Long week of work and lacrosse, not upset this week has come to it's end. After our hiccup with the hubbs and his lay off last year we have been working very hard on our finances. If you have followed anything on my blog you know that I read a lot, especially when it comes to finance. I have almost finished Chris Hogan's "Retire Inspired, It's Not an Age It's a Financial Number" (Chris works with Dave Ramsey). It is really enlightening. I highly recommend this book, and it does not matter what age you are. In fact I would recommend reading it in your 20's so that you can retire inspired. I really wish I had started sooner with thinking about things like this and thinking about saving rather than the immature notion of immediate gratification. That may be another one of those all too important life lessons you have to learn for your self.
Our life changed, our thought process changed, and our eyes were opened wide when my hubby was laid off two weeks shy of his 25 year anniversary with his company. Update on that in case you did not know. The hubbs is back with his same company, at his previous managers request, after 6 months of looking for another job. He did get a raise and with their new product launch has been making a great bonus and we are taking full advantage of this extra income to pay off our house. An irresponsible response to this extra income would be to buy new cars that we do not need or take lavish vacations etc. . Because we have been debt free, except the house, for a couple of years now that was not our response to this extra income. It would be so great to be free of house payments so that we could really save for our "Inspired Retirement." We are not only paying down the house but, we are adding to our retirement savings.
Yes, I have two boys getting ready for college in one year and in four more years. We have been saving for college since the boys were born, it is never too early to start a child's saving fund for college. College is important but do not skip saving for your retirement to save for your kids college. This is not a Dave Ramsey thought and I do not remember exactly where I heard it but it makes a whole lot of sense. Banks will let you borrow money for college, they will not let you borrow money for your retirement. This one is a Dave Ramsey, kids can get jobs and help pay for their college. You do not want to have to depend on your kids to support you in your retirement. It is not their responsibility.
Recommendations for today: If you have kids start a college saving fund, no mater what age you are start a retirement fund (IRA, ROTH IRA etc. . .), read a book on finance (Dave Ramsey, Suze Orman, or Thomas J Stanley), and last but not least enjoy this beautiful day.
Stay tuned because college planning is coming. . .
Showing posts with label savings. Show all posts
Showing posts with label savings. Show all posts
Friday, June 23, 2017
Friday, August 12, 2016
Friday and Finances. . .
Since it is Friday and I try to talk about finances on Friday I am going to talk a little about them today. You all know how much I like Dave Ramsey and I will start by saying if you have not read his book or at least looked at his website, Dave Ramsey, I highly recommend it. You may not agree with everything he has to say but he does make a lot of sense about money matters. I do not agree with everything, but there are areas that he really helped my family.
I would suggest you also check out his "Tools" section on his home page. He has what he calls "ELP's" this is an endorsed local provider. This is a real estate agent, insurance provider, or financial adviser that follows the Dave Ramsey plan but is located in your area. The hubbs and I looked up an ELP to help us move our kids 529 plan that we had set up years earlier and just to talk to someone else that followed Dave Ramsey. They have helped us for the past ten years and they were one of the first folks I called when my very sweet hubby was displaced. We knew we were going to have to move his 401K and possibly his pension and a few other benefits. We had no clue how to proceed, thankfully these guys knew exactly what we needed to do and they made this part of our displacement very easy.
One other thing I will point out that was a big benefit to us is Dave's debt snowball. This helped us get out of debt except for our house and helped us get our emergency fund in place. That emergency fund is really important because, should the worst case scenario play out, that will pay our bills. The funny thing is, since they stopped contributions on his 401K and his HSA his severance pay is actually more than when he was actually working. This has allowed us to add to our emergency fund and to add extra on our house. I am also still using my envelopes just as I did before our displacement. The envelope system is great and I encourage you to check it out too. The envelope system helps you stay with your budget and helps you save for specific items like: vacation, a car, college tuition, or the braces your kids might need. I have an envelope for each one of those myself. I put my college on hold when my dear hubby was displaced but we used my tuition money I had already saved to buy him a new laptop and a printer. That money did not upset our regular budget because I had already saved it in my envelope. If you are going to use a particular envelope's money for something other than what it was intended it is very important that you and your partner are in agreement on that move. A budget and the envelope system only work when both parties are in agreement and work together.
The most important thing to remember is that a budget is a living organism, it grows and changes with each month or even week depending on your life style and where you are in life. You must look at it each month to make sure you have everything covered.
Have a good weekend!
I would suggest you also check out his "Tools" section on his home page. He has what he calls "ELP's" this is an endorsed local provider. This is a real estate agent, insurance provider, or financial adviser that follows the Dave Ramsey plan but is located in your area. The hubbs and I looked up an ELP to help us move our kids 529 plan that we had set up years earlier and just to talk to someone else that followed Dave Ramsey. They have helped us for the past ten years and they were one of the first folks I called when my very sweet hubby was displaced. We knew we were going to have to move his 401K and possibly his pension and a few other benefits. We had no clue how to proceed, thankfully these guys knew exactly what we needed to do and they made this part of our displacement very easy.
One other thing I will point out that was a big benefit to us is Dave's debt snowball. This helped us get out of debt except for our house and helped us get our emergency fund in place. That emergency fund is really important because, should the worst case scenario play out, that will pay our bills. The funny thing is, since they stopped contributions on his 401K and his HSA his severance pay is actually more than when he was actually working. This has allowed us to add to our emergency fund and to add extra on our house. I am also still using my envelopes just as I did before our displacement. The envelope system is great and I encourage you to check it out too. The envelope system helps you stay with your budget and helps you save for specific items like: vacation, a car, college tuition, or the braces your kids might need. I have an envelope for each one of those myself. I put my college on hold when my dear hubby was displaced but we used my tuition money I had already saved to buy him a new laptop and a printer. That money did not upset our regular budget because I had already saved it in my envelope. If you are going to use a particular envelope's money for something other than what it was intended it is very important that you and your partner are in agreement on that move. A budget and the envelope system only work when both parties are in agreement and work together.
The most important thing to remember is that a budget is a living organism, it grows and changes with each month or even week depending on your life style and where you are in life. You must look at it each month to make sure you have everything covered.
Have a good weekend!
Saturday, March 21, 2015
Emergency Fund?????
Do you have an emergency fund? You may have your $1,000 quick cash emergency fund but I am talking about the 3-6 months of income emergency fund. They are both important and are both very necessary. The $1,000 quick cash is cash on hand that you can get to easily for emergencies like broken pipes and pay day is a week away or broken heat pump in the middle of summer. The 3-6 month emergency fund is for times when you may not have an income. Maybe you or your spouse are hurt and cannot work or you get laid off. Unfortunately both of these situations can be your reality in today's economy.
If you follow Dave Ramsey you have heard him talk about both of these items in his Financial Peace lectures. I told you earlier you would get tired of me saying, "Dave says." I do believe what he has to say works, we do not do everything according to Dave but we do most. If you read what he has to say and really sit back and think about it, it makes sense. I would not do it or recommend it if it did not make sense to me.
I have dipped into my $1,000 emergency fund and I replaced it as soon as dear hubby was paid. With all of our debt paid except the house, any extra money we get is divided between the 3-6 month emergency fund and extra house payments. We have already taken two years off of our mortgage and saved a good deal on interest. You would be surprised what a mere $200 extra could save you in interest.
Now to figure out how much you need for your 3-6 months emergency fund. Take your expenses for the whole month, be honest, short cutting and lying to yourself will not help you in the long run. When you have your expenses for the month multiply them by 3 to get a 3 month estimate and multiply by 6 to get a six month estimate. Last time I checked we had about a 5 month emergency fund. This is very important for us because my husbands' business is very volatile, he has survived 5 lay offs in the last 4 years or so. You just never know when you might get that call. With our emergency fund in place it is not quite as scary.
Since my dear hubby had his injury and had to have surgery and is facing short-term disability and lots of rehabilitation, that emergency fund will be a cushion for us. Dave always says you need that rainy day fund, because it will rain.
I think when you have an emergency fund it is insurance against the rain. We may need ours for doctor and hospital bills too.
I would recommend setting your 3-6 months emergency fund up in a money market account if your bank has one. As your fund grows you can take advantage of that extra interest. If it is in a money market account you are less likely to spend it on something that is not an emergency.
I do not get kick backs from Dave Ramsey, this is just something that I believe in and am passionate about.
If you follow Dave Ramsey you have heard him talk about both of these items in his Financial Peace lectures. I told you earlier you would get tired of me saying, "Dave says." I do believe what he has to say works, we do not do everything according to Dave but we do most. If you read what he has to say and really sit back and think about it, it makes sense. I would not do it or recommend it if it did not make sense to me.
I have dipped into my $1,000 emergency fund and I replaced it as soon as dear hubby was paid. With all of our debt paid except the house, any extra money we get is divided between the 3-6 month emergency fund and extra house payments. We have already taken two years off of our mortgage and saved a good deal on interest. You would be surprised what a mere $200 extra could save you in interest.
Now to figure out how much you need for your 3-6 months emergency fund. Take your expenses for the whole month, be honest, short cutting and lying to yourself will not help you in the long run. When you have your expenses for the month multiply them by 3 to get a 3 month estimate and multiply by 6 to get a six month estimate. Last time I checked we had about a 5 month emergency fund. This is very important for us because my husbands' business is very volatile, he has survived 5 lay offs in the last 4 years or so. You just never know when you might get that call. With our emergency fund in place it is not quite as scary.
Since my dear hubby had his injury and had to have surgery and is facing short-term disability and lots of rehabilitation, that emergency fund will be a cushion for us. Dave always says you need that rainy day fund, because it will rain.
I think when you have an emergency fund it is insurance against the rain. We may need ours for doctor and hospital bills too.
I would recommend setting your 3-6 months emergency fund up in a money market account if your bank has one. As your fund grows you can take advantage of that extra interest. If it is in a money market account you are less likely to spend it on something that is not an emergency.
I do not get kick backs from Dave Ramsey, this is just something that I believe in and am passionate about.
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