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Getting Out Of Debt In January 2013! - Page 5

post #81 of 155

Thanks everyone!  It does feel amazing!! Now all I can think about is what to do next, more toward mortgage & set up Roth IRAs, Dh start contributing to his 4O1K again, all while simultaneously saving 3-6 month EF....Seems to make the most sense to me.  Because they are all important but it is not baby step style alla DR. 

 

I keep trying to figure out if there is a way that I can fully fund a 2012 Roth for myself by the cutoff date of April 15.  Because I understand the sooner that we start the better.  I'm thinking that if we get our taxes done early & continue to pay the car loan minimum that I might be able to do it.  It is something that I have wanted to do for years and I think mentally will give me a feeling of security.  It would  the make us postpone paying off DH's vehicle loan for a couple of months but we can't ever get back the option to start in 2012 after April 15, YK?  THOUGHTS??? 

post #82 of 155

There is not a tax advantage for ROTH IRA (from my understanding), so I'm not sure it matters if you put current money into a 2012 ROTH IRA.   The sooner you invest money the better, but you can't "retroact" investment earnings.  If you were putting money into a traditional IRA then you could allocate it to 2012 and then when you do your taxes it will go towards lowering your taxed earnings.


Edited by SunRise - 1/17/13 at 10:02am
post #83 of 155

Yes, Sunrise that is my understanding as well.  However there is a cap of $5000/person/year.  So if I don't start it by April 15 (for 2012) I will miss the opportunity to contribute $5000, I can then contribute another $5000 in 2013.  Make sense?  I just feel since I'm in my mid 30's and have nothing other than my $1000 EF, (DH has a 4O1K)  that I really want something for retirement asap!      

post #84 of 155

Ah, I get it, the goal is to have 10,000 in it before the end of 2013. Yes, good idea.  Makes sense.

Roth is good to use as an EF too, since one can withdraw principle without penalty.  I started an ira 2 years ago and I do like the sense of security it gives me and that Im doing something financially responsible!

 

A side note, I did notice in my (traditional) IRA account that I am able to save 5500 in year 2013, so I am assuming the amount has gone up.

post #85 of 155
Thread Starter 

Cookie Pie you rock! I'm glad I'm not the only one that loves those dancing veggies....

 

 

So after much concideration, I'm pretty sure I'm not going to take the house. I think my realtor must be totally fed up with me. It took us about 45 offers to finally get an accepted one. The problem is that it needs so many repairs. I really don't think I make enough money to pay my mortgage plus take care of all the repairs it needs. What do you wise ladies think I should do?????????????????????

post #86 of 155
Unless you have the time, money and knowledge to do a REALLY good job on repairs or the money and connections to hire out, I'd walk.

All houses will have upkeep and money that you need to spend and repairs you need to do as you go, but for every repair you know about or can see, there is probably at least one more you don't know about or have overlooked.

We own two houses. An older house that was an "easy" (floors/paint/fixtures) project that only got "finished" because we were moving and we couldn't sell it so rent it and it's still costing me repair money :S and our 6 year old house that was in "move in condition" and now that we've been in it 6 months or so I'm noticing stuff that needs to be done on top of the few things we knew about the day we moved in wink1.gif

So I wouldn't take on something you know you can't afford to fix already, there will be enough projects in house that doesn't seem to need anything... It will come along!

Before we bought this house we had an offer on another and I didn't see it at first, we put in a super low offer based on my husband and friend seeing it and pictures I had and it was turned down. We walked and when I was able I went and saw it (was 900miles away) and realized how much more work than originally thought and didn't even think about putting in a second offer!
post #87 of 155

I did our long term budget today and figured out that we will pay off our CC in August of this year and the van by July 2014..then we will be 100% debt free! Now just to keep on budget, it's a tight one which makes it hard but I so want to be debt free!

post #88 of 155
Quote:
Originally Posted by micah_mae_ View Post

I did our long term budget today and figured out that we will pay off our CC in August of this year and the van by July 2014..then we will be 100% debt free! Now just to keep on budget, it's a tight one which makes it hard but I so want to be debt free!

AWESOME!!

Quote:
Originally Posted by trekkingirl View Post

Cookie Pie you rock! I'm glad I'm not the only one that loves those dancing veggies....

 

 

So after much concideration, I'm pretty sure I'm not going to take the house. I think my realtor must be totally fed up with me. It took us about 45 offers to finally get an accepted one. The problem is that it needs so many repairs. I really don't think I make enough money to pay my mortgage plus take care of all the repairs it needs. What do you wise ladies think I should do?????????????????????

I hate to say it, but I'm thinking "walk" also. If you're going to be that tight or even over on your budget, I think that it would just be way too much stress to go through for years and years.

post #89 of 155

Thanks!!!  DH brought home his 4O1K forms and we have to sit down and look at them!!!

 

I realize it is a different market now, than when we purchased our home, but after our home inspection we negotiated the seller fix certain things that the inspector found.  We also got money kicked back to us for a brand new heating system.  We never thought that they'd agree to all of those terms, but they did.  Apparently we were the only offer on this house!   

post #90 of 155
Thread Starter 

thanks for the responses. here in the bay area there are about 20+ offers per property and it took me about 45 offers to finally get an accepted offer on this property. That's why I am so scared to walk away. The house is owned by fannie may so it's a REO and they won't even replace the cracked windows! So from what I can see it needs a new roof, new windows, a new kitchen, and eventually two new bathrooms. Also they put linoleum over the kitchen and living room floors and you can see the ripple where the two floors used to be divided. So basically they didn't bother to remove the old floor before putting down the linoleum. In the back yard it needs new fence on all three sides plus two sheds removed. Also I lost all my furniture because my storage had a rodent infestation. So I also need all new furniture! Oh and the central heat unit is 20 years old, not sure how long those usually last.

 

and we found signs of rats and possible mold.

post #91 of 155
Quote:
Originally Posted by veganmama44 View Post

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?

 

It's not exact, but you can get an idea of your credit score (for free) at Credit Karma:

http://www.creditkarma.com/

 

You can also get a free copy of your credit reports.  Make sure everything is correct before you go any further.

 

Personally, UNLESS you have had credit card issues in the past, I would get a credit card for emergency purposes.  Savings is good for your bottom line but won't directly effect your credit score.

 

Quote:
Originally Posted by orangemomma View Post

 I am new to DR -so somebody jump in and correct me but, I would think that you would keep saving for these items; car maintenance etc. These are expenses that you know are going to occur at some point down the road - so budget for them.

Otherwise, if you don't maintain your car, it will break and then you will need to dip into your EF.

 

Yes (not a DR follower, but have read a couple of his books). Those are called "sinking funds" and they should be part of your day to day budget.  Like you said, otherwise you'll be dipping into your EF fund for planned, not emergency, expenses.  If sinking funds don't fit into your budget, then your budget doesn't actually "work."

 

Quote:
Originally Posted by CookiePie View Post 

 

Now as we proceed with DR's steps, next in line is to pay off vehicles, right?  We have one that is almost paid off (if I snowball it, it will be paid off in about 2 months) and the other vehicle is on a 0% interest loan.  So do I really have to payoff both vehicles before I start to really save?  I'm inclined to payoff first vehicle and split the snowball amount in half to payoff car faster and to begin save 3-6 months of expenses and start funding Roth IRA's for both of us.  Looking for some guidance on this as I'm feeling a bit torn!

 

Personally, I would only pay of the vehicle with interest before starting on the 3-6 months expenses.  The 3-6 months of expenses could be used for *anything* (you could decide, at any time, to pay off the car for example but you could also use it in an emergency).  You have to remember that Dave Ramsey's steps aren't the most financially astute way of becomming financially stable--- they are the way that work best (?) for people who have had problems with money in the past.  If you will keep to the plan without sacrificing the interest savings, that is better financially (for example, just looking at money it is best to pay off debt from highest to lowest interst.  DR  has found that people are more motivated, and more likely to succeed, if they do it in order of smallest to biggest debt.  If you'll actually do the first, it's "better" but many people won't so the 2nd becomes the better option).

 

Quote:
Originally Posted by micah_mae_ View Post

Here's a question for y'all..if you have multiple savings accounts for different things do you count them all as your Efund or do you do it separate? For example our savings, the kids savings and our "Christmas fund" are all separate from our emergency fund but technically we could borrow from those funds any time. So if you had $1000 spread across these accounts would you move on to baby step 2? Or would you wait until you have $1000 in a dedicated Efund account?

 

I would wait until the $1000 was in the dedicated Efund account.  The Christmas fund would be considered a sinking fund.  Just like I wouldn't rely on the money I was saving for my property taxes or car repair to help in an emergency, I wouldn't count on *any* money that I had already specifically budgeted towards something.  I'm now at a point I might revise that decision, though--- simply because I have many sinking funds set up and the likelihood that ALL of those emergencies would happen at once seems very unlikely.

 

Quote:
Originally Posted by CookiePie View Post

 

I keep trying to figure out if there is a way that I can fully fund a 2012 Roth for myself by the cutoff date of April 15.  Because I understand the sooner that we start the better.  I'm thinking that if we get our taxes done early & continue to pay the car loan minimum that I might be able to do it.  It is something that I have wanted to do for years and I think mentally will give me a feeling of security.  It would  the make us postpone paying off DH's vehicle loan for a couple of months but we can't ever get back the option to start in 2012 after April 15, YK?  THOUGHTS??? 

...

However there is a cap of $5000/person/year. So if I don't start it by April 15 (for 2012) I will miss the opportunity to contribute $5000, I can then contribute another $5000 in 2013. Make sense? I just feel since I'm in my mid 30's and have nothing other than my $1000 EF, (DH has a 4O1K) that I really want something for retirement asap!     

 

Personally, I would invest in the Roth.  Until you can get the vehicle loan paid off, though, you might want to keep the funds invested in something more conservative than you would otherwise so you can treat it as an extension of your emergency fund (since contributions can be withdrawn, tax and penatly free, at any time).  I know I felt *really* good when we finally had our Roths set up and you're right--- you can never get that tax-protected savings space back once the time has pased.

 

 

 

Roth is good to use as an EF too, since one can withdraw principle without penalty.  I started an ira 2 years ago and I do like the sense of security it gives me and that Im doing something financially responsible!

 

A side note, I did notice in my (traditional) IRA account that I am able to save 5500 in year 2013, so I am assuming the amount has gone up.

 

I'm trying to shift my thinking towards considering the Roth as an EF.  It makes logical and financial sense, I just need to be able to feel it, kwim.

 

And yes, the maximum (for people under 50) for IRAs in 2013 is 5500.  The maximum for 401(k)s has also gone up to $17.5K

Quote:
Originally Posted by trekkingirl View Post

The problem is that it needs so many repairs. I really don't think I make enough money to pay my mortgage plus take care of all the repairs it needs. What do you wise ladies think I should do?????????????????????

 

I'm sorry you're facing that problem.  I have to agree with everyone else, though--- I'd pass.  If you already know you can't afford it, it's only going to get  harder.  You WILL get there though.

 

 

 

Thanks for all the inspiration guys!

post #92 of 155

TiredX2~ That was a very thoughtful and helpful post!  I really appreciate it!  I did modify the way that we went about using DR method.  For instance we paid the highest to lowest interest credit card rather than smallest amount to biggest. 

 

DH & I have been discussing our options and have decided to attempt to fully fund a Roth for myself for 2012.  We are also going to start contributing to his 4O1K again to get the company match (now that they are matching again) enrollment is this month so we lucked out!  Then we will down his vehicle loan, then start a Roth for DH and get our EF up to 3-6 months.  Also want to pay extra towards mortgage payment, it is a little bit overwhelming to think about, but in a good way I guess!  We are in better shape than we have ever been with our finances now we just have to continue that momentum.

 

I spent a couple hours on Mint.com today getting our accounts updated and re-organizing the budget.  It didn't record all of our transactions over the last year & I had such issues getting it updated every time that I logged on that I gave up.  Well now we are in business and hopefully if won't give me such grief and I can use it instead of my notebook method which I keep getting behind on now that I'm working more!

post #93 of 155

orangemomma, the first 2 meetings have been great- the first meeting was on savings and tonight was about relating - so far there hasn't been any new material.

 

trekkingirl, I would agree with all the previous posters about walking away from a house that has too many repairs for the amount of mortgage payment, utilities, and just general upkeep.

post #94 of 155

I'll join here! We are in a Financial Peace University class at our friends church right now. We have class #3 this coming Tuesday. Luckily we aren't too bad in the finance dept, we just don't have a lot of cash flow to work with. We have $4000 of car loan and I think $100,000 of mortgage. We were doing Dave Ramsey for a while but had an emergency car issue that ended up with us financing part of a car, then we also financed new carpet which wasn't a need but a strong want. ha! We got that paid off in Dec though.

post #95 of 155

Hey everyone! I haven't been on a MDC for a bit, but I haven't fallen off the bandwagon. I actually have a question for ya'll. (cross posting in the main forum too)

 

So about a year and a half ago, I made a bad car decision. I was pregnant with our second and decided that I needed to sell my 2003 Mitsubishi Lancer and buy a minivan. I just wanted more space. So I sold the Lancer for 4K and bought a 2003 Ford Windstar for 3.9K. Sounds like a good idea, but it turned out that the Windstar was a complete piece of crap. Within a few days the check engine light turned on (500 to fix the vacuum system) and then the brake and ABS lights started going on and off (haven't fixed that). We fixed an oil leak and now there's already another one. There's a wheel baring that needs to be replaced immediately too. That's not even counting the more cosmetic things of the passenger "door open" sensor being stuck so it always thinks the door is open, the radio fading in and out as you drive, and the DVD player having a short. Including the maintenance catch-up we did in the beginning, we've spent well over $1000 on repairs to this car and there's more coming. I made a very, very bad decision in buying this. None of this is even accounting for the fact that this van has such bad gas mileage that I spend twice as much to drive it, and therefore my husband drives it his short distance to work instead (so it's not even fulfilling it's original purpose!). We need to get rid of this thing!

 

So I see us as having two options. Either we get an absolutely cheap car, like 1000-2000, and assume there will be some repairs. My friend who has a degree in something to do with cars said that she'll look over any car that we're buying first, so that'll help root out the ones that are about to implode and just get the ones that are old with high mileage. She said that when you have that kind of car that you should expect to spend some money on it a couple times a year to get things repaired, but it's the trade off for not having a car payment. 

 

The second option is to get a bit of a nicer car and have a payment. I really don't like the idea of having a car payment, but I'm tired of always having cars that break down. If I have a car payment (I wouldn't be going for anything over $200 a month for sure), at least it's consistent. Maybe I could have a car that's under 100K miles on it again. It's been a while. Our other car is in really great condition (only previous owner was my FIL and he took great care of it), but it's getting older too (also 2003). It had it's first real repair (beyond maintenance stuff like oil and clutch) just a few months ago. So it would be nice to have one car that's a bit younger (maybe like 2008 or something?) and not be constantly repairing one or the other. Someone on here mentioned owning a Mazda5 and I think that would be great. Or maybe even something with really good MPG so that we're saving money there like a Toyota Prius. Still though, having a car payment stucks. Getting more debt sucks. But does having a car that's constantly breaking down suck more?

post #96 of 155
Thread Starter 

every new car or slightly used car with a car payment has always had just as many problems. Cars just aren't made as well as they used to be.

post #97 of 155

BaileyB, welcome! I hope you are enjoying your DR FPU course right now.  My DH and I are going through it again to keep ourselves on the same page. We went through it last year and it has made a difference in our financial life.  We have paid off over $9000 worth of debt in a year. Feels absolutely great to be closer to being debt free.

 

lactatinggirl, I would keep fixing the minivan until you save your money for the younger, more gas efficient car. Keep looking for someone else who is off-loading their newer car for something that is a "worth it to you" cash payment. I know how much car payments suck - having DH's car paid off in 2014 is something I am looking forward to with great expectation! I think being "car poor" is just as bad or worse as being "house poor".  Life happens and getting your car repossessed because you couldn't make the payments for some reason would be worse than your "have to fix it again and put lots of gas in it" car that you have now.

post #98 of 155
tiredx2, thanks, i did look at creditkarma.com and am now in the process of disputing my car loan., it was from a credit union and its stating that i still owe 9 grand! i have the title! i paid 6 long years to own my car! hopefully this will get cleared up soon and my score will go up a few points. im going to wait til i hear back about this dispute ( with in a week or so) until i apply for a cc ( i need to build my score so that i can get a mortgage, but i will only charge my gas an payoff in full each month).

baileyb, welcomewelcome! sounds like you are doing great. i just finished daves tmm an it really taught me so much!

lactinggirl, car loans are the biggest suck ever. i say stick with watch got until you can upgrade ;p its tough paying for repairs, but nothing is worse than paying interest!
post #99 of 155
tiredx2, thanks, i did look at creditkarma.com and am now in the process of disputing my car loan., it was from a credit union and its stating that i still owe 9 grand! i have the title! i paid 6 long years to own my car! hopefully this will get cleared up soon and my score will go up a few points. im going to wait til i hear back about this dispute ( with in a week or so) until i apply for a cc ( i need to build my score so that i can get a mortgage, but i will only charge my gas an payoff in full each month).

baileyb, welcomewelcome! sounds like you are doing great. i just finished daves tmm an it really taught me so much!

lactinggirl, car loans are the biggest suck ever. i say stick with watch got until you can upgrade ;p its tough paying for repairs, but nothing is worse than paying interest!
post #100 of 155
Thread Starter 

baileyb  I remember you from my DDC feb 2011

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