It's January, time for a fresh start, a couple of weeks ago my husband and I sat down and reevaluated our budget. So far following the Dave Ramsey method for 1 year has allowed us to pay off my car loan, save for my travel, save to pay for car insurance in 1 payment instead of monthly, save for birthday and Christmas gifts so we don't have to go into debt at the holidays, save $1000 in a cash emergency fund, and now we are throwing huge sums of money at my remaining student loan and expect to be debt free by summer or sooner!!!
Did you feel like you came up short on money or even had to go into debt these holidays? Hate that feeling? Take a cue from Megan and I. We are using variations on a tried and true method - budget! Megan can weigh in on her process if she'd like, but here is what we are doing.
How much do you want to spend on gifts for each person on your list next holiday season? Add that up, divide by 12. This number is what you have to save each month in order to have enough for your gifts in December. Delightfully easy. This is the method we use for everything. Car insurance is due every 6 months so we divide the premium by 6 and that is how much we need to save each month.
There are lots of free tools online. We have been winning with Dave Ramsey, there are other schools of thought out there too. The bottom line is assign every dollar to something - food, gas, rent, mortgage, loan, travel, etc.etc.etc. I don't actually use the Dave Ramsey forms linked above, but use a basic spreadsheet. You should try a few of the options on for size to see what fits your math brain and budgeting needs best.
Showing posts with label debt free. Show all posts
Showing posts with label debt free. Show all posts
Monday, January 26, 2015
Monday, January 12, 2015
Checking In
I've been off the grid (but really back on the grid as I am home with my folks on the mainland) for a few months. I traveled back to my hometown in October and have been here through the holidays. I think I'll head back to the island late February or early March. After the cabin fever and blues of last winter I felt it was in everyone's best interest I winter in the tropical mid-western USA. It has been great!
Right after coming home I fell into a new product line making baby shoes from leather and luxury fabrics. Also, baby leg warmers from recycled sweaters and ear flap hats from recycled sweaters. My part time job picked up exponentially, allowing me to pay down huge payments towards my student loan. I think I will be 100% debt free in the next few months!!! AMAZING! Thank you Dave Ramsey and my dear friend that referred me to your method!
My folks have been grateful to have me around. My retired father enjoys the company and the project assistance. My mother has been managing a team at work short staffed for too many months and needs the domestic help at home - I cook, clean, help with household projects. When I came home my parents had just finished resurfacing their wood floors so the entire main floor was empty. I spent several days moving furniture and stuff back into the space.
It's been nice seeing friends and having a *gulp* social life. Albeit occasional, I get invited to do things with friends and sometimes even convince them to do things with me. Shocking! I even took a road trip to Orlando with my good friend and we went to Universal Studios for the first time in my life - fun! And I will tell you I was still able to throw $700 at my student loan last month and this month and go on a trip! No credit cards and all bills/food/needs are being paid for/met.
Right after coming home I fell into a new product line making baby shoes from leather and luxury fabrics. Also, baby leg warmers from recycled sweaters and ear flap hats from recycled sweaters. My part time job picked up exponentially, allowing me to pay down huge payments towards my student loan. I think I will be 100% debt free in the next few months!!! AMAZING! Thank you Dave Ramsey and my dear friend that referred me to your method!
My folks have been grateful to have me around. My retired father enjoys the company and the project assistance. My mother has been managing a team at work short staffed for too many months and needs the domestic help at home - I cook, clean, help with household projects. When I came home my parents had just finished resurfacing their wood floors so the entire main floor was empty. I spent several days moving furniture and stuff back into the space.
It's been nice seeing friends and having a *gulp* social life. Albeit occasional, I get invited to do things with friends and sometimes even convince them to do things with me. Shocking! I even took a road trip to Orlando with my good friend and we went to Universal Studios for the first time in my life - fun! And I will tell you I was still able to throw $700 at my student loan last month and this month and go on a trip! No credit cards and all bills/food/needs are being paid for/met.
Sunday, August 10, 2014
Revisiting Budgeting and Surviving (and Succeeding) Just Above the Poverty Line
A few months ago I mentioned I had been starting to follow the Dave Ramsey budgeting and financial planning method. I am pleased to report it is working really well! I traveled in February and March and my husband and I couldn't figure out how to keep up with the budget we had started in January. We noticed a difference. Money walked away...about $1000 wandered off into stupid, unplanned for purchases. That money could've been used towards paying off my car loan.
Lesson learned. We need a budget! Not only do we need a budget, through trial and error trying to find or rhythm with this program, we found we need the envelope system. The good, old fashioned, "there are $500 for food this month, $500 goes into the food & household envelope at the beginning of the month and when it's empty, it's empty" method. We run the following budget line items off of the cash only envelope system: food & household, gas, bus, entertainment, VB blow money, and my husband's blow money. The rest is debit and we reconcile the books at the end of the month (cuz I am too lazy/distracted to reconcile as we go).
Facts: my husband and I are living on 1 full time income (I just this month picked up some part time work that will cover 1 bill/month). We are living at only a few thousand dollars a year over the federal poverty line. But, with this considered, we have successfully paid off $5000 in debt since January. We have no credit card debt, and we are nearly finished paying off a car loan (on a 2012 I bought in 2013!) and after that will follow Dave Ramsey's "debt snowball" concept and apply all of the car loan money towards the student loan to pay that down too! That means within the next 12 months we will be 100% debt free and can start saving for a down payment on a home and retirement!
This has been challenging, it has caused arguments. But now after 7 months, I can say we have a really good system in place. Our finances are in check and we even have extra money every month to throw at debt. This is after we have put money towards saving for gifts, saving for travel, saving for French class tuition, saving for car repairs, saving for dental, saving for medications, saving for clothes. You get the idea. I highly recommend you give this method a try if you are having trouble managing your finances or if you find yourself with a lot of debt.
Even if you aren't much of a reader, Dave Ramsey's radio show is broadcast for free from his website. It's not a bad listen (if you can ignore the 3% of the time he spends on his extreme right politics) and you can learn a lot about winning at money. Here's his website. "The Total Money Makeover" and the workbook were what we used and found it to be enough information.
Lesson learned. We need a budget! Not only do we need a budget, through trial and error trying to find or rhythm with this program, we found we need the envelope system. The good, old fashioned, "there are $500 for food this month, $500 goes into the food & household envelope at the beginning of the month and when it's empty, it's empty" method. We run the following budget line items off of the cash only envelope system: food & household, gas, bus, entertainment, VB blow money, and my husband's blow money. The rest is debit and we reconcile the books at the end of the month (cuz I am too lazy/distracted to reconcile as we go).
Facts: my husband and I are living on 1 full time income (I just this month picked up some part time work that will cover 1 bill/month). We are living at only a few thousand dollars a year over the federal poverty line. But, with this considered, we have successfully paid off $5000 in debt since January. We have no credit card debt, and we are nearly finished paying off a car loan (on a 2012 I bought in 2013!) and after that will follow Dave Ramsey's "debt snowball" concept and apply all of the car loan money towards the student loan to pay that down too! That means within the next 12 months we will be 100% debt free and can start saving for a down payment on a home and retirement!
This has been challenging, it has caused arguments. But now after 7 months, I can say we have a really good system in place. Our finances are in check and we even have extra money every month to throw at debt. This is after we have put money towards saving for gifts, saving for travel, saving for French class tuition, saving for car repairs, saving for dental, saving for medications, saving for clothes. You get the idea. I highly recommend you give this method a try if you are having trouble managing your finances or if you find yourself with a lot of debt.
Even if you aren't much of a reader, Dave Ramsey's radio show is broadcast for free from his website. It's not a bad listen (if you can ignore the 3% of the time he spends on his extreme right politics) and you can learn a lot about winning at money. Here's his website. "The Total Money Makeover" and the workbook were what we used and found it to be enough information.
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