Moving...

You know when you get that feeling in your gut, where you know life is going to change in a huge way and you don’t know if you are ready? I am there right now.  We are moving in two weeks, well less than two weeks really.  We have had our house up for rent for 2 months and we had resigned ourselves to the fact that it just wasn’t going to work out this summer, and then, when we got back from vacation, we had an offer.  The renters are perfect and they will be great to the house.  I have no worries there.  I just can’t stop crying… I NEVER thought it would be this hard.  I moved constantly as a child and I don’t remember it ever bothering me.  Every corner of this house has a memory of my children.  I brought two babies home from the hospital and laid them in cribs here.  I decorated my daughter’s room with butterflies, and she still tells me it is perfect for a princess.

You might wonder where we are moving.   My in-laws have an apartment above their detached garage.  It has two very large rooms and a bathroom.  There isn’t a kitchen, but, let’s face it, I make most of our meals in the microwave anyway.  We will be living there.  Our plan is to live there for two years.  We will save money, pay off the rest of our debt, and buy a new home, closer to them, putting down 20%.  We will be closer to Ford’s school in Newport News, and about the same distance from Paul’s office.  Right now, Ford is 5, Grace is 2 ½ and Lily is a year old.  When we move Ford will be 7, Grace will be 4 ½, and Lily will be 3.  I know they will barely remember this whole experience, so if it turns out to be less than ideal, it will be just a minor blip on their radar… so the problem isn’t them… it’s me.

We built this house with our growing family in mind.  We picked out the flooring and fixtures.  Paul and I spent an entire day debating on the siding color and how it would coordinate with the window shutters.  I had the nursery painted yellow. We fenced in the back yard and put in a swing set for our active son. Each time I found out I was pregnant I planned a room for my child.  I sat in that room and dreamed of their little faces, chubby knees, and sweet smiles.  I feel as if some of that love and anticipation is stored in these walls, like I can touch them and get some of it back. I remember exactly where Grace learned to walk, and where Lily learned to crawl. I nursed Lily in the same chair in her room every night for the first year of her life. I think that if we were going to have more babies this wouldn’t hurt so much, but it seems like the closing of a beautiful chapter and I desperately wish there were more pages.  I know the next chapter is going to be wonderful and exciting, but it is hard to let go of what I love so much.(cue crying here)

Ok.. so in addition to all this sappy emotional turmoil I am also realizing that we have accumulated an enormous amount of crap in the last 4 years.  I have parted with the better part of the baby stuff, but there is a lot of other “stuff” that I have to decide THIS WEEK if we are going to keep, toss, or store.  My brain is about to explode with the enormity of it all.  The apartment is about 1600 square feet and mostly furnished, and we live in a 2700 sqft house.    Normally I would actually enjoy all of this sorting, but Paul is out of town, of course, and I had food poisoning yesterday, so I am less than thrilled about all of the sorting.   

I know all of this falls into what Paul jokingly refers to as “rich people problems”. I mean really, there are so many really important things going on in the world right now.  We are so incredibly blessed, not only with wonderful opportunities, but fabulous supportive family.  I am going to put on my big girl panties and take an inventory of all I have to be grateful for…  gazelle-like intensity isn’t easy, but I am sure the payoff is going to be fantastic.  In two years we will literally not have to worry about money again, barring some kind of disaster, and that is worth a lot of heartache now.

The Debt Monster

About two months ago I was looking at our budget and I thought to myself, “Things have got to change.” We can never seem to get ahead.  When we moved to Williamsburg the economy was just starting its downward spiral.  We went from making money every time we sold a house to not being able to sell our house.  We went from steady raises and big bonuses to no raises and smaller bonuses.  When we bought our house we bought down points and got an interest only loan.  It seemed smart at the time.  We didn’t plan on living in it for more than 5 years.  We had our sights set on a gated community.

Now reality…

We are not irresponsible with money.  We have never bought anything we couldn’t afford the payments for… but we also have always spent ALL of our money.  We always planned to put more away for retirement and save for the kid’s college, but unless we find a money tree, the likelihood of us finding hundreds of extra dollars isn’t too high.

So things needed to change.

We bought a book, started a debt snowball, and we are now about a year away from paying off all of our debt.  When that is done we will start seriously saving for retirement and the kid’s college funds.  While I am grateful that we are moving in the right direction, the only thing that I keep thinking is that I wish we had started this sooner.

This is why….

I will use my brother Christopher as an example… he is 25 years old.

If Christopher would like to retire at 65 he as 40 years to save for retirement.  If he would like to retire on, let's say 50,000 a year (which wouldn't go too far, but it is a round number) he would need 625,000 to have that amount per year when he retires.  In order to save that money he needs to put way 178.75 EVERY month until he is 65.  He SHOULD be contributing at least that into his 401K but it is important, even as young as he is, to open a Roth IRA as well.

Paul is closer to 40 years old.  We would like to retire on 100,000 a year (hopefully the house will be paid off by then).  That means we need a nest egg of $1,250,000.   If we want to retire with that amount we need to put $1313.75 away EVERY month... which honestly is not going to happen.  Do you see how important it is to save early?  If Christopher wanted the same retirement he would need to put 357.50 away every month....  We already put 400 a month away, but we are going to up that to 700.00 a month when our debt is paid off, which will give us about 60,000 a month when we retire.  Hopefully, when I start working again we will be able to put away more.

We also need to plan for college…. We have three children and I would like them to be able to go to school relatively debt free.    We will promise the kids 4 years of college and 15,000 every year.  If they want to spend more it will be on their dime. 

60,000 per kid…  249.48 a month for Ford, and 155 each for Grace and Lily.  We need to put away $560 a month for college. 

And the GRAND TOTAL is… $ 860 extra dollars a month for retirement and college savings.  Any money left over will be put in savings…. I guess the good news is that after our car is paid off we will have that much extra money to work with.  I just wish we had thought about all this sooner!

If you want more information about how we started our debt snowball look here..

Dave Ramsey