PocketCoinage

Back in August, I stumbled upon Dave Ramsey’s material while researching personal finance articles.  I have heard about him before through J.D. Roth’s podcasts and blog on GetRichSlowly.org, but I never really looked into his material.  Let me tell you, I wish I looked into him sooner.

I started listening to his podcasts and I was hooked.  There were real people, with real debt problems, calling into his show to ask for his advice.  So I sat, listened, and learned.  I found out that I was on the right track with my Emergency Fund and paying off my debt.  However, I did not have the mindset to pay it off sooner.  I was on target to get my student loans of $17,000 paid off around 2015 and just accepted it.  Once I started listening to his show, I looked at that date and thought there has to be a better way!

Through his show, I found out that Dave has 7 Baby Steps to getting out of debt and building wealth:

1. Save $1000 for a starter Emergency Fund.
2. Use all available money above and beyond the $1000 Emergency Fund (minus retirement) to pay off debt; starting from the smallest balance and work your way up to the largest.  He calls it the Debt Snowball
3. Once you are debt free (except the house) start on your emergency fund of 3-6 months of expenses; not income.
4. Save 15% of income towards retirement.
5. Save for your children’s college.
6. Pay off your home mortgage.
7. Build wealth like crazy so you can live and give like no one else.

And that is the proven plan for financial fitness.  Doesn’t it seem simple?  That’s the beauty of it; It’s so simple and has common sense!  However, most people have trouble finding the right footing.  If you are committed and follow the plan exactly, you will become successful with money.  Which, oddly enough, makes you become successful in other areas of life (career, fitness, etc.).

You can start off with Baby Step 1 immediately, but there are a few things that will help you jump start your debt snowball:

• Live on less than you make
• Do a monthly written budget
• Cut back on lifestyle

I already live on less than I make, but I was pulled in so many different directions that I felt as if I could not get any traction.  I putting money into my Roth IRA, Emergency Fund, House Fund, and Vacation Fund.  Once I got myself on a written budget, I was able to see where all my money was going and gained a whole lot of control.  I found that I had about $1000 of free money to throw towards my student loan debt.

Through Dave’s advice, I was able to reduce my student loan target date from 2015 to 2011!  As of today, more than half of my loan is paid off and I have between 7 – 9 months left until it’s finished.  If I did not discovered Dave, I’m not sure that I would have been as intense in getting rid of my student loans.  To also keep me accountable, I post my student loan balance on the right side of my blog, the average monthly payment amount to reach my goal, and my target date.

You can find Dave’s one hour free podcast through iTunes and his book, The Total Money Makeover, on my list of recommended readings on the right.

You tune into the news one evening to discover that a hurricane has the potential to make landfall.  They said it could happen in about twenty days.  What do you do?  Do you deny the possibility and keep living your life, or do you start to prepare now?  You start to prepare.

This is exactly what I am doing right now.  Recently at work, there have been talks of layoffs if the finances do not improve.  I’ve heard this through the grapevine over the past three months, but nothing in writing to confirm the rumor.  This, however, changed in the past week; upper management put it in writing.  Because of this, I am officially stopping my debt snowball until the storm passes.  I should find out if they will proceed with the layoffs by next month.  Just to be safe, I’m looking to put it all on hold for the first quarter of 2011.  If things still look cloudy, I’ll continue to stock pile money.  Once things get better, I will toss all that I saved onto my debt and resume the snowball.

I’m going on a strict, written budget for the next couple of months.  I’ll keep you posted.

Picture this: You just came back from an over budget vacation to find your pet unable to go to the bathroom.

First panic sets in because you notice he is in a lot of pain.  Once you bring him to the vet, you find out he is going to be just fine and will need to stay for a few days.  You request a quote for the approximate cost and they tell you $800.  A few hours later the vet calls you back to let you know your pet is doing well.  He’s also requesting authorization for more tests to determine why the problem started in the first place.  The new estimate is now peaking $1,000.  You then find out he needs to stay an extra night and he will need to be on a special diet; the estimate is now at $1,100.  Once all is said and done the total bill comes out to almost $1,300.

This was me the day we came back from our Maine vacation.  Our cat Rocky had bladder crystals that made it impossible for him to use the bathroom.  The vet needed to unblock him and watch him for a few days.  They said this is caused by the type of cat food he was eating.  The only thing I did was switch him from Meow Mix dry to Blue Buffalo wet and dry.  I guess this was a big, painful mistake for the both of us.

I learned that cats, especially males, should not eat dry food.  Think about it, if they were in the wild would they have dry food?  They should stick to wet food and make sure they have plenty of water.  Needless to say, all my cat are now on a wet food diet.  The vet also recommended a Drinkwell Pet Fountain.  I picked one up for my cats and they love it.  They play around with the water and drink from it more often than their old water bowl.  I think it’s because of the constant recirculation of water.

This whole experience didn’t come cheap.  I tapped my Emergency Fund for the $1,300 vet bill.  I thought about pet insurance even before this whole experience occurred, but I felt it was not worth the cost.  The plans the vet had me look at was roughly $20/month per cat, plus you have the $50-100 deductible, and 80% reimbursement.

Have you experienced a vet emergency?  Do you carry pet insurance because of it?