loan. After paying $800 towards it this month (and $1000 last month) it is down to $5392.09. A far cry from the over $12000 it was at two years ago.

This means we’ve paid off a little over $31000 of our debt as it stood in June 2007. Our total percentage of debt paid off is now 85.21%, which means we only have ~15% to go!

To pay that off by the end of the year, with only 3 months of payments left, we’d have to average almost $1800 a month in payments, which unless some crazy economic thing happens to shower money upon us, is not going to happen. But, paying half that each month, or about $900, may indeed be doable. Paying off the student loan by March 2010 doesn’t sound too bad to me.

Of course, something could happen to derail that - but for today I am an optimist, and I’l got this thing in my sights. No more Ms. Nice Gal. or something.

And now to see if posting deletes all my formatting…. Heh.

The final stretch, when you’re at the start, seems like it’ll be the easiest part. As you eliminate debt, more resources become available, and more can be allocated to fight the good fight. Momentum is on your side - the snowball rolls downhill faster and faster until it seems nothing can get in the way.

But, that isn’t always the case. Just as any other part of the debt elimination journey, setbacks can appear at the end as easily as the start. The length of the journey itself can be daunting - that initial adrenaline about completion can only last so long. And as more things creep into sight, debt elimination seems like it might have been the least complex part of the puzzle.

I haven’t completely lost focus - we’re still making progress (which I need to update on the numbers page, we’re closer than that currently reflects). But it has been much easier to get distracted into dealing with other things. As the debt becomes less, it almost seems less urgent - at the beginning, it was so much as to be overwhelming, and put a serious weight on our finances that felt almost inescapable. But as we’ve beaten back that debt monster, the threat of imminent destruction to our finances has become less (or at least, has felt less) because of debt. It has been easier to prioritize other goals before the final debt elimination. It has, in a word, become less urgent. Not in fact, but in feeling.

And the less urgent the debt elimination feels, the easier it is to not focus on it when other things get in the way. And that’s how the home stretch becomes an endless silent struggle. A lot of things have changed for us in the past two years. A lot of good, and some bad as well. But even though there may be other things affecting our lives that we never anticipated, this final debt elimination stretch will not continue to drag on. The refocusing of our finances back to where it began starts now.

First on the list - making this month’s student loan payment and then updating the neglected numbers page. Nothing like a Tell All Thursday to get things back on track. I doubt we will completely eliminate the non-mortgage debt by the end of 2009, but I’d like to beat the original December 2010 goal by as many months as possible. And figuring out where we are is how we’ll get to that point.

Saving money doesn’t commit it

When you pay money to a debt, you are doing just that - letting go of money under your control and giving it to someone else.  This reduces your obligation to that person or entity, but it also commits that money.  The money’s gone, and you can’t take it back and make another choice with it.  When money is put into savings, it is flexible.  There are many possibilities for the money you save.  Which leads to the next point…

Preparing for the unexpected keeps the unexpected from destroying you

One of the things, maybe the main thing, that throws a person’s or family’s finances off track is the occurrence of something unexpected.   From a home repair to a car repair to a job loss to a health problem, there are many unexpected things that can happen.  Having money in savings allows you to deal with unexpected things without going deeper into debt.

Security happens in many ways

Having money in savings provides a level of security and a feeling that one can handle life’s challenges.  This relates to the above unexpected comment, but is different because it is the provision of peace of mind even if nothing unexpected happens.  That level of security is sometimes necessary even more than the security of eliminating a debt.

Interest rates don’t lie

What happens when your savings rate is higher than your debt rate?  While that might not be common in today’s economy, it has happened before, and will happen again.  In fact, some people currently have student loans at a low enough interest rate that their savings rate at some point may exceed it.  While that may not be a big enough reason for some to save vs aggressively pay down debt, it can make financial sense.

Should you pay down debt aggressively or save money aggressively?  Only you can really answer that question, by really looking at what makes more sense for you.  What makes your heart feel good?  What mix of savings and elimination work for you?    Where does your perfect mix lie?

This seems like it should be a clear cut process with a easily defined answer, but it is not.  Every situation is different, and the factors that come into that situation will vary.  Instead of looking at a cookie cutter one-size-fits-all solution, here are reasons I’ve prioritized debt elimination over savings.  Later I’ll look at the other side of the coin - when savings is prioritized over debt elimination, and then finally, what decisions I’m currently making as well as the future of our financial life.

Debt elimination reduces obligations

The most dramatic and immediate affect of reducing (and eventually eliminating) your debt is reducing the amount of financial obligations you have.  The less you owe, the more of your money is actually yours and not promised to someone else.  The more decisions you actually get to make about your money that aren’t made for you.

Debt elimination has a snowball effect

As you reduce and subsequently eliminate debt, there is more money freed up in your budget that can be applied to remaining debt, producing a snowballing effect.  The more money put towards debt, the less that debt becomes, and if you keep building upon that, the path to debt freedom gets shorter and shorter.

Debt elimination makes an immediate difference

$100, $10, or even $1 paid towards debt is that much more you do no owe, that much more you are no longer paying interest on, and in some loan cases, can immediately reduce the amount you are obligated to pay in a month.  This is a difference that can be immediately felt in your monthly budget, and paired with the snowball effect can have drastic positive consequences.

Debt elimination frees funds for emergencies

Money that is not obligated to pay towards existing debt can be, if needed, used towards other events, emergencies, or obligations.  If you now have to pay out $800 a month vs $1000 a month, that $200 can be, if need arises, diverted to a pressing immediate need.

Of course, many of these reasons can be turned on their head and used to defend a position of savings over debt elimination.  Which is why the path to take is a uniquely personal one.  And Next time I will be doing exactly that - turning things upside down and seeing where that gets us.   I’ve been on both sides of this debate, and mostly somewhere in the middle.  Finding that middle ground that is the right balance for you is the trick.

The soccer field is part of a much larger park, which is good because it gives my daughter a lot of room to run around in, but at the same time, she can’t just do anything she wants, because there are service roads, other fields, and other obstacles she needs to be aware of and avoid.  At 2, she doesn’t always recognize her limits, and this being a new place, she doesn’t always know what she is supposed to do.

What works the best for her (and for me) is finding a balance between letting her roam free and setting very clear limits on what her freedom entails.  She cannot enter the parking lots.  She cannot climb on top of the picnic tables.  She can run all the way to the end of the unused field next to my son’s, but not across the road at the end.  Things of this nature, that keep her safe but let her have some freedom to make choices as well.  Too many rules and she can’t remember them all and doesn’t bother to even try to follow any of them.  Too few, and she could end up hurt, or worse, because she’s not yet equipped to make judgments about the consequences of some of her actions.

Does that mean she doesn’t test those limits?  No, of course not.  I’ve stopped her many a time this past week as she looks at me and carefully steps one foot over the line into the soccer field my son is playing in, or puts her knee up onto the top of a table.   She is two, after all.

All this has reminded me a lot of the process of finding a balance between working towards one’s long term goals and enjoying life here in the present.  Every individual, couple or family’s balance will be different, but the process of finding that balance is strangely similar to keeping my two year old from hurting herself or becoming a disruption.  Too many restrictions (focusing exclusively on the future and not on the present) can make one rebel and try to break every rule.  Too much leniency (or no control over what happens in the here and now) and an emergency could be a never-ending disaster.

Our balance has changed over time, sometimes more focused on getting to the point of debt free, sometimes more focused on preparing for emergencies, and sometimes a little more focused on enjoying life in the here and now, but when we aren’t working on a balance, and focus too much on one aspect, we tend to lose sight of the big picture.   And a few times of stepping over the line, so to speak, testing those limits and backsliding at times as well, serves to reinforce why those limits are there, and can be turned into a positive and a renewed commitment.

Where is your balance?  What are you working toward?  What helps you to keep on track?

For newer readers of the blog, Tell All Tuesday is where I recap what’s changed as far as our debt situation since the last update.  I used to do it every Tuesday, or close to it, but once I got down to the student loan, I can only make payments to it once a month without them advancing my due dates, and I want everything that possibly can be applied directly to principal, so I only make a payment once a month.  So Tell All Tuesday has become more of a monthly affair.  But, hey, today is still Tuesday.

Since last month, we got an unexpected refund of part of our escrow account because our property taxes have gone down.  That added to the budgeted amount we pay monthly to the student loan was almost $1500, so I rounded up to make it even.  When looking at my actual amount owed on the loan, I wanted to bump it up even more to cross another thousand milestone, but we weren’t able to do that this month, so we still owe just over $7000, to be exact, $7097.86.  That payment put us at having paid off 80.53% of the total non-mortgage debt amount we owed (credit card, 2 student loans and car loan)  two years ago, when I started this blog in June of 2007.  Less than 20% to go!

The home stretch has taken longer in some ways than some of the middle steps did - it seemed we ran into a streak of good luck for a while and were able to make a lot of progress, and then hit some harder times where our progress has somewhat stalled.  But it is still moving forward, even with the adjustments we’ve made to saving a bit more preemptively against needing a new-to-us car or any financial setbacks on the work front.  And although $7000 still seems like a whole lot to me, paying off 80% of the original ~$36000 in two years makes the final 20% seem more than achievable.  Our current amount paid off is now $29353.85, and my goal is to not only knock the student loan under $7000 next month (which would happen with even our minimum payment), but to knock that paid off number up to over $30000.  Our budgeted amount (due to the change in our mortgage payment) is $543.66, so I’ll only have to snowflake at a minimum about another $150.  We can tighten our belts more than we have been, and we can make this happen.  And from there it seems all downhill… that works for me. 

I was contacted a few months ago by a representative for Brother, asking me if I’d like to review one of their all in one printer/fax/scanner/copier machines, the Brother MFC-5890CN.  I get a number of offers to review things and I usually don’t accept because I’m not all that into writing reviews, but in this case, I think my spouse would have cried if I didn’t say yes.  We have to fax a number of documents each month for our Flexible Spending Account, and usually that means I have to go to our local copy shop and pay them to fax them for me.  It isn’t a huge expense, but it is a recurring one that’s nice to eliminate.  In the spirit of full disclosure, in exchange for writing an honest review of the all-in-one printer (not positive or negative, just what I honestly think), I get to keep it.  Yahoo! 

And honestly, I think it is pretty cool.   I’ve only ever had a printer before, so I didn’t know what I would think.  Some background information about the all-in-one printer:  as I said before, it prints, faxes, copies, and scans, as well as direct photo capture from a memory card.  It prints up to 11″x17″ paper for both photos and documents, and there is an auto feeded on top that feeds up to 50 sheets for scanning, copying or faxing.

Some of the things I just love about it:  scanning.  Oh, the scanning.  I can scan documents into PDFs, I can scan pictures into JPGs, and it does it pretty fast.    I also really like that where the paper comes out is basically right under the machine, so it doesn’t shoot out into the room, and takes up no more extra horizontal space.  The machine is sort of large to begin with, so this feature really helps save space on my desk.  The quality of pictures, both scanned and printed, has been very good for me.  And I am happy with the ease and speed that it both prints and copies, especially color.  The black and white does seem a tad slow to me, but the color more than makes up for that.  And it is pretty simple to use - there are big buttons on the front to change functions, which is good for me since I am not a big doirection-reader. 

A few things I am not as fond of:  the pages when I print come out in the order printed, meaning that my documents are in reverse order.  There may be a setting to reverse that, but I couldn’t find it. Also, setting up the fax was a bit complicated and tim-consuming.  We did get it to work, and there is even a place you can fax to verify it is working, but it took my spouse a few tries to get things right.  Lucky for me, my spouse sets things up.  :)  These are small things in thebig picture, but things that annoyed me.

All in all, I’m pleased by the device, and I am excited to never have to pay for faxing again.  Compared to our previous inkjet printer, this one is pretty slick, and the cartridges are much less expensive.  It does have 4 cartridges though, not two, so I am sure that factors in somewhere, depending on how fast they run out.  But if you want a printer that scans, faxes, copies, and does it all quietly and efficiently, look into this one in your search.  It is pretty nifty.  And now I am going to play with it some more, I have copying to do!

But as I said, their contract ended in May, so last week, my mom and brother made another trek to the Verizon store, this time to end their phone plan (that was no longer under contract, they thought) and sign up for a different plan that more suited their needs (my other brother is joining his fiancee’s plan instead of another family plan with my mom).  And that is where the fun begins.  I can only report it secondhand, for I live 1000+ miles away and wasn’t there, but in the 3.5 hours (yes, three and a half hours) that they were there, this is what basically happened.

When they tried to end their phone plan, they were told that if you have a contract, it automatically renews once it ends until the authorized account holder cancels it.  The authorized account holder is my dad.  And because my dad is dead, he can’t cancel it.  So it can’t be cancelled.  YES, the first set of employees point blank told my mother and brother that the contract (that had already run out) could not be cancelled by anyone other than my dad, and because he was dead no one could cancel it.  My mom had brought the death certificate with her, and the employees told her it didn’t matter, no one else was authorized without my dad giving them authorization, even though he had passed away.

So then my mom told them “Good luck getting William to pay it then beyond the grave” and the employees went to get first a manager, and then after the manager claimed they couldn’t do anything, a supervisor, and the supervisor finally, after consulting “headquarters” and having my mom and brother both refuse to accept they had to keep paying, changed the authorization to my mom and allowed her to cancel it.

This, as I said, took three and a half hours.

So, if you have a Verizon family plan, look into your authorized account holders and see if you can have more than one.  Because if the unthinkable happens, Verizon may try to collect from you forever.  Literally.

Tomorrow I’ll talk about something I like to balance this rant about things I definitely do not. 

Using The Prioritizer is pretty straightforward. You begin by entering up to fifteen goals by name, one per line. These are just simple descriptions of each goal, such as “Retiring at Forty” or “Vacationing in Rome”.  Once you’ve entered your goals, the Prioritizer gives you a list of pairings of your goals, and you rank one of each pair as the more important to you.  Think about each pairing before you choose - really decide which of those two things is more important in your life.  This is the key.  Comparing the goals two by two is much less overwhelming than trying to compare everything at once.

Once you’ve done that, the Prioritizer uses the data you’ve entered to rank your goals from most important to you to least important, with a percentage ranking next to each.  the higher the percentage, the more important to you.  The beauty is in the simplicity.  This isn’t anything you couldn’t do yourself with a number of pro/con lists, but it does it automatically for you and gives a simple list ranking your goals for you.  From this, you not only know how your priorities rank - but how much more (relatively) important one priority is than another.

Is it perfect?  Of course not.  It is a tool like any other - but it may give insight to you when you’re stuck trying to compare apples to oranges.  When I’ve been stuck looking at a number of different goals and not sure where my priorities truly lie, I’ve been able to use this tool to make things a bit more clear cut.  And readjust my financial focus (and otherwise) appropriately.