Baby Step 3 - CHECK!

Well, it's official - we have completed Baby Step 3! 6 months of emergency funds ($30,000) saved. It feels great!!

The money is definitely tempting to my husband (who wants new windows, new patio furniture, to remodel and expand the house . . .) but there is no way I'm giving up this security! Luckily our short term savings is starting to grow now too - up to $5,000 already. So, we should be able to get him some of the things he wants soon.

I have to admit that this whole process has turned me from a spender into somewhat of a saver. I actually feel a little reluctant to even dip into the $5,000. It is so hard to prioritize what to spend the money on. I just want to be conservative and spend our funds wisely.

Now we can finally begin (much too late!) to focus on saving for college for our 3 daughters. Our oldest is already 13 and will be going to college in just 5 short years. Not a lot of time to save the hundreds of thousands that will be needed.

Isn't it crazy - just as soon as something is crossed off the list, it's time to work on the next step! It's like the finish line is always moving!

But, I have to admit, when we began this process 3 years ago - being where we are today seemed almost impossible. I am so grateful to Dave Ramsey and all my PF Blogger friends for showing me the way and encouraging me to stay on track!

I am truly blessed!

Looking Good

Well, things are looking up a bit. May will be a big income month for us. My husband will get an extra paycheck (being paid every other Friday, with an extra Friday in the month); we are expecting a large tax refund of $7,500; I have several craft shows booked and am budgeting $500 (as most the money I keep in the business); we are getting a check from FEMA for $500 our flooded basement, and I have several babysitting days lined up accounting for another $200.

So, looks like we will be able to finish the Emergency Fund of $30,000 and put another $8,000 into short term savings!! I really can't believe it!

We will finally be able to start saving for college and do some much needed home repairs. The Dave Ramsey Plan really works!!! :)

BACK TO THE OLD WAYS

Well, I'm embarrassed to say that I have not been paying attention to our finances lately. I have definitely sort of reverted to the old ways. We have a good amount of money in our checking account and I have just been using my debit card willy nilly. This does not feel good.

Our Emergency Fund is substantial, but not complete. I have not looked at our budget in weeks (maybe months?).

I could make excuses and say that life has been busy - and it hasbeen, but when is it not? I have spent a lot of time applying to Craft Shows and focusing on my pendant business (which is going well), but a lot of people work full time and manage to handle their finances. I need to get back on track.

I remember someone saying that Baby Step 3 (Finishing the Emergency Fund) is even harder than Baby Step 2 (Getting Out of Debt) - and when I was in BS2 I found that hard to believe, but now that I'm here in BS3 I think they might have been right.

Looking forward to re-focusing and catching up on my PF Blogger friend's blogs for some inspiration!

Simplifying Life

. . . . aaaaahhh . . . . this is always one of my goals for the New Year - to simplify my life. Well, this year is no different. In fact, I think I need it more than ever!

I feel like my head has been spinning for the past several months. Trying to keep up with the schedules and activities of my three daughters, run the household and the budget, and keep my Scrabble Pendant business going - it has been busy, busy, busy.

I often feel an underlying stress pulsing through my body, when what I really crave is peace.

I don't have a set of goals outlined yet, to achieve this simplified life. But I know that I will begin by reading up on the subject.

Here are some of my thoughts in no particular order:

1. I need to improve my Calendar system. I am not prompt in recording things on the calendar and this results in things slipping through the cracks. (And causes much stress!)
2. I am not proactive enough. I leave too much for the last minute. I am overly confident about how much I can accomplish in a certain amount of time, usually resulting in frustration.
3. Frustrated and stressed is probably how my family would describe me a lot of the time - and this is NOT what I want. I want to be a source of peace for my family.
4. My Scrabble Pendant business has been a great source of pleasure and income for me, but I must put limits on the amount of time I spend on it and be sure the needs of my family are met.
5. I must plan carefully which craft shows I will attend, and more importantly, how many craft shows I will attend. Balance is essential.
6. I spend far too much time returning items, or organizing things to be returned. It is fiscally prudent to return items you don't want or need, but this is a time consuming and stressful process that needs to be weighed in terms of costs and benefits. Many returns result from things given to us by others (gifts, etc.) but many are self induced - and I must refrain from making purchases if I am unsure. I want to change my habit from "I'll buy it and return it if I decide I don't need it" to "I'll think about it and come back if I decide that I want it".
7. More attention needs to be paid to planning and reviewing the Budget!
8. Planning meals and grocery shopping regularly will help relieve Dinner Time Stress!
9. A clean (and organized) house goes a long way toward putting me in a peaceful mood. I need to make the time to clean (and organize)!
10. Less stuff means less clutter, less cleaning, less stress!

Well, that's a list that should keep me busy for most of 2010!

What are your goals for the new year?

Update

Hello! I don't know why but lately I feel like I don't have much to blog about.

We have increased our Emergency fund to $17,000 - so we are on our way to our goal of $30,000.

I spent the day filling out applications for craft fairs. I hope to do about a dozen of them by the end of the year. It's a bit hard committing to dates this far in advance, and to shell out the booth fees (usually around $100) - but every show I've done so far has been worth it, so I'm hopeful.

I received a payment from Associated Content this week. It was for $6 and some change I think. I really do like getting that passive income, even if it is small. I have been thinking about starting to write a little for them again. I also noticed that several people signed up using my referral link (thanks to anyone who did!) - but many of those people haven't written any content yet (start writing! lol!), although one person has written 39 articles - wow!

I had some fun playing around with this calculator:

You can play with the numbers and figure out hold old you will be when your income from investments will be greater than your income from your job. It's kinda cool.

That's about it. I'll try to update my totals and post some more this week.

Hope you all are well!

P.S. I have been going on the llnoe.com forums a lot lately. Gets addictive!

Is This Worth It? 4.44% APY

I saw an ad on t.v. today for a local bank that is offering an on line savings account that pays 4.44% APY (on balances up to $25,000).

Here are the stipulations:
Sign up to receive monthly e-Statements
Receive at least one direct deposit per statement
Make at least 15 debit card purchase transactions per statement
Use Home Banking and Bill Pay at least once per statement

I was thinking of maybe keeping my FFEF in here. My FFEF goal is $30,000.

The hard part of those requirements are making 15 debit card purchase transactions per statement. It seems (though I'm not sure) that just withdrawing the money from an ATM wouldn't count. (Although they do offer free ATM withdraws from their banks and refund up to $10 per month of any ATM fees that other banks charge.)

Anyway - it's not like I want to make 15 purchases every month - but 4.44% interest on $25,000 is like $94 a month.

Do you think it's worth it? Any suggestions on fulfillling the purchase requirements easily?

Thanks for any input!

Moving On To BS3

Well, we are still plugging along.

We have been approved for our refinance, we're just waiting to get our closing date. Our new mortgage will be a 15 year mortgage for $240,000 at 4.5%. This will cover (pay off) our Home Equity Loan and get us "debt free except for the house". Yay!

We will then move on to Baby Step 3 - save 3 to 6 months of living expenses as our Fully Funded Emergency Fund.

Here is what I come up with as our bare bones monthly living expenses:

Auto Gas: $200.00
Auto Insurance: $120.00
Grocery: $400.00
Home-Cable/Phone/Internet: $150.00
Home-Electric: $180.00
Home-Mortgage: $2,250.00
Home-Oil: $350.00
Home-Trash: $22.00
Personal-Braces: $100.00
TOTAL: $3,772.00

If I round up to $3,800 and plan to save enough to cover 6 months, that would be $22,800.00. I didn't include COBRA insurance payments (and I really don't know how much that would be) but I also didn't count on receiving "unemployment" money (which I also really don't know how much it would be or how long we would receive it for) - so I'm hoping those 2 will cover each other and cancel each other out?? (Anyone know more about these things?)

You might also notice that I left our cable/phone/internet rather high at $150 a month, but I figured we'd need the internet for me to continue my on-line business and for my husband to job hunt, and I figured we would want the cable as our only entertainment. (I fear that if we were to cancel it we might snap and go back into debt.)

Miraculously, we are expecting a large tax refund (even though we changed our withholding last year, guess we need to change again), and a large commission check in May and July - soooooo, we could actually have our FFEF by this July!!! This is amazing to me!!

This would mean that in just a few short months we could actually move on to Baby Steps 4 and 5 - and not a minute too soon as my oldest daughter is 12 and we need to really focus on college savings.

So, I'm feeling pretty optimistic tonight.

How did you all figure how much to save for your Emergency Fund?

Ideas Of What I Will Sell On Ebay

I plan to increase my earnings this year by selling more jewelry and selling more on ebay.

This is just my personal list of items in my house that I may be able to make some cash by selling on ebay.

- First Things First book
- Financial Peace University Kit
- The Secret dvd
- Lands End winter coat and snow pants
- lots of Gymboree baby clothes
- Mr. Potato head collection
- Bratz dolls collection
- Pez collection
- Barbie dolls and accessories
- Dress Up clothes
- Halloween costumes
- Christmas dishes collection
- Maternity work clothes/suits
- Fur Real Friends stuffed animals
- Princess/Barbie books
- LL Bean backpack
- Computer and Video Games

Side Bar Updates

I have updated some of my Sidebars.


Debt Payoff Progress

Starting Debt: $44,000
Current Debt: $23,144
Total Paid: $20,966

I'm a little disappointed that it's been 20 months and we have only paid off $20,966. I would have thought that we would be more than half way to having these debts paid off by now.

I guess I can be happy that at least we are moving in the right direction.

And I do remember that during this time we have also taken a vacation to Disney World (planned with the children prior to starting our debt free journey)and paid cash (about $4,000), and we bought tickets (with cash) to take my whole family to Florida for my sister's wedding (about $1,000), and we replaced our very old mattress ($1,000), and we replaced our broken dishwasher ($1,000), and we replaced our old and broken water heater ($1,000).

And on top of that we are paying cash monthly for our daughter's braces ($100/month). And we have almost $5,500 in savings.

I guess that's not too bad. Definitely an improvement over how we were living and spending before February 2007!



Savings Progress

• Emergency Fund: $1,000
• Jewelry Biz Earnings: $994
• Other: $3,500
• Total in Savings: $5,494.00

Our monthly savings total varies quite a bit from month to month. Here is my savings projections for the next 14 months. (Keep in mind that we have temporarily stopped paying extra on our last debt, a HELOC for $23,000, to put extra into savings due to the uncertain economic situation in our country.)

Savings Projections
11/08 $5,494
12/08 $4,794
01/09 $7,694
02/09 $8,694
03/09 $7,694
04/09 $7,194
05/09 $7,494
06/09 $7,994
07/09 $19,394
08/09 $18,894
09/09 $17,894
10/09 $19,894
11/09 $18,194
12/09 $17,794


Extra Earnings

Starting in November I am also going to once again begin tracking all extra income that I am able to earn. This will include tracking income and expenses (thus profit) for my jewelry business.

Thinking Through A Large Purchase

A few weeks ago our dishwasher broke. It is very old and was beyond repair.

The most frugal thing to do would be to not replace the dishwasher and to wash all the dishes by hand. A very good friend of mine voluntarily lives without a dishwasher. She built a new home about 5 years ago and actually chose not to put a dishwasher in her new home! She says she has always hated emptying the dishwasher and finds it easier to just wash the dishes by hand. So, I guess it can be done . . . just not by me. Although a dishwasher isn't an actual necessity, I personally feel that it is very close to being a need (rather than a want).

So, we had decided we would purchase a new dishwasher.

We just had to decide how much we were going to spend.

If you haven't shopped for a dishwasher in a while, they vary greatly in price and generally range in price from about $250 all the way up to $1,500 and more.

The way I saw it, we first had to think about our kitchen and decide if we would ever do a major kitchen renovation before we could decide which dishwasher to purchase.

Although we have no immediate plan to renovate our kitchen (as much as I would like to), I do dream of a new kitchen. In my dreams, we would enlarge the kitchen (extending into our large back yard) to include a large area for a table (making it an eat in kitchen) and get all new cabinets and appliances. Given our current financial situation and the fact that I would like to pay for my 3 daughters to go to college, this kind of a kitchen renovation is probably unlikely.

More likely, we would update our current kitchen keeping the existing floor plan. We would update all the appliances, the counter tops, and maybe new cabinets (or reface the existing cabinets), and get a new floor.

Deciding on if and when we would ever renovate our kitchen as well as to what extent we would renovate became crucial as we contemplated the new dishwasher.

Basically, we had 3 options to consider.

Option 1 - Real Cheap Dishwasher
My mom was for this option. She felt that we should get a real cheap dishwasher. Then, when we renovate out kitchen (someday) she advised we could just get rid of the cheap dishwasher and put in a nice one.

I thought about this but decided that ideally I would like to do some upgrading to our kitchen within the next 5 years and it would not make any sense to throw out a dishwasher that was less than 5 years old.

Option 2 - High End Dishwasher
My best friend felt we should purchase a dishwasher that would be able to be "integrated" in our kitchen once it is renovated. This would mean that it would be like a regular dishwasher now but when we get new cabinets, the front of the dishwasher would be able to be covered with the same cabinetry as our cabinets (making it integrated). Though I love the look of this, when I really thought about it I came to realize that I don't think this kind of a very high end kitchen is really realistically in my future (given the other financial goals that I would like to achieve). So, I decided against spending over $1,200 on a dishwasher for this reason.

Option 3 - Mid Priced Dishwasher
Ultimately, I decided to get a mid priced dishwasher ($550 after $150 rebate) in stainless steel. I think I will eventually upgrade all my appliances to stainless steel, so getting a dishwasher now that we can keep even in our renovated kitchen seemed to make the most sense to me.

It's funny how much a simple dishwasher made me think about our future financial goals and plans. A renovated kitchen of varying magnitudes has always been a far off dream. Even though the high end dream kitchen was fun to fantasize about, I actually feel more excited about a modest kitchen renovation that could actually happen within a decade.