Lily's Christmas Card

While I was messing around with some digital scrapbooking stuff (see below) yesterday, Lily decided that she wanted to make her own Christmas card. She chose out the glitter color and the bow and we printed out several for her to give to her friends.

She's totally putting me to shame. I haven't designed our card or written our annual Christmas letter and tomorrow is 2008. I'm such a slacker!

Two books that are changing our financial lives

Warning: You may want to make a bowl of popcorn. You could be here awhile!

The Total Money Makeover by Dave Ramsey

We have been drowning in our debt for several years and we always thought there was no other alternative because Dan was in graduate school and I was only working part-time, taking care of the girls. This book, first off, tells you that there is no other solution than hard work and sacrifice if you want to become debt-free and financially independent. Knowing where our money is going hasn't really been our problem; I have been tracking our daily expenditures in Microsoft Money for four years now. Our problem has been that there just wasn't enough income coming in to cover our monthly debt obligations. So we either needed more income or less debts.This book tells you if you aren't making ends meet, you have to cut down to the bare bones on your budget, and if that's still not good enough, you just have to generate more income. Sounds simple, I know, but it really is a conversion in your way of thinking.

Dan found out about this book while listening to Dave Ramsey's radio program (on 570am from 7:00-10:00pm in our area.) He was feeling frustrated about the fact that he had been out of graduate school for 6 months and our financial situation hadn't improved any. He checked this book out at the library and I was thrilled to see him taking an interest in finding a solution to our financial problems. I've been in charge of all the bill paying and money management essentially our whole marriage and it has been such a HUGE relief to finally share the burden and be unified in finding a way to dig ourselves out of our hole. As I mentioned earlier, it really is like a conversion when you finally realize that even if you can pay your bills every month, you're still broke if you aren't accumulating any savings.

Let me ask you this difficult question: If your whole household became unemployed, how long could you live? For us, the answer was not even two weeks because we have no savings and our credit cards are maxed out.

Dave's book lays out a simple plan, in a specific order, that you can follow to become debt-free and financially independent.

1. Figure out where your money is going and make a budget. This is the most painful part. It takes discipline and time you would rather spend doing something else to track every dollar and cent for a month to see what you are spending. Once you have done that, you can see where you are spending too much and where you can cut back. Dave's big message is that you have to become intense if you want to improve your financial situation.

I felt pretty sure that we were living pretty tightly, but we made some major changes and cut our budget by several hundred dollars. At the end of September we sold our Nissan Xterra. It took us about a year to decide to sell it because we had bought it new and finally paid it down below what we owed on it. We felt like if we could just stick out the payments for another 2 years, we'd have a paid-for vehicle that was very reliable. Plus you just hate knowing that you spent $4800.00 a year for the last 3.5 years and if you sell, you'll have nothing to show for it. But as Dave would say, "Broke people don't drive nice cars." So we sold the truck and now we share our 1989 Honda Accord. It ain't plush, but it sure is nice having the extra $400.00/month! In addition to no longer having our car payment, our gas expenses have drastically decreased. Our fuel economy is better, but we also plan our trips better and try not to drive anywhere unless it is absolutely necessary.

Dave suggests using a cash envelope system for all expenditures that aren't set payments, such as groceries, gas, entertainment, personal care items, babysitting, clothing, etc. Anything that you have to make a payment for, like your credit card bills, insurance, rent/mortgage, utilities, etc., pay out of your checking account. All other things you pay cash for, and when the cash runs out, well, you just can't buy anything! We started the cash envelope system at the beginning of December, and you know what, it totally worked! We cut our food budget by about $150.00 because I knew I only had a set amount for groceries so I shopped more carefully, and we ate out a fraction of what we normally do because we knew there was only $75.00 to last us the whole month. We cut our gas budget down to $100.00. Clothes? Only absolute necessities, which were nothing this month, but will include snow boots for Lily next month. We've cut our childcare items (diapers, wipes, etc) and toiletries and such down to only the bare necessities.

Dave's website has a quickie budget form and a monthly cashflow planning form if you need help getting started.

2. Get all of your bills current. If you're behind on anything, get caught up first before you start putting money towards anything else.

3. Save up a $1000.00 Emergency Fund as fast as you can. This is to be used only in the case of a true emergency, like the car breaks down or something. It's not for a great sale on camera equipment (that was a reminder for me!) Having an emergency fund in place enables you to stop turning to your credit cards whenever unexpected expenses arise.

4. Pay off all debts (except the mortgage) using the debt snowball. The basic idea is to arrange all of your outstanding debts in order of smallest balance to largest balance, regardless of interest rate. Once you have paid off the first one, you apply that payment to your next debt until it is paid off, and so on until you are debt free. And obviously you have to stop buying on credit. Conduct a little plastic surgery! You can read a great explanation and example of the debt snowball here.

We've figured out our debt snowball and if we stick to our plan, we'll be completely debt-free in four years. The thing with being debt-free is that you can really begin to use your most valuable wealth building tool, your income. Imagine how much of your income you could make accumulate wealth for you if you didn't have to make debt payments! And you don't have to make a ton of money to become debt-free in a relatively short period of time. Many examples in the book and callers into Dave's daily radio program get out of debt in 2-3 years on $60K/year or less.

5. Build a fully-funded Emergency Fund with 3-6 months of expenses. It's important to clarify that this is not 3-6 months of replacement income, but rather 3-6 months of how much it costs you to live. The average is $10,000.00 to $15,000.00. If you're self-employed, it's wise to save up towards the six month figure instead of the three month figure.

The remaining steps involve what to do once you are out of debt and can start saving towards retirement and other goals. The order is: save 15% of your income towards retirement, save for your kids' college education, and pay off your mortgage early. After that, be charitable with your extra money. The last thing the book teaches, or rather, what it teaches throughout, is to stop buying on credit and save for the things you want. Don't buy things, even cars, unless you can pay cash for them. Sound crazy? It's really not, it's just that society has trained us to assume that debt is a part of life. But it doesn't have to be!

We are on the path, and we will prevail!

The Millionaire Next Door by Thomas Stanley & William Danko

This book is referenced in Dave's book a few times and as luck would have it, Dan found it among Mom's book stash. This book is awesome because it really gets you thinking about wealth in a whole different light. Being wealthy is not about what kind of house you live in or how much stuff you have or even how much money you make. Being wealthy is about how much money you have in the bank. Many people who appear wealthy are just as broke as the rest of us!

Many of us, me included, assume that you have to make a high salary to be a millionaire. On the contrary. There are many examples in the book of people who earn less than $100K/year and have still become millionaires (have a net worth of $1,000,000 or more.) They have done this by being frugal, plain and simple. And those who earn high incomes and are millionaires live by the same principles. There are two contributing factors to wealth accumulation: income and consumption. There's one example in the book comparing two physicians in their 50's who earn about $700,000/year. One lives a frugal lifestyle, in a modest home, and has accumulated $7.5 million in wealth. The other lives a hyper-consuming lifestyle, living in a super-nice house with all the latest and greatest "things" but only has a net worth of $400,000. If he were to retire, he could not maintain his standard of living for even one year! The book uses a great sports analogy about wealth accumulation. You can have a great offense (earn a high income) but you can't win the game unless you also have a good defense in place (live a frugal lifestyle.)

The goal is to be financially independent. Can you imagine living without money worries? Without wondering when or if you'll be able to retire? I guess I'm getting old because I'm starting to think a lot about that. When you're young, you just worry about providing for your lifestyle now. But what happens when you wake up and you're 65 and still living paycheck to paycheck? I want to be able to retire in dignity and in comfort. Not lavishly, but to own a home free and clear, have enough for modest monthly expenses, and to be able to travel. Dan says he'll work till the day he dies, but hopefully that will be out of boredom, not out of necessity.

I look forward to the day when we can say we are debt-free and we can start saving for a down payment on a home. Sometimes I get depressed that we have been married for almost 12 years and don't own a home, and won't own one for at least another 5 years. But I'd rather improve our financial situation now, before we get into a mortgage, so that we can live a life of financial peace. As Dave says, "Don't bother trying to keep up with the Joneses. They're broke!"

Snow, glorious snow!

I've been experimenting with some digital scrapbooking lately. There are so many free downloads online, if you just look you can make some pretty cool pages without spending any money! This layout was a quick page (just drag and drop your pictures in and add text) by a digital designer named Flergs. This page was part of the Whimsical Wonderland freebie. Several designers contributed to a "12 Days of Christmas" freebie with lots of free papers, accents, and alphabets all with a Christmas theme. This one can be found here under where it says "OK, here is MY part." I think the quick pages are in download #1.

Click to view larger.

Quick pages can be really versatile. Here is what the original design looked like; I just adjusted the hue and saturation in Photoshop to make it match my pictures better.

These pictures are from a great snowstorm we had on December 8th. There were so many fun pictures, I just had to show you some more!

Snow, glorious snow!

Amelia will never wear a hat, unless there is snow involved. Then she's willing to put up with it!

One of Lily's best friends, Halle, was at our house when it started snowing. She only had her coat, so we dug out an old box in the top of Mom's front closet and found her a hat, scarf, and some gloves. Guess what else we found? Two pairs of my old leg warmers! Dude, those have been in that box for a long time! She's a maniac, maniac, on the floor...And she's dancin' like she's never danced before...

It was such a crack-up watching Lily and Halle trying to push this huge snowball!

Lily finally enlisted the help of Daddy!

That dirty dog!

Note the snowball hitting Lily in the back!

Lily and Halle formulating their strategy for retaliation. You can see their plan worked out really well...

The best part of fresh snow? Eating it, of course!

I don't mind this kind of snow. Big flakes, perfect for making snowballs, and the best of all, I get to watch from inside, where it's nice and warm!

My work here is done

Now I understand why my parents were always so bleary-eyed on Christmas morning.

Here's wishing you the opportunity for a late morning nap! Merry Christmas!

Who says mice aren't cute?

Lily had her first ever dance performance last night. She was one of the mice in the battle scene of the Nutcracker. Oh, was she excited about her costume! "It's so CUTE!" she kept saying over and over. She was also thrilled that she got to wear makeup (even mascara) but fortunately, after having to apply it twice in one day, she decided it wasn't all it's cracked up to be. The one thing she wasn't thrilled about was putting curlers in her hair. She was NOT amused when I insisted on taking her picture!

However, when we pulled the curlers out and she saw how cute her hair was, she decided it was worth it. Her hair is just like mine, super fine, and never holds a curl from a curling iron. But those old foam rollers really did the trick!

Lily's friend Liesel, whose mom is the famous woobie seamstress, was also one of the mice. (Thanks, Brooks, for doing Lily's hair! I'm such an amateur!)

Look at that tail fly!

I will post pictures of the performance in the next day or two when I have time to go through the bazillion pictures I took. For now, I'm off to bake gingerbread cookies with my sister, Becky, and the two cousins, Lily and Dani. I can't believe how good it feels to have an evening where I don't have a reprint order or editing hanging over my head!

M-O-M-M-Y

Lily has started spelling out my name when she talks to me. It's so funny to hear her call, in a sweet little voice, "M-O-M-M-Y?"

She said the funniest thing this morning. She was cuddling up with her snuggle blankie and said, "This is my snuggle blankie. No one but me can touch it. Just like not one but Amelia can have her woobie...What's your woobie? Is Daddy your woobie?" I said "yes" and she said, "and you're Daddy's woobie."

You gotta love kids!

A little irreverent Christmas humor

Paddy, my mother-in-law, emailed me several Christmas comics and these were just too good not to share.

Dec. 9 Note: By popular demand, more comics added. See below.

More funnies to relieve the holiday stress:

Speaking of snow cones...

Christmas Traditions

I know, I know, I'm supposed to be working, not posting on my blog, but I couldn't resist sharing a fun Christmas tradition that we started last year. For the month of December I get 24 Christmas books. Most are from the library, but I'm buying a couple each year to build up our collection. Then I wrap each book and put them under the tree. Each night the girls get to open one of the books and read it for bedtime stories. Lily loved this tradition last year and has been looking forward to starting it this Christmas season.

This is what books are for, right? Fun to read and useful in case there's an indoor snow storm!

Our book tonight is one of our own called What is Christmas? by Michelle Medlock Adams. It's a fun board book that talks about all the fun stuff at Christmas, but that the real meaning is to celebrate Christ's birth,

Another favorite that we discovered at the library a couple years ago is The Crippled Lamb by Max Lucado. I loved it so much that I bought the board book last year. It tells about a lamb who was in the stable when Jesus was born.

One I found at the library last year and will check out again this year is A Night Without Darkness by Timothy Robinson. It tells of the night of Christ's birth from the perspective of the Nephites in the Book of Mormon. Very powerful.

It's so nice living with Mom, especially at Christmastime. I'm always so busy at Christmas that I often don't take as much time as I should to do fun seasonal things with the kids. That's one thing that I'll always remember from my home growing up, Mom and Dad always decorated the house festively and there were always good smells, pretty candles, and Christmas music playing.

This year Grammie got Lily a paper Christmas tree of her very own that she could build and decorate. She's been having a great time with it!

Mom has this blow-up snowman that usually sits out on her front porch. This year she brought it inside and the girls, especially Amelia, were so enchanted with it that she decided to leave it inside. Amelia runs up to it, pokes it so that it tips backwards, then giggles and runs around the room.

Mom also has a couple of other fun toys for kids at Christmas. She has three talking/singing stuffed animals that the girls get a real kick out of. There are two snowmen that sing "We Wish You a Merry Christmas" and another one that sings "Rockin' Around the Chrismas Tree" with penguins that shake their tails. So cute! Amelia loves the teddy bear that reads "Twas the Night Before Christmas." She carries him around and loves on him several times a day.

Another thing that I love to do at Christmas is sit in the dark and look at the Christmas tree lights.

Growing up, we called it "watching the tree" and Dan always thought it was silly to watch a tree without blinking lights, so this year we made them blink. Tonight after stories, Lily and I turned off the lights and I sang Christmas songs to her. It brought back such great memories from my childhood. I love all the Christmas hymns. More than anything, that is what makes me feel the Christmas Spirit.

As we were laying on the couch, I said to Lily, "Did you know that sitting on this very couch watching the Christmas tree is when your Daddy and I decided to get married?" I told her of how I was home visiting for Christmas after I had met Dan in Virginia, and he flew out to see me and meet the family. We were sitting on the couch and Dan said to me, "Well, do you feel ready to get married?" It was the closest thing to a proposal there was. The next week we called the Washington D.C. Temple and scheduled our sealing.

Here are a few other favorites from Christmas Eve last year. Growing up we always read several versions of The Night Before Christmas followed by Dad reading Luke 2 from the Bible.

Last year we read two Christmas books then Dan read from the Bible. I set up my camera with the wide-angle lens and cable release and snapped photos while we listened.

The best thing about Christmas Eve last year is that we decided to do the big family party with all the cousins the weekend before Christmas and we stayed home for a quiet, intimate evening at home with just our little family and Grammie. I don't know about you, but I love Christmas Eve even more than Christmas Day. I love the anticipation, but I also love the spirit I feel as we read together as a family.