r/PlantBasedDiet - Great sub with good active members always willing to help!
The Starch Solution - I have read this and follow this. Losing weight constantly.
The Forks over Knives Plan - I have not tried this but the documentary they made is what changed my way of eating (hopefully for life)
Edit: I don't count calories, I eat what is allowed in the diet until I am full (ad libitum). I follow visual guidelines of how much food should be of each group. I try not to cheat except for special occasions. My lipid and Hb1AC numbers have come down to where I have never seen them before since I have started tracking them and lost 24 lbs in 3-4 months or so.
You want a weight loss and health-promoting diet which also is disease-preventing.
Good luck!
I agree OP should suspend contributions, but I wanted to point out that in the Total Money Makeover book Dave gives an example of an exception to the rule:
>Tammy has $74,000 in student loans with another $15,000 in credit-card debt. Tammy is a single mom with three children and has an income of $24,000 per year. It is going to take Tammy a few years to work her Debt Snowball. She will figure a way through it, but her situation is one of the very rare exceptions; she should keep contributing to the 401k with the match.
The most benefit you'll get out of FPU is the fellowship with other people. The thing I see helping people the most is being able to talk about money with "strangers" and not have to feel guilty or embarrassed. Everyone is in the class because they suck with money, so nobody is judging you. What is really cool is the herd excitement for getting smart, making good decisions, and getting traction. You'll be excited for other people, and they'll cheer you on in return.
Otherwise, there's not really a lot (if any) information in FPU that isn't discussed in the Total Money Makeover - in the academic sense. It's just really nice to have coordinators and a room full of people when you have questions or if you want that fellowship. You also get the benefit of watching Dave talk, which is a lot more inspiring than just reading.
I finished FPU and have coordinated a few classes. I tell people that FPU was the single biggest contributor to my financial success and is 100000% worth it.
It's the best. I'm debt free right now so my bills are pretty minimal in number, but even when I had payments on things I used this method. I just pick out 20 minutes and pay EVERYONE in one whack and then update my budget system (YNAB).
It was purely a mechanical exercise. No stress and it took very little thought. There was no figuring out "who do I pay this week" and trying to figure out how to align my pay checks with people that I owe money. My girlfriend at the time had various money issues and I would watch her stress and struggle with bills. She would spend HOURS trying to figure out how to align pay checks to bills...it seemed such a waste of time, energy, and life.
At this point bills are a nuisance that I wish my money guy would handle (he doesn't) because I'd like that 20 minutes a month back. But I will say that once doing bills was purely mechanical -- that is once I got used to the budget mindset -- I became annoyed with ANY payment I had to make b/c it was a nuisance. This has motivated me to pay down debt faster than I already was to eliminate the nuisances lol.
Take a look at the YNAB method: https://www.youneedabudget.com/method/ if you'd like to learn more. Their product is good if you choose to try it. I've been using them for years.
Geez some of those comments ... Those are people who have completely given up at winning with money. I try to spread Dave's message about debt and savings to friends and family so there are far less of them.
I have 5 copies of The Total Money Makeover sitting under the tree for various friends and family right now. It's just about the most valuable thing I could give this holiday season. I'll look like a crazy cult follower, but hopefully they read the books and take what it says to heart.
Honestly, we follow the YNAB approach.
https://www.youneedabudget.com/method/
The money we make in January is used to pay for February. so for instance my husband's paycheck will come in on Friday and I know that we only need to use about a third or so of it to finish off February's expenses. One February is fully funded everything else will get dumped into the student loan or in this case savings. :) it takes a minute to get to where you were full month ahead but honestly just makes life so much easier.
YNAB is a great tool for sinking funds, and it also helps make it very obvious where the money comes from. I use sinking funds for a ton of stuff now that it's so easy.
Currently we're using a sinking fund for giving, electricity, health care, daycare, home maintenance, auto maintenance, christmas, two car replacements, and vacation. It has really helped us see each month what our real life expenses are rather than having emergencies.
Furniture. Our Marie Kondo/konmari journey had us realize over time what furniture we no longer needed. We sold items at 30-50% of retail price. Most people have way too much furniture for their houses. We have far less than average and we still found furniture items we no longer needed or were no longer our style.
Appliances you don't use. We got a great breadmaker for about $50 on nextdoor.com
About twice I was able to get something for free on craigslist and sell it, so that's an option. Made $175 on a desk and console table that way.
Tools, garage racks.
Downsize your housing - it might be something to consider. In the long run. Most people have far more than they really need.
I hope these ideas are helpful! Good luck. I like that you're willing to think outside the box and consider new options.
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Great list! I'm always interested in checking out new tools that people use. Here is one of my favorite apps.
I use this app a lot. It's great for projecting
Yes. Also a single girl a couple years later than you down the road. It's totally worth it. I'd just say try to find at least one way to connect with others that doesn't take money. Church was a big one for me. You will regret if you stay in your house for 3 years because you don't have money to go out. But, volunteering, going to church, free exercise groups on meetup.com (actually a ton of groups there) are ways to have a "social life" for basically free. Even if you only have time to do something once a week, it takes the pressure off and reminds you you're not alone in the world. You're not too intense, it's perfect. Plus, the weight that's goign to be lifted in a couple years is AMAZING. And you won't have to get to the end to start feeling it. You'll feel better and better each month that balance decreases.
The best thing you can do is read and then read some more! Find those articles about investing and start learning the language. You can probably find what you need from a couple of books at the library or you can find them on Amazon but if you need help understanding it, then get help. You can call an investment broker in your area and schedule a meeting. They will usually spend some time with you for free in hopes that you will invest with them in the future.
As long as you can do the avalanche without losing your motivation it’s usually the mathematical smarter option. I highly recommend using the Debt Payoff Planner. You can enter all of your accounts and then choose whether you want to use the snowball or the avalanche and it will give your your payoff date, how much you’ve paid in interest, as well as how much you’ve paid total. For me, the time frame to pay off all of my debt was only one month shorter using the avalanche. iOS - Debt Payoff Planner & Tracker by OxbowSoft LLC https://apps.apple.com/us/app/debt-payoff-planner-tracker/id1009323715 Android - https://play.google.com/store/apps/details?id=com.oxbowsoft.debtplanner
Honestly, it probably crossed my mind as I was reading The Total Money Makeover. I sold it....maybe 2-3 months after starting my debt free journey. Once I realized that I could sell it and IMMEDIATELY pay off my car, I realized I had to do it.
Well, I think this is a sinking fund issue. You need to set some money aside in the month ahead so that you can cover your early in the month bills with money from the previous month. Just because you, "in theory" have $4000 to spend this month doesn't mean you should spend it down to the last cent. Save $800 or so from the end of the month and carry it over so that you have it later.
I also don't use every dollar. It let's you budget with money that you do not have yet. I like YNAB (You Need A Budget) it won't let you assign money to a category unless you have cash on hand. It's a little tricky but it won't let me spend what I don't have and makes me set aside money for later in the month or next month. I can see the ditch coming down the road and I set money aside ahead of time.
https://www.youneedabudget.com/
YNAB's theory isn't exactly Dave's but all personal fiance is personal and maybe this software will help you get where you want to go. They also have TONS of tutorials and helpful hints on budgeting. They even have examples of different types of incomes and how to budget with different frequency paycheck examples.
No worries, they look pretty common on the east side. Save A Lots also appear to be an East/South state thing; apparently there's no need for low price groceries to be proliferate in the West. Lol.
In my town there's a local grocery, a Walmart, and a Kroger affiliate. The next town over has three local owned grocery stores, no chain store. The town another half hour out from there has one locally owned grocery store, no chain store. Over the summer I got some good produce deals at the farmer's market but that ended in September. If you type my state's name and "discount grocery store" into a search engine you get a map full of Family Dollars...last I stopped at one their stock was really limited in the food department, but I guess it could count?
I'm grateful the Kroger affiliate hasn't had incredible increases; they're my preferred store at this point. If I'm careful and watch their app for discounts and automatic coupons I can keep our groceries in the same dollar range as they were a year and a half ago. It means we've tried some new foods and new brands as we shop the sales, but I'm okay with that.
IMO changing how we think about money and our future is key. I recommend reading the Money Myths section of the Total Money Makeover over and over until we can almost quote it. Add to that listening to Dave's show as much as possible until you know the answer Dave is going to give. Those are my top 2.
Still seems very high. You're really only giving us bits and pieces of info instead of the big picture here. I suspect you don't have a grasp on the big picture yourself. Are you able to identify the $13k in expenses?
Have you read Total Money Makeover?
I am an agnostic and I have never read The Total Money Makeover (I did read his book Entreleadership and thought it was pretty good) All I ever did was listen to the podcast and ignored all the religious stuff. Let me tell you, his baby steps are great for 95% of Americans. Check out the prime directive on /r/personal finance if you want some verification. Most of the disagreement with DR is with his credit card policy and whether or not you should pay off your house as fast as possible since mortgage rates are pretty low. But his steps are easier to follow then the "prime directive" so I went with Dave.
Being debt free has changed my life. There is so much less stress when you do not have payments on everything (except the mortgage). I can only assume it will be even better when the house is paid off which just a few years away.
Hard choices for sure. I'm sure you love those cars and your motorcycle. But now is not the time based on your scenario you posted. Get out of the motorcycle loan, sell the cars, get intense and get out of debt. Whether you sell the stocks or not is completely secondary in my opinion, because you have to make the decision to get Gazelle intense first. Once you realize how big of a mess you are actually in (52k in debt with 80k income), you can then decide what to do you with your stocks and other contributions.
Once you are out of debt, you can think about getting back in your car hobby again in cash, you won't have all the debts hanging over your neck and the hobby will feel more enjoyable.
If you have already made that decision to be intense, then refer back to The Total Money Makeover and just follow Dave's plan. Which includes taking out all of your savings, CDs (take the early withdrawal), etc. down to $1,000 and use all of that to pay off the debts. I've recalled the only exception is investments in 401k and IRA accounts, you don't cash those out. So in that case, without any penalty to your ESPP you should do it, just get out of debt as fast as you can, you can rebuild your investment in step 4. Good luck in whatever you choose to do. :)
One poster here has a blog about their personal debt journey called stewardandslave.com, which I enjoy.
Also agree about The Millionaire Next Door.
There are tons of books on extreme budgeting (by Mary Hunt, Steve & Annette Economides, etc) and on living simply/minimalist style that are incredibly motivating as well.
Listening to Dave's talk show, "The Total Money Makeover" audiobook, and listening to the debt free screams are huge motivation for me. Find something that motivates you and write it down, write down steps you're going to do to get there. Sit and think about how you'll feel once you're there, all the things you'll be able to do, and all the worries you won't have!
Totally agree 100% with getting rid of the risk as fast as possible. Btw, if you're having a baby soon. I would recommend saving as much money as possible right now to make sure y'all clear the pregnancy. Once the baby is back home and healthy just roll the extra savings into your debt snowball.
https://www.fool.com/retirement/2017/05/01/this-is-the-no-1-reason-americans-file-for-bankrup.aspx
Have you ever heard of https://librivox.org/. Volunteers make audiobook recordings. I’ve listened to several and the quality varies widely. But it might be a way to get some practice and build a catalog that potential clientele can sample.
I know this wasn't your question, but the numbers you have budgeted don't reflect what you're actually spending. You should probably head over to r/YNAB or the YNAB website (https://www.youneedabudget.com/learn/). You'll want to move money from the green categories to the red ones so your budget reflects reality. You should also categorize the uncategorized expenses at the top. The fact that you only budgeted $200 for dining out doesn't matter if you end up spending $400+.
Great Reminder!
In terms used by You Need A Budget (YNAB), it's Embracing your True Expenses (Rule 2).
This works for lots of things. Other than just having a budget, this has been the second most important concept that's just made our financial life easier. We've still been able to hammer away at our snowball at the same time.
Upwork.com can be a decent place to get side work if you have any skills you can do, bookkeeping, design, spreadsheets, and several other types of remote computer work. It can be tricky to get your first gig, but once you've got a few ratings it gets easier.
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Pizza delivery is the generic recommendation that does actually pay decently in most markets. My 57 year old father is in BS2 and doing pizza delivery in the evenings. Some nights he makes more per hour than my day job!
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usertesting.com is not super consistent, but a good way to get an extra little bit of cash for not really much work from the comfort of your own home.
The topic of giving is more of a moral discussion and less of a money/budget discussion. This means there really isn't a right/wrong answer. Someone who believes wholeheartedly in tithing will always give 10% of their income, no matter what, before budgeting anything else. Someone who doesn't believe in it will not budget for it and will claim not to have an extra 10% to give. It's all about priorities.
Me personally? I buy copies of Total Money Makeover in bulk on Amazon and anonymously give them out to people I encounter who may need it. Some people never bring it up. But sometimes they tell me about how the book "showed up in their lives" at "just the right time". I can't help but chuckle to myself. But it feels good, and it's my little secret :)
I didn't grow up in a religious family, so the concept of tithing/giving was very new to me when I got into Dave's plan. I don't ever plan to give 10% of my income to a church, but I do make it a point to give something each month. It's usually in the form of time or in the form of a book -- anything to help people. I haven't worked up to forking over cold-hard cash just yet...
We were in a similar situation investment-wise, and we just switched to Vanguard (literally today), and I feel really good about it. That said, I spent the last 6 months reading/educating myself. The more I learned, the less tolerant I became of high expense investments. Obviously, I can't speak about your ELP, but we weren't too happy with the advisor we had (not an ELP - none available in our area at the time).
As for question 2, I'd need more info on the funds you're invested in and the allocation you're shooting for. Either way, I'd recommend reading some investing books - they've proved extremely valuable for me.
Edit: a few books that I found particularly helpful were A Random Walk Down Wall Street and Common Sense on Mutual Funds.
As for myself...
When did you start the baby steps? January 1st, 2016
Which baby step are you currently on? Just finishing up BS2
How long did each baby step take you to complete? I already had more than $1000 in savings so I hopped right into BS2, and it should take me about 10 months from start to finish.
Household income when you started vs. now? Started at $50,000 and with a few promotions and side jobs we're close to $75,000
Total debt (minus mortgage) when you started vs. now? We started at $33,000 and we have $5,000 left! Planning to finish in November.
What happened 9 months ago that got you started on this journey? I realized I brought in the "average" household salary in America but was living paycheck to paycheck. We had an HOA bill arrive for $275 and I couldn't even pay for it, so I got a late fee tacked on. That's when I knew enough was enough...I was sick and tired of being sick and tired! Did some Googling, found Dave Ramsey...checked out some Youtube videos and I was sold. Went to the library and got Total Money Makeover and my new years resolution for 2016 was to be debt free. Barring any unforeseen circumstances we'll be meeting this goal!!
(Optional) Current age? 28
"The Millionaire Next Door" by Thomas Stanley talks extensively about this. When he was looking for millionaires he first looked in the high end exclusive communities but found that few residents were millionaires (net worth over $1million) because they simply consumed everything they made (high income/high consumption). That part includes a story that characterizes those folks as "big hat, no cattle"; a phrase that Dave uses often.
Congrats on getting your steps down. With intense focus, you WILL get through this.
First things first, follow the steps as he lays out. Make sure that budget is tight but it will realistically take a couple months for you to really fine tune it. Get that emergency fund filled ASAP and make sure it is liquid and available at a moments notice.
Second, attack the debt. List your debts smallest to largest and go at them hard. Yes, mathematically higher interest saves some interest but thats NOT the way the Total Money Makeover works. Its psychological. Beat the snot out of it. It'll make you feel super accomplished as you knock them out. For a calculator, I used this Google Sheet in my TMM.
I'll echo others sentiments for the car. You need to sell it and get a beater. A $21K car is WAY over your means and is killing you. He would recommend looking up the value on Kelly Blue Book and trying to private sell it. If there's a difference in value vs what you owe, you will either need to come up with the difference or go down to the local credit union and get a loan for the difference. Get a beater $1K car.
Ill also say listen to the show religiously and call the show. Can't hurt to talk to the big man and see if our advice is on par with his :).
[edited to fix google link]
Do you have a link? I've tried to spread Dave's advice because I've personally had a lot of success. I usually keep 10 purchased copies of his audio CD from the "Total Money Makeover" to give to people who I think could benefit from it and at least "hint" that they'd like some help. I've had more failure than success in my efforts.
I've come to realize that most of the opposition to money advice is because people:
It's also an uphill battle because society has successfully cultivated behaviors that go against Dave's ideas. It's assumed that everyone should have a credit card, use debt to build wealth, buy new cars, and always have a house payment. When you try to convince someone that these ideas are bad, they just aren't easily willing to make the paradigm shift and many will go out of their way to fight you.
Also, I think some people are rubbed the wrong way based on Dave's religious and political views, which he doesn't spend a ton of time discussing in his books or radio show, but enough to make a bad impression with some people.
Dave wouldn't call it sinful, just dumb.
I'd really recommend reading through his book at least.
The plan is certainly against any car loan, even 0%. The problem with car loans isn't just the interest rate, but to put it into the big picture you'd really want to have gone through the book.
Personally, I see low interest financing on cars as a marketing gimmic more than a payment plan. If people had to save up $30k and then drop the lump sum on a car, it would be a much more emotionally turbulent experience than signing up for a few hundred a month. Car payments make the purchase paletable, not wise.
In any case - read through the Total Money Makeover and see what you think of his plan and everything with the whole picture in mind. It's not very expensive and worth the time if you're thinking about taking Dave's other advice for the biggest purchase of your life. The radio show is great, but its just bits and pieces instead of the whole step by step plan and how everything fits together.
I really like an idea that I saw on a YNAB blog. My advice would be to start a "wish farm" for your goals. Here's the blog post.
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Dave does a great job explaining how to get out of debt; however, he does not totally explain how other goals work into Baby Step 6. Ideally, you would start saving for your goals. As long as you pay cash, Dave would be ok with your plan.
It’s not necessarily tax and penalty free for early withdrawals. I found this site that can give you more info: https://www.schwab.com/public/schwab/investing/retirement_and_planning/understanding_iras/roth_ira/withdrawal_rules
Every Dollar or YNAB are really handy ways to keep track of your budget on your phone. The basic version of Every Dollar is free, YNAB is $84/year, and Every Dollar Plus is $99/year I think. This helps you use the envelope system without necessarily keeping the envelopes full of cash.
YNAB! You can keep all of your money in one account (having 8 different bank accounts just seems ridiculous to me, although if it works for you go for it.)
It's the same as having envelopes but instead of $1,000 in cash sitting in a drawer it's a number on a screen that you can easily move around.
Give the free trial a try and see if it works for you.
Car repairs and maintenance expense should be expected. There should be money set aside every month for car repairs. If the right amount is set aside month after month, you'll generally have enough to cover most things.
It's about the same with home maintenance. It was only a $500 repair, and there should be money set aside for repairs. (I would have much more sympathy for a $7k Furnace/AC replacement a month past it's warrantee.)
I'm using YNAB, not Every Dollar and it seems like it (or at least some of the training available on their web site) might help you. It is more of a cash flow planning system than a monthly budgeting system. I still do a monthly budget to double check my goals in YNAB and to make sure I'm carrying out my plan. But YNAB really helps on the saving and spending part if used as designed.
According to the Schwab website, you can withdrawn contributions tax free but earnings are taxed. There are a few certain situations where you can withdraw earnings tax free under age 59 1/2, but those are limited.
I didn't directly read the tax law, but I don't think we're spouting BS.
My SO and I use virtual envelopes via Goals with our bank (Simple, the one you see ads for all over the internet).
For the most part it works really well. We have separate accounts for each of us and a shared account that is used for food/gas. Due to our strange circumstances, I pay all of the "living expense" bills and she pays all of the debt with her paycheck.
We both have 2 debit cards, one for the personal, and one for shared account. Depending on what we are buying we use the appropriate card.
Once you assign money to a goal, it essentially disappears from your remaining balance. The money is still there, but my funds labeled as "Safe to Spend" decrease. I can create goals with deferred saving as well so I can save for a large purchase a little every day. I want to take my SO to Hawaii next year for our anniversary, so I'm about to make a goal for $5,000 that needs to be completed by about this time next year. So for the next 12 months, Simple will transfer $12/day from my Safe to Spend to my new goal.
If you're interested, Simple actually wrote a blog post on this a few years ago that explains it pretty well.
https://www.simple.com/blog/envelope-budgeting-with-simple
Feel free to ask any questions.
I have found that I actually have the opposite problem. I use Simple for my banking, and they have an integrated envelope system they call Goals. As soon as my paycheck is deposited, it gets split up between all my Goals, and each transaction gets categorized from a Goal as soon as it's spent. Ultimately, that means that cash is a sneaky little tagalong that's just sitting there in my wallet, with no category, no plan, and no accountability. I can blow it on whatever I want and no one is the wiser.
https://www.amazon.com/Total-Money-Makeover-Classic-Financial-ebook/dp/B00DNBE8P6/ref=nodl_
Piracy is a form of stealing. Don’t think Dave would be OK with stealing.
If you really need the book, call in, and he might give it to you for free.
Dave has hard cover on his site for $16 and audiobook for $20 (price rounded up). Amazon sells kindle for $17.
Read this book. Take in what it says about the balance (ignore the investing advice~it's garbage). It's possible to keep working towards your goals and reap the benefits of your hard work thus far, such as vacations, dinner out, etc. As my wife and I say, "just put it in the budget"
https://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766
I use a spreadsheet to list re-occurring bills that includes five columns:
Column 1: Service (Mortgage, Mobile Phone, Electricity, Vehicle, Natural Gas, etc., Amazon Prime, VPN, Email, etc.)
Column 2: Provider (AT&T, Honda Financing, Met Life, Amazon, NordVPN, ProtonMail, etc.)
Column 3: Amount (dollars + cents)
Column 4: Due Date (I list the date of the month, so Mortgage is 1, AT&T is 5, etc. - if it's every other month, quarterly, twice annually, yearly, or every few years, I put the last month + date in. For example, NordVPN I bought 3 year sub on May 15 2017, so my due date is May 15, 2020)
Column 5: Frequency (Monthly, bi-monthly, quarterly, etc.)
Maybe this will help for you? This allows for my partner and I to both have an overview of what's due when and what to budget for on the things that are only yearly or such.
I through my VPN sub in here for fun, since that's what you are considering. :) This is off-topic, but look into a VPN that runs outside of the FiveEyes jurisdiction.
Has she read The Total Money Makeover? Have you gone through FPU together?
Why doesn't she want to do the budget? How does she feel about your debt situation? What is holding her back? You've got to get the conversation started with her.
THIS! Sometimes you have to be harsh....Dave usually doesn't hold back either lol. But yes, /u/fluffy_mastodon maybe give The Total Money Makeover another read (or if you haven't read it, start it ASAP! He really highlights that this is about behavior, sacrifice, and maturity.
A Certified Financial Planner I know has a mantra response to this:
*Building wealth is never about "TIMING" the market, it's about "TIME IN" the market. *
His rant is on starting your savings early so you have time in the market to grow the investment. Trying to "time" the market is nothing more than guessing & presuming upon the future, while leaving the money invested in the market has a centuries-long track record of success.
Also, on your original question about leveraging / buying lots of rentals with debt -- that's precisely what Dave did in his 20's just before he went bankrupt. Great story and worth hunting it down in the FPU dvd's or in the Total Money Makeover book.
Love your comment about letting your net worth in 10 years speak for you!
Here is what helped me. Reading and rereading the money myths in Dave Ramsey's Total Money Makeover until I could almost quote them. We have been told so many myths so often that we think they are requirements. I listened to his radio show until it became predictable and boring. I read the "We did it" stories on his web site. I observed my friends in their high anxiety over money and too often fighting with their spouse over money.
True story. I have two MD friends. Early 50's. This last summer they commented that they will never be out of debt. I was able to look up one of their salaries on the internet....$240K. Wow. I'm particularly close to one of them and I feel sad as his life is deeply affected by the lack of financial peace.
Due to my personality I'm not a landlord. Two of my friends are. It has been impressive to watch their financial situation improve over the last 10 years. They are true entrepreneurs that would consider single income streams, such as our salaries, to be risky. For example. One bought a single wide trailer for $6K. Pockets $500 a month off the rental. Did not own the "dirt." But who cares? I call it his "drug deal." He actually ended up buying the 19 unit trailer park. When some of the owners leave he buys their trailer. The cash flow adds up. Reminds me of the book "The Millionaire Next Door." I'm probably off topic for this sub. I'll delete if prompted.
$20,000 in debt. Car and credit cards and almost even on both of them. His car is on its last leg, so the car pretty much has to stay, at least at the moment. He has no debt. Savings for me is $0. He has about $5,000 in savings.
I don't think he resents my debt, but he doesn't understand it and how I could have gotten into it in the first place. He does seem willing to assist pay it down, but he is afraid to decrease everything to a $1000 emergency fund. That scares him more than anything.
Is it a better idea to ask him to read the Total Money Makeover and get him to understand from that point, or is there another direction to take that I am not thinking about?
I recently got out of debt after three years using DR's advice. I never went through FPU. Like you, I read Total Money Makeover twice. I watch a ton of people on YouTube doing their budgets and cash envelopes. I listen to the DR podcast on iTunes. The videos and the podcasts kept me motivated to become debt-free. I'm still watching and listening to keep me on track and every now and then I learn something new about investing or retirement.
I believe the FPU videos are on YouTube as well. I didn't like those so much.
If you are self-motivated enough, I feel you don't really need FPU. There are tons of other resources out there.
I've heard of that but not tried it. I've heard you can only budget what's actually in your account which doesn't work for me because I like to plan ahead. I just wish there was a way to have that planning sheet from the back of Total Money Makeover where it has a vertical column for each paycheck electronically. The ones that's really my only complaint about EveryDollar.
If your brother went in debt on a new truck he is not kicking the pants off of you. Debt, especially on vehicles, is a form of pretense. His new truck lost 20% of its purchase price when the title was signed over to him. It will continue to lose value at a high rate for 3 years. I think Dave says 10% a year, check me on that though. My entrepreneur friend does not buy new vehicles for this reason. If you want to read a good book that will help you with your perspective please consider the "The Millionaire Next Door."
Benjamin Franklin's "Way to Wealth" is extremely similar to Total Money Makeover and is very enjoyable especially if you are in to historical persons. "The Millionaire Next Door" is another really good read and Dave based a lot of his teachings off of it. "Rhinoceros Success" is a really fun read and is inspiring while extremely corny at the same time. I also second "The Richest Man in Babylon."
Well, you brought up jeans.
More fun facts: according to the research performed by Tom Stanley for The Millionaire Next Door, only a quarter of millionaires have even owned a pair of shoes worth over a hundred dollars. But you must know something they don't.
That might actually be a way to approach it. At this point I think the issue is just making sure we're at $15k minimum for that specific savings account (which I'll admit is better than a .01%).
We have also discussed taking any money that's leftover at the end of the month and putting some of it toward my car and some of it probably toward savings or something else.
Honestly, I'd love to go through FPU but the problem with it being at night is that my FH works from 2 p.m. to 11 p.m. I'm considering handing him Total Money Makeover (after I read it and make notes in it) and suggest that he read it. We live far apart from each other right now so it's not like he's been near me when I've been listening to the podcast or reading things on Reddit, etc. Maybe therein lies the disconnect.
That's why you keep $1000 in your starter emergency fund (baby step 1). You are in a Dave Ramsey sub. You keep talking about interest rates and reordering the baby steps... Read Total Money Makeover and listen to the podcast.
It showed up on my doorstep Monday which totally threw me off. I wasn't expecting it. I actually don't like to make much time to read books but so far I'm digging this one. Of course it's fun trying to read it in Chris' voice, haha. I'm tempted to listen to the audio version of it as well. He has some straight to the point stories in there and I really enjoy the fact that he takes the time to teach people how to think about retirement. Sort of how Dave's Total Money Makeover takes the time to talk about money myths first. I'm only a few chapters in at this point but I'm loving it.
Dave calls car leases "fleeces" so that gives you an idea of his opinion of them. In Total Money Makeover he explains that the effective interest rate that you pay to lease a car is usually higher than getting a car loan. Not to say a car loan is good, but a lease is worse.
Dave advises buying the cheapest car you can for cash that will get you around until you are in a position to pay cash for a good used car.
I'd like to echo what others have said. You need to jump on Dave's plan immediately. First thing I'd do is to stop contributing to retirement period. I know that it sounds backwards but in the end it will help you get out of debt. If you haven't already pick up Total Money Makeover and follow the baby steps.
He described this on-air as his first "Christian book"--where he describes his others as being for everyone, but written by a Christian.
I thought the Total Money Makeover and Financial Peace University were pretty Christian... so it'll be interesting to read this book and see if any of it is applicable to us non-Christians. I was able to see past it for TTMM and FPU, so hopefully I can with this one too!
This article just came out which seems concerning with regards to debit cards and the possible risk vs. credit cards: https://lifehacker.com/dont-pay-debit-on-anything-you-cant-afford-to-lose-1833941136
There is a term for what you're describing. It is called credit card float. Here's a good article on it:
https://www.youneedabudget.com/how-to-identify-escape-the-credit-card-float/
>The Fast Way Off the Float
>This’ll hurt a bit (interest!), but it’s the most powerful way to learn how to budget within your means:
>1. Stop paying your credit card in full. 2. Use your money to cover all of your current obligations, including the minimum payment to your credit card. 3. Use any leftover money to pay off your credit card debt.
>fervently preach that you should budget first and never put a dime on a credit card that you can’t afford to pay off monthly.
For me I think the key to using a credit card is the YNAB method (You Need a Budget software). For a credit card you have to have the cash in hand already for the purchase and the program re-budgets the cash from the spending category to the credit card category.
Otherwise you can end up riding the credit card float and thinking you're fine when you're really a month in debt.
I discovered this when I was first starting out:
https://www.youneedabudget.com/ynab-four-rules-budgeting/
Even if you do not use the program to budget, the principles are golden. You already have the right idea about building your buffer. Trust me... once you get to the one month buffer, you’re going to feel so much better! Stress and worry decreases 90% haha. The other 10% stress is just normal “adulting stuff” like doing your budget, sticking to it, paying your bills, setting your goals, and working the baby steps. I think you’re going to be able to figure all this stuff out!
I would keep the car and just add it to your debt snowball. It’s fairly low miles and a Honda that is maintained is quite affordable and will run for a long time. I think you would benefit getting onto a good monthly budgeting app like Every Dollar or You Need a Budget (YNAB), and learn to do a zero dollar based budget, if you haven’t already done so. I use YNAB. Even if you do not use the program, their four rules of budgeting are golden. The only thing from YNAB that isn’t part of Dave’s program that YNAB recommends is to get 1 month ahead so that you can budget next month’s expenses using this month’s income. It breaks the paycheck to paycheck cycle because you never end up waiting on a paycheck to pay a bill. The money is already there in your checking account from last month’s income. Here is the link to the 4 rules: https://www.youneedabudget.com/the-rules-are-the-magic/
Edit: spelling
I would recommend couples therapy followed by marriage preparation counseling in addition to going through Financial Peace University together. Seems like you got quite a lot going on. 6 years is an awful long time together (enough for civil marriage in some states if you're cohabitating).
Generally, if you approach your partner by explaining that this is an important part of your life that you'd like them to share in, and not becoming upset, you'll get better results. I speak from experience of course. :)
You can totally budget as a server/bartender. It just takes more discipline with saving. Check out YNAB for a good introduction. YNAB even teaches classes on budgeting with variant incomes using their software. You could take the courses together and talk through it.
https://www.youneedabudget.com/say-goodbye-to-crazytown-mastering-your-variable-income/
Just save up until you are a month ahead. Then use this month’s income to budget next month’s expenses.
Been doing this for 6 years. Changed my life. Breaks the paycheck to paycheck cycle because you’re never waiting on a paycheck to pay a bill. Its already sitting there in the checking account. I learned the method from “You Need a Budget” (YNAB). Even if you don’t use the program/app, the 4 rules of budgeting are golden.
in my opinion it is the best budgeting software. Very easy to follow Dave principals except one:. In YNAB you only budget money you already have. In classic Dave you budget based on what you think you'll take in this month.
Using YNAB's method makes more sense to me because you don't have to worry about dealing with irregular income.
You can check it out at ynab.com
If you want to break the paycheck to paycheck cycle, I highly recommend following the 4 rules from You Need a Budget (YNAB) and getting a whole month ahead. The concept is to pay this month’s expenses with last month’s income. I.e., if your budget requires spending $5,000 a month, keep saving every month until you have $5,000 in your primary checking account that you use for your day to day living. That way, you always have money ready to budget for next month’s expenses, without having to wait on a paycheck, since the money is already there. I suggest doing this ON TOP OF the $1,000 emergency fund as part of babystep 1, before paying down debt in babystep 2, and then continue to use this method of being one month ahead “forever.”
Even if you do not use the YNAB program for budgeting, the 4 rules are golden principles for managing your monthly budget: https://www.youneedabudget.com/the-four-rules/
Since you are obviously most concerned about the debt, focus on reading and learning about how to be intense about Baby Steps 1 and 2. I know you already have BS1 almost wrapped up, but the process and intensity is the same for BS1 and BS2.
Focus on one item at a time and start hammering away at that debt with the Debt Snowball. Remember to set aside money in sinking funds for those upcoming expenses like car registrations and maintenance.
If Every Dollar doesn't click with you, try You Need A Budget. Because BS 0.5 is to make a budget.
I recommend the YNAB method of being an entire month ahead, on top of your $1,000 emergency fund, so that you are paying this month’s bills with last month’s income.
https://www.youneedabudget.com/the-four-rules/
Even if you don’t use the budgeting software, the four rules are golden. You will never live paycheck to paycheck if you follow those four rules.
I am a big "You Need A Budget (YNAB)" fan for my budgeting software, and they have a great article on this titled "Are you riding the credit card float".
I will admit though now that I have used YNAB for several years that I am using a credit card again. The way YNAB handles it is you have your cash in virtual envelopes for each expense. If you put a change on your credit card, you code it to the appropriate category (say, groceries), and YNAB moves the cash to the envelope to cover the credit card bill. You never put anything on a credit card without already having the cash on hand budgeted for it.
Your advisor should be someone you can trust and who you’re comfortable handling your hard earned money.
Check out this book. It’s got a great section on how to choose a financial advisor:
Investing QuickStart Guide: The Simplified Beginner's Guide to Successfully Navigating the Stock Market, Growing Your Wealth & Creating a Secure Finan https://www.amazon.com/dp/1945051868/ref=cm_sw_r_cp_apip_I2JCCMx86Ldnb
It's wrong to ignore people's behavior and focus on just the math. Obviously if people did what was mathematically the best they wouldn't need Dave in the first place.
96% of people with HSA accounts don't have the money invested
Not cherry picking but just using 20 and 30 year returns. Got it.
And regarding fees: Total Return per Morningstar
So ok, I should have said "all fees" since the sales charges aren't included. That applies to CPOAX. The point is that none of those funds will actually generate 12% per year in reality.
I plugged that $300k into an annuity calculator
Not sure of her age, but a 70 year old Californian woman can buy an annuity that’d pay her over $1,600/mo for the rest of her life with that $300k. Add that to the $3,500/mo she’d have to pay and that’s the cost of this community. Do you think what she’d be getting is worth $5,100/mo?
It’s a good idea to shop around for these things. Compare a few more communities to this one.
I'm not an expert but doesn't this say otherwise? https://www.schwab.com/ira/roth-ira/contribution-limits
Unless you're talking about a traditional IRA, but you never tried explaining why it's better than a traditional brokerage account. You ignored that part.
You can absolutely invest in mutual funds, there's no income requirement for them at all. I don't think that person knows what they're talking about. Here's a link that may be helpful for your situation! https://www.schwab.com/resource-center/insights/content/how-can-i-invest-if-i-dont-have-earned-income
Then you have a penalty and pay taxes on it. If they get a full scholarship, there are no penalties.
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https://www.schwab.com/resource-center/insights/content/529-account-what-happens
Yes. It's very easy and even matches items you've chosen you enter manually. Use this link try it for free for two months (i get no kick back) https://www.youneedabudget.com/landing/ar-high-2-month/
Let me know what you think.
Here's a link to a 3-month free trial (for as long as this promotional offer link works). I didn't think I could justify paying for a budget program when I should be saving. I am now absolutely convinced that using the software has more than repaid me for the cost of the app.
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If you're going to use a CC, at least don't get stuck riding the float. We personally don't use CCs because we don't want to play their game or be tricked or tempted into overspending
Students do get a year for free! So if you’re eligible, I would do that, plus using this link for an extended trial beyond just the normal 34 days that they offer: https://www.youneedabudget.com/landing/camp-patton/
You might need to write in if you find that it still only gives you 34 days. But their support team is awesome and will hook you up.
It's still unedited! I get it from player.fm since Mozilla nuked my ability to download from rss feeds but here it is- https://player.fm/series/the-dave-ramsey-show/we-were-too-broke-to-buy-a-loaf-a-bread-hour-1. Scroll down and right click on the play button and click "save link as"
Yes privacy.com is a good option for online purchases. I wish banks just offered this as an option to their customers. I've not heard of one that offers temporary card numbers for a debit card. And yes credit cards need to be replaced after a breach just like debit cards would.
https://www.trustpilot.com/review/timeshareexitteam.com
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1100 plus reviews with a 2.7 rating. Most of the negative ones have a common thread, paid thousands of dollars and 3 to 6 years have gone by with no progress.
I agree it's harder as a single person. I actually approached my church about leading an FPU class ONLY for singles to address this. The one way it's easier is you don't have to get others on board, but that's far outweighed by the limited resources you're dealing with.
I mentioned in a previous comment, you can date and meet people without spending a lot of money. Meetup.com, church (or whatever your equivalent is if you're not a Christian), local outdoor exercise meetups.... #budgetsociallife :)
Sounds like your option is that you need to invest into a traditional IRA, then convert to a Roth.
Hey there! I am a full time independent contractor as well so I can answer this for you.
According to Dave Ramsey, no. Just start with the $1,000 and then start BS2 with intensity. I think the idea is that many people may never get to BS2 if they spend too much time on BS1.
However, as an independent contractor myself I think Dave’s advice is assuming all his readers are W2 employees. I personally set my BS1 amount to equal one month of exact expenses since at any time my job could end (and has in the past). I find one month to be the bare minimum of what I need to get me back on my feet in the short term. It’s not as comfortable as a fully funded emergency fund, but then again that’s not the point of BS1.
For more advice on living with a variable income, like we do, I highly recommend checking out YNAB’s blog posts on slaying the variable income dragon.
Nothing to do with debt and finance... But I love Handel on the Law. It is a fun legal call-in show that comes from KFI in Los Angeles.
"This Handel.on the Law. Marginal legal advice where I Bill Handel tell you have absolutely no case and have fun doing it!"
Yes! Can’t wait to buy that Golden Eagle someday! Here’s the frame I bought: Tiny Treasures Black Display Frame for 10 Morgan, Peace Dollar Silver Coins (Not Included) https://www.amazon.com/dp/B07YCYCLHY/ref=cm_sw_r_cp_api_glt_fabc_HN1J7JM71H7512794AJG
Okay yeah, that is more along the lines of what I was looking for anyway. I might vary in how much I move over every month but I just wanted to make sure that it was possible to do.
Random question - Do you use/have you ever used a service like Robinhood? https://robinhood.com/
When we started our Dave journey I was really strict with the food budget, then I realized that he actually gives pretty generous food budgets to folks that are cooking at home - depending on the base income. I've regularly heard him say $600-800 for groceries when people aren't in a crisis.
He also endorses a program called eMeals which gives you a weekly meal plan and accompanying grocery list. I am on the Diabetic plan, but they also have a really good low-budget plan. Groupon also regularly runs specials on eMeals
I don't think you can do your plan of split withdrawal. You either lump or rollover. No 10% penalty either way, but you'll pay income taxes on the withdrawal.
Per Schwab: "You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free."
It's very very very very low.
Most people in America don't have a net worth of $300k. So you are not low.
Knowing what the average amount is in a 401k is not valuable information for you if you are trying to figure out if you are well on your way to wealth.
https://www.personalcapital.com/blog/retirement-planning/average-401k-balance-age/