Money, Love, and Change » Dave Ramsey

Our mortgage company sent us a check for $180

moneyloveandchange — Thu, 30 Oct 2008 03:18:28 +0000

In addition to getting an e-mail today letting me know that my credit limit increased on one of my credit cards (I thought things like this weren’t supposed to happen anymore?), we got a check from our mortgage company today for $180. Our escrow account was a little too high (hence the check). In addition, our payment amount is going to decrease by roughly $25 per month.

We already overpay slightly on our mortgage (we just round it up to the nearest $50, so we pay an extra $48 per month), and we intend to keep making the same payment, but it is still a pleasant surprise.

I’m very happy, because it is an additional $180 we can use to rebuild our emergency fund! Dave Ramsey would be proud

We’ve met our savings goal – almost!

moneyloveandchange — Wed, 07 May 2008 17:31:04 +0000

Our stimulus check arrived last week. I just transferred about $540 to our emergency fund to bring it up to $5000 again. This was our first Dave Ramsey goal that I talked about in a previous post. So it’s not official yet (since technically the money isn’t in the account), but it’s in the process!

It feels great, but I will feel better about it once I have secured another part-time work-at-home job to bring in income over the summer (I currently tutor online, and the hours will be decreasing soon). I don’t want to have obtained our goal only to dip back into the emergency fund a couple of months later!

Next, I need to update our accounts to see what we can put towards our high-interest student loan.

What were your plans for your stimulus check? Did you follow through with your plans?

Thoughts on Dave Ramsey

moneyloveandchange — Fri, 25 Apr 2008 17:47:59 +0000

I recently finished Dave Ramsey’s Total Money Makeover, and it is a quick and easy read. I would recommend getting it from your local library – I would not buy it just because there are enough blogs and information on his methods on the web (and you can use the cost of the book as your first snowflake!). I think that Get Rich Slowly has a nice synopsis of the book here if you want to get the basic idea before investing your time reading the whole book.

Is Total Money Makeover going to change our lives? I’m not sure. We have been working hard to pay down debt, and I am confident that we will eventually reach our goal of being debt-free. However, this book made me realize that we need more of a concrete plan. We tend to throw money towards debt in a haphazard manner, but I like the idea of having a psychological boost of seeing something get eliminated. After talking it over with my husband, we’re going to create a modified version of his plan:

1. Get our savings back up to $5,000 – Ramsey suggests a $1000 emergency cushion, but this just doesn’t sit well with us. Maybe it has to do with my lack of dependable income, the recent upheaval we were in as my husband found another job (since his old one will be in China soon), or the fact that our little truck will have to give out someday. We recently used a portion of the emergency fund to cover some unexpected car repairs, and it is sitting at roughly $4400. We will both sleep easier at night when it is back up to $5000.

2. Pay off that *$)!(@ private student loan – it is not our smallest debt, but it is our highest interest debt (currently at 7.5%). I hate it. I don’t care that the interest is deductible. Every time I log into this account, I cringe. At roughly $3500, it needs to go.

After these two goals, we have a couple of others, but we are not sure what order they will go in yet:

3. Max out our Roth IRA contributions – Although Ramsey suggests stopping 401(k) retirement contributions until debt is paid off (in most cases), I just can’t pass up free money. In a recent post, I talked about how we recently decreased our contributions from 20% to 10%. My husband’s company match is 75% on the first 6% – keeping at 10% will help us in attaining our goal of $100,000 in retirement accounts by the end of the year.

4. Pay down our mortgage so that the balance is at 75% of the value of our home – this will allow us to close our escrow account and keep the money in savings. Since we are about $3000 away from reaching this goal, it seems reasonable. Although interest rates in savings accounts isn’t so great right now, the lower mortgage payment would be a nice psychological boost. I know we have enough discipline to put the money aside every month, and I also like the idea of having a little more wiggle room about where our money is going every month.

What do you think of these goals? Are we destined for failure because we are not following the Ramsey plan exactly?