How to Cash Flow Kids’ College

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I am super obsessive. Too bad I didn’t use that superpower before to stop and attack my debt. But I’m doing it now. When I ought to be grading papers or making final revisions to my current book project or prepping class, I’m obsessing over schedules.

Good thing. Because before I had despaired over the possibility of getting my kids through college without debt, I have now figured out how to do it.

I’ve got our bare bones budget down to $6200 per month (half of that is our mortgage). Minimum debt payments add up at this moment to $2700 per month. That leaves about $2500 per month to put more toward debt or college costs. We’ve got consulting income that comes in every few months totaling $50k per year. I’ve created a schedule whereby we can cash flow college expenses of at least $20k per kid per year — above that they are on their own — and still pay off debt. I say they are on their own because there are scholarships available to them that make this totally doable. But if they want a fancier education, they can pick up the difference. I finally have the confidence in these matters to say that.

By every August and January, we’ll have put about $25,000 into a savings account for college costs. That will come from monthly deposits of $2,000 plus 4 of 5 consulting payments.

The more we get rid of debts, the more we have available to pay off other debts — hence the snowball metaphor. We can then pay off the next item on the list by April, which will free up another $400 per month, then we’ll be hunkering down to stash cash for the fall semester. Then we can pay off the next item by the following January, freeing up another $400 per month and then it all starts moving quicker, even while we’re stashing cash for spring and fall semesters. With two kids in college at the same time — and us having never prepared for this moment — this is a big deal. In two years, all the credit card debt will be gone, one kid should be out of college with no more debt (than the $11k he has already incurred), the other halfway there, and then we’ll have money to make major advances toward paying off the house and maxing out our retirement options.

The key to all this is first and foremost a solid budget that is well below our income. Second is discipline to stick to it like maniacs. Third is postponing contributions to retirement beyond what our employers already contribute. Then with good planning everything else can fall into place.

 

Greek Roasted Potatoes

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Greek roasted potatoes are maximal umami. Start with some starchy potatoes, like Russets, slice lengthwise into about six pieces. Preheat oven to about 425 degrees. Put potato slices in a big casserole pan and add about 3 cloves minced garlic, ground black pepper, about a tablespoon dried oregano, a big drizzle of olive oil, about 1/4 cup water, stir around, cover loosely with some foil, and stick in the oven. Cook for about 30-45 minutes, stirring once or more to unstick potatoes from the pan. Remove foil, sprinkle on some salt, add some water if dry, stir and cook another 15 minutes or until done. Remove from oven and then drizzle on juice of about 1-2 lemons and salt to taste. Stir. Serve, Yum. Key flavorings are garlic, oregano, pepper, salt, olive oil and lemon. This side dish might cost you about two bucks tops.

Grocery Bucks

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I started this blog about seven weeks ago. Looking back at that first entry, I’m amused that I could hardly fathom paying $600 a month for groceries — that seemed frugal crazy and impossible — especially given that I had often spent north of $2500 a month. Now I know that my ways were crazy. I’m still not quite sane, but I’m getting there.

For the three of us, I’m starting to make a weekly trip to Aldi’s to stock up on some basics for about $28. On top of that I make a trip to a local huge produce-heavy market for veggies and some dry goods, and some cheap wine, for about $50 a week. Then there’s the occasional trip to a normal grocery store to get my Peet’s coffee and some other commercial stuff. And an occasional trip to Walmart for some toilet paper or saran wrap. And at the beginning of the month I went to the wine shop and got a case of wine on discount. I gave the fella $400 for pocket money for the month, mostly for the occasional food and beer he picks up plus his occasional lunches out. He’s pretty modest, compared to me, in his spending, putting about $1,000 a month on his credit card. Now I see that as crazy, so allotting him $400 a month and asking him to lay off the card is moving in the right direction.

SO…. in the past where we’d easily run up $2700 in groceries plus $1000 fella’s spending  now we’re getting closer to $900.  And right there is $2800 a month to apply to paying off debt.

Every little bit adds up to a lot. I’m still not at $600 a month, but that no longer sounds crazy. It seems like a reasonable amount to spend on food. Of course, this means cooking, from scratch, but I can manage that even in just 30 minutes after getting home from work. You can too.

This Bloody Mary Better Be Good

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Back at the airport on another work trip out of town. I enjoyed two days at home, walking on real wood floors, drinking real French Roast coffee, sleeping in nicely worn pure cotton sheets, catching up with the fella, standing in the woods out back playing frisbee with the dog.

And now I’m back to the faux life of faux comfort. Not all is faux. Currently I’m sitting in the airline club, a leftover perk from my life of financial debauchery. Yes, you can get “free” membership in an airline club if you pay $450 a year for the “privilege” of a certain credit card. How much did I pay for that card last year, interest and fees included?

Let’s look…$2,895!!! Oh, lovely. My little perk of sitting in the airline club is in exchange for an annual-fee-plus-interest cost of $3,345!

Oh, but I also got the perk of no international charges when paying for things overseas. Of course, if I had paid for stuff in cash, I wouldn’t have had any charge either, especially since I tend to keep Euro in cash and not exchange it back and forth.

So, brilliant me.

I do have on my calendar to cancel this card before the next annual fee is charged in June. In the meantime, I’m making the most of this club.

Time for a Bloody Mary!

Don’t Blame Human Nature

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The other day one of my students said, “It’s human nature just to want more and more.” Any time I teach the classics in political economy I hear this. Supposedly, we are hardwired to be acquisitive creatures with wants that can never be satisfied.

Surely my credit debacle seems to testify to this. Why would someone with an income in the top 6% get up to $107,000 in credit card debt — plus the home equity, car, and mortgage debt — unless she is inherently desirous of more and more?

Human nature is the easy answer. It is also, I think, the wrong one.

For one thing, the more I live on a budget, the happier and more hopeful I am. Even though my style is cramped, I am feeling freer and better about what I already have and also a bit horrified whenever I think about making an unnecessary purchase.

Second, I have grown me some patience. For example, there are certain home improvements I want to make — including replacing my fireplace –and before I wanted them NOW. But now I am happy to wait for the time, not terribly long from now, when I’ll be out of debt, cash-flowing kids’ college, and setting aside some money for home improvements.

Third, and most importantly, I realize that my money problems have psychological roots, not roots in a supposed human nature. Things happened in my childhood that created a hunger for care. As an adult, that hunger was temporarily met with a trip to Bloomingdales or, literally, a cartful of groceries at Whole Foods. The more I deal with the real roots of my hunger, the less I need to deny them and seek substitutions.

Conferencing

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I’m in a Hilton Garden Inn, which could be anywhere in the developed world, decorated in hipster anonymity which isn’t really hip at all. Manufactured faux “wood” flooring, scratchy carpeting, uncomfortable riff on a classic modernist chair, in-room keurig coffee maker, pretend art on the walls, dispensers of product in the bathroom. Meeting facilities without any natural air or light.

And a glass of wine for $9.

When I got here I went to the corner hipster market to get some things to keep in the fridge so I wouldn’t spend $20 on breakfast or another $10 for a nightcap. Even though those things come out of my research funds, I am now hyper aware that those funds are limited.

I even took the bus from the airport to the town, then walked from the bus stop to the hotel. All to save $50 that I never would have thought twice about before.

The good part of all of this is time with old and new colleague friends, talking over ideas about how to change the world, discovering new places in a pretty cool town. I love my work, even when we have to do it in a Hilton Garden Inn.

May the Bankers Quake in their Boots

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The credit card debt is down about $16,000 in three months, from $106,636 in November to $90,653 now at the beginning of February. And I only started focusing on this at the very end of the year. I’m already a wee bit under where I hoped to be now.

That means we can really kill it going forward.

Out of credit card debt by by February 2019.

Car loans paid off by the end of April 2019.

Emergency fund of $22,000 stocked up by June 2019.

Then we’ll tackle the home equity and mortgage, which we should be able to knock out in another four years, max.

A plan is a fearsome thing. Let’s all get one, follow it, and let the bankers quake in their boots.