The reason for the season

With such a focus this year on budget and getting our selves out debt..we are very proud to say that no credit cards were harmed during our shopping for Christmas and that all funds have been payed in cash. Now, just to be totally honest, we charged a couple of PayPal things on credit cards just because (and I know Dave Ramsey says that debit cards have the same protection as cc's) sometimes you just get that feeling...

But, more importantly this year..we are so thankful for what God has done for our family...growing us..stretching us..and blessing us. We have received the wonderful gift of His Son Christ Jesus and we pray that, for all of you, you will know the peace that comes through that relationship and appreciate the true reason for the season!

Happy Birthday, Jesus!

The new numbers are in!

WE have reached the 25's woohoo! Down, baby, Down!

Thanksgiving is right around the corner

We would love to hear what cost savings ideas people have around guests, parties, etc. Anyone having a pot-luck? Anyone having peanut butter and jelly in-lieu of a big meal? Do share?

What the heck is happening to this real estate market??

I am sure I am not alone in this..but I was amazed to see that we our $58k upside down in our house. Now, we are blessed and able to afford the payments that we signed up for 6 years ago. And, that is awesome. But, the house we signed up for at $318k 6 years ago is not worth about $260k at best.

Now, before you say "you haven't lost anything until you sell..I totally agree with that statement. But, what have you lost in the here and now? Well, you have lost any flexibility to accept a better job in another location. You have lost equity (and while that moves around a bit..you are still in the negative) and, some may say, you lose a sense of pride as the value decreases.

All this ranting is to say one more thing...credit in the hands of the irresponsible is a REALLY BAD thing! Lenders and borrowers alike that straddle the American econoomy with the sub-prime mortage industry are directly responsible for where we are today. Those of us that pay our payments monthly and struggle to make a life for ourselves, bare the burden for those that just threw up their hands and walked away from a committment they never should have been in.

OK..I will end my ranting. I encourage all of you to speak up when you see friends and family using credit badly. Call them into accountability...until their is a ground-swell, it will continue. I can't wait to see the fall-out from the "cash for clunkers" programs. But, don't worry Dave Ramsey fans...there will be some awesome "beater" deals on really nice repo's!

;)

New Totals for the end of October

Another $1100 bites the dust! What a great way to start off November! Happy Monday everyone.

6 Simple Steps to $1 Million

provided by Investopedia


Let's face it; we all don't make millions of dollars a year, and the odds are that most of us won't receive a large windfall inheritance either. However, that doesn't mean that we can't build sizeable wealth - it'll just take some time. If you're young, time is on your side and retiring a millionaire is achievable. Read on for some tips on how to increase your savings and work toward this goal.

Stop Senseless Spending

Unfortunately, people have a habit of spending their hard-earned cash on goods and services that they don't need. Even relatively small expenses, such as indulging in a gourmet coffee from a premium coffee shop every morning, can really add up - and decrease the amount of money you can save. Larger expenses on luxury items also prevent many people from putting money into savings each month.

That said, it's important to realize that it's usually not just one item or one habit that must be cut out in order to accumulate sizable wealth (although it may be). Usually, in order to become wealthy one must adopt a disciplined lifestyle and budget. This means that people who are looking to build their nest eggs need to make sacrifices somewhere - this may mean eating out less frequently, using public transportation to get to work and/or cutting back on extra, unnecessary expenses.

This doesn't mean that you shouldn't go out and have fun, but you should try to do things in moderation - and set a budget if you hope to save money. Fortunately, particularly if you start saving young, saving up a sizeable nest egg only requires a few minor (and relatively painless) adjustments to your spending habits.

Fund Retirement Plans ASAP

When individuals earn money, their first responsibility is to pay current expenses such as the rent or mortgage expenses, food and other necessities. Once these expenses have been covered, the next step should be to fund a retirement plan or some other tax-advantaged vehicle.

Unfortunately, retirement planning is an afterthought for many young people. Here's why it shouldn't be: funding a IRA early on in life means you can contribute less money overall and actually end up with significantly more in the end than someone who put in much more money but started later.

How much difference will funding a vehicle such as a Roth IRA early on in life make?

If you're 23 years old and deposit $3,000 per year (that's only $250 each month!) in a Roth IRA earning and 8% average annual return, you will have saved $985,749 by the time you are 65 years old due to the power of compounding. If you make a few extra contributions, it's clear that a $1 million goal is well within reach. Also keep in mind that this is mostly interest - your $3,000 contributions only add up to $126,000.

Now, suppose that you wait an additional 10 years to start contributing. You have a better job and you know you've lost some time, so you contribute $5,000 per year. You get the same 8% return and you aim to retire at 65. When you reach age 65, you will have saved $724,753. That's still a sizeable fund, but you had to contribute $160,000 just to get there - and it's no where near the $985,749 you could've had for paying much less.

Improve Tax Awareness

Sometimes, individuals think that doing their own taxes will save them money. In some cases, they might be right. However, in other cases it may actually end up costing them money because they fail to take advantage of the many deductions available to them.

Try to become more educated as far as what types of items are deductible. You should also understand when it makes sense to move away from the standard deduction and start itemizing your return.

However, if you're not willing or able to become very well educated filing your own income tax, it may actually pay to hire some help, particularly if you are self employed, own a business or have other circumstances that complicate your tax return.

Own Your Home

At some point in our lives, many of us rent a home or an apartment because we cannot afford to purchase a home, or because we aren't sure where we want to live for the longer term. And that's fine. However, renting is often not a good long-term investment because buying a home is a good way to build equity.

Unless you intend to move in a short period of time, it generally makes sense to consider putting a down payment on a home. (At least you would likely build up some equity over time and the foundation for a nest egg.)

Avoid Luxury Wheels

There's nothing wrong with purchasing a luxury vehicle. However, individuals who spend an inordinate amount of their incomes on a vehicle are doing themselves a disservice - especially since this asset depreciates in value so rapidly.

How rapidly does a car depreciate?

Obviously, this depends on the make, model, year and demand for the vehicle, but a general rule is that a new car loses 15-20% of its value per year. So, a two-year old car will be worth 80-85% of its purchase price; a three-year old car will be worth 80-85% of its two-year-old value.

In short, especially when you are young, consider buying something practical and dependable that has low monthly payments - or that you can pay for in cash. In the long run, this will mean you'll have more money to put toward your savings - an asset that will appreciate, rather than depreciate like your car.

Don't Sell Yourself Short

Some individuals are extremely loyal to their employers and will stay with them for years without seeing their incomes take a jump. This can be a mistake, as increasing your income is an excellent way to boost your rate of saving.

Always keep your eye out for other opportunities and try not to sell yourself short. Work hard and find an employer who will compensate you for your work ethic, skills and experience.

Bottom Line

You don't have to win the lottery to see seven figures in your bank account. For most people, the only way to achieve this is to save it. You don't have to live like a pauper to build an adequate nest egg and retire comfortably. If you start early, spend wisely and save diligently, your million-dollar dreams are well within reach.

FICO 781 - and payday is coming...all great news!

We pulled our credit reports for our annual check up and were surprised to see that we had a FICO of 781. And, while some folks focus on this..I look at the bottom line of our credit owed for our standing on credit. To me, it's not any ratio's or debt to credit numbers...it is really how much do you make (income) and spend (expenses) and if there is a negative difference in the two, why are you spending more than that? That's called CREDIT!

I have to say, I differ a little with Dave Ramsey in that I do believe a FICO is important. In some fields of work, pulling your credit to ensure you are not a financial risk to the corporation is a norm. And, let's face it..until we are self-funded multi-millionaires, responsible credit will be a part of our lives.

Great Book Review - Boundaries

We have been reading a really great book entitled "Boundaries" by Henry Cloud. In our adult lives, we all need boundaries. We talk about them for our children all the time..we don't let them have candy after 6pm, they can't run in the mall, and on and on. But, as adults, we have the freedom to do as we choose...and, wouldn't you know it, there are no 7 years olds in debt...they are all adults!

This book can help with all aspects of life..it really is a book about setting boundaries for yourself, your relationships, your family...and I bet after reading it..we all find that we need some boundaries on finances...just a guess.

Hope everyone is having a great week!

The I '"really don't like" AT&T Rant

In July 2009, we moved back home from Southern California to Northern California and while down there, we had AT&T U-verse which was very cool. When you finish with it, you simply take all the gadgets to the UPS store and they scan and mail it for you at no charge. Well, until 2 months later when AT&T sends you a letter saying that you returned 3 pieces of equipment and not 4 and here is your bill for $150.00.

So, I provide them with the tracking number...on 9/3/09. And, 2 a month and half later...they come back and say "yes, we confirmed the tracking number and got the box, but it was still missing the piece of equipment...pay us $150.00".

Each time I call, the person says "give me the tracking number and that should do it"...I explain I give it each time and get the same results...and the next word is "Well, that's weird"...tell me about it.

So, I finally had to go to the UPS store and get the serial numbers of what they scanned and provide those to AT&T...and when I called them yesterday to give them this...they said "All I need is the tracking number.." I try to be nice and reply...You have had that since 9/3/09...and each time you close out the case with "We got the box, but missing a piece of equipment, pay $150.00"...lol

So, I apologize if any of you are AT&T customer service agents for U-verse. But, man...what a bunch of nuts! I wish I could get away with that at my job...give lip service, do nothing, etc.

On second thought...nah...then they could get ANYONE to do my job!

Have a great week...and RUN FROM AT&T!

A call for encouragement for DiggingOutOfOurMess

Good morning, blog followers.

I want to ask you to heck out http://diggingoutfromourmess.blogspot.com/. Mysti is in a very rough spot and could use encouragement and advice as she goes through this "season". We already posted some advice..and I know Mysti would appreciate encouraging words, lessons learned and advice!

What's with people and their dogs?

This is not a financial post..but just a random thought and venting!

What is the deal with people and their dogs?? I get that people love their dogs..I get that people treat their dogs as family..even a little human. We have, in our neighborhood and town, have people that think everyone is in love with their animals...to the point where they (I think) honestly believe that when their dog uses your yard as a restroom, you should be honored at the gift placed at your feet. I know, I sounds like a grumpy old man now, but c'mon!

In life, we all have to clean up the mess we make. We learned that in kindergarten along with not eating paste! In our financial life, we don't just get to leave the "dump" on someone's door - we work hard and clean it up! Wow - I did turn this into a financial issue :)

I wonder what the correlation between people who don't clean up their mess and their financial life...that would be interesting. If you tend to be more cluttered, are you more likely to be financially irresponsible? If you are a neat freak...are you more likely to have your finances in check?

OK..I am done :)

Free Blog Makeover

Mom's the word Free Blog Makeover contest is going on right now! Nan is such an inspiration to all the people trying to make their way through the blogsphere! I highly recommend following her blog and taking her very useful - and funny- advice! Thanks, Nan, for what you do in the community!

updated debt totals!

We have been at this thing called "Getting out of debt" for 14 1/2 months. We started out at a whopping $59,063.20 and, as of last week our current balance 10/15/09: $27,643.19.

It is hard to believe we have paid of $31,420.01 in what seems like a pretty short period of time looking back..but - boy- hasn't always been easy! And, quite frankly- it seems like a long way to go! But, month by month, a thousand at a time, we continue to see progress. We continue to be inspired to press on..and we continue to watch our money.

I think the hard part, right now, is that we feel like we have been doing this forever and we have a long way to go...and then when we get the debt paid off, that extra money goes to fund retirement accounts, college, and then start paying on the house..so you never really get this "windfall" of cash that you get to start throwing your money around...and I guess that is the lesson in all this. Being fiscally responsible, or as I like to call it "Being a Fiscal Grown-Up" is a committment you make for the rest of your life...not just to get out of debt...for the rest of our lives we will be budgeting, saving, making trade-off's. But, oh how sweet when we hit retirement age, have a couple million in the bank and can really LIVE LIKE NO ONE ELSE! Now- I'm motivated!

Go get 'em!!

Oh happy day!

Friday's are just the best. Going out with friends tonight to an open field where our kids can run around...free; Going to South Lake Tahoe tomorrow to watch the salmon spawn...free; time with my beautiful family PRICELESS!

Money ain't everything...family is!

Have a wonderful weekend everyone~!

The flu hits the house and the budget

Well, none of us got more than the stomach flu...but having it run through a household of 5 people is horrible! Equally bad is the fact that no one wanted to go to the grocery store..much less think about cooking. So, with one day before payday..are robbing every category just to buy eggs and milk.

The plus side: No credit card was harmed as a result of the flu!!

Hope you are all having a debt-reducing good week!!

Updated Debt Totals

Thank God it's Friday!!

Our new debt balance (as of last night) is $27,776.72 and we have paid down $31,286.48! This has been since 8/1/2008. Pretty incredible progress over 14 months, if we do say so ourselves.


Fall is here! A great time to reflect on a new season. And, all we can reflect on right now is the debt free season of our lives that seems to be as close as Winter!

We sincerely hope you are all enjoying your lives, making progress towards your goals and being blessed in the process!

Another Murphy Strike!

Yes, we have had another "Murphy Strike" in our home..this time the washer! But, this time, we struck back!

My wife has actually been looking at the front-load washers for a while on her "dream list" and well, Home Depot made that a reality.

The washer started out at $699.00..but do people getting out of debt have that to spend? NO! We spent $366.00!

$699.00 at home depot -minus- 10% GE rebate -minus- 10% home depot card discount (No, we haven't gone back to credit cards, the amount is sitting in our emergency fund ready to go, but who's turning down 10%?)-minus- $75.00 PG&E energy rebate - minus- $125.00 Water District rebate = $366.00

That's a whopping 52% off!

That's one big ol' coupon!

Happy Saturday everyone!

I love pay day!

You know, most people love payday's because it is that tangible moment for all the hard work and long hours put in over the last 2 weeks (or whatever your pay period may be.

I am clearly the "nerd" in our family because I love payday because it is the day that we get to go to the bank, take out cash to re-fill our envelope system and pay down debt! Every two weeks, our debt takes a little dip downward...and that gets me excited - what a geek!

I would love to hear from some of those who are debt free (or are well on your way) as to what happens with that excitement, energy once you have paid it all off! What will pay day mean to me when that happens? My first thought...WEALTH!

Go get 'em!

Setting investment goals

Most people dream about a nice retirement, sending their kids to college debt free or building their dream home. The problem is that many people don’t know how to make their dreams become a reality. The first, crucial step in achieving your investment goals is writing them down.

Sounds weird doesn’t it? However, the act of physically writing down your goals really does help. It works like a switch, taking your goals from a distant dream to a vision that is ready to go to work. Yet, this important step is often overlooked. As a result, many people fail to reach their goals simply because they skip this first step.

To help make your goals a reality, be sure to:

Briefly list any short-term goals. The keyword here is “brief.” Think bullet points. The more detailed list comes later.

Short-term goals can be things you want to save for or purchase within the next two to five years. An example of a short-term goal might be buying tires for the car, finishing furnishing the house or taking an overseas vacation. Classify these goals as needs or wants.


Make a list of long-term goals. Again, make a brief list. Long-term goals are things you want five years or longer from now. Long-term goals are likely to be retirement, buying a home, or college savings. Ask yourself questions that help you determine what specific goals you have, based on where you are in life. For example, if you're in your early thirties, you might already be dreaming of a nice retirement or owning your first home. Ask yourself which will make you the most happy and give you a sense of peace.


Dig in to the details!

Now is when you get into the specifics. First, list your goals with the most important at the top and the least important at the bottom. Next, it’s time to get more specific with your goals. Instead of just listing retirement as a goal, give it a number by writing down how much money you want to have in your retirement account.
Finally, all good goals have a time limit. Give yourself a specific time limit to reach the goal. If you’re 40 years old, then you might give yourself 20 years to reach your retirement goal. Do this for each goal you wrote down.

Here’s a short example:

Retirement – Have $820,000 in retirement fund by age 60.
College funding – Save $25,000 in eight years for daughter’s tuition.
Dream house – Build our $300,000 dream home in next 20 years.

The Main Tip:
Your job as an investor is to determine in clear and simple terms what your short- and long-term goals are. Remember, it’s your money, so be intentional. Once you have your list of goals, sit down with a trusted investing professional to help you further prioritize and reach your goals.

props to www.daveramsey.com and his team for the useful information!

The importance of a will

You know, as we looked at our mounting debt, I never really gave any thought to having a will. I mean...nothing divided amongst many still amounts to nothing. But now, as we see the end of the tunnel ahead of us..and are on our way to building real wealth with our income, trusts* estate planning* and wills are in the forefront of my mind. Not to mention, we have small children who will need to be taken care of in the event we go together.

So, this is friendly reminder! Plan for the unthinkable. If you have a will..has it been updated? Do you have all your assets in your trust? Are you plans the same as they were then..or have things changed.

We were thinking about using www.legalzoom.com and would love to hear any other suggestions folks might have!

Work at home for alternate income

Has anyone had any experience with some of the "work at home" positions such as blogging for income or call center outsourcing?

We are always looking for ways to stay with our children, but fill the 24 hours here with ways to pay off this anchor around our neck...

Hope you are all seeing the light - and it's not a train

Free Books!!

As we started our venture out of debt, the one thing we kept struggling with was the many good books that are available to read, "My Total Money Makeover" "The 9 Steps to Financial Freedom" and many others, was how do we afford books at $20-$30 a pop when you are trying to get out of debt?

This is just a plug and a reminder that your local public library is FREE! With the invention of on-line book buying, Libraries have become an after-thought. But, you can get a ton of good books - not just finance related- at your local library..and it's FREE!

And, for parent's, there are usually weekly activities for the little ones like story time and craft time!

Blog Spotlight: Budgets Are The New Black

We have been following Jolyn and her blog for a while now and absolutely love it!

Jolyn states in her profile that she is the "Wife of one Air Force man. Mother of three well-traveled children. Just another woman of this world saved by His Grace until His Kingdom comes. Welcome to my domain."

We share a lot in common...car, budgets, three kids and trying to hold it all together. We strongly encourage you all to visit her space!

www.budgetsarethenewblack.blogspot.com

Did you bring the "Dave Ramsey Book"

Have you ever wondered how getting out of debt impacts your kids?

Last night, we were walking through CVS and the requests started coming in! We need halloween candy buckets! Oooh! We should get that! Oooh! Do you see that car, can we get that? (You know the drill). Then, our oldest looks up to me and says "Did you bring the Dave Ramsey Book?" and I replied "no". Without any further discussion, our two boys went from the "I want's" to "oh, look at that!" without ever asking for anything the rest of the night.

The "Dave Ramsey Book" is his Envelope System for carrying and tracking cash for the budget.

I guess in the few short weeks that we have been on this journey...we really are changing our family tree! (Btw, my kids openly detest Dave Ramsey, his 'money' book, his TV show and would gladly go back to the "old ways" anytime! - lol)

The really cool thing in all this..our kids know what cash looks like...they watch it dwindle..and they watch us prioritize! Maybe our kids will NEVER have to debt snowball...that would be awesome!

Wal-Mart prints checks??

So, we opened a new checking account and were told by the bank that 150 checks would be 32.50 plus shipping. I was shocked and said "Then we won't use checks..." Well, I know you can't really do that.

I did find Wal-Mart prints checks! The traditional (old, ugly..but they work!) checks are $6.96 for duplicates. I think shipping was $2.00 or something.

This saved us over $25.00! Can you imagine? In this day and age, banks still charge these outrageous fees for items like this? ugh!

There is always a better solution out there if something seems to high!

Blog Spotlight: Mom's the word

We haven't had the opportunity to recommend any blogs to our follower's yet. But this one caught our attention based on the story "Everything I learned about life, I learned from coffee cake."

My wife and I are huge coffee cake fans. It is really how we economize...our philosophy is that "Any cake served with coffee is COFFEE CAKE...and COFFEE CAKE is a morning food!" Have you ever had chocolate cake with coffee at 8am? What a great way to start the day!

So, give Mom'stheword a look. She is a great, diverse blogger with a lot of good information

Thank God for payday!

I say that as a praise to God and in celebration that we have made it through the pay period.

Highlights:

Our envelope cash system had $662.00 in on 9/29. My wife shopped and fed for our family of 5, we had two birthday parties with gifts to buy - My wife continues to amaze! She walked into the toy store and said "I have a $20 budget, show me my choices". She is playing to win!!

And, that darn jeep needed an alignment, not an unknown cost - so there really was no stress there!

The great news is We still have $135.00 in cash today!

Truly, living on a budget and making each dollar sit down and take a number certainly makes you feel like you have more money! It is making a difference in our lives!

The "Negotiator"..

My wife is awesome! The "clunker" jeep is on the mend and the final thing is an alignment. WOO HOO!

So, we couldn't get into the tire store closest to us, so she picked another on. The price of an alignment at our store of choice was $56.00 and the cost at the one that could get us in was $71.00. The first words out of her mouth, "Do you price match?" Could I love this woman more? SHE IS INTENSE at getting this thing paid off. She will never cease to amaze me.

A reminder....EVERYTHING IS NEGOTIABLE! And, by the way...they did price match!

Way to go, honey!

Freedom is never FREE

In memory and respect for those lost on 9-11-01 and the years following.

What's the deal with cars??

OK..for any of you reading this that are still in high school - or even Community College with vocational classes - TAKE AUTO!

So, the other night I was at guitar class and I got a call from my wife that when I left, our car (not the new clunker jeep) left behind a puddle of some reddish fluid. C'mon....this was supposed to be old reliable that we didn't have to worry about!

Dave Ramsey talks about Murphy of "Murphy's law" fame. I cannot stress enough the importance of having some little contingency of money set aside before you start getting out of debt for little emergencies like this. The great thing is... it keeps what you have set aside for credit card payments going to the credit cards...and you can still keep driving.

I can honestly say, and I am sure anyone who is on their way out of debt can attest, with a little money set aside and a light at the end of the tunnel...these little fluid leaks and stuff become a minor irritant as opposed to a life altering event!

Half way there!

It just dawned on me that we are half way through paying off this $59,000 beast! Hooray!

One of the things that I have noticed when you start to pay off your debt..is that you tend to want to reclaim power over every aspect of your life. Over this past holiday weekend, we actually spent the time at home (let's call it a stay-cation) and worked on getting our house organized. We cleaned our storage room ( a lot of junk), raked yards, mowed, weeded. And, it hasn't stopped. We are now starting to go through the house and get it straightened out.

All this to say is that I didn't realize how powerful getting a hold of money would be. We are control freaks...and are getting freakish about getting a hold of EVERY aspect of our lives!

Replacing luxury with function

As I have previously posted, we actually did sell our 2004 Lincoln Navigator for $17,000 and paid debt with that money. We held back $5000.00 for a new "beater" car. The only two requirements were that it had to fit all 5 of us and have 4wd because we live in the mountains and are blessed to get snow.


After a lot of looking...we settled on a 1999 Jeep Cherokee Sport
It's green..the color of money..and we paid $3,600 for it. That leaves us $1,400.00 for any little repairs, registration and (a priority to my wife) tint the windows. Look at us? How responsible are we? We not only paid cash..but we held money back just in case we needed it! WOO HOO!

I am not sure where "Murphy" (from Murphy's law fame) was hiding in that darn truck...but he was either under a seat, in the glove box, or somewhere.


1. We knew that there was a noise when it was driven and backed-up. We decided it was the transmission and hopefully minor. We took it to a horrible transmission shop were they held it hostage for 6 days doing their "diagnostic checks" and finally decided that the transmission had to be rebuilt at a cost of $3500.00. My Godly and intelligent wife called our mechanic who told her to get it out of that shop ASAP and take it to AAMCO (http://www.aamco.com/). It ended up being fluid change and adding Pozzi additive to the rear differential to the tune of $168.00. Dodged a bullet there!


2. We took it to our mechanic the next day for oil change, check the "washy feel" and because (low and behold) we were unable to put gas in the truck - it just sprayed back. Well, of course, give even a good mechanic the opportunity and they will "maximize" their profits. So, they fixed the fuel issue to the tune of $220.00 and checked the brakes for $19.99 and changed the oil for $40.00. So, we are $290.00 there.


3. The other recommendations from the mechanic were a tune up to the "tune" of $300.00 and replacing some front end parts (tie rods, bushings, etc) to the tune of $600.00. We are blessed to have wonderful friends who actually work on cars and he agreed to do it if we bought the parts...so $900.00 worth of repairs for $190.00. Woo hoo...cooking with steam..


4. Uh oh, there's Murphy. We were driving home from Church on Sunday and - oops! There goes the fuel pump! Back to the mechanic and $668.00.


5. DMV still wants their money. $147.00


So, how did we do?

Transmission: ..................$168.00
Maint/Gas issue ..............$290.00
Front end/tune ................$190.00 We love Chris and Jen!!
Fuel Pump ........................$668.00
DMV ..................................$147.00

Total .................................$1363.00


Not bad..and it is running great. OK, so when our friend changed the serpentine belt, the AC started to scream like a dying pig...but that's a little adjustment.....lol


Our advice: If you are going to buy a use car...know about cars, know someone who knows about cars...and check out http://www.edmonds.com/ for historical information about cars! We are still in the ball-park of our budget. And, hopefully, we have left Murphy on a curb somewhere for someone else to pick up :)

Plasectomies

Dave Ramsey has a great segment on his Friday night Fox Business News show called "Plasectomies". It is viewers video's of them destroying their credit cards and getting intense about their debt.

I recently started guitar lessons at a local community college. What a deal: 17 lessons for $56.00 (about $3.00 lesson) as opposed to the $100+ I have seen.

Check out this video...guess what my guitar pics say?

http://www.youtube.com/watch?v=vqK3GzcVO2Q

Ca$h for Clunker$

Ok, this is a whole new twist to the US Government's Cash For Clunkers program.

In 2007, we were expecting the arrival of our daughter and knew that the 1999 PAID FOR Isuzu Rodeo (did I mention it was paid for) was not going to hold our family of 5. My wife had went back to work on a short-term project making great money. We created a budget of $20,000.00 (it's funny to say budget - that's the amount we were willing to finance) for a new truck that would hold all of us comfortably and get us through the snow in the winter time. We knew we were going to buy used..because we were really smart at this point and we were going to let someone else pay the depreciation on the car...and we were going to get a deal.

We will skip past the part where we obviously either had a stroke or lost our ever-loving minds...but we end up driving off the lot from CarMax in a 2004 Lincoln Navigator with every upgrade known to man! I mean..the DVD system had THX surround sound, the seats were both air-conditioned and heated, the running boards "popped" out to greet you.. it had it all! And, the price tag (remember we set a budget of $20,000) was $32,000.00. We got a whopping $2,500 for our PAID FOR Isuzu Rodeo and ended up financing $30,000.00 or so. We looked great in the car...we all loved it...the kids called it the "Alligator" and we had personalized plates on it G8R CRW (for the 'Gator Crew). But, sadly it was all a big old lie and we really couldn't afford it, but my wife's job made the almost $700/month payments - so we were surviving.

My wife had stopped working and we were straddled with this looming $27,000 debt load and no additional income to pay it. So, we "CHASEd" down some credit cards and got 0% financing for 1 year to "HELP" us out...are you seeing how we go from bad to worse here??? I mean, debt did so much for us in the first place, we just needed to expand our horizons!

So, this past August, 1 year in to our own "Total Money Makeover" my wife came down to my office and said "I think we need to sell the truck." We listed that think on www.Craigslist.org on Monday and by Thursday, the truck was on it's way to a new home in Idaho..for $17,000.00

So, let's look at the math of buying a new-used car that someone has already "paid the depreciation down for you".

1. We gave up our paid for 1999 Isuzu Rodeo for $2,500. (You'll laugh at the next post were we talk about the 1999 Jeep we bought to replace the Navigator).
2. We went an additional $29,0000 in debt.
3. We sold the truck 2 years later for $17,000 still leaving approximately $15,000 from the original purchase on our debt books. Dave Ramsey (http://www.daveramsey.com/) calls this a "stupid tax".

So, what did we do with the money we got? We paid down $12,000 in debt and we set aside $5,000 for our new "clunker". So in reality we still have about $15,000 of the truck still on the debt books...about half...and we don't have the beautiful truck any more...but we don't have the maintenance costs, cost for premium fuel, and most importantly, we don't have the burden of driving around a big old fat lie.

But, what we do have is intensity, commitment and motivation! This is what is looks like to get intense about getting out of debt. Sacrifice. Achieve. Win!

"Live like no one else, so later you can LIVE like no one else" -Dave Ramsey

What's green and hurts when you spend it?

CASH!

I have heard it said that when you spend actual cash, it gives the same sensation as pain! And, man, we are feeling the pain :)

We decided as apart of our new budgeting strategy and new life, we would enlist Dave Ramsey again and follow his envelope system. Simply put, we are cash-flowing our monthly expenses instead of credit card...it is an amazing thing to actually "THINK" about what you are spending..instead of pulling out the card!

Not everyone is on board with this system. We were at Wal-Mart this weekend for some shopping. The people behind us in line were none to happy when we made the cashier ring up our "gifts" separately, our household cleaner separately, our clothings and other items separately. I have a feeling that the cashier has been through this before..because she was very patient with us. But, I tell you this...doing this made us really think about what we were buying and where the money was coming from. We looked at prices...we put stuff back..we actually had to think what we had at home and what we could do without.

We have easily spent $200.00 at Wal-Mart without a thought. By using the envelope system...we spent $20.54 on our gift, $64.30 on our household supplies, and $3.49 on an infant tooth brush.

I would encourage you to make a list...set a budget...and carry cash into any store. You will become very wise to how these stores are trying to get all the money they can..and you'll get wiser on how to keep it for yourself!

A budget? You've got to be kidding!

John Maxwell says, "A budget is telling your money where to go, instead of wondering where it went."

Let me start with this: I hate budgeting! I hate sitting down at the beginning of a month and trying to figure out where our money is going to go and have to think about: medication, gifts to friends and family, can we get a babysitter, can we go out to get a burger....and on and on. It is better now..but, still not my favorite way to spend time.

We started budgeting last year (2008) and it quickly dropped off our radar due to a family illness and chaos. But, we have gotten back on track with in the last month and we are making our money "sit down and pay attention". Strangely, it really does feel like we have more money! We are budgeting $200.00/month for clothes (and before you think that's a lot...we are a family of 5 and 3 of them are growing like crazy!) We have money set aside for babysitters and a little dining out and fun! It's crazy...you get more disciplined and you have more money. Where did it all go before???

I have to give credit to my wife...she has become the grocery-shopping dynamo and has not broken her budget AT ALL! She carries here little pink calculator (bought for $1 at Wal-Mart http://www.walmart.com/) around and makes every dollar count! SHE ROCKS!!

We would love to hear any of your budget-stretching suggestions attached to this comment.

Who is this Dave Ramsey character??

We have been in some kind of debt as long as we have been married. There have been those time when we were a little better off..and certainly worse off. The best time was November 2003 when we were completely debt free...except for the new house we purchased...and we had $30,000 in debt. And, that was just about 6 years ago....what did we do??

Sometime around July 2008, I was on in Oregon on business and driving around. I was listening to talk radio and heard this "folksy" guy with a thick southern accent talking about baby steps. - and a light bulb went off. That's what we needed...some little bite sized chunks to get ourselves out of this mess.

Dave's approach is really basic:

Step 1. build a $1,000 emergency fund so you stop using credit cards immediately!.

Step 2. List all debts smallest to largest (regardless of interest rate) and start throwing everything at #1 while making minimum payments on the rest until they are your top debt. This is referred to as the "debt snowball".

Step 3. Build a 3 to 6 month emergency fund after you are debt free (not including the mortgage).

Step 4. Invest in retirement

Step 5. Fund College

Step 6. Pay off your home early

Step 7. Build wealth

To be honest, step 4-7 isn't even on our radar yet. But, as you can see from our debt reduction section the left side of this blog...we are killing our debt. And, right now..that's the babystep we take!

I would encourage any of you to get Dave Ramsey's "The Total Money Makeover" (http://www.daveramsey.com/). If you are so far in debt..buying a book seems like an impossible dream - I checked mine out at the library for free! Remember that place? The library - yeah you pay taxes to have it - use it!

Not living here!

So, let's take a moment to clarify the title of the blog: "NotLivingHere". As we have become more intense in our debt reduction plans and actions, the tougher it seems to get. You'll read on in this blog how we sold our 2004 Lincoln Navigator (www.lincoln.com) and bought a 1999 Green Jeep with 144,000 miles on it and it spent the first weeks going from shop to shop. We would take a deep breath and look at each other in agreement and say "It's OK, we're not living here!" Remember, poor is a state of mind..broke is a temporary situation!

Uh oh! How'd we do that?

Can you imagine waking up to find that you have spent $59,023.20 and you really didn't know where? You don't see bags from Bloomingdales (www.bloomingdales.com) or Macy's (www.macys.com) in the bedroom. You walk out to the living room and there is no 58" plasma screen that you picked up at Best Buy (www.bestbuy.com) that past weekend. And, then, there it is...you walk out and see the nice shiny 2004 Lincoln Navigator out in the garage. But, that cost $33,000.00 and you bought it in 2007 (because you were doing the right thing - you bought used and let someone else take the equity hit, right?). So, where else did it go???

Well, that is what this blog is going to be all about. Not so much about how we spent ourselves into debt...but how we are getting ourselves out of debt and how we are going to stay out. We welcome you along for the ride and if there is anything you can glean from this and not follow the same path..or lessons that you have learned and can share with the blogsphere...then we have left the world a little better (and a little less in debt) than we entered it!

So, a little about ourselves: Jeff is a 39 year old project-manager for a large IT company. Melissa is a 37 year old work at home mom (taking care of our 6, 4, and 18month old is WORK! - make no mistake). And we are the parent's of three wonderful children who live near South Lake Tahoe in California. Hey...if you are going to be in debt...pick a good spot, right?

So, over the next couple of days, we hope to get you caught up on:

1. How we found Dave Ramsey (www.daveramsey.com)
2. A budget? You want a budget?
3. Ummm, I am not going to carry around envelopes!
4. I cannot shop on $600.00/month for a family of 5!!
5. You sold the Navigator for that piece of crap?
6. Did you know that "Murphy" was in the back seat of the Jeep?

So, be patient as we get you caught up and move forward! It will be a fun ride!