PF Under 30

Paying off debt and finding my financial lifestyle

Archive for category Finance Gurus

Dave Ramsey: I’m a slave driver.

Nov 6

Posted by kiki in CC Debt Progress, Finance Gurus | No Comments

Last night was our final night of Dave Ramsey’s Financial Peace University. If you and your significant other haven’t gone through it, I highly reccomend getting in on a class. It will make sure you are both on the same page, and even those of us who pay attention to this stuff (otherwise we wouldn’t be reading this blog) still can learn A LOT!

Anyway, at the end we tall up as a class how much we have saved, paid off, and avoided between now and the start of the class. My BF submitted the numbers for the two of us, which added up to around $14,000 in debt paid off. I was shocked! Mine wasn’t quite $3,000, and I knew he had a $7000 lump sum that was paid off from a friend paying him back some money he had loaned them. Still, we had done $14,000? I was shocked.

What was even more shocking though was that the class total was only around $40,000. This was for 25-ish people, and ours was a good third of that. Suddenly, I felt really bad, I felt like a slave driver. I’ve been pushing HARD on this, and we came in at 33% of the class total. Of course, that’s a good thing, that’s an AMAZING thing, but I need to step back and acknowlege that as well. He was making a lot more progress than I thought he was, and I was making less progress than I thought I was. I leaned over and said “WOW. I’m a slave driver huh?” And without hesitation, he said. “Yup.”

Yikes, that hurts. Very glad we have made that much progress, but we do still have a long way to go. Going to keep pounding away at it, cleaning out crap, and working on my love drawer. I have also comitted to getting my life insurance up to 10x my annual income by my next birthday.

But great wins are still great wins, and I need to stop and appreciate the progress. To my honey (who probably has no idea I have this blog), he has progressed leaps and bounds for us, and I’m very grateful for that.

Changing Priorities the Dave Ramsey way….

Sep 3

Posted by kiki in CC Debt Progress, Emergency Fund, Finance Gurus | 1 Comment

Today we have turned a corner. We’re motivated. VERY motivated! And we have the right tools at our disposal we need to be successful.

Today is the day I’m changing my 2008 Goals to reflect the Dave Ramsey principles. I’ve put $1000 in the bank for Emergencies, I’m saving monthly for annual expenses like life insurance, my home warranty, Christmas, and car tabs and repairs, I’m also paying $900/month toward paying off that USAA Amex. I will not, however, be funding my Roth IRA this year. Yeah, I said it. I’m not doing it.

Why? 1) Dave told me so. 2) I’ve been putting my debt reduction strategy on hold every year to fund my Roth. While I’ve successfully funded my Roth every year, I’ve been treading water on the debt.

My #1 and only goal before January 1, 2009 is to pay off that USAA Amex. According to my nifty Dave Ramsey calculator, contributing $900 a month will have me paying it off at the end of May. I’m going to do it by the end of December. Why? Dave Ramsey’s calculator doesn’t account for my extra paycheck, or stuff I’m going to sell to get “Gazelle intense.” It also doesn’t account for the fact that I will be trimming my budget ($250 in electricity costs down to just over $50, and a $219 health insurance payment this month that’s going to move down to $70 next month. 

Yes, my friends, I’m getting “Gazelle intense”. I’m also going to pay off the Citi card and the car loan by the end of 2009. That is my gift to myself next New Years Eve. I will be debt free minus the house. Then, and only then, the two of us made a decision tonight to hold off on buying a house together until we are both debt free. 2010 will be our year. Heck, the next 1 1/4 years will be our year. This is the biggest investment we will make in our future and independence to date. I can’t tell you how freeing it is to have both of us on board with this. This was the best $93 I’ve ever invested in our relationship. 

Anyway, from now until the end of next year, you will see my progress bars change to my last 3 remaining debts. It will be a triumphant year, I can guarantee it.

Direct Transfer to HSA – why not?

Aug 15

Posted by kiki in Emergency Fund, Finance Gurus, Taxes | No Comments

So I was about to call into Dave Ramsey and ask him if it was OK to put my Baby Step #2 on hold to contribute the max for my newly established HSA (Health Savings Account) – when I saw this “feature” -
Apparently you can rollover money from your IRA (not SIMPLE or SEP-IRA’s) once – up to the maximum annual amount – to your HSA without getting any distribution penalties.

I’ve got about $9,000 sitting in a Traditional IRA that will be taxed when I retire and withdraw it. If I move it (without penalty) to an HSA – it’s basically like a ROTH – grows tax free and can be withdrawn tax free (for qualified medical expenses.) If I had the cash, that would be ideal, but I’m already worried about maxing out my ROTH before April 15, 2009. If I can make taxable money non-taxable money without a “balance transfer fee” – why isn’t this a no-brainer?

In other news – I am establishing my Dave Ramsey Emergency Fund. Just transferred my first $200. However, I have a meeting w/ somebody on Monday who’s interested in buying my old bedroom set. If that goes through, I will have made my $1000 Emergency Fund and can check off Baby Step #1. Look for my brand new progress bar for the Emergency Fund coming soon.

How to deal w/ Money with your “other.”

Jul 28

Posted by kiki in Credit and Debt, Deals and Steals, Finance Gurus, Living Expenses | No Comments

Sorry I haven’t posted in a while, with everything going on, I’ve been so busy. And being so busy, it’s not that you don’t have the time to post, but your priorities are so messed up that you don’t even know where to start.

Well, I wanted to tell you that almost 2 weeks ago now, the boyfriend and I signed up for Dave Ramsey’s Financial Peace University. It’s 13 weeks of Wednesday nights, but we’re comitted to doing this together. And he is actually excited about it! I know I know. It’s still hard for me to believe too. I found the nearest class at DaveRamsey.com, which happened to be a local church in our area. He reluctantly agreed, but when we walked in the door for the preview orientation he said “Oh Dave Ramsey…. you didn’t tell me this was a Dave Ramsey course.” Then we watched the preview video (arms crossed) and he leaned over and said “You know, I didn’t know this is what it was going to be. If I would have known that, I would have done this much earlier.”

Umm. WOW!

The gist of the whole thing though is that we are both learning. I am not telling him, and he is not telling me. An objective 3rd party is coming in and telling us the reasons why we should live this way and how it’s going to improve our lives… in the short and long term. Even though I’ve already listened to Dave’s audio book and know what he’s going to say, I’m by no means an expert and I probably could use just as much training as he could (though probably in other areas.)

The point is, if you’re having the same trouble as I was with your significant other about money, and it’s straining your relationship like it was mine…. it might not be Dave Ramsey, but go make a comittment to learn some of these principles together…. even if you think you’ve already got a handle on most of it. The equilization to your “other” will take the bite out of these discusssions and they will be so much less confrontational. Just make sure you’re sitting in class learning too, instead of nudging them saying “See… I told you so.”

In other news, that very same weekend we went to San Diego he announced “I have budgeted $100 for this weekend. When that’s out, I am done. When we went out to eat, he took his $100 bill out and paid CASH. I looked at him and smiled. He answered “What?” And I said “You’re starting early. I like this.” His reply “Because I know what’s coming. I’m looking forward to putting together a budget.”

Blank stare from me. I’m not even looking forward to putting together a budget!

This was the best $93 I’ve ever spent, and it includes a lifetime membership. If we ever need to go back and refresh or repeat a course, we can do so free of charge… forever!

My New Automated Budget

Oct 31

Posted by kiki in Credit and Debt, Finance Gurus, Living Expenses | 4 Comments

OK – so I was wondering around the PF blogsphere yesterday when I ran across a post about someone setting up their own ”Virtual Employer”. (Sorry still looking to link to whomever wrote this – I can’t seem to find it today.)

Anyway, the premis of this is simple

  • The guy direct deposits his paycheck into a 401(k), Roth, Checking etc. 
  • He sets up automatic transfers to bills, savings, etc.
  • He also sets up automatic transfers to a spending account. This is then what he has to live off of.

The idea here is that he basically gives himself an allowance. If he gets a raise, he doesn’t notice it, a bonus, same thing. I used to do this myself when I was living off my college fund and working without a mortgage. Once I got a house that all changed.

So last night, tossing and turning, I starting thinking about setting one up for myself. Like David Bach says, the Automatic Millionaire way.

  • Direct deposit to my Roth Every Paycheck
  • Automate Mortgage Payment, Utilities, Car Payment, and Insurance
  • Automate those pesky credit card payments including minimums on both and extra debt reductions on one.
  • Calculate total cost per month and divide by two (per paycheck, I get paid twice a month)
  • Setup Direct Deposit to deposit to Roth, Automatic Payment account, and spending account.
  • Just work on living off the rest. (Gas, Food, Fun Money, Extras)

According to my calculations, my spending money should be about $620 per paycheck. This seems like a lot, but probably isn’t considering I am spending about $200/month in gas.

Going to try this out for a while and see how it goes. I would like to setup a Christmas Savings account too though. I have a feeling I’m going to like it this way.