As I posted a couple of days ago - my savings account is now rolled back to $0.
It's sort of a scary prospect. It's scary because if we needed something; I'd be forced to go back to the credit card. The upside is my 0% card from Wells Fargo is 0% on balance transfers AND purchases - so that gives me access to free credit provided of course I can pay it off before the promotional period expires. But the habit of swiping a credit card at this point makes my stomach turn, so while searching the internet for advice, I stumbled across Dave Ramsey and his seven "wealth building" baby steps.
When it comes to radio, I really only listen to NPR so I have no working knowledge of Dave Ramsey from talk radio - but I did google this question yesterday:
Is is better to pay off debt or put money in savings?
The links took me to some forums and eventually I found Dave Ramsey's seven baby steps. And there it was. His step 1 is: put away $1000.00 for your baby emergency fund. I like it. It's enough to cover a failed alternator but not too much to take away from debt butt kicking. So next month's debt reduction will be re-purposed to make sure I have a G in savings - just in case.
2010/08/11
Ready to put August in the history books!
This August has temporarily crushed my debt attack. Here are the mistakes that I made.
1. Not sticking to the cash box budget meant that for the last few months, we've once again began living beyond our means.
2. Related to number 1: we've dipped in to savings to bridge the spending gaps and now savings is zero!
3. I switched auto insurance and to get a cheaper rate, I paid the full six month premium at once
4. My car broke down, see point 1 again - no money left in savings
5. My kids back to school shopping was done without a budget - which means we spent more than we had
In summary, unexpected medical premiums over $200 bucks, sports and tournament fees, back to school stuff, etc., has slapped my debt reduction plan upside the head. Now we'll need to use September to just recover from August, so hopefully the plan will be back on track come October.
1. Not sticking to the cash box budget meant that for the last few months, we've once again began living beyond our means.
2. Related to number 1: we've dipped in to savings to bridge the spending gaps and now savings is zero!
3. I switched auto insurance and to get a cheaper rate, I paid the full six month premium at once
4. My car broke down, see point 1 again - no money left in savings
5. My kids back to school shopping was done without a budget - which means we spent more than we had
In summary, unexpected medical premiums over $200 bucks, sports and tournament fees, back to school stuff, etc., has slapped my debt reduction plan upside the head. Now we'll need to use September to just recover from August, so hopefully the plan will be back on track come October.
2010/08/06
Saved $440 bucks on my auto insurance
I’ve had the same insurance company since I was 16. Now that I’ve been driving far longer than I haven’t in this life, I thought it was high time to figure out if I could save some money on car insurance rates.
My wife and I have excellent driving records so I had just sort of assumed that I was getting a good rate – after all, why would my insurance company want to stick to a loyal customer like me right? Wrong! It's not so much that they were taking advantage of me, they were simply taking advantage of most people's reluctance to drudge out the paperwork, size up the policies, and shop around.
Insurance is a business and in business, competition is good. Turns out shopping around was not that hard to do. The policies are fairly standard from one carrier to another from what I could tell so doing an apples to apples comparison wasn't that difficult.
For some reason, I just assumed that switching auto insurance companies was not worth the trouble. How wrong was I?! My old six month premium on two cars was $1001 or $2002 per year. My new six month premium on two cars is $718.00 for a total car insurance annual outlay of $1436.00 – an annual savings of $440.00 per year!
For very little effort on my part, I’m now going to have some serious extra money.
My wife and I have excellent driving records so I had just sort of assumed that I was getting a good rate – after all, why would my insurance company want to stick to a loyal customer like me right? Wrong! It's not so much that they were taking advantage of me, they were simply taking advantage of most people's reluctance to drudge out the paperwork, size up the policies, and shop around.
Insurance is a business and in business, competition is good. Turns out shopping around was not that hard to do. The policies are fairly standard from one carrier to another from what I could tell so doing an apples to apples comparison wasn't that difficult.
For some reason, I just assumed that switching auto insurance companies was not worth the trouble. How wrong was I?! My old six month premium on two cars was $1001 or $2002 per year. My new six month premium on two cars is $718.00 for a total car insurance annual outlay of $1436.00 – an annual savings of $440.00 per year!
For very little effort on my part, I’m now going to have some serious extra money.
2010/08/05
Busted Alternators and Savings Accounts
Well, remember that avalanche I spoke of in July? Turns out it's not quite as powerful as I'd hoped.
The good news is, in the avalanche, there's enough money to re-purpose for things like an unexpected alternator failure which is going to cost me about $600 bucks!
The bad news is, the credit card companies will get another month or two of interest out of me as I'm having to push out my paydown time line.
I now need to be very mindful of savings accounts as well. I'm wondering for other folks aggressively paying down debt, how much do you set aside in savings before you start building the avalanche? Or, do you throw caution to the wind and tackle the debt first before you build any savings?
The good news is, in the avalanche, there's enough money to re-purpose for things like an unexpected alternator failure which is going to cost me about $600 bucks!
The bad news is, the credit card companies will get another month or two of interest out of me as I'm having to push out my paydown time line.
I now need to be very mindful of savings accounts as well. I'm wondering for other folks aggressively paying down debt, how much do you set aside in savings before you start building the avalanche? Or, do you throw caution to the wind and tackle the debt first before you build any savings?
2010/07/17
Apparently I've been surfing the debt avalanche
I found a very interesting website this morning called Consumerism Commentary. One article in particular that caught my attention was titled, "Debt Reduction Methods and Philosophies: Snowball, Avalanche and More".
Before reading this post, I'd not given too much thought in the difference between a debt snowball - where one pays off the smallest debts first vs. a debt avalanche - where one pays off the most expensive debts first.
I've been thinking I was doing a debt snowball when in fact, I've been doing a debt avalanche; which really warms my heart because I can't stand the idea of giving a bank any more interest income than the absolute minimum. It just seemed intuitive to get rid of the most expensive debts first, but after reading Consumerism's post, it makes sense that different people have different motivations.
So I did a quick non-tax deductible interest (i.e., consumer debt interest, not mortgage interest) summary on my debts this month and discovered that on balances of $21,275.93, I paid in interest $18.77 on my car loan, $33.26 on my highest rate card now with the lowest balance due, $44.38 on the lowest rate card with the highest balance, and 0% on the card in the middle that I just switched on a promotional deal, for a grand total of $96.41 in interest!
Before reading this post, I'd not given too much thought in the difference between a debt snowball - where one pays off the smallest debts first vs. a debt avalanche - where one pays off the most expensive debts first.
I've been thinking I was doing a debt snowball when in fact, I've been doing a debt avalanche; which really warms my heart because I can't stand the idea of giving a bank any more interest income than the absolute minimum. It just seemed intuitive to get rid of the most expensive debts first, but after reading Consumerism's post, it makes sense that different people have different motivations.
So I did a quick non-tax deductible interest (i.e., consumer debt interest, not mortgage interest) summary on my debts this month and discovered that on balances of $21,275.93, I paid in interest $18.77 on my car loan, $33.26 on my highest rate card now with the lowest balance due, $44.38 on the lowest rate card with the highest balance, and 0% on the card in the middle that I just switched on a promotional deal, for a grand total of $96.41 in interest!
2010/07/07
Yahoo! Finance Article on Cell Phone Money Pits
Here's an interesting article from Yahoo! Finance on cell phone costs:
http://financiallyfit.yahoo.com/finance/article-110000-5853-1-the-cellular-money-pit?ywaad=ad0035
The article says that the average American household is spending $107 per month on service - I wish! With four phones in our household, we're up to around $200 per month with Sprint and I've done everything I can think of short of telling the kids they're out of luck.
If you would've told me 10 years ago that rather than paying $30-$40 bucks a month for phone service (i.e., land line, call-waiting, caller id, etc.) that I'd be paying over $200, I probably would have called you crazy. Now look who's the crazy one!
ugh...
http://financiallyfit.yahoo.com/finance/article-110000-5853-1-the-cellular-money-pit?ywaad=ad0035
The article says that the average American household is spending $107 per month on service - I wish! With four phones in our household, we're up to around $200 per month with Sprint and I've done everything I can think of short of telling the kids they're out of luck.
If you would've told me 10 years ago that rather than paying $30-$40 bucks a month for phone service (i.e., land line, call-waiting, caller id, etc.) that I'd be paying over $200, I probably would have called you crazy. Now look who's the crazy one!
ugh...
2010/07/05
Wells Fargo Offer Too Good to Pass Up
I've taken a major gamble, something I told myself I wouldn't do again.
I bit on a "0% for 9 months on balance transfers" solicitation from Wells Fargo to transfer the balance off of my American Express.
But here's the math I used to justify this risky move:
The cost of the balance transfer: $171.93
My monthly interest charge on the Amex: about $70
The number of months I estimated to pay off the Amex balance: 8
Total interest expected to pay Amex: approximately $500.00
So if I stay current on this card, I'll have saved roughly $330 in interest. There are some big "ifs" in that statement that I have to maintain otherwise it will have been a wasted move that cost me an extra $171.93.
As it stands today, I still have three outstanding credit card balances: the one I'm paying down now has a 14.24% rate (I have four more payments on this one), the other two have a 0% and 5.4% rate. Here's to keeping our eyes on the prize - no more interest to credit card companies and banks!
I bit on a "0% for 9 months on balance transfers" solicitation from Wells Fargo to transfer the balance off of my American Express.
But here's the math I used to justify this risky move:
The cost of the balance transfer: $171.93
My monthly interest charge on the Amex: about $70
The number of months I estimated to pay off the Amex balance: 8
Total interest expected to pay Amex: approximately $500.00
So if I stay current on this card, I'll have saved roughly $330 in interest. There are some big "ifs" in that statement that I have to maintain otherwise it will have been a wasted move that cost me an extra $171.93.
As it stands today, I still have three outstanding credit card balances: the one I'm paying down now has a 14.24% rate (I have four more payments on this one), the other two have a 0% and 5.4% rate. Here's to keeping our eyes on the prize - no more interest to credit card companies and banks!
Happy Fourth of July!
Independence day is the perfect time of year to revisit our debt pay down progress. Being financially independent is what being debt free is all about right?
Well, we've had an expensive summer so I've unfortunately had to dip in to our small savings account to pay for some big ticket items; mostly for the kids.
That said, we've stayed relatively on track so as of now, we are 42 weeks - that's a mere 10 more months - from achieving consumer debt freedom!
I know I'm ready for a bigger snowball which I should be able to use in December; but again, December is a very tempting month for holiday spending, so staying on target now is even more important.
Right now it's tough when we see our friends taking great summer vacations and I know we need to reward ourselves for our progress; but it sometimes stinks to know we still have some more sacrifice ahead - but light is at the end of the tunnel!
Well, we've had an expensive summer so I've unfortunately had to dip in to our small savings account to pay for some big ticket items; mostly for the kids.
That said, we've stayed relatively on track so as of now, we are 42 weeks - that's a mere 10 more months - from achieving consumer debt freedom!
I know I'm ready for a bigger snowball which I should be able to use in December; but again, December is a very tempting month for holiday spending, so staying on target now is even more important.
Right now it's tough when we see our friends taking great summer vacations and I know we need to reward ourselves for our progress; but it sometimes stinks to know we still have some more sacrifice ahead - but light is at the end of the tunnel!
2010/04/14
Interesting article about folks "cutting the cord" on TV
I was reading this article earlier today because I too have been waffling on this very decision:
Nearly 800,000 U.S. TV households 'cut the cord,' report says
My TV coverage through Comcast is pretty darn basic - I have maybe 18 channels and of those, only 7 or so are watchable. I also have high speed internet through Comcast as well. In addition, Comcast has actually increased my fee over 20% in the past year! So basically I'm paying more for less value.
On the one hand, I can increase my monthly cash outlay on this "service" and add a lot of TV garbage in the hopes of catching more of my beloved soccer matches on ESPN and FSC, or I can continue to the roll the dice and watch intermittent streams or go to pubs to watch with the crowd, or I can cancel the cable TV altogether and just try to grab signal the old fashioned way, with an antennae.
It's funny, I haven't thought about using an antennae in a very long time, but this article is getting me thinking - that would free up about an extra $40 / month and I believe we'd be getting the same channels we get now. Hmmmm, I'll keep you posted.
Nearly 800,000 U.S. TV households 'cut the cord,' report says
My TV coverage through Comcast is pretty darn basic - I have maybe 18 channels and of those, only 7 or so are watchable. I also have high speed internet through Comcast as well. In addition, Comcast has actually increased my fee over 20% in the past year! So basically I'm paying more for less value.
On the one hand, I can increase my monthly cash outlay on this "service" and add a lot of TV garbage in the hopes of catching more of my beloved soccer matches on ESPN and FSC, or I can continue to the roll the dice and watch intermittent streams or go to pubs to watch with the crowd, or I can cancel the cable TV altogether and just try to grab signal the old fashioned way, with an antennae.
It's funny, I haven't thought about using an antennae in a very long time, but this article is getting me thinking - that would free up about an extra $40 / month and I believe we'd be getting the same channels we get now. Hmmmm, I'll keep you posted.
2010/04/04
Does KDB have a green thumb? We shall soon find out!
Does KDB have a green thumb? We shall soon find out!
Have you bought tomatoes or cucumbers lately? If you live in a part of the country where your fresh produce came from Florida, then you have seen the prices for these fresh goodies skyrocket! The obscenely cold winter did a number on Florida produce and now consumers are having to pay the price (supply and demand and all that).
Well, I happen to like fresh cucumbers, tomatoes, eggplant, and zucchini; so on a trip to Wal-Mart last night, I decided to buy some seed packs. I have no idea if this will work. My grandparents have been gardening since they were kids, so they have a good 80 years of experience. I on the other hand, do most of my gardening at Publix. I mention the grandparents because they almost never try to start a garden from seeds, opting instead to buy seedlings from the farmers market. But I figure for 4 bucks and a little dirt on my hands, why not give it a go the really old fashioned way!
I just pre-planted my tomatoes and eggplant this morning in to small containers and will be working on prepping my garden plot this afternoon. I’ll keep you posted. Happy Easter!
Have you bought tomatoes or cucumbers lately? If you live in a part of the country where your fresh produce came from Florida, then you have seen the prices for these fresh goodies skyrocket! The obscenely cold winter did a number on Florida produce and now consumers are having to pay the price (supply and demand and all that).
Well, I happen to like fresh cucumbers, tomatoes, eggplant, and zucchini; so on a trip to Wal-Mart last night, I decided to buy some seed packs. I have no idea if this will work. My grandparents have been gardening since they were kids, so they have a good 80 years of experience. I on the other hand, do most of my gardening at Publix. I mention the grandparents because they almost never try to start a garden from seeds, opting instead to buy seedlings from the farmers market. But I figure for 4 bucks and a little dirt on my hands, why not give it a go the really old fashioned way!
I just pre-planted my tomatoes and eggplant this morning in to small containers and will be working on prepping my garden plot this afternoon. I’ll keep you posted. Happy Easter!
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