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Getting Out Of Debt In January 2013! - Page 2

post #21 of 155

Happy 2013!  Im still here and will be looking at my budget in a week or so, when I return from visiting family. I know I didn't meet all my 2012 goals, some will have to be met with Jan. income (maxing ira, a little short on cash savings goal, but made huge strides, and have to pay off the rest of kitchen reno $ in Jan too, etc), but over all good.  I may have a huge change coming my way, but I dont want to jinx it so wont say anything yet.

post #22 of 155
Welcome, Veganmama! It sounds like you have some great plans and are heading in the right direction!

Lunar, what a great leap to make quick progress! Was selling your car an obvious/easy thing to do or was it challenging emotionally?

Sunrise, that all sounds like good stuff. Good luck with the upcoming shift, whatever it is! I love the idea that even if you stray from the plan and maybe fall short, at least you're heading in the right general direction; that's definitely our M.O..
post #23 of 155
Here's how I did with my December goals and thoughts for January and the New Year:

 

1. Keep current on ALL bills - this one is the hardest for me. I realize that I should look for full time work - but at this point in my life I am unwilling to pursue this option for personal reasons. So my plan is to take any additional shifts that come my way at work. (I am only guaranteed a certain number of hours at one of my part-time jobs - some months that is all I get - others I am offered shifts for people's vacations etc... My second part time job is salaried - no room to make more there - family business)

(I did have a 3rd part time job that helped me to keep current on my bills. However, when I was ready to return to it after maternity leave - it no longer existed.) - I was able to keep current for the month of December! Yea!

 

2. Contribute 1% income to charity - done with great happiness

 

3. Add another $50 to my EF - this month I am going to try to see if I can sell some things from around the house. - Nix on this one. At this point my emergency fund has $2 in it. I don't see how I am going to add to it for January unless something sells that I have put up on Craigslist.

 

4. Continue to work on ways to cut lifestyle/trim budget - Nothing different for December but I have ideas for January..

 

 

For January and the New Year - I am thinking that I am going to be modifying my DR plan a bit. I know that he says $1,000 to the EF  before the debt snowball but my debts are CRUSHING me. I have many small debts that if I pay them off - they won't reoccur. For example, I have a CC that has been closed by the issuing party -it's at $290 now. If I pay it off, I can't charge anything on it............................ I owe the IRS money and they charge big fees every month of my payment plan. I won't get into trouble with them again because I changed my withholding and built in a cushion.

I will work on my EF at the same time - but after 3 months of budgeting and working at it - I have only $2 in it. I am WAY discouraged and thought that perhaps I might give this way a try.

Anyone do the DR plan this way? How did it work?  Thoughts??

Thanks

post #24 of 155

orangemomma, congratulations on staying current with your Dec. bills and making your charitable contributions.  Feels good doesn't it?  With the IRS, you said you have added a cushion in this year.  Do you think you will get a refund or will the IRS be garnishing that to pay your back taxes?  I know for my DH and me, the irs tax return was the only thing that bumped us over the top to have $1000 in our savings and we have been struggling to get back up to $1000 since we had to pay out to fix my tires on my car.  Saving doesn't come easy when I have a salaried job and his work is putting a limit on overtime.

 

I saw this idea on pinterest about the 52 Week Saving Challenge.

 

http://pinchthisstretchthat.com/52-week-savings-challenge-week-1/

 

Where a person saves a $1 for each week of the year and by the end of the year they have over $1378 or something like that.

 

You say you have $2 in your emergency fund. You want to increase your fund.  Maybe a dollar a week is more than you will be able to handle by mid year but increasing your emergency fund by any amount will give you a sense of satisfaction and accomplishment.  How about if you only added a penny for each week?  You could probably find that as change dropped on the street or parking lot or in your couch cushions.

 

By the end of the year, you would have this:

    Contribute 1 penny each week    Money saved by the end of the year
1/7/2013    $0.01    $0.01
1/14/2013    $0.02    $0.03
1/21/2013    $0.03    $0.06
1/28/2013    $0.04    $0.10
2/4/2013    $0.05    $0.15
2/11/2013    $0.06    $0.21
2/18/2013    $0.07    $0.28
2/25/2013    $0.08    $0.36
3/4/2013    $0.09    $0.45
3/11/2013    $0.10    $0.55
3/18/2013    $0.11    $0.66
3/25/2013    $0.12    $0.78
4/1/2013    $0.13    $0.91
4/8/2013    $0.14    $1.05
4/15/2013    $0.15    $1.20
4/22/2013    $0.16    $1.36
4/29/2013    $0.17    $1.53
5/6/2013    $0.18    $1.71
5/13/2013    $0.19    $1.90
5/20/2013    $0.20    $2.10
5/27/2013    $0.21    $2.31
6/3/2013    $0.22    $2.53
6/10/2013    $0.23    $2.76
6/17/2013    $0.24    $3.00
6/24/2013    $0.25    $3.25
7/1/2013    $0.26    $3.51
7/8/2013    $0.27    $3.78
7/15/2013    $0.28    $4.06
7/22/2013    $0.29    $4.35
7/29/2013    $0.30    $4.65
8/5/2013    $0.31    $4.96
8/12/2013    $0.32    $5.28
8/19/2013    $0.33    $5.61
8/26/2013    $0.34    $5.95
9/2/2013    $0.35    $6.30
9/9/2013    $0.36    $6.66
9/16/2013    $0.37    $7.03
9/23/2013    $0.38    $7.41
9/30/2013    $0.39    $7.80
10/7/2013    $0.40    $8.20
10/14/2013    $0.41    $8.61
10/21/2013    $0.42    $9.03
10/28/2013    $0.43    $9.46
11/4/2013    $0.44    $9.90
11/11/2013    $0.45    $10.35
11/18/2013    $0.46    $10.81
11/25/2013    $0.47    $11.28
12/2/2013    $0.48    $11.76
12/9/2013    $0.49    $12.25
12/16/2013    $0.50    $12.75
12/23/2013    $0.51    $13.26
12/30/2013    $0.52    $13.78

 

That is 7 times what you have in savings right now and finding 52 cents or less per week is possible without getting a new job or working overtime.

 

What if you could add 73 cents per week all year long?  You would have $1000 by the end of they year!

 

Week    Contribute 73 cents each week    Money saved by the end of the year
1/7/2013    $0.73    $0.73
1/14/2013    $1.46    $2.19
1/21/2013    $2.19    $4.38
1/28/2013    $2.92    $7.30
2/4/2013    $3.65    $10.95
2/11/2013    $4.38    $15.33
2/18/2013    $5.11    $20.44
2/25/2013    $5.84    $26.28
3/4/2013    $6.57    $32.85
3/11/2013    $7.30    $40.15
3/18/2013    $8.03    $48.18
3/25/2013    $8.76    $56.94
4/1/2013    $9.49    $66.43
4/8/2013    $10.22    $76.65
4/15/2013    $10.95    $87.60
4/22/2013    $11.68    $99.28
4/29/2013    $12.41    $111.69
5/6/2013    $13.14    $124.83
5/13/2013    $13.87    $138.70
5/20/2013    $14.60    $153.30
5/27/2013    $15.33    $168.63
6/3/2013    $16.06    $184.69
6/10/2013    $16.79    $201.48
6/17/2013    $17.52    $219.00
6/24/2013    $18.25    $237.25
7/1/2013    $18.98    $256.23
7/8/2013    $19.71    $275.94
7/15/2013    $20.44    $296.38
7/22/2013    $21.17    $317.55
7/29/2013    $21.90    $339.45
8/5/2013    $22.63    $362.08
8/12/2013    $23.36    $385.44
8/19/2013    $24.09    $409.53
8/26/2013    $24.82    $434.35
9/2/2013    $25.55    $459.90
9/9/2013    $26.28    $486.18
9/16/2013    $27.01    $513.19
9/23/2013    $27.74    $540.93
9/30/2013    $28.47    $569.40
10/7/2013    $29.20    $598.60
10/14/2013    $29.93    $628.53
10/21/2013    $30.66    $659.19
10/28/2013    $31.39    $690.58
11/4/2013    $32.12    $722.70
11/11/2013    $32.85    $755.55
11/18/2013    $33.58    $789.13
11/25/2013    $34.31    $823.44
12/2/2013    $35.04    $858.48
12/9/2013    $35.77    $894.25
12/16/2013    $36.50    $930.75
12/23/2013    $37.23    $967.98
12/30/2013    $37.96    $1,005.94

 

Do you think you could find that much money each week this year to get you to your savings goal?

 

Check out this spreadsheet for other amounts that could be saved https://docs.google.com/spreadsheet/ccc?key=0Avkkz2Vwt_UrdE5FUUo5b0o5TlpFY29fYjh2XzB4NXc


Edited by lilacvioletiris - 1/7/13 at 4:05am
post #25 of 155
lilac, that is pretty cool smile.gif makes it clear that the pennies really do add up!

eirual, thanks for the welcome. i am feeling pretty motivated, which is good. and doing all this reading and research is keeping my mind off of my other NY resolution, which is giving up sugar. orngtongue.gif

i went grocery shopping today for the first time this month and managed to stay under budget even with my weekly 6pk of mikes hard lemonade.

i also found a budget site that is pretty simple, so i set up that. www.budgetworksheets.org i have one for my income because it varies so much, and one for expenses. so my goal is to keep them both pretty close.

i am wondering if you all have thoughts on improving credit scores. i am not sure what exactly mine is, but i know its bad. i currently have no cc and no loans, should i get a cc an buil my credit, or just concentrate on saving?
post #26 of 155

I think I've joined before but I'm committed this year to working on getting our family healthy both physically and financially. Last year was a very expensive year for us. We're talking new job, separate living situations, travel, long distance move, new house, more travel and a big Christmas with lots of guests... We also had to buy a lot of stuff to prepare for a long long cold winter as we've never had to deal with that before.

 

This year I am hoping we can figure out a long term and short term savings accounts and just go back to living simpler and more frugal. We'd like to take 1-3 vacations this year and figure out retirement funds. I realize that we're not in the dire straits that some are but we have been there for most of our married life and are suddenly and recently in a category where we are doing more than fine. But I'm scared of times becoming lean again and so I'd like to prepare for everything and I need help!

 

We are in Canada so our retirement and such works different but I'll put where we are in the quote below... I'm not a huge Dave follower but I like his steps. I much prefer Gail's way of doing things but with a bit of Dave thrown in, so I jump back and forth a lot and some of it probably doesn't work with others here. What I really need is a kick to stay accountable and on track to our goals. I've lurked on these threads for a couple years now and I'm committed to making our goals both short and long work out. My DH works really long and hard and while he usually enjoys his job it's hard work. I'd like for us to be able to be in a place where we can have him enjoy the fruits of his labour so to say while still being financially responsible. We went from both laid off for the last two months of 2011 with no end in sight to DH making double-triple his previous income in a matter of days. I really want to hold onto my frugal roots as much as possible. 

 

 

Quote:
Originally Posted by trekkingirl View Post

 

Here's DR's plan:

Pre-Step 1: Get current on your debts and do a budget I know how much we owe and where... It's the budget part I'm having a hard time with.
0.1 No new borrowing. We won't be borrowing anything big, but we will be looking into a new credit card. Reasons? I don't have a credit card in my name, DH's credit card limit is so low we can't usually book flights on it (should be a good thing but we're so far from family that we need the resource) and currently I tend to travel long distances with the kids for Dr's Appts and to visit family and I would feel more comfortable with a CC for backup. Anytime I need to book a hotel I have to search to find ones that will let me put a deposit in cash and it's worked out so far but we're only going to travel more. 
0.2 Talk with spouse and get him/her on the same page as you concerning finances. He's on board. He *really* wants to go to Vegas and drive to visit our family this year. We'd most likely combine that trip (but would count for 2 of our trips). We'd also like to take the kids to DL sooner than later as we'd also like to plan to have another baby sooner than later but after we do a bit of traveling. 
0.3 Do a written budget Working on this. But I struggle with budgets. I'm working on meal planning and going to look into going to the jar/envelope system
0.4 Temporarily stop all retirement contributions Done since we've never really started. Something we're looking into.
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) We are current up to Dec. Only have gotten one bill for Jan so far and it will be paid on Thursday.
0.6 Amputate "toys" (bikes, boats, ATV's etc) to help snowball Don't have anything like that.
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF. I'm babysitting and this money will be going straight to a EF. I'm also going to do a large declutter and all the profit will also go to this.
0.8 Get current on ALL bills Done 

BS1 $1,000 to start an Emergency Fund Working on this. Babysitting money, sold items and possibly a large chunk from DH's next couple paycheques will go to this.
1.1 Chop up/freeze CC's (You have an EF now) CC's aren't used often. Only for flights and a bit of online shopping which is rare. I will be hiding our current card, although I think it's put away anyways and I don't know where it is...
1.2 Get Health insurance NOW if in the US Live in Canada and our premiums are paid monthly, DH also has an extended health plan given to him through work.
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. Have this, would also like to do a Will this year before we go away. 
1.4 Amputate cars that you can't pay off within 24 months We own our 'Trucksuv' outright and sold our other vehicle just after moving. DH drives a company vehicle.

BS2 Pay off all debt using the Debt Snowball 
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. Currently owe $3767. Would like to have the smaller debt of $930 paid off in the next two PC's. The $2837 is on our personal LOC and I'd like to have that paid off by end April. I'm hoping that I can put $350-550 per pay depending on how much DH works.

BS3 Three to six months of expenses in savings I'd like to start this by the middle-end of year. 
3.1 Start car replacement fund My goal for next year. Our vehicle now is great, but in a couple years something that can handle the winter roads a bit better would be nice. But if we do increase our family size it will make a difference in what we purchase.
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI. I don't know how this works in Canada. We had to payout Mortgage Insurance on this house when we bought as our Downpayment was too small but I don't think we can drop it. It was just a one time payment? If we do sell our other house *see last BS* then I'd like to take the money we make from that and put it straight to our mortgage. Either in one year or two depending on how much we make off of it. We had quite a large DPayment on it and have a lot of equity in it. While the market where it is, is down it's not horrible and is slowly starting to look up. 
3.3 Start furniture or other non-essential stuff replacement fund Yes! I'd like to start this in cash after the babyEF is done. There are a few things we are going to need for the house sooner than later but we're really good at making do and repurposing or scavenging. Most of our furniture has come to us through family, friends, gifts or cheap second hand. We have bought some new but very little comparatively. We inherited a bunch of the previous owners stuff when we bought this house and it's turned out really well for us too!

BS4 Invest 15 percent of household income for retirement Looking at Gail's chart we should be able to start this ASAP. The debt snowball numbers above are based on her 15% to debt repayment. I like Dave's steps, but I like Gail's pie better. Having under $5000 in debt has never worried me, we have always been able to pay it off. Of course I'd like to put the money into savings instead but we almost always live on a cash budget anyways. The money on the LOC and CC is mostly from moving, preparing for Winter (which was big as we've never really had winter before) and a too lenient Christmas (our first ever, usually Christmas is done on cash, and will be again in the future. But as I said to start, 2012 was waaaaay too crazy and by the end of it I kind of just gave up stressing.) So I'd like to start retirement contributions ASAP, I just need to figure out where to start. I have a small pension from my old job but I'm thinking it might only pay for a package of meat each month when I do get it, as it is quite small ;)

BS5 College funding for children I know family has money set aside for both of the children. Most likely what my parents put away alone will pay for a good chunk of school. I am not as worried about this as while I believe in helping my children with continuing education, I don't believe it has to be a college or uni degree and I also believe they should contribute to school themselves as well. I would like each of my children to first get themselves a skill or a trade before a degree so that they will have something to fall back on.

BS6 Pay off home early One day ;) but I think this is more a 5 year goal for us before we even start to look at it. 

BS7 Build wealth and give! Invest in mutual funds and real estate We actually own a separate rental property that we couldn't sell due to a down market and us having to move and the rental market where we moved to. The property fully funds itself (mortgage, property taxes, property manager, insurance) and leaves enough left over for a contingency fund. If the current tenants decide at 9 months that they will not stay past their 12 month lease then we will put it back on the market (both selling and renting). If they do decide to stay then we'll just keep renting it. I'd personally like to sell at this point, but if it's going to continue to fund itself then we might as well keep it :)

post #27 of 155

subbing for inspiration
 

post #28 of 155
Thread Starter 

veganmamma Dave Ramsey followers supposedly work towards a zero credit score! In other words, if you commit to never borrowing money ever again than there is no reason to have a credit score. It kind of goes along with a cash system as opposed to putting your money in the bank. Just another way to stick it to the man, so to speak!

post #29 of 155
Quote:
Originally Posted by eirual View Post

Welcome, Veganmama! It sounds like you have some great plans and are heading in the right direction!
Lunar, what a great leap to make quick progress! Was selling your car an obvious/easy thing to do or was it challenging emotionally?
Sunrise, that all sounds like good stuff. Good luck with the upcoming shift, whatever it is! I love the idea that even if you stray from the plan and maybe fall short, at least you're heading in the right general direction; that's definitely our M.O..

It was emotionally challenging to sell my car. It was the one "luxury" item I thought we could afford, and it was great. Seating for seven, power tailgate, Bluetooth, satellite radio....I really loved that car. But you know what? My $6k car is actually pretty good too. And the extra $ every month will be worth it. I'm tired of watching our money like a hawk because we are so close to the line each month. Less debts means less stress, and that is more relaxing than any leather seat ever could be.
post #30 of 155

I'm back for January!  I have some catching up to do as I did use my CC during Christmas shopping. I plan to pay it off this month as to not incur any interest.  I finally began reading DR!  I also decided to join the 52 week challenge starting with saving $1 dollar for week 1!     

post #31 of 155

I would like to join! I just started reading DR's plan and I think I will do a modified version of it. One of my problems is medical debt. I don't have any right now but I have to figure out how to stay out of it with two special needs kids. We do have health insurance and I am putting the max amount in my FSA at work. I'll update as to where my family is with DR later. It's nice to meet everyone!
 

post #32 of 155
We're on BS 0.7 but once that's done we'll jump to BS 2!
post #33 of 155
trekkingirl, yesss! i LOVE sticking it to the man...but i am hoping to buy myself some land one of these days, and i am afraid that if i wait til i have enough cashed saved up, i will be dead orngtongue.gif i AM going to get my kindle copy of dave ramsey right now, but are credit unions approved for saving accounts? or do i literally put cash in my mattress?

nice to meet you pattimomma smile.gif
post #34 of 155
Thread Starter 

I use a credit union and not a cash envelope system but many DR followers literally put cash in an envelope. You should do what is right for you. I'm right there with you. I'm actually putting my debt snowball on hold while I borrow $300k for a house. Seems really backwards but it's what I'm doing because it's what works for me. I hope the book is helpful for you, I really benefited from reading it.

post #35 of 155

Vegan mama - I use a credit union for checking and savings.  I also withdraw cash for my groceries and misc. each month (although it is usually "cash back" at Aldi where I use my debit card to get groceries since getting to to the credit union during open hours doesn't always happen).

post #36 of 155

I use a credit union.  I have done cash but it isn't my preference.  It is beneficial in the beginning because it is harder to part with cash, but it is easier to track my spending, if I get behind with keeping my budget current I just log onto my account. 

post #37 of 155

I use a credit union. I don't know why but I can part with cash way easier than I am willing to spend from my accounts. I guess I am backwards but it's what works for me.
 

post #38 of 155
Quote:
Originally Posted by trekkingirl View Post


Pre-Step 1: Get current on your debts and do a budget
0.1 No new borrowing. Ok
0.2 Talk with spouse and get him/her on the same page as you concerning finances. Done
0.3 Do a written budget Done (always did this)
0.4 Temporarily stop all retirement contributions Done
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) Done (never was behind)
0.6 Amputate "toys" (bikes, boats, ATV's etc) to help snowball Don't own any
0.7 Cut lifestyle (Cut cable, cell, extras, eating out) and/or get a second job to raise $1000 EF. Working on it.
0.8 Get current on ALL bills Done (never was behind)

BS1 $1,000 to start an Emergency Fund Working on it
1.1 Chop up/freeze CC's (You have an EF now) Done
1.2 Get Health insurance NOW if in the US Done
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. Done
1.4 Amputate cars that you can't pay off within 24 months Don't have any, owe 10,000 on current car it will be paid off in less than 2 years

BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. Working on it, should be complete by April, except for student loans.

BS3 Three to six months of expenses in savings This looks like the hardest step for me, I will probably start it in April
3.1 Start car replacement fund
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.
3.3 Start furniture or other non-essential stuff replacement fund

BS4 Invest 15 percent of household income for retirement

BS5 College funding for children

BS6 Pay off home early

BS7 Build wealth and give! Invest in mutual funds and real estate

 

post #39 of 155
Thread Starter 

I just realized that since starting my total money makeover I have taken out a $5000 loan to buy an RV, paid off a credit card (actually two but the following week my transmission went out and had to recharge another $4k) and now I'm buying a $269k house by borrowing more money. Despite sounding like I'm actually getting deeper in the hole I actually feel like I am getting somewhere. Weird, huh?

 

If you didn't figure it out from that last statement, we did finally get an accepted offer on a house today. We originally wanted a $250k house and we are ending up with a $269k house so I'm pretty happy with that. DH is going to look at it Friday to finalize the deal. He hasn't seen it yet but I think it's a really good property for us.

 

and now, for some dancing vegetables!

 

 

 

 

broc1.gif carrot.gif broc1.gif carrot.gif

post #40 of 155

trekkingirl, that is awesome!  A home to live in that is permanent and not on four wheels is a major part of the "Four Walls" that Dave Ramsey talks about.  I am so excited for you!  I know it has been a long road to get to this home.

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