March Getting Out of Debt - Page 5

[imamomx2]

Originally Posted by applecider 

I'm in again. Although I I'm on BS3/4/5 and it feels like we will be there FOREVER. So I've really run out of motivation/goals. We have no debt but the mortgage and a really small student loan (which according to DR I should just pay, and I may do here as soon as it comes out of deferment). So currently I'm throwing about 10% into 401k, an extra $300 at the mortgage each month (just started doing that) and the rest extra is going to savings. We are redoing our kitchen this summer (hopefully on the cheap) and also taking some trips. Also, I would REALLY like a poured concrete patio, but we'll see how much that costs. DP has decided to sell his Harley, so that would be 12-15k if it sold. Which would be AWESOME. But I have heard others feel like when they get to this point, it is hard mentally because there is nothing to really focus on and I have noticed that I spend a bit more freely now. Not a bad thing, but I don't want to lose focus. Anybody got any advice or tips on that?

I am worried about this also.  We are now on BS 3/4.  We have always put 8% in our 401k, and we will up that as soon as we get our emergency fund and our car savings in place. However, this month was terrible. We planned to take a celebration month, and so we bought an armoire and flat screen TV.  We planned for it, but still... I'm worried that we will spend more freely on little things because we aren't as intense.

[beansmama]

We recieved an unexpected co-pay refund, so our FFEF is now at $5750/$10,000. I'm continuing to look for books and whatnot around the house I can sell...but I'm running out of things, lol!

My mini-goal right now (I decided I needed one, hah!) is to have $7,000 in our savings by May 1st. Technically, *that* is our entire FFEF, but $10,000 is a nicer number, and having a 8.5 mo EF isn't going to hurt a bit, right? From what we can save from Dh's checks, we'll be about $350 short of that goal, but he's commuting to work 4 times in April (to another location to cover someone's PTO) so that's probably an extra $150 from his job (after we pay for extra gas), and he's selling a guitar to my x for $175...although $75 of that is going back into the sinking fund...I'll have to squeeze the rest from..somewhere!

I'm just so excited to mooooove on from this step! I want to start saving for a house! I'm obsessed with looking at local real estate...and the prices are so great right now it makes it hard to stick to things, but whatever. I know we're better off sticking to our plan...it's just haaaaard!

[MyTwoAs]

We are done with BS2 and are joining those of you in BS3-land!

Crazy busy lately but will come back for personal posts tomorrow when I have time to breathe!

[Ragana]

Good news!

We expected to pay taxes this year, but ended up getting a small refund that knocks 2 mos. off of debt #2 in our snowball! So, as soon as that payment comes in, debt #2 is done & it's on to debt #3. It also means we keep what we have saved in our "slush fund" for the summer so that we can see an elderly relative this summer. Whoo hoo!

[imamomx2]

We are on bs3 also.  We decided a while ago that when we left bs 2 I would quit my job.  Well, here we are... and well, it's kinda nice to have the extra cash!  I am considering quitting in the summer, after we have a few months of expenses saved.

I'm nervous to give up my income though.  You know, in this economy, though my dh's work has been fairly stable.  I'm not sure if going from $1500 extra a month down to $7-900/month is comfortable enough for me.

Anyone else experience this?

[kitteh]

Hey Ladies, I think I'm going to finally join in here. I've been following the threads on and off over the past year in order to keep my motivation up. Two years ago I was returning to the US from a year abroad in Chile. I had met my fiance (now husband) there and we were in the midst of a visa/immigration process to get him to the US so we could get married. I was just finishing up at UCLA with about $26K in student loans and $23K in high interest credit card debt when my husband arrived, and *surprise* I was pregnant! (literally, the day he arrived in the US we conceived.) He didn't have authorization to work yet and I only had experience as a server, so I was doing that because I didn't think I'd be able to get a job using my degree (Comparative Lit with Latin American Studies minor) especially the way the economy was 2 years ago. So it was a pretty dire situation, financially.

Well, fast forward 2 years and our daughter is a beautiful and healthy 13 month old, our marriage couldn't be better (still in the honeymoon phase, perhaps?) and our credit card debt is down to $6k, with roughly $23K in student loans on an IBR program. We were poised to have the credit cards paid off by may and then our plan was to start saving for a car. Unfortunately I was unexpectedly fired from my (crappy) serving job this month, which has put a bit of a monkey wrench in the gears! Luckily DH has a secure job as a valet at a swanky hotel which brings in about $2K a month and I'll be getting just under $1,100 from unemployment, so we'll be fine but our budget is definitely tightening up a bit. I'm hoping to be able to throw between $800 and $1000 at the debt each month, which will still have the credit cards paid off by September/October . It's just going to be a bit more challenging, as our budget for entertainment and "fun" spending is definitely going to take a hit.

So, I'm hoping to use this thread for inspiration and motivation!

[chely7425]

Welcome!!  Sounds like you guys have a great plan and definitely the right mindset to attack your debt :)

As for us... we will have our $1000 baby emergency fund finished by the 1st.  It has taken us awhile because we are simultaneously saving for a move at the start of May, which I REFUSE to put on a CC so we were saving for that instead of our emergency fund.  Related to that... I got the washer and dryer we wanted for an awesome deal the other day, which made me happy!!

[eirual]

Welcome, Kitteh!

It does sound like you have a great plan and a great hunger to move forward and make it work. Chely, here's hoping that the move goes smoothly with no surprises or unexpected expenses!

It appears we're getting a tax refund which I wasn't banking on. A hefty one to boot (which is good since we've been saving a little less than I'm comfortable with)! Given my DH's history of filing our taxes, we're going to put it aside for 6 months until we've been re-assessed to be sure it's really ours (we have a tendency to get refunds, but then end up owing a portion of it back). We've kept things much more organized this year tax-wise so I'm hoping that will reduce the chances of an error (last year I obviously failed to file 2 important slips, so they didn't get entered when we were doing our taxes) and when we were re-assessed we ended up owing since those slips were from bonuses/extra income.

I've started keeping a large ziploc baggie for each tax year in our filing cabinet and that's really helped keep things together since with file folders everything sinks to the bottom and falls out the side since most papers are small or tri-folded. This way, you can take the whole thing out, it's organized by year (vs. the larg tax/gov't folder I used to have with everything mashed together), and you can slip things in vertically so they take up less space. Yay for the mental clarity that comes with keeping finances organized! This year, I'm going to find a list of all you can claim to slip into the tax baggie too- I had no idea we could claim our moving expenses, and having done it all in cash one way, I don't have detailed records of it.

[Turquesa]

How old are your bundles of joy?  Were you working full or part time? 

Have your run calculations on how much it was costing to work?  You may still take a hit, but that hit may not be as big as you think. 

Originally Posted by imamomx2 

We are on bs3 also.  We decided a while ago that when we left bs 2 I would quit my job.  Well, here we are... and well, it's kinda nice to have the extra cash!  I am considering quitting in the summer, after we have a few months of expenses saved.

I'm nervous to give up my income though.  You know, in this economy, though my dh's work has been fairly stable.  I'm not sure if going from $1500 extra a month down to $7-900/month is comfortable enough for me.

Anyone else experience this?

[Turquesa]

Well, I'm starting into BS4 and completely clueless.  I'm 35, and we've never had a Roth IRA.  Those of you who have one....

1. Did you open one through your bank?  A discount broker?  Other?

2. Do you have your money automatically deposited?  Or is there an option to do it on your own?

3. How did you allocate your assets?  Did you do it exactly as Dave recommends (e.g. 1/4 in international funds, 1/4 in growth stock mutual funds, etc), or did you come up with another formula?

4. Did you see a financial advisor first, or did you just dive right in?

[MyTwoAs]

Congrats again on BS4 Turquesa!

We had a Roth IRA and went through an investment advisor to set it up (Edward Jones).  When we were able to fund it we did so through an automatic monthly withdrawal from our checking account and then had the option to make lump-sum deposits as well.  As far as asset allocation, since it was so small at the start we just put it into one fund.  We only funded it for a very short time ($400 in deposits, ea) and then stopped to do the debt snowball.  We don't qualify for a Roth anymore so we cashed it out and put the lump sum on our debt last year.  Since it was post-tax contributions, we only paid tax on the growth (I think a total of $60 in growth between the two so only a few dollars in tax).

Here's a quick primer on the Roth - http://www.daveramsey.com/article/roth-ira-101/lifeandmoney_investing/

My husband's company added a Roth 401k option this year and so we'll be taking advantage of that once we get to BS4!  :)

[sarah1122]

Just checking in...good to see so much good news.

Just put another $1400 into savings....$1400 more next month and I've hit my 3 month FFEF goal of $15,000 before my maternity leave!

YIPEEEE!

[eirual]

Awesome, Sarah!! 

Here's hoping there are no surprises between now and then. That's gotta be record time for BS3!

We're moving out from my parents' house and into our 1BR apt tonight (down from a 3BR house to a 2BR condo, to this- hello, simplifying!)

[mtm]

imamomx2, I think the key to not opening up the spending once you're in bs3/4 is to make sure you automate the savings just like its a bs2 debt. It is, in fact, a debt, just one that you owe yourself. We did a few planned splurges but had the automated payment ready that next month so we didn't see the money in the bank and blow it.
 

beansmama, you're doing great on that ffef. You're over half way already!

MyTwoAs, congrats! Welcome to bs3.

Ragana, yay on the tax refund and sending it to debt. I'm hoping when we file, we don't owe. I'd love to use that money we've put aside for home renos.
 

kitteh, glad to see you posting. You sound like you're doing well with the debt repayment so once you've found a new job, you'll rebound quickly.

chely7425, great attitude on not wanting to put the move on your cc.

eirual, how is the new apt?  I hope the tax refund is yours to keep, that would be awesome.

turquesa, congrats on reaching bs4. I'm Canadian so no help on the roth stuff but I like the advice on getrichslowly and thesimpledollar

 so maybe check them for how to get started? We went into the bank to set up our rrsps (Canadian retirement). We do direct deposit and have a mutual fund mix. I'm not the biggest fan of Dave's investment advice I have to admit
 

sarah1122, great job building up the ffef.

We're about to file our taxes, all the prep work is done and the file is en route to the accountant. I'm hoping we don't owe but ready if we do. I spent too much on spring/summer kids programs/camps but a bit of belt tightening should help.

[mylilmonkeys]

Hi,

This thread is so fascinating!  I've heard of David Ramsey, but never really looked into his method.  It sounds very similar to what I have been doing, which has worked out really well for us.  I just ran the numbers, and we have paid off $11,265 in cc debt since Jan '10 on a single income of roughly $35,000 gross (very gross ).  Now, about half of that came from last year's tax refund, which gave us the jump start by paying off two cc, and using those payments to add to the next targeted card.  I didn't always pay off the smallest balance cards first, but sort of did my own assessment including the minimum payments and interest rates when deciding which card I'd pay off next.  So, I might hold onto a smaller balance card if I could free up a larger minimum payment to be able to use on the next, etc.  We also ran into an unexpected expense when we discovered our surprise pregnancy was TWINS! and were able to pay our midwife fully in cash, as well as some necessary related expenses (new infant car seats...).

I have a few questions for the experienced here:

1.  We have one card left, with a $4400 balance, and $4000 left from this years' refund.  I'd like to keep $1000 for savings.  We are also fixing up our house to hopefully be able to put on the market so that we can move closer to dh's work/school.  He won't have time to work on the house until summer when he is off of school.  I'm nervous about the money just sitting there, but if I put $3000 towards the card, I'm not certain we will fully pay off the card by June and be able to buy supplies with the extra money from the freed up payments.  We could probably get by with $500 in savings, putting $3500 to the card which would allow me to pay off the thing in time.  Then I'd refund our savings starting in Aug when the fall semester starts.  What would you do?

2.  Which of DR's books would you start with?  Being so close to having eliminated all this CC debt, I am now starting to think about how much we should be saving.  I'm excited to see a plan to work from rather than figure it out by myself!

3.  I don't really have a budget.  Dh's income fluctuates with him being on an hourly plus commission wage.  Every check is kind of a surprise, sometimes good, sometimes not. LOL  He delivers water and we should be moving from the low commission time of year into a higher commission, provided he doesn't lose more accounts in this economy.  I've done amazingly well without a strict budget, but I need some help to work one out.  I'd like to be able to know that school supplies and clothes for the kids are not going to be big hits to the finances, etc.  I've been tracking our expenses with our credit union's finance software, which does include a budgeting tool, but every budget we've tried to work out in the past has been a massive fail.  Where do I start?  

I am so addicted to all the new little $0 balances in my accounts.  Nice to find a group of people who understand!!  We don't have a whole lot of wiggle room, but finally we are spending less than we make, and soon will be saving!  Woohoo.

[Turquesa]

Originally Posted by mylilmonkeys

We have one card left, with a $4400 balance, and $4000 left from this years' refund.  I'd like to keep $1000 for savings.  We are also fixing up our house to hopefully be able to put on the market so that we can move closer to dh's work/school.  He won't have time to work on the house until summer when he is off of school.  I'm nervous about the money just sitting there, but if I put $3000 towards the card, I'm not certain we will fully pay off the card by June and be able to buy supplies with the extra money from the freed up payments.  We could probably get by with $500 in savings, putting $3500 to the card which would allow me to pay off the thing in time.  Then I'd refund our savings starting in Aug when the fall semester starts.  What would you do?

What would *I* do?  I’d stick with the 1000 as the emergency fund.  But I’m personally not much of a gambler.  Chances are low that you’ll have a financial emergency between now and August.  But there’s still a chance.  If you did need more than 500 before August, assuming that going in to further debt would be self-defeating and a non-option, what would you do?

Originally Posted by mylilmonkeys 

2.  Which of DR's books would you start with?  Being so close to having eliminated all this CC debt, I am now starting to think about how much we should be saving.  I'm excited to see a plan to work from rather than figure it out by myself!

Total Money Makeover. 

3.  I don't really have a budget.  Dh's income fluctuates with him being on an hourly plus commission wage.  Every check is kind of a surprise, sometimes good, sometimes not. LOL  He delivers water and we should be moving from the low commission time of year into a higher commission, provided he doesn't lose more accounts in this economy.  I've done amazingly well without a strict budget, but I need some help to work one out.  I'd like to be able to know that school supplies and clothes for the kids are not going to be big hits to the finances, etc.  I've been tracking our expenses with our credit union's finance software, which does include a budgeting tool, but every budget we've tried to work out in the past has been a massive fail.  Where do I start?  

DR has a budgeting sheet for those with irregular income.

Hopefully that helps.

Welcome aboard! 

[mylilmonkeys]

Originally Posted by Turquesa 

What would *I* do?  I’d stick with the 1000 as the emergency fund.  But I’m personally not much of a gambler.  Chances are low that you’ll have a financial emergency between now and August.  But there’s still a chance.  If you did need more than 500 before August, assuming that going in to further debt would be self-defeating and a non-option, what would you do?

That is an excellent question!  I would only pay the minimum on the remaining card, which should be quite small as the card minimum on this card is calculated according to the balance remaining, and skip the second payment I have been making in the middle of the month.  Those combined would almost make up the difference, roughly $400-500 depending on what dh actually brings home.  The rest would come from what's left of my husband's paycheck for discretionary spending, whatever remains of his financial aid, and what he has in his "blood money" account.  I don't think I'll wait until August to start building the savings account, but what I put in it will vary allowing us to finish buying the materials we need for the house in the meantime.  I just paid bills this morning, and actually had already transferred the $3500 before reading your post.  

Thank you for the link to the budgeting guide!  I've been looking at the area libraries for Ramsey's books, and they either don't have them or are all checked out.  Dh might be able to get to the bookstore to purchase a copy today.  Thanks for the recommendation.