Author Topic: Overwhelming - How did you start?  (Read 10307 times)

MsPeacock

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Overwhelming - How did you start?
« on: December 31, 2014, 09:30:32 AM »
So glad to have found this forum - and determined to get my financial life in order. There is *so much* information here and it is overwhelming. Assuming you had a starting point (vs. just emerging freshly hatched as giant fuzzy mustache), how did you start? Where did you start? What prompted the change?

I have filled several notebook pages w/ notes of things "to do" - and I know I haven't scratched the surface. I do plan to do a 'case study' once I've had a chance to get all my information together. Trying to figure out first steps and how to get myself pulled together at ths point. I know this is going to be process of transformation which will take time. 

Nutshell - was doing well until divorce and have spent 210k in legal fees in past 4 years due to divorce and custody battles (3rd challenge to custody has just started) vs. ex who won't stop and has much greater financial means that I have. Of that 210k, I have about 50k in credit card debit from paying the lawyers remaining.

Thanks!

Future Lazy

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Re: Overwhelming - How did you start?
« Reply #1 on: December 31, 2014, 09:35:15 AM »
I started with picking a big bill, and making it smaller, and saving the difference. Rinse, repeat.

But, based on your background and the debt, I would start by analyzing my money in vs.s money out, and try to engineer a debt snowball to get rid of those leftover fees.

If you need help with this, see the "How To Write a Case Study" sticky in this forum, and check out other's case studies. Even if you never get to posting the case study, I've found that just typing budget stuff up makes me feel more organized.

Once the debt is gone, that gives you room to save. Debt is almost always the starting place. :)

Welcome, and good luck!

Metta

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Re: Overwhelming - How did you start?
« Reply #2 on: December 31, 2014, 09:41:18 AM »
It may not sound logical, but the place we started was with the concept of "Pay Yourself First". We set a very small percentage of our income to automatically debit from our paycheck and to be put in an investment. Then we used the snowball method with our debt to eliminate it. Once we had done that, we increased the withholding for our paychecks. It was a great comfort to be building the future while we were eliminating debt.

dandarc

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Re: Overwhelming - How did you start?
« Reply #3 on: December 31, 2014, 09:42:45 AM »
Dave Ramsey's plan is a pretty good starting point if you have debt - something as simple as walking through how to do a monthly budget can help big time if you're losing a lot to disorganization.


skunkfunk

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Re: Overwhelming - How did you start?
« Reply #4 on: December 31, 2014, 10:16:37 AM »
The most important thing to start doing right away is to cut expenses and do something with the money other than spend it or let it sit. Build an emergency fund, pay down debt, invest it, whatever - you can figure out how to optimize as you learn. Most important thing is to cut expenses and get started!

If you want specific advice, post a case study.

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #5 on: December 31, 2014, 10:31:21 AM »
Thank you all - I am really interested in hear where you each started and why. Not looking for advice here - just your story of what you did first and why you did it.

Just a bit more information - I do have savings and retirement accounts that are still intact. I choose not to empty them because I need emergency funds and I can hopefully pay off the credit cards relatively quickly. I do plan to do a debt snowball w/ them and stop some savings (college savings for the kids, non retirement savings for myself, overpayments on mortgage and car) and target the cards. I'll get to the case study w/ details when I pull that all together.  I haven't been completely unmustachian - I was totally debt free aside from mortgage until the most recent legal round (one year - total cost 70k). I decided at some point the take the debt because I am scared of emptying my pockets of emergency and retirement funds (and because there is no sign that the legal stuff will ever stop).

The parts I am finding overwhelming is the long list of things like get rid of cable (figure out if an attenna will work, figure out how to install one, etc.), get rid of landline, get internet phone (and figure out how to work it), get new ISP, track grocery spending, budget groceries, make an actual budget for everything and track all expenses (I've never done this - wince - so embarassing), get rid of expensive cell phone and go cheaper, and on and on and on and on. Basically, getting a handle on all the unmustachian things I do and making them more moustachey.
« Last Edit: December 31, 2014, 10:34:39 AM by MsPeacock »

JuSp02

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Re: Overwhelming - How did you start?
« Reply #6 on: December 31, 2014, 10:38:29 AM »
I started by opening up an account on mint.com and entering in all of my financial information. An account is free. You can't really start doing anything until you have a comprehensive understanding of your spending, assets, and debts. Unfortunately, mint only gathers information in present-time, which means you will need to look over your bank accounts and credit cards to recreate your last month's or year's expenses.

Once you do that, you can start identifying areas with fat to trim. Start with the low-hanging fruit. Unnecessary gym memberships, ridiculously insurance rates, eating out way too much, switching to a low-cost cell phone provider, getting rid of cable, mysterious disappearing money from mindless lattes or target or whatever purchases, etc.

Next, I would list out all of your debts and organize them by interest rates. The debt with the highest interest rate should be the one you pay off first. (There's some debate about this - some people prefer paying off the smallest debt first for psychological benefits.) Schedule automatic extra payments to your credit cards. These payments should come out of your checking account the moment your paychecks are deposited so the money is gone before you can spend it.

After that, go back to your expenses and keep trimming down the fat. Attack each item one-by-one. You could even dedicate one week or one month per item and spend that time really exploring any and all possible ways to get that particular expense down. Switching cars? Moving to a different house/location? Getting a roommate (temporarily or permanently)? Finding a better job? Learning how to cook more from scratch? Get creative! Above all, stop spending mindlessly!! One of the hardest things for me was learning to really consider and be aware of each purchase before I made it. The easiest way to stop hemorrhaging money is by not spending anything.

Once you have freed up a decent amount of additional funds, you will need to start considering asset building instead of just debt reduction. Start by building an emergency fund first so you have a cushion for all of life's unexpected surprises. One to three months of expenses is a good place to start while you continue to pay down your debt. Also, don't forget to invest in your 401k to the extent your employer provides a match. Deal with investments much the same way as you dealt with your expenses. Spend a certain amount of time focusing on each thing. For instance, take a week or two learning about the purposes and different options for emergency funds. Then move on to index funds and retirement accounts.

Once expenses have been trimmed, debt payments have become automatic, investments are automatic, for extra mustachian bonus points, I would explore side hustles.

Good luck!! It's easy to get overwhelmed by all the information at first, but just take it step-by-step and you'll have a mustache a mile long in no time!

epipenguin

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Re: Overwhelming - How did you start?
« Reply #7 on: December 31, 2014, 10:39:16 AM »
I also started by tracking my spending. There are plenty of different ways to track spending but I found that mint.com was easy for me to do. I find that mint.com is not super useful until you've built up a couple of months of data though, so you can sign up for that now, link all your accounts, and then go away and focus on other things, reading, and learning. Then, go back to mint and once you know what you're spending, you can start targeting the low hanging fruit. And keep reading case studies and other things. When everyone else is saying that a $600 grocery budget for one person is excessive, you can look at yours and go...oh! Oops! Lemme figure out how to cut that.

Some things are easy - just cancel/quit doing something that you're spending money on needlessly. That gym membership you don't use? Call them and cancel. Repeat with other things. Tackle a few of those straight away so you feel good and are getting some good savings. Personally, on the other hand, I find that some things take a while. I know my cellphone bill is too high, for example, but I also know that my 2-year contract runs out next month. So for the past 6 months or so all I've done about that is some research, and then I "encouraged" my boyfriend to sign up for Republic Wireless to try it out and see how it would work for him (me). I didn't rush to cancel my plan all at once. Some people do, as they figure out that even with early termination fees or whatever they are still going to be saving so much, that it makes it worthwhile. My clothing and skin care/hair care budget also took a while to come down. Some of that was psychological/habit stuff that had to be worked through. I was lucky that I don't have debt other than my mortgage so I didn't feel like I was in a hair on fire emergency situation. I make it kind of a game with myself, like initially setting one budget and then after meeting it for a few months, setting it lower or bringing in other categories of spending under the same budget. Other things you may need help with - for example, my electricity company does energy efficiency surveys and will come to your house if you call them and ask, and that can help you save on your electricity bill, but it requires a few weeks to set up the appointment and then implement the suggestions. I am not the type of person that can go from zero to super-mustachian in one week. BUT there can be a value in that - continuing to work on it will cause you to hang around and keep learning!

Future Lazy

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Re: Overwhelming - How did you start?
« Reply #8 on: December 31, 2014, 10:42:35 AM »
Thank you all - I am really interested in hear where you each started and why

Just a bit more information - I do have savings and retirement accounts that are still intact. I choose not to empty them because I need emergency funds and I can hopefully pay off the credit cards relatively quickly. I do plan to do a debt snowball w/ them and stop some savings (college savings for the kids, non retirement savings for myself, overpayments on mortgage and car) and target the cards. I'll get to the case study w/ details when I pull that all together.  I haven't been completely unmustachian - I was totally debt free aside from mortgage until the most recent legal round (one year - total cost 70k). I decided at some point the take the debt because I am scared of emptying my pockets of emergency and retirement funds (and because there is no sign that the legal stuff will ever stop).

The parts I am finding overwhelming is the long list of things like get rid of cable (figure out if an attenna will work, figure out how to install one, etc.), get rid of landline, get internet phone (and figure out how to work it), get new ISP, track grocery spending, budget groceries, make an actual budget for everything and track all expenses (I've never done this - wince - so embarassing), get rid of expensive cell phone and go cheaper, and on and on and on and on. Basically, getting a handle on all the unmustachian things I do and making them more moustachey.

Re: Debt vs. Existing Savings

If your debt has a more expensive interest rate than your savings, it will cost less in the long run to dip into savings and pay off the high interest debts. For example..
30k Debts at 15%
30k Savings at 7%
Loss of 8% over time, not accounting for inflation.

30k Debts at 2%
30k Savings at 7%
Gain of 5% over time, not accounting for inflation.

That's a severely simplified way of assessing it, of course, but it's an important principal to remember.


Re: Long list of things to fix

I picked my biggest bill, which was Rent, and moved into a slightly more uncomfortable place for 50% less per month.
Then I picked my second biggest bill, which was Cellphone Data with AT&T, and switched to Republic Wireless for 65% less per month.
Then I picked my third biggest bill, which is eating out, and I'm still tackling it. It's tougher than I thought to change this habit.

My prioritization was by size of bill and potential savings. But, I was already pretty much debt free, paying myself first (@Metta, good advice) and tracking everything through Personal Capital (@epipenguin, also good advice!).

So, prioritize! I would start tracking right away, though. Since you're feeling overwhelmed, using something pretty automatic like Personal Capital or Mint is probably a better way to go.

PS. TV antenna issue is easy - buy one, screw it into your cable jack on your TV, flaps it's little rabbit ears back and forth... If TV, yay! If not TV, return that dang antenna for every dang penny. Bam.

PencilThinMust

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Re: Overwhelming - How did you start?
« Reply #9 on: December 31, 2014, 10:43:13 AM »
Started with Mint, read every MMM post and some convincing of my wife,    Still working on it...
« Last Edit: December 31, 2014, 10:45:20 AM by PencilThinMust »

Cookie78

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Re: Overwhelming - How did you start?
« Reply #10 on: December 31, 2014, 10:48:23 AM »
I felt the same way when I started a few months ago.

The first thing I did was look back over the last 6 months to take an inventory of expenses, incomes, debts, assets to see where I was starting. It was very enlightening and motivating. I'm also very goal driven, so it was a good first step for me to see exactly where I was starting.

After that I took a closer look at my expenses to see what areas I could cut down. Next I aim to increase my income through side-gigs and selling things while decluttering. Also I want to increase my automatic payments to my TFSA.

There are lots of different expenses I could lower, extra incomes to make, and investment strategies to learn, but I'm trying to pace myself and do them one step at a time. Each day I try to get one step closer, whether that's learning something new, working on a small business, selling something, raising rents for tenants (long overdue), or cutting expenses. It's an overwhelming amount of work, but just try one thing at a time.

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #11 on: December 31, 2014, 11:32:12 AM »

PS. TV antenna issue is easy - buy one, screw it into your cable jack on your TV, flaps it's little rabbit ears back and forth... If TV, yay! If not TV, return that dang antenna for every dang penny. Bam.

Well - I did that a couple times already - the indoor ones do not work (and were returned) - according to the antenna website I need a large amplified rotating antenna, which has to be mounted outside up high.

 It is a low priority item (maybe no priorty), truthfully, because I never watch TV and I don't care if my kids have TV (they care - but they have internet and Netlflix so somehow they manage to survive). Higher priority is cancelling the stupid cable and getting ISP straightened out (which is actually very high on the to-do list). I hate Verizon so much.

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #12 on: December 31, 2014, 11:33:43 AM »
Adding Mint.com to the very top of my to-do list!

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Re: Overwhelming - How did you start?
« Reply #13 on: December 31, 2014, 11:52:34 AM »
I started by tracking my income and expenses--down to the penny. To do this, I just used an Excel spreadsheet. It was eye-opening. I started in 2012, and my expenses went down a lot in 2013, and even more in 2014.

I think the next big thing I did was to move some investments to Vanguard.  I had never even heard of Vanguard before finding MMM. Now those dollars are actually working for me.

And I also came to hate spending money. Buying new shiny things no longer gives me any pleasure.  Why did I used to enjoy handing my money over to other people?

Good luck in your "transformation". You came to the right place...you will get lots of support and great ideas here...with possibly a few gentle face punches here and there.  :)

Bobberth

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Re: Overwhelming - How did you start?
« Reply #14 on: December 31, 2014, 02:04:55 PM »
I think the best way to start improving your finances is to start by making a Balance Sheet.  In a spreadsheet, list and add up everything you own-car, house, investments, savings etc.  These are your assets.  Next list and add up everything you owe-mortgage, car loan, student loans, other loans, bookie etc.  These are your liabilities.  Subtract your liabilities from your assets.  This number is your Net Worth.  Net Worth is THE core number when it comes to personal finances.  It can be negative, positive, big or small.  It doesn't matter what it is right now, it matters where you are going with it.  On page 2 of the spreadsheet, paste your Net Worth and the date.  Update as you see fit.  I used to update monthly.  Lately I've been updating 2-3 times a year.  I suggest monthly for starting out so you learn about how it works and how your decisions affect it.  Keep notes next to the months of big events-car repairs, windfalls, large expenses etc as that is fun to look back over the years to see how what seemed like a major setback at the time was just a little blip in your ever increasing Net Worth. 

Everything you do flows through and shows up in your Net Worth.  Make your monthly mortgage payment?  Your liabilities went down and your Net Worth increased.  Congrats!  Did you participate in your 401k?  Your assets went up and your Net Worth increased.  Did you go overboard at Christmas and added to a credit card balance?  Your liabilities went up and your Net Worth went down.  Did you finance a new car?  Your liabilities went up and so did your assets.  But you now own a used car instead of a new car so your assets went up less than the amount the loan increased your liabilities so your Net Worth went down.  Did you take some money out of your checking account and invest it in mutual funds?  You converted one asset into a different asset, no change in Net Worth.  Did your mutual funds go up in value?  Your assets increased and so did your Net Worth.  Did you buy a $100k investment property for $100k and financed 70% of it?  For your assets, cash decreased by $30k and Investment Property went up $100k while liabilities went up $70k with the loan.  A net $0 change for your Net Worth.  Buy a $100k property for $80k?  Net Worth increases by $20k.  As the property start to pay rent, assets go up while liabilities go down.  Buy lunch for $10?  Your assets decrease along with your Net Worth.  Bring your lunch for $2?  Your Net Worth still decreased because you still need to eat but it went down less than the alternative.

That was a bit long but do you see how many financial questions are answered by consulting the Balance Sheet?  Start with creating a Balance Sheet, especially if you are overwhelmed, as it offers the most impact for how simple it is.  Once you understand the Balance Sheet and how it works, it will lead you to learning about budgeting and optimizing.  It will lead you to investing and how to get your assets growing themselves.  It will lead you to keeping your liabilities in check.  It will lead you to FI.  It will lead you to FIRE.  Don't get bogged down by doing too much at once.  Start simple but powerful.

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #15 on: December 31, 2014, 04:57:16 PM »
Bobberth - thank you. I started on Mint and I see that they can give me a balance sheet - I've had to do similar worksheets for the courts due to endless custody/child support issues. I haven't used it as a tracking method though - and I will. Very helpful!

Threshkin

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Re: Overwhelming - How did you start?
« Reply #16 on: December 31, 2014, 05:27:18 PM »
Bobberth - thank you. I started on Mint and I see that they can give me a balance sheet - I've had to do similar worksheets for the courts due to endless custody/child support issues. I haven't used it as a tracking method though - and I will. Very helpful!

I wish you the best MsP.  We just (hopefully) finished with the court battles with my DW's Ex.  That took over 7 years.

Thegoblinchief

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Re: Overwhelming - How did you start?
« Reply #17 on: December 31, 2014, 06:37:57 PM »
I arrived at MMM via the Stoicism and lifestyle design posts, less so the personal finance. But the way I got jazzed up from bike commuting got me interested in not just tracking spending (I'd done that for years) but reducing spending. In 4 months I reduced spending by more than $1,000/month with basically no lifestyle change.

The most important thing is to spend mindfully. Track every dollar. When looking  at each month, did that spending align with what you value, or did you spend too much unconsciously? Alternatively, do you wish you spent more money, or at least got more for it in a certain category?

Your life energy is finite. Make it count.

RockinLife

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Re: Overwhelming - How did you start?
« Reply #18 on: December 31, 2014, 07:22:31 PM »
First, we started with an account with Mint. 

Then I made a list of our top 10 monthly expenses and would put it up on the fridge and leave it there for the month.  We'd look at each expense and decide if it could be had more efficiently or for any less money.  This lead to the change in cell phones, shopping around for cheaper car insurance and the hubs reevaluating his smoking.  Saving hundreds a month, with little long term effort.

Really, anything that gets you moving in the frugal direction is a good move.

Eric

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Re: Overwhelming - How did you start?
« Reply #19 on: December 31, 2014, 07:48:50 PM »
Thank you all - I am really interested in hear where you each started and why. Not looking for advice here - just your story of what you did first and why you did it.

I went back and read every single blog post in order.  Then I started tracking our spending on a spreadsheet.  Although Mint is good if you're not a spreadsheet person. (I happen to love them)

dungoofed

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Re: Overwhelming - How did you start?
« Reply #20 on: December 31, 2014, 09:57:45 PM »
Hi MsPeacock -

I started by writing down the things in my life that were absolutely essential expenses. Then I worked at trying to get those remaining items down as much as possible.

Same with "things," I threw out about three quarters of my physical possessions.

Things that I have found helped along the way were:

- Having a policy of not reading a book more than once. Read it, then throw/sell/gift it.
- Simplifying my kitchen and cooking. If I can't make it with the spices and condiments I have at home then I'll eat it at a restaurant some day.
- Rationalising my "cleaning goods." Domestos is very versatile, albeit you need to be careful with it.
- Spending a day at the office scanning in all paper documents that I had lying around. I uploaded them to Dropbox and threw out the originals except for the biggies (birth certificate, graduation certificate,... that's about it). Then being vigilant about not letting documents accumulate.
- Tracking expenses. I used YNAB but it seems like a lot of people recommend Mint.com. Most important initially is that you're just entering stuff in there.

Btw the best solution for your TV woes might be to "store" it on Craigslist. Considering you've got a lot of MMM reading to catch up on you won't have much time for watching anyway.

Good luck!!

BriarRose111

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Re: Overwhelming - How did you start?
« Reply #21 on: December 31, 2014, 10:46:55 PM »
I started with Dave Ramsey in Feb 2010.  Why?  A coworker talked about him alot.  And though my finances were not in horrid shape, I did carry a credit card balance.  My coworker loaned me one of his CD's about the zero-based budget and I decided to give it a try.  It's been nothing but forward progress every since.  If you are feeling overwhelmed, and reading where you're at, I would recommend checking into him.  You can probably check out Total Money Makeover (one of his books) for free at your local library.

Kim
Thank you all - I am really interested in hear where you each started and why. Not looking for advice here - just your story of what you did first and why you did it.

Just a bit more information - I do have savings and retirement accounts that are still intact. I choose not to empty them because I need emergency funds and I can hopefully pay off the credit cards relatively quickly. I do plan to do a debt snowball w/ them and stop some savings (college savings for the kids, non retirement savings for myself, overpayments on mortgage and car) and target the cards. I'll get to the case study w/ details when I pull that all together.  I haven't been completely unmustachian - I was totally debt free aside from mortgage until the most recent legal round (one year - total cost 70k). I decided at some point the take the debt because I am scared of emptying my pockets of emergency and retirement funds (and because there is no sign that the legal stuff will ever stop).

The parts I am finding overwhelming is the long list of things like get rid of cable (figure out if an attenna will work, figure out how to install one, etc.), get rid of landline, get internet phone (and figure out how to work it), get new ISP, track grocery spending, budget groceries, make an actual budget for everything and track all expenses (I've never done this - wince - so embarassing), get rid of expensive cell phone and go cheaper, and on and on and on and on. Basically, getting a handle on all the unmustachian things I do and making them more moustachey.

former player

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Re: Overwhelming - How did you start?
« Reply #22 on: January 01, 2015, 02:44:35 AM »
Can you talk to your lawyers about the litigation bills?  After so many rounds of the custody battle, I can't see that there will be much new to say, and that it should cost you so much: just "here we are again and the facts haven't changed".  You may be able to cut a deal with your lawyers for less work to be done or for the basic work to be done by people at the firm who have a lower charge-out rate.

Any chance of an application to court to get your ex ruled a vexatious litigant (stops them filing new claims) or requiring them to pay your costs?  Can you make an argument to the court that your ex is deliberately running up these big bills to try to win just by making the costs unmanageable, rather than having any sort of decent case on the merits?

kathrynd

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Re: Overwhelming - How did you start?
« Reply #23 on: January 01, 2015, 02:52:34 AM »
The first thing is to stop this craziness with custody battles.
Its bad for finances.
Its worse for the kids !!!!

My 2nd husband and his 1st wife spent years going back and forth in court.
Only one who got really hurt was the child.
For the parents, it was costly...for the lawyers ..they loved it.

Split custody 50/50
Move on with your life.


Thegoblinchief

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Re: Overwhelming - How did you start?
« Reply #24 on: January 01, 2015, 05:48:19 AM »
Can you talk to your lawyers about the litigation bills?  After so many rounds of the custody battle, I can't see that there will be much new to say, and that it should cost you so much: just "here we are again and the facts haven't changed".  You may be able to cut a deal with your lawyers for less work to be done or for the basic work to be done by people at the firm who have a lower charge-out rate.

Any chance of an application to court to get your ex ruled a vexatious litigant (stops them filing new claims) or requiring them to pay your costs?  Can you make an argument to the court that your ex is deliberately running up these big bills to try to win just by making the costs unmanageable, rather than having any sort of decent case on the merits?

At this point you could have gone to law school yourself and be fighting your own court battles.

Roadhog

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Re: Overwhelming - How did you start?
« Reply #25 on: January 01, 2015, 12:28:28 PM »
After putting all of my expenses in Quicken for years, finally took a hard look at where all of the money was going.  Broke out some of the categories to get a better handle on some expenses.   Started with the big obvious stuff first, like reducing the $$ spent on groceries and going out to eat.   Reduced our driving by combining trips and threatening to buy a red bozo nose for us to wear if we even think about driving 1/2 mile to the store.   Cancelled cable.   Bought efficient light bulbs.   Upped 401k contribution by 2% to max it out.

One step at a time and hope to make more progress this year on increasing take home savings %.   Awareness was the first step.   Next step is to move forward with making the house more energy efficient.  In the past we got a free home energy audit and have been working through the list of improvments as we have the cash.

Zikoris

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Re: Overwhelming - How did you start?
« Reply #26 on: January 01, 2015, 12:44:03 PM »
I think the first step for me was cancelling cable. I didn't actually watch it myself, but had it so my ex-boyfriends could watch it. Then I stopped buying food at work. Then I started using Mint. Then I moved to an apartment where I could walk and bike everywhere, and stopped buying monthly bus passes. Then I cancelled my grocery delivery service. Then I slashed my phone and internet bills. Then I stopped buying clothes. Then I stopped buying pretty much everything else.

Now that our savings rate is above 60%, it's just a waiting game until we retire.

scrubbyfish

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Re: Overwhelming - How did you start?
« Reply #27 on: January 01, 2015, 12:46:13 PM »
Thank you all - I am really interested in hear where you each started and why. Not looking for advice here - just your story of what you did first and why you did it. [...] The parts I am finding overwhelming is the long list of things like get rid of cable (figure out if an attenna will work, figure out how to install one, etc.), get rid of landline, get internet phone (and figure out how to work it), get new ISP, track grocery spending, budget groceries, make an actual budget for everything and track all expenses (I've never done this - wince - so embarassing), get rid of expensive cell phone and go cheaper, and on and on and on and on. Basically, getting a handle on all the unmustachian things I do and making them more moustachey.

My moves are all Journalled; in fact, you can probably find lots of people's starting points in the Journals section of this forum.

My own first big moves were:

1. Unhook from partner - I realized that the way my area's laws work, continuing to live with him was going to become a financial liability I couldn't actually afford. In moving out, I avoided that position and also placed myself in a position of having direct control over what my life was costing.

2. Very low rent. Housing can cost heaps, and I was in Vancouver, literally one of the most expensive-for-housing cities in the world. I committed to finding options to make that not true for me.

3. Then I started killing day-to-day costs that I had thought were "essential", basically taking on one item at a time until that one item was resolved. So, for several months I focused on reducing my grocery costs until I was satisfied that I'd gotten them as low as I could for now. At another point I focused on my coffee shop habit, until I'd built enough free alternatives (that still satisfied my soul) that the expense was gone. Another month I researched internet costs and options. Most of these budget lines changed dramatically upon the one move of recording and posting my spending daily.

I believe that recording one's spending every single day has the biggest impact for most people. Posting it daily to a Journal here increases the effect. Simple, fast, powerful...an almost effortless way to change everything.

Chrissy

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Re: Overwhelming - How did you start?
« Reply #28 on: January 01, 2015, 02:08:37 PM »
My first step was moving.  Saved me from a $230 rent increase!  Next was calling my internet company, and they lowered my bill by nearly 50% for 6 months!  Took me 10 minutes and was an easy win. 
« Last Edit: January 01, 2015, 09:14:04 PM by Chrissy »

darkadams00

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Re: Overwhelming - How did you start?
« Reply #29 on: January 01, 2015, 03:35:12 PM »
Started with $80K in debt (mortgage not included) and wanted to put together a plan for the future. I began to prioritize my spending to align with MY life goals--not my parents or distant family, not my friends, neighbors, and coworkers, not Dave Ramsey or MMM, and certainly not the folks on this or other forums I frequent. I'm comfortable sharing "ideas" for learning, but I learned quickly that we don't always share the same "ideals." For example, I paid off the debt in short order without a severe lifestyle crunch--my children were in private school, my younger son got braces, I junked two old cars and bought a more reliable used car for cash, we went skiing a couple times, we bought several items related to our family's various hobbies, etc. I could have shaved a year off the payoff period by putting my kids in the reputable public schools in my neighborhood but chose not to for reasons that are completely satisfactory to my wife and me. Instead I did buy bikes for our family, eat out less often, and watch the weekly unplanned dollar-by-dollar leakage more carefully.

I've never paid for cable TV, cellphone data plans, new TVs, new video game systems, expensive clothes, fancy cars, or exorbitant housing, so those weren't issues anyway. However, I have paid quite a bit over the years for hobbies for the entire family. In short, I identified what was important to us and put our money there--eating out, not important but a well-used but professional-grade keyboard in the music room, important. We've bought the things we like, quit spending so much on the things that didn't matter, and saved a lot of money as a result.

Optimal Spending = Minimized Required Spending + Minimized Lifestyle Spending + Unavoidable Emergency Spending

We identified the first two inputs for our family, planned a cushion to absorb the possible variance of emergencies, and arrived at our level of Optimal Spending--about 50-55% of our income for the last several years. When we had debt, we put most of the balance towards debt payoff. Once the debt was gone, we began to put that money to work. This plan has worked for us. I'm the most financially conservative person in my family, in my workplace, in my church, and in my circle of friends. I get basic questions from coworkers, family members, and friends almost every month. I'm happy with my life now, and I plan to be happy when I retire. Hopefully, you can find that place as well.

Calvawt

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Re: Overwhelming - How did you start?
« Reply #30 on: January 01, 2015, 03:59:49 PM »
Good luck with your legal challenges, I would never wish that on anyone.

I started by increasing my 401k automatic withholding on my paycheck and THEN figuring out where to spend less.  It forced me to spend less.  Every couple of months I increased it another 1-2%.  Now, I am set to contribute the $18k max for 2015.

Now I actively look for ways to spend less or increase income.  It just becomes a lifestyle change after a while.

homehandymum

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Re: Overwhelming - How did you start?
« Reply #31 on: January 01, 2015, 04:21:45 PM »
My order of doing things.

1. Track expenses for 3 months without worrying too much about a budget.  This will automatically reduce spending as it makes you more mindful.  I use an app for my phone which I need to manually input information into (MoneyWise is what I use, although there are dozens around).  Pen and notebook will work too :)

2. Using the information from the last 3 months, create a beta version of a monthly budget, continue to track expenses and at end of each month tweak budget. (the phone app can export data to excel, where it is much more useful)

3. As part of budget, establish a 'fun money' amount per week that is within budget and can be spent guilt-free ($20 per week? So you can buy a latte and a muffin if you really want one), and rules about what is 'fun money spending' and what is not.

4. As you identify the fat that can be trimmed (for us it was contact lenses vs glasses, buying lunches, high insurance costs that could be lowered by increasing the deductible etc), just pick one at a time and focus on that.  Maybe make it one per month so you don't get overwhelmed.  If it turns out to be an easy half hour job then you can do another one, or pat yourself on the back for the rest of the month and start researching next month's cutback.

5. Don't sweat the small stuff.  It's easy to be penny wise and pound foolish.  There is little to no point in making your own laundry soap if you're driving a leased car, or flying cross-country 3 times a year when you could reduce it to once, for instance.  Focus first on the things that will give you the most bang for your buck.

Spiffsome

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Re: Overwhelming - How did you start?
« Reply #32 on: January 01, 2015, 04:56:48 PM »
I started by basically being a poor university student, being surrounded by other poor university students, and not changing that lifestyle much over the years. I don't have a lot of experience with dramatic change, but what experience has taught me is that 'normal' is an incredibly flexible concept, and you can change your 'normal life' to be very different if you do it one thing at a time. It looks overwhelming when you look at it all at once, because you're thinking about changing everything at once. Don't do that.

Pick one thing that you can change, that seems doable to you. Different people choose to change different things, but you have to pick the changes that seem manageable to you. (I had no problem renting a room from a friend for the first three years of my marriage, but I struggle to get on my bicycle or start a garden.) Change your one thing. Live with that change until it feels like a normal, everyday piece of your life. Then pick another thing to change, that also seems manageable. Step by step, your baseline for 'normal' will change. Some changes will lead to other changes. For example, turning off your TV may lead to more reading or more exercise as you look for something else to fill your time. Cooking more may lead to shopping at the farmer's markets because they're cheaper and have better produce. One thing will lead to another until you look back and have to remind yourself where you started from, because it will feel like you've always lived the new way.

The 'save 10% automatically to another account' idea is a good place to start, because it's small, it's automatic (so you don't have to choose it over and over again) and it gives you an 'instant win' that you can look at. Changes that provide concrete, instant results are very good places to start, because they give you something tangible as a result of your efforts.

Please be forgiving with yourself if things don't change as much or as fast as you think they should. Lasting change takes time to settle in and become a part of your life. Your situation is a pretty stressful one, and people tend to revert to the familiar under stress.

If you want some books to read about making lasting change, my favourites are 'The Power of Habit' by Charles Duhigg and 'Reality is Broken' by Jane McGonigal. 'Power of Habit' is a great analysis of how powerful our unthinking habits are, how to discover them and how to change them. 'Reality' is an insider's look at how computer game designers build rewards and incentives into their games to hook people on playing at difficult tasks for hours on end - kind of a voice from the 'dark side' about how motivation works. The main points are that people will work hard at tasks that are (a) well-defined and have concrete conditions for success and (b) provide small rewards at frequent intervals. If you design your changes so that they provide frequent, small bursts of success ('$50 into a savings account from every payday'), you have a better chance of success than if you set a long-term, vague goal ('save more money this year').

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #33 on: January 01, 2015, 05:07:14 PM »
Thank you everyone - I am reading and taking notes!

sheepstache

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Re: Overwhelming - How did you start?
« Reply #34 on: January 01, 2015, 05:12:10 PM »
Can you talk to your lawyers about the litigation bills?  After so many rounds of the custody battle, I can't see that there will be much new to say, and that it should cost you so much: just "here we are again and the facts haven't changed".  You may be able to cut a deal with your lawyers for less work to be done or for the basic work to be done by people at the firm who have a lower charge-out rate.

Any chance of an application to court to get your ex ruled a vexatious litigant (stops them filing new claims) or requiring them to pay your costs?  Can you make an argument to the court that your ex is deliberately running up these big bills to try to win just by making the costs unmanageable, rather than having any sort of decent case on the merits?
The first thing is to stop this craziness with custody battles.
Its bad for finances.
Its worse for the kids !!!!

My 2nd husband and his 1st wife spent years going back and forth in court.
Only one who got really hurt was the child.
For the parents, it was costly...for the lawyers ..they loved it.

Split custody 50/50
Move on with your life.

+1 on the idea of tackling the legal costs.

In some ways MMM is your basic frugality blog about cutting small things like cable bills. Every dollar counts, for sure, but it also tackles larger costs like cars or, as many have suggested here, housing. A lot of these things don't get questioned by many people wondering why they struggle to get by. "Well, I have to have a car." I'm wondering if the custody battle is a similar thing for you.  Unless the ex is a violent psychopath, of course.

TerriM

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Re: Overwhelming - How did you start?
« Reply #35 on: January 01, 2015, 06:54:24 PM »
We're not in debt, but my first step (which I did last month) was to track all of my spending.

I don't believe that you can cut down what you can't measure.  Obviously you can make large sweeping changes like canceling cable or cutting down on your eating, but how do you know that they aren't being replaced by other expensive habits if you don't have actual number?  Maybe you cut out eating out, but reward yourself by buying a bottle of wine.  Did you save anything?

To know how to fix your finances, it's best to have a full picture of what they really are.

MsPeacock

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Re: Overwhelming - How did you start?
« Reply #36 on: January 01, 2015, 08:20:55 PM »
Can you talk to your lawyers about the litigation bills?  After so many rounds of the custody battle, I can't see that there will be much new to say, and that it should cost you so much: just "here we are again and the facts haven't changed".  You may be able to cut a deal with your lawyers for less work to be done or for the basic work to be done by people at the firm who have a lower charge-out rate.

Any chance of an application to court to get your ex ruled a vexatious litigant (stops them filing new claims) or requiring them to pay your costs?  Can you make an argument to the court that your ex is deliberately running up these big bills to try to win just by making the costs unmanageable, rather than having any sort of decent case on the merits?
The first thing is to stop this craziness with custody battles.
Its bad for finances.
Its worse for the kids !!!!

My 2nd husband and his 1st wife spent years going back and forth in court.
Only one who got really hurt was the child.
For the parents, it was costly...for the lawyers ..they loved it.

Split custody 50/50
Move on with your life.

+1 on the idea of tackling the legal costs.

In some ways MMM is your basic frugality blog about cutting small things like cable bills. Every dollar counts, for sure, but it also tackles larger costs like cars or, as many have suggested here, housing. A lot of these things don't get questioned by many people wondering why they struggle to get by. "Well, I have to have a car." I'm wondering if the custody battle is a similar thing for you.  Unless the ex is a violent psychopath, of course.

Lawyers have reduced my fees at my request because ex's behavior is "an affront to the legal profession"  - and they farm out their work to the much lower cost secretaries as much as possible. I won't go into other details - sometimes you can't avoid the court no matter what you do. You can make offers, be rational, etc. - and the other person will turn around and file complaint and motion one after another after another. No sanctions yet - hopefully round 3 will bring some relief. If someone is going to disagree w/ everything, no matter what it is, because they WANT to go to court - there isn't anything I can do to stop them. 

scrubbyfish

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Re: Overwhelming - How did you start?
« Reply #37 on: January 01, 2015, 08:41:34 PM »
If someone is going to disagree w/ everything, no matter what it is, because they WANT to go to court - there isn't anything I can do to stop them.

Yep. Some legal situations are ridiculous, awful, nonsensical, and unavoidable (unless we're willing to accept severe consequences of not holding our ground). Where I live, people can ask that endless applications over details be considered vexatious, and consequently dismissed. Perhaps that's what you mean by sanctions, in which case, yes, hopefully the judge will end the nonsense sooner rather than later. It's stunning to me what judges will allow -one parent showing up court date after court date after court date after court date with everything in order, the other not showing up or showing up having "forgotten" their financial statements again, and the judge just setting a new date three months out. Why do they do that?!?!? Surely the judge has some idea of how much money, time, energy, and stress that costs the conscientious parent, and what the kids lose as a result? And that the judge is simply perpetuating a power trip? I know that judges/courts are supposed to allow everyone the benefit of the doubt, wiggle room, time to get their crap together, etc, but argh. I'd like to see more balance/limits. I'm sorry you and your kids are in this boat.