It's July and we're getting out of debt with DR - Page 3 - Mothering Forums

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Old 07-10-2009, 05:01 PM
 
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ahem. I am going to have to do some creative rebudgeting.
My SIL came to visit and brought her two black labs who are extremely old (14 and 16 years). One can barely walk so often didn't signal a need to go out until too late and the other has a leaky bladder issue. They were here for a week and left yesterday. She did her best to clean up after them....but....I had the carpet cleaners show up today. House looks and SMELLS great : I just have a thing about nasty carpets. I can cover the expense, but it makes the rest of the budget way tight
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Old 07-10-2009, 08:20 PM
 
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Ho-hum, ho-hum.

I've had zero movement so far this week. We took a planned family trip last week, so that left nothing extra, and this week we're paying for some concert tickets we committed ourselves to months ago (crap!). Next week, I should be able to get moving again.
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Old 07-11-2009, 12:23 AM
 
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$20 a year? What kind of internet phone is that? I thought mine was cheap at $30 a month.
Its called magicjack. You have to leave your computer on all the time if you want to recieve calls. You hook a device up to your computer and it runs through your phone line. So far it's been awesome, except dh and I keep shutting off the computer to save electric costs... but at least we can call out whenever we want!

Wife to - Mama to DS 6/08 and DS 9/11
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Old 07-11-2009, 03:02 AM
 
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Routine car maintenance put me back $800 this month. Grrrrr

Akie, single mom to M (02/18/06), E (08/04/07) and Z (06/22/09)
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Old 07-13-2009, 01:27 PM
 
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We have been trying to do DR for 2 years and I always find excuses. Well we just had to buy a minivan for safety reasons and I told dh we wouldn't get it unless we became serious and did DR. So here we are.

Pre-Step 1: Get current on your debts and do a budget
0.1 Commit to NEVER borrow $$$ again - Done - really really Done with this one!
0.2 Talk with spouse and get him/her on the same page as you concerning finances. Done
0.3 Do a written budget Been doing this for years just need to get serious about the other parts
0.4 Temporarily stop all retirement contributions Cannot do this - dh's work requires it - I mean you can not opt out or anything - it is crazy
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing)Done
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months We don't have any big toys - just some small ones that we have already listed on craigslist
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. Will have EF by 60 days if not a lot sooner
0.8 Get current on ALL billsDone - Just need to get EF and then move on to the next step
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Old 07-13-2009, 01:44 PM
 
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We're joining now. Baby Step 1.

The pre-steps have always been done, we've never had a problem with those. We have a budget and we stick to it pretty well (the only thing we're not great on is sticking to our food budget, but that ends now). We have no credit card debt. Which is probably why it took us so long to see how deep in the hole we are. We always figured we were ahead of others. We started putting money in our retirement in our mid-20s. Paid off our previous car in 2 years instead of 4. Our yearly spending on haircuts is $0, for clothing is $0, for DVDs is $0. We have no cable and not even Netflix (just borrow movies from the library for free, that's it). We are sooooo frugal, right?

But we are soooo in the hole. We have $23k in student loans (down from $26k, oh, 7 years ago - in other words hardly touched). We have $7k left on our current car, which we only prepaid just a little unlike our previous car. And $107k on a mortgage. Sigh. We are deep in the hole.

I regret buying the car we did, though the car is actually great. We didn't buy it for prestige but strictly for reliability and good mileage etc. All the responsible reasons. And the reasons were really good. Only we couldn't afford to buy that car. We thought about buying a $1.5k clunker but ultimately chose the car we got. I am thinking that selling it would not be smart, but I don't know. We can pay it off in about 18 months so probably doesn't make sense? I've considered just not having a car at all, for a while at least, but we would have no way to get to our CSA farm to pick up our groceries for the rest of the year.

Rather than being excited about the DR pledge, I'm really bummed. Admitting we're in terrible shape is not easy, since we had this self-image of being SO GREAT with our money. Probably we USED to be good with our money, but since having a house and a kid that just went out the window. Hardly anything goes into retirement anymore (seriously, like $25 a month I think). We get excited if we send $10 extra on our car. That's how bad we've gotten. We just really blew it

I know DR says everyone should get their $1k EF in less than a month, but we have to save $450 more to do it and I don't know how in the world we can do that in a couple of weeks. Obviously we'd have to sell something but I don't know what. We already live frugal lives. DH does have a cell phone, but it costs him $8 a month and I think it's worth that for the safety value. I have no cell phone. We have no landline phone and pay only another $8/month on a VOIP line for the house. My point is, we've long since done all the stuff to trim our lifestyles, and I just don't know how to go forward. The one thing I did think of was we can sell my coin collection but I have no idea how much (or little) it will net us. Guys, we don't even have a sofa.

Sigh, I should be elated to start this but I'm really not. Which probably doesn't spell well for our success. By every calculation we will be far, far behind everyone else, it will take us probably twice the time for us to do every step (and probably more, for the 1st step - I don't know how to come up with $450 in less than maybe 3 months). I still want to do them - hell, I don't want to be enslaved forever - but it's just really daunting.

Homeschooling mama to 6 year old DD.

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Old 07-13-2009, 02:10 PM
 
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laohaire - I can understand where you are coming from. We are pretty frugal and have always lived by a budget. But when we realized we had too much stud loan debt and the mortgage, we decided to start DR. The problem we have is that we don't have any huge amounts to be discovered to save each month - no $5 a day latte that we can give up to save $150/month. So it is frustrating. It will take us longer than average to save the EF and to get started paying more toward our debt. I was really frustrated last night with this but woke up this morning realizing that this is my life and if it takes us a little longer than other people - so what - at least we are still getting on a plan to make our lives financially better. Most people don't even have a plan. So yes we aren't going to get there as fast as the others that have joined the DR plan - but we are going to get there faster than the majority of the people in this country who never save and just keep getting deeper in debt.

Set your goals in writing - and post them where you keep the motivation to do it. And maybe focus less on the "timeframe" that Dave suggests and focus more on the fact that you have realized things need to change and now you are changing them and in the long run your life will be so much more peaceful financially.

Oh and I wanted to tell you that DR plan really is geared more for those that have never done a budget and don't even know where to start. But that doesn't mean that you can't tailor it to your situation and just use the basic principles to get back on track and get out of debt. Like for us, we don't have a lot of little debts so we will pay off our highest interest rate debt first. But for a lot of people, DR plan regarding debt is awesome!
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Old 07-13-2009, 02:23 PM
 
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Oh and I wanted to tell you that DR plan really is geared more for those that have never done a budget and don't even know where to start. But that doesn't mean that you can't tailor it to your situation and just use the basic principles to get back on track and get out of debt. Like for us, we don't have a lot of little debts so we will pay off our highest interest rate debt first. But for a lot of people, DR plan regarding debt is awesome!
I want to echo this. DR's plan is full of common sense. You already have a budget and live frugally - that makes you that much further along in the plan. You can do this, it may be hard, but it's hard for all of us.

me, 28 & dh, 32.
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Old 07-13-2009, 03:27 PM
 
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Thank you for the previous posts, I really appreciate them. Yes, we're not a latte family.

While DH and I would know what to do without DR, I do like having the instructions all laid out. We used to discuss all the time strategies - oh, here, we have an extra $100, what do we do with it? Pay it toward the car, savings, retirement, what? So while we were responsible we never really had a consistent plan. DR's map seems as good as any, so it's nice not to have to keep discussing every step.

DH hasn't read/listened to DR yet but he's totally onboard for being ultradisciplined about money again, so that's good.

Homeschooling mama to 6 year old DD.

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Old 07-13-2009, 05:18 PM
 
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It seems like a read or heard Dave Ramsey say you could do a $500 Emergency Fund instead of $1,000 at first if you were below a certain income or something. Anybody know what I'm thinking of?
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Old 07-13-2009, 05:39 PM
 
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Yeah, he does say that for people with incomes under a certain amount - maybe 20k or 24k or something.

Our income is 42k (gross) but I guess we've managed to have a lifestyle that exceeds our income anyway, even living frugally. It's just the big stuff that's got us - mortgage, student loans and the car.

Good news is DH mentioned (I had totally forgotten) that we had some savings in other currencies : so we are discussing converting some or all of it back into dollars to deal with step 1 and maybe even a bit of step 2. So we might have step 1 almost tackled after all!

Homeschooling mama to 6 year old DD.

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Old 07-14-2009, 03:41 AM
 
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laohaire-Dave says that if you can pay off your car in 18 months then you can keep it. Actually that might be if you can pay off your car and all other debt besides your primary mortgage in 18 months you can keep it. His goal is to get you out of debt in 18-24 months.

I really got our debt snowball rolling by throwing newspapers and I just took the kids with me. Any chance of doing something like that or babysitting etc.?

Homeschooling Momma to DD 8 years old, DS 7 years old, DS born 03/11 by adoptionheart-1.gif , waiting for DD born 07/10 and two furry labs. Wife to my wonderful husband of 12 years.
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Old 07-14-2009, 09:18 AM
 
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Good news is DH mentioned (I had totally forgotten) that we had some savings in other currencies : so we are discussing converting some or all of it back into dollars to deal with step 1 and maybe even a bit of step 2. So we might have step 1 almost tackled after all!
Be careful doing that - you lose money every time you convert money between different currencies because the bank takes a cut. So if you are going to be needing money in that currency, it might not be a good idea to convert to US dollars now.

Mommy to  N baby.gif, born 2/20/12.

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Old 07-14-2009, 11:31 AM
 
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laohaire-Dave says that if you can pay off your car in 18 months then you can keep it. Actually that might be if you can pay off your car and all other debt besides your primary mortgage in 18 months you can keep it. His goal is to get you out of debt in 18-24 months.

I really got our debt snowball rolling by throwing newspapers and I just took the kids with me. Any chance of doing something like that or babysitting etc.?
The way we're rolling now we can pay off the car but not the student loan in 18 months. I've figured what we can do if we DON'T increase our income:

Car paid off ($7) - 17 months
Student loan paid off ($23k) - 51 months

If we don't prepay the student loans, we'd have 128 months left on it as of today, so even though it's too long for DR it's still a pretty accelerated payoff.

That's honestly the best we can do right now assuming we don't increase our income (assuming we don't sell anything, get another job, get a raise that does anything more than meet inflation, etc.). So we should probably think about increasing income somehow as well.

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Be careful doing that - you lose money every time you convert money between different currencies because the bank takes a cut. So if you are going to be needing money in that currency, it might not be a good idea to convert to US dollars now.
Yeah, np, if we convert it we won't convert it back. We will probably at least break even this time given the way the currencies have gone (i.e. US dollar down).

Homeschooling mama to 6 year old DD.

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Old 07-14-2009, 11:34 AM
 
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Oh, and the above scenario also doesn't really work because it assumes our car will be fine for the next 51 months as well. Which of course we are hoping it will but if we have to buy a clunker in the meantime or even have some major work done that will obviously set us back a bit.

Homeschooling mama to 6 year old DD.

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Old 07-14-2009, 11:44 AM
 
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I'm going to join. I'm pre-step 1.

We are Currently behind on Student Loans, cell phone, Direct TV, internet and electric. One month ago I was 3/4's of the way to having an emergency fund. Now my emergency fund is empty, I'm behind on bills, and my CC balance grew. : I should be caught up on all bills by mid August.

PS .7 I don't have a home phone. Internet access is required for my job. We have a contract with Direct TV for another 6 months.

BS #1
1.1 12/1000

BS #2
CC 1 - 477
CC 2 - 1475
CC 3 - 3250
Signature loan - 2092
Car Loan - 15122
SL 3 - 19352
SL 2 - 19399
SL 1 - 24872
I'm almost done with pre-step 1. Only the garbage bill is behind.

BS #1
87/1000

BS #2
CC 1 - 440
CC 2 - 1400
CC 3 - 3250
Signature loan - 2025
Car Loan - 14950

I'm trying to consolidate the student loans and will move them down and pay them after the mortgage. I've paid off almost 350 this month. 22,060 to go.
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Old 07-14-2009, 02:12 PM
 
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The way we're rolling now we can pay off the car but not the student loan in 18 months. I've figured what we can do if we DON'T increase our income:

Car paid off ($7) - 17 months
Student loan paid off ($23k) - 51 months

If we don't prepay the student loans, we'd have 128 months left on it as of today, so even though it's too long for DR it's still a pretty accelerated payoff.

That's honestly the best we can do right now assuming we don't increase our income (assuming we don't sell anything, get another job, get a raise that does anything more than meet inflation, etc.). So we should probably think about increasing income somehow as well.
Have you considered rolling the Student loan to step 6? It looks like the loan is a bit more than half your annual income (you said 42k right?), so it could technically qualify for step 6, if you wanted it to. Have I mentioned this before? Sorry if I have.

me, 28 & dh, 32.
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Old 07-14-2009, 02:44 PM
 
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Have you considered rolling the Student loan to step 6? It looks like the loan is a bit more than half your annual income (you said 42k right?), so it could technically qualify for step 6, if you wanted it to. Have I mentioned this before? Sorry if I have.
Ah, no you didn't. I seem to have missed that in the book. That's certainly a consideration. Fortunately the interest rate on that loan is pit-bottom - I think it's 2.125%. (Obviously that doesn't mean I want to keep it forever, but at least I'm not paying an extra arm and a leg for it!)

Homeschooling mama to 6 year old DD.

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Old 07-14-2009, 04:04 PM
 
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We are back from our vacation and doing well - readjusting to eating at home and cooking again - made super frugal "sushi bowls" last night (sushi rice, toasted nori and seasoned veggies from the fridge and leftover salmon from the night before).

I also had my : of the month where I put a big chunk into savings every month on the 2nd paycheck - gosh it feels good to see those savings #s jump! YAY us

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Old 07-14-2009, 04:54 PM
 
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sorry not to have posted much this month...

still here and doing well...lessened the snowball a tad this month to pay for a tux for my dh (he is a best man in a wedding) and I had to buy a dress.

It's so great to know i can just lessen my snowball a bit this month to cover it as opposed to just sticking it all on a credit card like I would have done before i discovered DR.

I think our bs2 is now down to 6,120 of the original 9,000 (started in March)

me, dh and 2 boys = our family (oh and a cat...who is also a male...lol)
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Old 07-14-2009, 05:17 PM
 
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What do you do about car insurance? Pay a little more overall and pay monthly, or suck it up and pay all in one month so the overall bill is less? Car and motorcycle insurance are due this month, paid car in full, wondering what to do about motorcycle.

Other big things this month that will probably keep me from putting anything into savings this month too, are:

car maintenance estimated to be around $400
car seat purchase $200? depends which one I buy?
preschool tuition deposit $205

Off to make my budget now . . .

check online for sales on good carseats. obviously i know car seats are crucial and quality counts, but 200$ is a lot for a car seat. i know the britax and true fit are good carseats, but check consumer reports, there are other good, safe carseats for less then even 100$. just my 2 cents.
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Old 07-14-2009, 05:23 PM
 
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We have some successes!

We have a $1000 emergency fund and have completely repaid our tax debt and one of our cc's. We have one more cc to go (accrued when there was almost no income due to job loss). And we still have some smaller student loans. But we are more than 2/3 there and dh will be starting a new job : next month.

(We will be a little stalled on the debt snowball as we use only cash to move, etc. but we will get back to it! )

 "Now bid me run, and I will strive with things impossible." (William Shakespeare -- Julius Caesar)

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Old 07-15-2009, 02:04 PM
 
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hi ladies. im a bit late to the game this month, but ****please move me to baby step 2***** yay!!!
so we start baby step 2 with:
medical 1 - $24.66 pd
medical 2 - $96.53 pd
medical 3 - $53.47/169.62
medical 4 - $25/341.61 (min. payment)
medical 5 - $25/395.45 (min. payment)
medical 6 - $50/630.03 (min. payment)
truck (personal) loan - $137/1813.80 (min. payment)
student loan - $174/11,339.53 (min. payment)
car loan - $397/18,201.87 (min. payment)

total debt pd since debt snowball (july09): $982.66

im back to wanting to get a different car. i have been advised to keep the car, trade it in for a used car, and just about everything else under the sun, but i havent made up my mind yet. there is a certified prius that is listed at how much my car is worth, and another that is listed at $5000 less than what mine is worth. so i might go drive those and see if they are what im looking for. it really is the car i wanted from the beginning, anyway.
my husbands truck is giving us heck right now and needs to be fixed, needs new tires, etc. we just put almost $900 into it and it still needs back brakes, e-brake fixed, and the new tires are over $500. dh is working overtime, but when i think about the potential $2000 we will be sinking into the car, it discourages me and makes me want to get him something more reliable.

i have found a place that is about a 45-60 minute commute (each way) from dh's work that is $300 less per month to rent, on top of that it includes heat and water which would save us approx. $162/mo. if we spread out the heating costs throughout the year (so instead of saying its a $200-300 bill 6-7 months a year, we say its $150 every month of the year, and thats if gas prices stay where they are right now) so it is a good deal if we can get in there and dh's vehicle can be reliable. especially during the winter. im going to set up an appointment to check it out this weekend.

budget is kind of getting hammered. dh was out of town the first two weeks of july, so that means he ate out every day. he has a per diem, though, so its covered. i made 3 naughty eating-out trips, as well as us getting sandwiches out 2 times this month. its all covered by the per diem, but it means i have some recalculating to do. same with diaper purchases, a walmart run or two, (budgeted, i just have to see where i stand) and dh has forgotten his lunch a couple times this week which = him eating out. anyhow, with all the extra money we are getting in from mileage, per diem and overtime everything is way more than covered, im just not looking forward to rebalancing the budget.

so... thats me so far this month!
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Old 07-15-2009, 03:12 PM
 
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What do you do about car insurance? Pay a little more overall and pay monthly, or suck it up and pay all in one month so the overall bill is less? Car and motorcycle insurance are due this month, paid car in full, wondering what to do about motorcycle.

Other big things this month that will probably keep me from putting anything into savings this month too, are:

car maintenance estimated to be around $400
car seat purchase $200? depends which one I buy?
preschool tuition deposit $205

Off to make my budget now . . .
Akie - IF you have USAA insurance (which you DO qualify for) there is no difference in price between paying monthly and paying lump sum.

If there is a difference in price, pay it lump sum if you have it in cash, but don't pay cc interest on it that would end up being more than the difference in cost between one time and monthly.

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Old 07-16-2009, 07:21 AM
 
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What do you do about car insurance? Pay a little more overall and pay monthly, or suck it up and pay all in one month so the overall bill is less? Car and motorcycle insurance are due this month, paid car in full, wondering what to do about motorcycle.

Other big things this month that will probably keep me from putting anything into savings this month too, are:

car maintenance estimated to be around $400
car seat purchase $200? depends which one I buy?
preschool tuition deposit $205

Off to make my budget now . . .
If you've already set aside the money to pay the insurance in a lump sum, I'd do that. We pay monthly for about 4 months right now, dividing the bill into 8 paychecks regardless of what the statement says. Starting next month, though, the budget is reconfigured to cut that back a little bit and put the insurance money into our savings account, so it's sitting there and ready for when it comes due next April.

We also budget in car maintenance/new car purchase as a monthly budget, along with upcoming kid purchases. It helps keep us from having unexpected oopsies down the road.....like this month. Our bondo buggy has a repair bill of $600, leaving dh to worry about where we were going to get that until I showed him the budget book and how much was in there to take care of it all. He had seen the car category in the monthly budget, but with such low amounts going in he didn't count on there being much in the account to take care of it. It was a nice surprise for him - and let him see that budgeting does work!
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Old 07-16-2009, 11:53 AM
 
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Just popping in to say hi! (Did i already do this??)

We're still working on our FFEF...we really haven't done much in the way of our TMMO this month or last. I added $103 to our savings this month. That's it. But...I'm due on Tuesday, and so we've been buying everything we need for the baby, etc...having money to do that is great - and it wouldn't be possible without our TMMO!

Sooooo...I had to re-apply for food stamps last week. I got my letter from them yesterday saying we'll no longer be receiving food stamps. That's $355/mo for food that we are losing. My new grocery budget is $260/mo (well, $130 every two weeks) so I'm going to have to really buckle down! No more splurging on junk or $25.99/lb cheeses!! (I'm lactose intolerant - but DH has a cheese tooth, lol).

Anyway, so yeah. Just have to tighten up the budget a bit. We can do it - I have no doubt, it'll just take us longer now! That's $260/mo LESS for our FFEF...poo!
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Old 07-16-2009, 01:08 PM
 
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I can be moved to Baby Step 1 now.

BS1 $1,000 to start an Emergency Fund$200/$1,000
1.1 Chop up/freeze CC's (You have an EF now)
1.2 Get Health insurance NOW if in the US (chances of getting sick w/ major medical bills are larger than that of death)-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 monthsNot applicable. We have one car that is paid for fully
1.5 Consider raising insurance deductables to $500 or $1000 Done

I think building our emergency fund is going to be slow. DH is a full time student and works full time as it is. He is trying to pick up some extra side work though. We have someone that owes us $300 for a website, but he just lost his main job and now doesn't know when he'll be able to pay us. But that money is for the EF whenever we do get it.
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Old 07-16-2009, 02:32 PM
 
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Since I've joined, here I am for the record:

Pre-Step 1: Get current on your debts and do a budget Already done
0.1 Commit to NEVER borrow $$$ again Done
0.2 Talk with spouse and get him/her on the same page as you concerning finances. Already done
0.3 Do a written budget Already done
0.4 Temporarily stop all retirement contributions Already done (sigh)
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) Already done
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months Already done (no toys to amputate)
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. Done, eating out is now officially eschewed and the rest of the lifestyle is already minimal
0.8 Get current on ALL bills Already done

BS1 $1,000 to start an Emergency Fund $970/$1000 - yes we are still scraping up the last $30!!!
1.1 Chop up/freeze CC's (You have an EF now) Don't care what DR says, we don't have a cc problem but using our debit card has cost us $300+ - so our cc stays, for travel purposes
1.2 Get Health insurance NOW if in the US (chances of getting sick w/ major medical bills are larger than that of death) Already done
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. Already done
1.4 Amputate cars that you can't pay off within 24 months Not needed (can pay in 12 months now)
1.5 Consider raising insurance deductables to $500 or $1000 Already done, homeowners and health

So we're $30 shy of moving to step 2

Homeschooling mama to 6 year old DD.

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Old 07-17-2009, 01:39 PM
 
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Finally able to move some money over to my midwife fund!

BS 1.2: Midwife fund - $1075/1800 Woot! I'm more than halfway by now! :

...though I haven't repaid the $100 I had to take of out my EF yet... but really it's all the same if it's all going toward savings and right now saving to pay the midwife off is stressing me out way more than getting that extra $100 back into my EF.
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Old 07-18-2009, 05:16 PM
 
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Quote:
Originally Posted by stellarae View Post
i have found a place that is about a 45-60 minute commute (each way) from dh's work that is $300 less per month to rent, on top of that it includes heat and water which would save us approx. $162/mo. if we spread out the heating costs throughout the year (so instead of saying its a $200-300 bill 6-7 months a year, we say its $150 every month of the year, and thats if gas prices stay where they are right now) so it is a good deal if we can get in there and dh's vehicle can be reliable. especially during the winter. im going to set up an appointment to check it out this weekend.
I'd recommend sitting down to crunch the numbers. Although heat/water included might save you money, commuting that far every day might eat up a lot of that $300/month savings. In addition to your DH commuting, will you need to drive 45-60 minutes to go shopping, visit friends, take your kids to classes, etc.? Gas prices are only going up.

New signature, same old me: Ann- mama of 2 boys and 2 girls, partnered to a fabulous man.
I'm an unintentional weasel feeder and I suck at proofreading.
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