Well, we didn’t spend anything we shouldn’t have, but a couple of setbacks happened today.  For one, I spent over $100 at the pharmacy.  Sure, this is health-related and I won’t hesitate to spend money here if I need to.  AND it’s reimbursable through my cafeteria plan, so I’m not losing money here…it just happened when I kinda need that money to be in the bank right now.

Also, the garbage disposal went out on us in the kitchen sink.  This is what some people would call a minor inconvenience, but with a family as large as ours we’ve really grown to depend on it more than one would realize.  This is something that just has to be fixed in our opinion.  I’ve done a little plumbing work in the past, so will take a crack at this beast of a project so we only have to pay for parts.  I’m really hoping I can get by using less than $100 from the rather small emergency fund we have.

So there’s Murphy’s law at work for you.  If it can happen when you don’t have the money…it will.

Today’s Progress:

• Earned - $0
• Spent - $105 (Prescriptions)
• Debt Reduced -$0

Wow, 11 days already have gone by.  I feel so much more organized, even though I still feel like I’m just not getting enough done.  Today was a good day just because absolutely nothing happened.  I may not have made any more money, but I didn’t go any further into debt either! 

I did happen to get another $70 worth of medical benefits statements that I can claim for reimbursement.  This is coming at a very important time.  I just got a notice from one doctor office claiming they were going to send me to collections next week.  I need to pay them right now…

Today’s Progress:

• Earned - $0
• Spent - $0
• Debt Reduced -$0

I made a big step toward reducing monthly expenses by canceling our monthly rental fees for the Culligan water service.  This is an excellent service, and we’re really going to miss the water softener and filtration system.  However, we’re taking the whole debt-reduction effort seriously and the tap water is just fine the way it is. 

Make it an easier transition

To get the kids used to the idea we’ve stopped letting them use the little filtered faucet and nobody really misses it anymore.  And we’ve not been by to buy salt for a couple months, so after it’s all removed we’ll barely know it’s gone.  This is going to reduce our average monthly expenses by over $30!  That may not seem like much to some people, but we’re really tight right now and will gladly take a few of these types of reductions. 

Another thing we did that really helped was to start using colorful water jugs with straws that can be washed in the dishwasher on a daily basis instead of buying bottled water every week.  We made this an exciting event for the children with each getting a designated color of their own. 

Part of the routine

Every day, we simply fill up the bottles with tap water and leave them on the counter for whenever they’re thirsty.  After dinner, they make their way to the dishwasher as part of the routine to be ready for the next day.  They’re easily portable for things like soccer games, or going down the street to play on a neighbor’s swing-set.

The savings

The convenience of having a bottle is 95% of the cost of bottled water.  I totally understand why you’d want that convenience, but why should you pay $1+ every time you want it?  Reusing the same $4 bottle hundreds of times can save hundreds of dollars over the course of a year.  Your tap water is practically FREE in comparison to other sources.

Between canceling the water service and not buying 50 bottles of water a week, we’re easily going to reduce our normal monthly spending by $50-60.  Maybe it’s time you considered doing the same thing?

So what type of approaches have you taken to avoid buying bottled water?  Where do you get your normal drinking water from on a daily basis and how much do you spend on it?

I had to do some budget updates today.  I got a letter in the mail from Direct Loans (student loans) saying it’s time to increment my monthly payment again for the graduated payment plan I picked out almost 10 years ago.  The payment is going from $161.78 to $185.93.  There goes another $24/month in a direction I don’t necessarily want it to go.

I also got a bunch more benefit statements that I can submit for reimbursement.  I tweaked next pay-period’s reimbursement to reflect the new balance.  Unfortunately, that just means I have another medical bill I need to pay too.  So I’m not making any ground toward my debt with this money, but at least it’s not affecting the bottom line any.

Spent a little more money on groceries again.  (I told you, 3-4 times a week at the store is pretty typical for us since we have very little storage space and a very big family-sized appetite.)  ;)  We also had dinner at church again, and I had to stop by and pick up prescriptions.  (part of the routine for the most part)  All in all, not a bad day financially because we didn’t go MORE into debt!

Today’s Progress:

• Earned - $0
• Spent - $68 (groceries, dinner at church, and medicine)
• Debt Reduced -$0

Dentist visits aren’t always fun, but they are necessary.  One thing my wife and I are adamant about while trying to get out of debt is to not cut corners when it comes to health.  Sure, the food budget is pretty tight, but we’re not eating mac & cheese and hot dogs 5 days a week.  We make well rounded meals as often as possible and make sure there’s some kind of variety from day to day.

So, today Mrs. DebtBeater racked up a couple hundred in dental bills, and I’ll likely do the same sometime before the end of the year.  This is why they made cafeteria plans or flex spending plans as part of many benefit packages.  I’m able to declare a certain amount of money to be applied, tax free, to anything medically related.  This year I put aside roughly $3000 in this plan where I’m getting reimbursements each time I have to pay out of pocket above what insurance will cover…so we don’t have to skimp on trying to keep everyone healthy.

No money spent today, I’ll include the expenses and reimbursements when the money actually moves.  One thing to consider is that when trying to get out of debt, any day without spending money is a GREAT day. 

Today’s Progress:

• Earned - $0
• Spent - $0
• Debt Reduced -$0

The last couple of days I’ve been playing with some different formulas for calculating what my net worth should be right now.  I’m looking for a goal to meet since having a quantifiable target makes it easier for me to put things in perspective with how well or how bad I’m doing.

I stumbled onto an article at The Simple Dollar that made me really stop and think about where I should be in my 30s.  A nice simple starter-formula was discussed that I think is a pretty good estimate for what a net worth goal should be.  Obviously anything higher than what this formula calculates would be great as well, but this certainly gets the brain thinking.

The formula discussed in the article is:

Target Net Worth = (Age - 27) X Annual Pre-Tax Income / 5

or with my actual values plugged in:

(30-27) X $80,000 / 5 = $48,000

48K?  Yikes!  Knowing my current Net Worth, it looks like I’ve got my work cut out for me.  Let’s put this goal in perspective with my current get-out-of-debt plan though.  Let’s plug in this equation for 5 years from now and assume a 3% annual increase (to be conservative):

(35-27) X $93,000 / 5 = $148,000

Phew!  Talk about a moving target!  What this essentially means for you is that it’s a much better idea to get on top of this as early as possible AND STAY THERE.  Getting behind from the beginning means you lose out on the compounding.  Even when I do get out of debt in the next 5 years (beside the mortgage) and start pumping the net worth into the positive values, I’m going to have yet another struggle to catch up to the values this formula calculates.

We’re talking a difference of about $20K/yr here for every year I’m just trying to get out of the negatives.  DON’T LET THIS HAPPEN TO YOU!!!  Learn from my mistake and hammer the debts down quickly so as not to get behind on the net worth potential.

So, are you above or below in net worth when using the above formula?  How did you get where you are?  How do you plan on catching up if you’re behind?  For anyone that’s ahead, how did you intend to stay there?  Share your experience and let’s get motivated to get rid of the debt so we’re not stuck chasing positive net worth from way behind the curve!