We have a lot to update on right now! I will work on doing a post about our past few sessions later.
My exciting news is that this week we received our tax refund! The time is NOW! We are about to put our cash reserve into savings, pay off one credit card in full and work on the 2nd almost completely! The excitement I have right now is unexplainable!
Keep watching that cute little ticker at the bottom of the page, it is going to be soaring in the very near future!!!
We are so thankful for God's faithfulness in teaching us, and the discipline to stay on task. The freedom that comes with this feeling is hard to put into words! We have a lot of goals in the future concerning paying off our mortgage and learning how to invest and make money! I hope if you are reading this you are also working on a journey of your own.
I have to share with you something that has completely encouraged me. I was praying about our debt. I felt completely condemned for the repetitive times we have fallen into credit card debt. But I was encouraged to hear God say, "Each day is your chance to start fresh and change!" If you had problems with expensive lattes every day hurting your budget or shopping too much, eating out every night, etc. Today is the day that you can start fresh and say I WON'T do that and I will take my debt seriously!!! We learned from our teacher, he is NOT about cutting out fun and entertainment, but if it is something that you let get out of hand and hurts your budget, find a new way to experience fun.
It has been a full month in our class and we have learned SO much! I need to correct one thing, while we have used a few clips from Dave Ramsey in our class, we are actually being taught by a CPA who attends our church. We are learning great stuff!
We started out with some basic financial/business terms, coming up with "dream sheets" to assess what our future goals are once we ARE debt free. Not just that though, it is focusing on our lives and finding purpose and destiny, not just living for the daily grind of things. I haven't completely finished mine yet, but I have felt like God has wanted me to work with teen girls for a couple years now. I did still have that on my heart as I approached my dream sheet, so we will see where God leads.
The following week we started working on commitment sheets. I enjoyed these as our teacher has given us great commitments every week.
#1 commit to coming every week to class--done, we won't miss it! :)
#2 I will not condemn myself or my husband - great reminder as that was the week we also sat down to actually add up our debt and see what our budget is monthly. The goal is to remember that you can change everything from this point on so don't sit there and kick yourself, get excited about the changes you commit to making!
#3 Read a business book. We learned just this last week that a typical person reads 1 book a year, while a typical millionaire reads 2 books a week. Time to change our thinking!
Here is the basis of what we have been taught:
STEP 1 - List your Debts
EVERY DEBT
Loans from relatives/friends
Back taxes
STEP 2 - Create a budget
Basic budget
reflection of how you are really living
present budget
STEP 3 - Cash Found
Include items from finding money session
Include items from your budget that you can trim
What can you sell? Ebay/Craigslist
"They still make it" rule. You can sell it - get debt free - then buy another one!
Build $2,000 cash reserve first ($3,000 mentioned for our size family)
Debt with the highest rate first - consumer debt - credit cards, car loans.
Apply all of cash found and monthly savings to pay down the debt.
Continue each month until first paid pff..then continue one with the next loan adding the paid off monthly payment to the next debt.
Now, into the next segment. Having we have an idea of what we spend monthly, having our numbers in black and white of what we actually owe now we get to the fun part!
FINDING MONEY
This part consists of figuring out if you need to pay for all the things you are paying for monthly. Our first step was checking out W-4 and realizing we are still missing out on taking at least 2 exemptions! We learned that the average person gets a $2500 refund from their taxes, meaning they are giving the IRS approximately $200/mo freely. It is time we pay attention to our cash flow and keep what is ours. We realized an extra $200/mo would be huge in helping us eliminate debt. I am not sure if the 2 exemptions will add that much, but I definitely can't wait to see how it helps!
This is also a good opportunity to check your car/house insurance and compare prices. We were taught that once you stick with an insurance company they are more likely to raise prices and not try so hard to keep your business, which can save you money if you switch--making sure you compare exact coverage between two companies or more. We were told to raise our deductible to around $1000 if possible (more related to this in a minute). Also, if possible, pay on an annual or semi-annual basis, the interest rate on monthly payments of insurance can be around 18-24%!!!
Go to missingmoney.com this is a legit website that helps you find money that could actually be owed to you! I have known numerous people who have found money on this site, take 5 minutes and see! I like to check it once in a while for family members just to verify if they are owed anything and don't know it! (I sent this to my MIL and sure enough, she found money!!)
-Drop your PMI (with your mortgage)
-Drop your landline - we just received our free 30 day trial of www.magicjack.com which is $46.90 to buy the unit but it includes one year of free phone service! Then it is $19.95/YEAR after that! I don't know about you but that will save our household around $256/year just with that one step! Check out the site to see the details! I am telling everyone I know about that darling device!!!
-Pay bills online save around $4.40/month from stamps (come May with the postage increase, if you also figure about 10 bills going out monthly).
-If you aren't already, use free checking, saving $5-7/month. (Check your bank and verify, I was on free checking for a long time and then they tried to start charging us, we got it corrected!)
MOM STAYS HOME?
Hidden costs of working mothers:
Income taxes - 2nd spouse is taxed higher
Child care
Working Expenses (dress clothes, eating out, gas money, eating out more for dinner or paying more for groceries at the last minute instead of having time to plan meals ahead, etc)
Household expenses
It is so interesting, when we did this analysis on my job we came to an amazing conclusion...I was making $200/mo to be away from my family for 160 hours AND miss my kids terribly and never have enough energy to really invest my time in understanding what they were learning at school, etc. I am so thankful that has all changed now!
In ending this post I will share a few things that our teacher shares every week, quotes that stick with you and our Bible verse.
Proverbs 23:7:
7a.For as he thinketh in his heart, so is he
We use this verse to realize that what you dwell on and believe is what can happen when you apply faith to it. So if you think you are always going to be broke...guess what? We lived by that for a long time looking at our parents and realizing they still dealt with money issues, so we figured we were just like them. Now that we are coming out of the box in our minds..things are changing hugely!!
To correlate this in your mind here is our great quote ...
"If you think you do a thing or you can't do a thing you are right"
- Henry Ford
of debt that is! My husband and I decided in the summer of 2008 we were finally going to take the verse that states having an inheritance for our children and children's children to heart! It was time to start working towards that goal instead of fearing it and hoping someone would show up and pay (or pave) the way!
While we did spend a little on our credit cards in the fall to handle back to school, clothing the kids because they grew not so much because it was that time of year! We turned around and paid over half of it back off again immediately! We were already on a better path the the 6 years previous that we were married and turned a blind eye to the interest and accumulation numbers on our credit card statements.
December of 2008 turned a great fortune for us! Not only did we do all of our shopping except for 2 small things in cash but we also received $843 which rolled right into our credit card payment for that month! Excellent feeling! Not to mention paying all of our other bills on time and some even 2 weeks early! We rarely pay bills late but what a nice feeling in the holiday season to be ahead instead of in lack!
This blog will provide a diary of these next months as we work on Dave Ramsey's Financial Peace University through church and learn new ways to handle our money, debt and aim to no longer be the slave that borrows but becoming the lender!
This is an exciting year and I can't wait for classes to start on January 28th!
