Rizzmo's Personal Finance Blog

Over the last few years DW and I have been working to cut down on our eating out. Now prior to the last few months our eating habits look like this. DW eats breakfast and lunch every day at home. I on the other hand seldom eat breakfast and eat out for lunch. For dinner we she eats at home 4-5 days a week; I eat dinner at home about 1-2 days a week. We made a change and now we eat breakfast and lunch at home, and eat out only one night a week. This allowed us to save a good deal of money, 300 - 400 dollars a month, but had some unexpected consequences for me.

I started eating a package of oatmeal for breakfast, and either a can of ravioli or a cup of ramen for lunch. Well over the last few weeks I have become increasingly irritable and been sleeping a good deal more than usual. It turns out there are not that many calories in any of these food choices. Before when I would eat out for lunch I would intake 800 – 1100 calories, now if I eat breakfast (160 calories) and lunch (240 calories) I am only around 400 calories total. I wasn’t hungry after eating so I didn’t realize this drastic reduction.

We sat down this morning and figured that my MBR requires around 1500 calories just for my body to function normal, and based on my activity level I really should be eating closer to 2000 calories. I doubt that, on average, even when I was eating out most meals that I consumed this amount of calories. I’m definitely going to have to start keeping track of my calories and make sure I’m at eating closer to these amounts.

Saving money by not eating out is great just be careful when you make sudden large adjustments to your diet.

Over the last few years DW and I have been working to cut down on our eating out. Now prior to the last few months our eating habits look like this. DW eats breakfast and lunch every day at home. I on the other hand seldom eat breakfast and eat out for lunch. For dinner we she eats at home 4-5 days a week; I eat dinner at home about 1-2 days a week. We made a change and now we eat breakfast and lunch at home, and eat out only one night a week. This allowed us to save a good deal of money, 300 - 400 dollars a month, but had some unexpected consequences for me.

I started eating a package of oatmeal for breakfast, and either a can of ravioli or a cup of ramen for lunch. Well over the last few weeks I have become increasingly irritable and been sleeping a good deal more than usual. It turns out there are not that many calories in any of these food choices. Before when I would eat out for lunch I would intake 800 – 1100 calories, now if I eat breakfast (160 calories) and lunch (240 calories) I am only around 400 calories total. I wasn’t hungry after eating so I didn’t realize this drastic reduction.

We sat down this morning and figured that my MBR requires around 1500 calories just for my body to function normal, and based on my activity level I really should be eating closer to 2000 calories. I doubt that, on average, even when I was eating out most meals that I consumed this amount of calories. I’m definitely going to have to start keeping track of my calories and make sure I’m at eating closer to these amounts.

Saving money by not eating out is great just be careful when you make sudden large adjustments to your diet.

$80k in student loan debt, that’s hard for me to even think about. They fact that I choose to write $80k instead of $80,000.00 speaks to this (psychologically those zero’s matter). It was tough for me to justify taking out a mortgage for our home. I finally beat into submission when DW and I settled on putting 20% down, taking a mortgage less than 1 year gross, and paying an (non optional) extra$500/m. This is how much I detest debt. Since she has been going to school the loans have been in deferment, but starting in January we will have to start paying them back to the tune of $1,000/m. This will definitely be felt in the budget. Up until now it has been out of sight, out of mind. I wanted to think of us as debt free apart from the mortgage, but that simply isn’t the case. Now I know this isn’t credit card debt, but it feels just as bad. I was reading a post the other day of someone who had no debt besides $20k in credit card debt, and for a moment I thought “I would sure be nice to be them”. For better or for worse, I choose to bury my head in the sand.

A few nights ago we sat down and had a long talk about how we are going to tackle these loans. Come to find out while I was forcing myself to be blissfully aloof of these loans, my wife had this feeling of dread, like some big weight was hanging precariously over her head. It had been my impression that she wasn’t concerned with the loans and had an unrealistic expectation of obtaining a high paying job that would easily pay them off. Turns out she was under no such dissolutions; the lesson learned is people shouldn’t pretend to read minds.

So what’s the plan? Well worst case scenario, the loans are paid off in 10 years. Not while I still have a pulse, but this is worst case. If DW doesn’t find a job and we put all of our budgeted non-retirement savings into these loans, realistically we could have them gone in a little under 5 years. Assuming DW finds a job it would be closer to 3.
Since these are still a bunch of different loans, we have 6 months to knock out as many of the small ones as we can. This lowers the monthly payment, and will accelerate the repayment.

Turns out student loans are an interesting sort of animal. It is hard to track them individually. They are bought and sold from one institution to another. They are for different amounts and different interest rates. I have yet to see any sort of account # for each loan. I suspect that they are assigned one once they become due; and I think many people consolidate them at that point. We will keep them separate, it is easier to snowball that way as you can see and feel yourself making progress. Once we have a final $ amount I will track it in my blog each time we make a payment.

Student Loan Debt: ~$80k

My wife and I finally decided to work on putting an emergency fund together. It has been a challenge for us to make a decision on how much to set aside, so we have kept putting it off. Dave Ramsey suggests $1k, then to move on directly to debt, then increase EF to 3-6 months of expenses. Suze Orman on the other hand adamantly suggests having an 8 month emergency fund setup, before tackling debt. We need $2,600 to cover our basic monthly expenses so Suze says we need around $20k. I'm thinking when it comes to EF's, one size certainly doesn't fit all. That said, below are the concerns we considered:

1. Job security. If I were to lose my job and not find equivalent employment how would we pay our bills in the interim? Currently DW is not working, but is actively seeking employment.

2. Purpose. If the goal of having an EF is so you will not have to resort to borrowing money to cover life's unexpected expenses it only makes sense that the EF be large enough to cover those types of expenses.

3. Amount of Debt. We have $80k in student loan debt and $93k left on our mortgage. This $80k will take some years to get paid off; the mortgage will be paid off in 2018.

Taking this into account this is what we have come up with. Concern #1 is a non issue. Due to strange circumstances, if I somehow was let go from my company, I will actually receive a 50% pay increase and be immediately employed by another company. So #1 is a non-issue. Issue #2, I earn enough to bankroll a $1k emergency month to month. The emergency’s that would affect us would be much more expensive, like car death. Issue #3 we really want that debt gone, but it may be years before it can be completely paid off. We both feel like we should have some sort of EF while we are paying off the $80k.

In the end we decided that we would save a 6 month or $16k emergency fund, in 1k CD’s, before paying off our debt. This should allow us to pay cash every expense (loss) that we are not insured against.

At the beginning of April we have 1 CD (1/16) opened in December. So far this month we have been able to open 5 more CD’s (6/16). This is a three paycheck month for me so we will open 2 more CD’s (8/16) on Friday. Our tax return for this year is 5k, so for the first time ever we will be saving all of it. That will be 5 more CD’s (13/16) in the near future. Going into May I have $400 in overtime plus we have budgeted $1,100 for the EF. If I can make $500 in overtime in May we will be able to open our final 2 CD’s (16/16). So with any luck we will finally have a fully funded EF by June!!!