I have started to learn more about Dave Ramsey's methods to being debt free and gaining wealth. At first, I wanted to just get our commercial debt down to zero and then work on everything else as it went (this included jumping into a home purchase). Well after doing some thinking (and watching lots of debt free screams on the Dave Ramsey Youtube page), I have decided that D and I will be working to become completely debt free.
The first step in Dave Ramsey's process to be debt free is to get a $1,000 emergency fund.
Second step is to pay off all debt with a "gazelle" intensity (I feel this more than D).
Third step (part A), save a 3-6 month emergency fund.
Third step (part B), save a 10-20% down payment for a house.
As of right now we have:
1 car lease (36 monthly payments to be completely paid off by February 2019)
1 car loan (36 monthly payments to be completely paid off by February 2018)
2 credit cards
9 student loans (each with 120-124 month payments which started February 2016)
My goal for us, with some sweet talking to the husband to get him more on board, is:
2 credit cards paid off by October 2016
Car loan paid off by March 2017
Car lease paid off by June 2017
All student loans paid off by December 2019
After this goal is completed (which is step 2), I want us to continue his steps!
Sunday, May 8, 2016
Wednesday, December 2, 2015
Long Time No See
Well, I have not posted in quiet some time. 2015 has given us a wonderful wedding as well as my step-son living with us full time! I could not be happier! As it comes with finances, we have paid of D's car completely! He was so surprised when I sent the last payment! It was funny to think that he couldn't believe that was possible. It made me feel amazing to get to mark that off the list!!
So right now we have my credit card to pay off with approx $8500 on it. My car also has a balance of $8,600 on the loan. After that we have my student loans at about $33k. However, with us trying to add to our family we are going to focus on some other things first.
To start, we will be creating an emergency fund. I have us putting back $15,000 in an emergency fund. I came up with this number by multiplying our regular outgoing costs by 3 (to have 3 months of finances in case something where to happen), that makes $2,550 x 3= $7,650. Then I thought about possible medical expenses, $25 PCP copay, $30 ICC copay, and $35 specialist copay. I multiplied each number by 4 and added a personal deductible ($2500) puts us at $2,860. Then our vehicle deductible is around $1500 a car, well we have two of those so that makes $3000.
$7,650 + $2,860 + $3000 = $13,510
After that, I rounded to a nice pretty number. Now the key for me here is to make sure that I only pull out the appropriate amount for the emergency. So lets say we get to add to the family next year, I no longer have any money left in our HRA and I still have $5,500 of my hospital stay to pay for out of pocket. That means I could only put $2,860 directly towards that bill, since there is an additional $1,490 in the emergency fund I can put that down for that too. That would leave me with $1,150 balance. I can do a payment plan at this point or use our excess money after our bills are paid to pay this down. Once this is achieved it is key to build the emergency fund back up.
The reason I want to only use that amount instead of just paying off the complete bill is because of one week in particular. One Monday in September I got the phone call that made my home complete, my step-son would be coming to live with us. This was amazing news since we would not have to continue in court, thus incurring more legal fees. That following Wednesday, I had to take a trip to the ER for some tachycardia. That Friday I then had a fender bender in the husband's car. So I am a little gun-shy to put all of my eggs into one basket.
So as much information that I just gave you, I want it to be known that our current financial priorities are going to be:
1. Pay of credit card
2. Emergency Fund
3. Purchase a home
4. Pay off Courtney's car
5. Pay off student loans
Ill have an update soon as to how things are going!!
So right now we have my credit card to pay off with approx $8500 on it. My car also has a balance of $8,600 on the loan. After that we have my student loans at about $33k. However, with us trying to add to our family we are going to focus on some other things first.
To start, we will be creating an emergency fund. I have us putting back $15,000 in an emergency fund. I came up with this number by multiplying our regular outgoing costs by 3 (to have 3 months of finances in case something where to happen), that makes $2,550 x 3= $7,650. Then I thought about possible medical expenses, $25 PCP copay, $30 ICC copay, and $35 specialist copay. I multiplied each number by 4 and added a personal deductible ($2500) puts us at $2,860. Then our vehicle deductible is around $1500 a car, well we have two of those so that makes $3000.
$7,650 + $2,860 + $3000 = $13,510
After that, I rounded to a nice pretty number. Now the key for me here is to make sure that I only pull out the appropriate amount for the emergency. So lets say we get to add to the family next year, I no longer have any money left in our HRA and I still have $5,500 of my hospital stay to pay for out of pocket. That means I could only put $2,860 directly towards that bill, since there is an additional $1,490 in the emergency fund I can put that down for that too. That would leave me with $1,150 balance. I can do a payment plan at this point or use our excess money after our bills are paid to pay this down. Once this is achieved it is key to build the emergency fund back up.
The reason I want to only use that amount instead of just paying off the complete bill is because of one week in particular. One Monday in September I got the phone call that made my home complete, my step-son would be coming to live with us. This was amazing news since we would not have to continue in court, thus incurring more legal fees. That following Wednesday, I had to take a trip to the ER for some tachycardia. That Friday I then had a fender bender in the husband's car. So I am a little gun-shy to put all of my eggs into one basket.
So as much information that I just gave you, I want it to be known that our current financial priorities are going to be:
1. Pay of credit card
2. Emergency Fund
3. Purchase a home
4. Pay off Courtney's car
5. Pay off student loans
Ill have an update soon as to how things are going!!
Sunday, July 27, 2014
IRAs
So D cashed out his IRA, it wasn't a lot of money (approx. $1800) but we got to use it towards debt! The reason we decided to do this was the day I told him we had gotten his collections debt down a significant amount! Well, low and behold, we come home to another collections account for around the same amount... that was a hard blow and I felt a little defeated. So we decided to go ahead and cash it out (since it was through our banker, it was a quick transfer and we will pay the taxes on it come tax return season in 2015). We sent the bulk amount to the new collections account, so we wouldn't have to worry about setting up a payment plan with them, then we sent the rest to that initial collection account and we are going to be able to pay that totally off next month!!
It's good to know that we are a step closer to being debt free, but once a pay increase comes around (or when our debt is payed off), we will definitely be contributing more into our retirement plans to help recover that money.
In the mean time I still totally have house fever, and it is driving me crazy. I just need to reset our goals and make sure that we have those set in our mind whenever we make any purchase!
It's good to know that we are a step closer to being debt free, but once a pay increase comes around (or when our debt is payed off), we will definitely be contributing more into our retirement plans to help recover that money.
In the mean time I still totally have house fever, and it is driving me crazy. I just need to reset our goals and make sure that we have those set in our mind whenever we make any purchase!
Saturday, July 5, 2014
Attorney's
We are starting to see the light at the end of the tunnel with our legal situation. And it looks like, for now, out costs will not be as high as we had thought. Due to this we will be shoveling all our excess into our first, most important debt. The collections account D has. With this being paid off he can finally start to see his credit actually bounce back! Though I continue to think, when will all of these puzzle pieces fit together for us to have our perfect financial peace? A couple things I have to remind myself:
1. I am 23 (turning 24 this month), fresh out of college... Things take time. There is no possible way I am going to take the elevator up the corporate ladder at my company, it's just not feasible. Work hard at what you do and that will show to others and help to further your position!
2. Don't compare yourself to your parents! They are about 30 years older than you! They have been in the workforce for that much longer (see above as to how hard they worked and how long it's taken them to get there).
3. Don't compare yourself to your friends. They may not have debt, they may have a home, they may have the beautiful children you hope for in the future. But each of these friends does not have the same financial situation you have. Focus on your successes and the steps you need to make to better yourself.
Now to plan for this wedding! We have planned on September 2015, and have started collecting glass jars and containers to decorate with! Thank goodness I'm crafty!
1. I am 23 (turning 24 this month), fresh out of college... Things take time. There is no possible way I am going to take the elevator up the corporate ladder at my company, it's just not feasible. Work hard at what you do and that will show to others and help to further your position!
2. Don't compare yourself to your parents! They are about 30 years older than you! They have been in the workforce for that much longer (see above as to how hard they worked and how long it's taken them to get there).
3. Don't compare yourself to your friends. They may not have debt, they may have a home, they may have the beautiful children you hope for in the future. But each of these friends does not have the same financial situation you have. Focus on your successes and the steps you need to make to better yourself.
Now to plan for this wedding! We have planned on September 2015, and have started collecting glass jars and containers to decorate with! Thank goodness I'm crafty!
Monday, June 16, 2014
Wedding Bells
Oh wedding bells are ringing for D and I. He proposed yesterday and I could not be happier! The only concern, of course, is finances. Things are still a little tight due to legal issues, and we are moving to a 2 bedroom in our apartment complex. So our budget is being stretched, to say the least! We are currently making a little more than minimum payment, but not much more. I am just ready to get it all gone, because I now have wedding on the brain and the costs that will incur, as well as now more than ever I want us to get into a house to make it our home!
A few things I plan on doing for sure to reduce costs with my wedding (which we are planning for august/september of 2015) is:
1. My mother is making my wedding dress. My mother is a wonderful seamstress, and offered to do this for me many years ago She made her own wedding dress and she wants to incorporate some of that into hers!
2. Reception at my grandparent's house. My family is very important to me, so having it at a family house cuts down on cost and keeps it personal. I also want to have the ceremony there as well, but haven't asked yet, so hush on that for now ;)
3. A small-ish bridal party. I will have 3, maybe 4, bridesmaids. I don't have the willpower to deal with 5-10 ladies complaining about something they don't like. Hush, it's my day!
4. My Aunt is going to be growing my flowers! She is like wonder woman with plants (like a super-green thumb for sure!) so I am recruiting her to do a lot of that!
I will keep everyone up to date on my wedding plans and how my debt is looking. No more, only less!
A few things I plan on doing for sure to reduce costs with my wedding (which we are planning for august/september of 2015) is:
1. My mother is making my wedding dress. My mother is a wonderful seamstress, and offered to do this for me many years ago She made her own wedding dress and she wants to incorporate some of that into hers!
2. Reception at my grandparent's house. My family is very important to me, so having it at a family house cuts down on cost and keeps it personal. I also want to have the ceremony there as well, but haven't asked yet, so hush on that for now ;)
3. A small-ish bridal party. I will have 3, maybe 4, bridesmaids. I don't have the willpower to deal with 5-10 ladies complaining about something they don't like. Hush, it's my day!
4. My Aunt is going to be growing my flowers! She is like wonder woman with plants (like a super-green thumb for sure!) so I am recruiting her to do a lot of that!
I will keep everyone up to date on my wedding plans and how my debt is looking. No more, only less!
Tuesday, May 20, 2014
Hospital Bills
I feel like when we get one step out of the hole, someone pushes us 3 steps back down! We got an old rental debt paid off AND I got hospitalized... it was something I was not expecting, but who expects those things other than pregnancies). Thankfully it was nothing too emergent, I was released on my 3rd day, and all of my labwork is back to normal! The positives I am taking from this experience is:
1. I am healthy
2. My experience was amazing, and I am so glad I work within the healthcare group I went too!
3. My deductible is now met (woop woop for 10% co-insurance!)
4. I know D is the one, since he stayed with me through thick and thin!
So, we got one debt paid, and accrued another :( and at the moment we are not able to put our excess money towards our debt due to other circumstances, but we are still making payments on time. If the Lord brings us to it, He will bring us through it!
1. I am healthy
2. My experience was amazing, and I am so glad I work within the healthcare group I went too!
3. My deductible is now met (woop woop for 10% co-insurance!)
4. I know D is the one, since he stayed with me through thick and thin!
So, we got one debt paid, and accrued another :( and at the moment we are not able to put our excess money towards our debt due to other circumstances, but we are still making payments on time. If the Lord brings us to it, He will bring us through it!
Sunday, April 27, 2014
2 More...
So circumstances required us to take on another piece of medical debt, but I like D with his 3 front teeth. So we had to do what we had to do. Thankfully, we were ever so blessed by God to go to a periodontist that his grandfather knows (he's a big time dentist outside our city) so we got it AT COST! Saving us $2k, and he is willing to take payments, so we are going to put his debt in with our snowball and try to pay it off as soon as possible to show that we do appreciate him performing this service.
Now on to the second piece of debt we have incurred upon ourselves. This one was not a necessity, but a want. It is at 0% financing for 24 months, and as a gift we have gotten help from my parents. This will be the last item (other than a car or home) that I want to finance anything. Even with the car, I only want to have to do that with our next vehicle purchase. I want to save, save, save to be able to pay in full from now on and not have any more car payments!
We are still plugging away on our debt, and I am currently reading Dave Ramsey's book Financial Peace, which has calmed down my house fever (do I need a house right now or am I wanting a home right now because I know a lot of people my age currently getting homes?). For us right now, we will be better apt to wait on a home. And I would honestly prefer to be debt free before getting into a mortgage.
Till another time! Thanks again for reading my ramblings, I hope that knowing we are going through something similar to so many other Americans will help you to realize you can make changes like we are! Good luck!
Now on to the second piece of debt we have incurred upon ourselves. This one was not a necessity, but a want. It is at 0% financing for 24 months, and as a gift we have gotten help from my parents. This will be the last item (other than a car or home) that I want to finance anything. Even with the car, I only want to have to do that with our next vehicle purchase. I want to save, save, save to be able to pay in full from now on and not have any more car payments!
We are still plugging away on our debt, and I am currently reading Dave Ramsey's book Financial Peace, which has calmed down my house fever (do I need a house right now or am I wanting a home right now because I know a lot of people my age currently getting homes?). For us right now, we will be better apt to wait on a home. And I would honestly prefer to be debt free before getting into a mortgage.
Till another time! Thanks again for reading my ramblings, I hope that knowing we are going through something similar to so many other Americans will help you to realize you can make changes like we are! Good luck!
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