tag:blogger.com,1999:blog-63607383947479329772024-03-13T17:01:54.322-07:00Our Dave Ramsey, Total Money Makeover ExperienceDocumenting our experience using the Dave Ramsey Total Money Makeover approach to getting out of debt and building wealth.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-6360738394747932977.post-83356730374056871102010-01-13T08:13:00.000-08:002010-01-13T08:36:19.802-08:00Okay, this time it's for real.We've had several, fitful starts and stops getting started with Dave's program. I think the biggest problem was that my wife and I weren't both on the same page at the same time when trying to start the program in the past. <span style="font-weight: bold;">This is absolutely vital to the success of the program</span>. Last month we both decided it was time to make this work. We have our third child coming in April and we're not sure what her work situation will be when the new baby arrives. For at least a short time we will need to live off my income alone and long term it is very likely her income will be less than it is now.<br /><br />We decided to setup a budget based on my income alone and use her paychecks to build up a savings account for when the baby comes. Not exactly the traditional plan according to Dave. I was struggling with this approach because I felt like we should follow the plan if we were going to commit to this. On the way home one night I was listening to Dave's radio show when a listener called in to ask if they should build up a larger emergency fund before beginning to pay down their debt. In her case told her no, but he said if you thought job loss was imminent or were going to be <span style="font-weight: bold;">having a baby in a couple months</span>, then yes, it's alright to shuffle the order a little. So that was it, we went forward with our plan.<br /><br />It was tough putting together our first budget. We used the budget tool on the http://mytotalmoneymakeover.com site. It was a huge help. I won't bore you with the details of our budget process but I did learn a couple interesting things as a result:<br /><ol><li>We spend an obscene amount of money on childcare. For what we pay for 2 kids, 2 days per week we could buy a second home...</li><li>Whatever you think you need for groceries in a month is too little.</li><li>This was a biggie for both of us - While the budget did put limitations on what we were able to spend, this structure was actually helpful for two reasons. 1.) It put a limit on how long we had to wait for something, if the money was gone we knew we could get it next month. 2.) <span style="font-weight: bold;">It took the guilt out of spending money</span>. As long as we stayed within the guidelines of the budget we didn't have to feel bad about what we were spending because we knew it was properly accounted for.</li></ol>For the first time in years we have a savings account built up and it's only been one month! I can't wait to see what we can do in the future.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com2tag:blogger.com,1999:blog-6360738394747932977.post-26362416069397271832008-10-27T19:50:00.000-07:002008-10-27T19:55:16.625-07:00I Do Not Choose to Be a Common ManI like when Dave gets political. He doesn't do it too often but lately on his radio show he's gone off a couple times regarding the current financial crisis. He makes good points. On his Friday show he read the following piece on personal accountability. It's very poignant and especially applicable today.<br /><br />---------------------------------------<br /><br />I Do Not Choose to Be a Common Man<br /><br />It is my right to be uncommon—if I can.<br /><br />I seek opportunity—not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me.<br /><br />I want to take the calculated risk; to dream and to build, to fail and to succeed.<br /><br />I refuse to barter incentive for a dole. I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia.<br /><br />I will not trade freedom for beneficence nor my dignity for a handout. I will never cower before any master nor bend to any threat.<br /><br />It is my heritage to stand erect, proud and unafraid; to think and act for myself, enjoy the benefit of my creations and to face the world boldly and say, “This I have done.”<br /><br />By Dean Alfange<br /><br />______________<br /><br />*Originally published in This Week Magazine.<br />Later printed in The Reader’s Digest, October 1952 and January 1954.<br /><br />The Honorable Dean Alfange was an American statesman born December 2, 1899, in Constantinople (now Istanbul). He was raised in upstate New York. He served in the U.S. Army during World War I and attended Hamilton College, graduating in the class of 1922.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-56385753326236101072008-10-12T17:33:00.000-07:002008-10-12T17:40:35.624-07:00Back on the wagon?I started listening to <span style="font-style:italic;">Total Money Makeover</span> again today. As you may have noticed, the market and the economy are struggling a bit right now so I thought it was a good time to get back on track with our financial makeover. To that end I've decided to try to spend cash rather than using our debit card. Hopefully that will help as I tend to spend quite a bit of money during the week on lunch, happy hour, coffee, whatever. By limiting myself to $xx.xx/week I'm hoping to help stop some of the hemorrhaging our bank account has been experiencing lately.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-57763010399430726702008-01-25T05:59:00.003-08:002008-01-25T05:59:45.953-08:00GR DaveDave was in Grand Rapids last night. Did anybody go? I'd be interested to hear how it was.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-36875471725597153662007-12-12T06:36:00.000-08:002007-12-12T06:38:08.024-08:00Dave's Coming to GRSo Dave Ramsey is coming to the city where I live. Should we shell out the cash to go see him? I'm not exactly sure what goes on at these events. If it's just a big rally, wooo hooo let's save money, I'm not interested. However, if he gets up there and actually teaches his techniques, I'd go for that. Anybody out there who's been to one of his shows?tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com2tag:blogger.com,1999:blog-6360738394747932977.post-83945245712284423152007-12-10T11:52:00.000-08:002007-12-19T08:53:56.833-08:00Off TopicIf you're interested in politics and the ongoing presidential race check out the Flex app that my buddy, <a href="http://merhl.com">Joe Johnston</a> and I built. It uses the Digg API to track information on the 2008 candidates.<br /><br /><a href="http://merhl.com/diggCandidates/">Digg Candidates Dashboard</a> <br /><br />Here's a few screen shots:<br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://merhl.com/wp-content/uploads/2007/12/picture-1.png"><img style="cursor:pointer; cursor:hand;width: 320px;" src="http://merhl.com/wp-content/uploads/2007/12/picture-1.png" border="0" alt="" /></a>tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com0tag:blogger.com,1999:blog-6360738394747932977.post-16749413690371410852007-11-06T19:00:00.000-08:002007-11-06T19:07:17.693-08:00Mint - Online Money Management<a href="http://mint.com">Mint </a>is a new Web 2.0 finance management site. These sites are a dime a dozen but I saw this one on <a href="http://lifehacker.com">lifehacker</a> a while back and they gave it a rave review so I decided to check it out. I have to say I was quite impressed. Setting up my account was very easy and within minutes they were showing me spending trends, total debt etc.... That said I stopped checking it for a while but I noticed their ad on my AdSense account so I logged back in and they've made significant updates in the past few weeks. One that particularly caught my eye was on the Spending Trends screen they not only show you what industry you spend most of your money at (ie. food) but they list the places out by name so I can see that in the last month I've spent almost $40 on coffee...<br /><br />I'm going to check out their budgeting tool in the next couple of days. This could become the tool I've been needing to help get me on track and keep me there. Stay tuned...tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com3tag:blogger.com,1999:blog-6360738394747932977.post-69704993409730722972007-10-05T08:22:00.000-07:002007-10-05T08:24:29.037-07:00I suck at this......both keeping up on the blog and keeping up on the program. We've pretty much done nothing to make this thing work so far. I really need to get the budget in line but I don't have the motivation for it. We did get rid of our 2005 Accord and replaced it with a 1999 Grand Prix. We had to borrow $1600 to do it but that should be paid off in a couple months if we get our act together.<br /><br />I did get a new job with a significant raise so hopefully that will help. I start there on the 15th. Maybe that will give me the motivation to put together a solid budget. Wish us luck.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-49816477433276435532007-09-17T06:16:00.001-07:002007-09-17T06:21:05.502-07:00No post for a while...I'm still here and we're still doing the Dave Ramsey thing. Nothing new to report really. Still struggling with the budget. Still breaking the rules occasionally but I think we're doing alright for just getting started. I spoke with our financial advisor a week or two back. He recommended taking some money out of the mutual funds to put towards an inexpensive vehicle. We've looked at a few over the last week. Found a really nice one in the paper this weekend. It's about $2,000 more than what we planned on spending but it would probably last us at least 2 years rather than 10 months. If we kept making our current payment we could have it paid off in a year so I'm going to consider it. He also suggested cashing out our universal life insurance and using the money to buy term life insurance. I'll think we're going to do that as well. <br /><br />More later...tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com0tag:blogger.com,1999:blog-6360738394747932977.post-64998368283479751152007-09-05T05:25:00.000-07:002007-09-05T05:35:49.569-07:00Week 1Well, week 1 is "in the books." Not much to report really. We stayed pretty close to our budget so far I believe. There are still some things we need to tweak, BLOW money, misc. (had to buy a new battery for the lawn mower)...<br /><br />I'm meeting with our financial adviser today to go over a couple of the questions from my last post, we'll see what he says. We are also going to meet with our "car guy" this week to see what he can do to get us out of at least one lease and into something around $5K. I'll keep y'all posted on how these things pan out.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-9188556970812223562007-08-30T19:49:00.000-07:002007-08-30T20:14:59.715-07:00QuestionsLet me start off by saying thank you for the encouraging comments a few of you have left. It's good to hear from people who have been successful at this.<br /><br />Last night I finally took a crack at putting together a budget using the budgeting application at the TMMO site. That was pretty depressing. We only have about $340 left after all our expenses but that doesn't include any savings for clothing, entertainment, gifts, etc... so I think that number will be a little lower after accounting for those things.<br /><br />This has raised some questions for me. Sadly, we have two leased cars with payments of $245 and $291/month. If we could get out of those we'd obviously be much better off. The problem is there is little to no equity between the payoff amount and what the cars are worth. We also have nothing saved up to buy a new car so even if we sold one or both we'd still have to get a loan to pay for the "new" car(s). We're going to out this weekend and see if we can find a decent "cheap" car and see exactly what we can get for one of the leases. Other than that I'm not sure what to do about this problem...<br /><br />We also have around $7200 in mutual funds left over from my college savings that my parents started for me when I was young. We've always treated this money as if it didn't exist and relied on it as an emergency fund if we ever need it. Now I'm wondering if we should take some or all of it out to either pay down some of the debt or help with the car situation. I've been searching around the Dave Ramsey MyTMMO site but haven't found any specific answers to this question.<br /><br />Finally, my wife has a variable universal life insurance policy that her parents started for her when she was young. It costs us $84/year to keep it going. I know Dave says these are absolutely useless investment tools but the payout on it is only about $740 and since it's so cheap I'm wondering if it's worth it to cash it out. I don't know if there are penalties or tax implications for doing this.<br /><br />ugg...tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com1tag:blogger.com,1999:blog-6360738394747932977.post-55260988665648588002007-08-30T19:16:00.000-07:002007-08-30T19:49:34.348-07:00I'm a little shocked...I wrote a post over at <a href="http://tttechblog.blogspot.com">my other blog</a> about the My Total Money Makeover web site using Adobe Flash and Flex (I neglected to mention this in my post but they also use Coldfusion). I thought this was pretty cool since I'm also a Flash/Flex/CF developer myself. I didn't really think much of it after that but I just noticed that I had a couple comments from people who I think work on Dave's team!<br /><br />Thanks for the comments guys!<br /><br />If by some coincidence you're still following this blog I'd love to hear a little about the apps. How about an AIR version of the budget application? You've obviously got a great team over there but if there's any interest in doing that I'd even be open to helping out if at all possible :) <br /><br />UPDATE: I had another thought, a Flash Lite app to update your budget on the go would be sweet too!tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com2tag:blogger.com,1999:blog-6360738394747932977.post-21072347875979790232007-08-29T04:15:00.000-07:002007-08-29T04:19:16.049-07:00Day 4Today is only Day 4 of our Dave Ramsey adventure and I've already broken the rules. I spent $2.54 yesterday on a bagel and coffee...<br /><br />We're still struggling with putting together a budget. This part really sux because it's neither fun nor easy to do. I've used the Gazelle Budget Wizard from the MyTMMO web site which helped but I don't think my numbers are very accurate. Oh well, they say it takes a few months before you get all the wrinkles ironed out. Hopefully by the next post we'll have the budget finalized for Sept. and I can post our starting amounts for the individual debts.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com3tag:blogger.com,1999:blog-6360738394747932977.post-81095375845691306122007-08-26T15:52:00.000-07:002007-08-26T15:54:11.435-07:00Day 1Well, I turned 30 yesterday, if that wasn't bad enough, today we start our total money makeover. So far so good. I don't think we spent a dime today ;)<br /><br />We're fortunate enough to have enough put away to jump right into step 2. We need to work out our budget and figure out exactly what our current debts are. Once I have those numbers I'll post them here as a baseline to document our progress. Wish us luck!tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com0tag:blogger.com,1999:blog-6360738394747932977.post-24389841487326260782007-08-26T08:05:00.000-07:002007-08-26T15:59:00.318-07:00The ProgramWithout stealing too much of Dave's thunder I thought I'd give a quick run-down of what the "Total Money Makeover" is. The concept is simple. Don't borrow money, ever. If you can't afford it right now don't buy it right now. Dave admits that while the concept is painfully simple, putting it into practice is very, very difficult.<br /><br />The program is broken down into "Baby Steps." Baby step 0.5 is to make all of you minimum payments and get current with all of your creditors. Once you've done that move on to baby step 1 which is to build up an emergency fund of $1,000 as quickly as possible. Now on to step 2, pay off the debt. In this step you use the "debt snowball" (I'll explain the snowball in another post) approach to pay off all of your debt except your house. According to the book, most people are able to complete step 2 within two years. It's not easy but it's totally worth it. Like Dave says, "live like no one else does so later, you can live like no one else does."<br /><br />After the second step you're debt free except for your house and you're ready to build up a full emergency fund. Dave Ramsey defines a full emergency fund as enough money to cover your living expenses for 3-6 months. <br /><br />Once your emergency fund is fully stocked you can move on to step three which is start investing and working on paying off or saving up to buy your home.tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com0tag:blogger.com,1999:blog-6360738394747932977.post-14720606398856566022007-08-20T20:09:00.001-07:002007-08-20T20:13:50.347-07:00Getting Started...Well, I just finished listening to Dave Ramsey's Audiobook "The Total Money Makeover: A Proven Plan for Financial Fitness" and I'm very excited to get started on working our way out of debt. The first step is to get my wife on board. Hopefully she'll be listening to the book very soon. The plan is to start the program on my 30th birthday which is this Saturday. I'm going to do my best to cover our document our experience here with the hopes that it will keep me motivated as well as help other people who might find themselves in a similar situation. Wish us luck!tthttp://www.blogger.com/profile/00280254935362718675noreply@blogger.com0