Financial - Family - Life

Time to Refinance?

noreply@blogger.com (Lance) — Fri, 10 Jul 2009 13:40:00 +0000

Image by TheTruthAbout via Flickr

When deciding whether or not to refinance there are a number of things to consider. These include things like: how long you plan to stay in the house, how much cash you have available for closing costs, and how much lower your new interest rate will be.

But most people, including me, want a simple straight forward bottom line analysis that indicates: is it worth it or not?

The answer here is a comprehensive breakeven analysis. This analysis looks at payback time based on the principal balance not only on the payback for the closing costs.

The main reason is that just looking at the payback of the closing costs is not the best way to reveal the overall costs associated with refinancing a loan, which means restarting your loan repayment schedule of payments (amortization table).

The best way to see this is to plot out the principal balance each month over the life of the loan for your current loan versus each of the options that you are considering.

For my analysis we had 3 options and we needed to roll most of the closing costs into the loan because we decided that we wouldn’t use our emergency fund to refinance. We also determined that what ever savings we achieved on the monthly payment we would just roll it in and continue paying the same amount as our original payment.

Building each of these things in to excel I created the amortization tables for all 4 situations (original plus 3 options). I then plotted the monthly principal balance over the life of the loans. This graph clearly shows the real breakeven point for each of the options. As in, how many months from now will the refinance options begin to have a lower principal balance than the original loan. This is the TRUE breakeven point.

Below are some screen shots from my personal spreadsheet analysis. Click images to enlarge.
If there is enough demand I could make the spreadsheet available for download.

Options:

Option Details:

Notes & Explanations:

Breakeven Analysis Graph:

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Frugalfice, what’s that you ask?

noreply@blogger.com (Lance) — Wed, 03 Jun 2009 20:15:00 +0000

Yesterday Matt Jabs of Debt Free Adventure out of Lansing, Michigan asked a question on Twitter that intrigued enough to respond. My response was actually included in his recent post (here).
Here’s the question as posted on his twitter timeline:

So what was my response?

LRG of Financial Family Life testified:
sacrificed: HD TV & DVR, blessing: watched too much TV anyway! now more family time

To elaborate...
Just before our son was born, we, my wife and I, made the decision to drop the following:
• HDTV
• DVR
• Movie Channels
• Extended Cable

How was this a blessing? Basically, I have come to realize as our son is approaching 2 years old and #2 is on the way, that the less TV there is to watch, the more time you have to spend with you family. Do we miss HDTV, yes (looking at antennas now for FREE ota). Do we miss the movie channels, no. Do we miss the DVR, absolutely! But it’s all worth it! Especially when you can cut your cable TV service by 50%!

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'Young Conservative Anthem' Causes Internet Buzz - Political News - FOXNews.com

noreply@blogger.com (Lance) — Tue, 02 Jun 2009 13:46:00 +0000

'Young Conservative Anthem' Causes Internet Buzz - Political News - FOXNews.com

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Dave Ramsey Asked and Answered on Fox & Friends

noreply@blogger.com (Lance) — Tue, 19 May 2009 14:16:00 +0000

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Wal-Mart's Impact on Price

noreply@blogger.com (Lance) — Thu, 09 Apr 2009 11:08:00 +0000

In 2007, independent research from Global Insight shows that the reduction in
the price level due to the presence of Wal-Mart translates directly into savings
for consumers amounting to $287 billion in 2006. This corresponds to savings of
$957 per person and $2,500 per household, regardless of where consumers
choose to shop. That is, even consumers who shop at Target, Best Buy or
Office Depot save money from the presence of Wal-Mart, due to the competitive
pressure of Wal-Mart's "Everyday Low Prices."

View article...

Interview with Dave Ramsey in Grand Rapids

noreply@blogger.com (Lance) — Mon, 23 Feb 2009 19:19:00 +0000

GRAND RAPIDS, Mich. (WOOD) - Personal financial guru Dave Ramsey, known around the nation for helping Americans get out of debt and live in financial peace, spoke Thursday night Van Andel Arena in Grand Rapids.
24 Hour News 8's Suzanne Geha talked with him prior to the event.

Preview: I Will Teach You To Be Rich - Introduction

noreply@blogger.com (Lance) — Thu, 19 Feb 2009 18:18:00 +0000

Check this out: 16-page introduction of I Will Teach You To Be Rich book

I Will Teach You To Be Rich Introduction

View more documents from ramit.

New Mortgage Rescue Plan

noreply@blogger.com (Lance) — Fri, 13 Feb 2009 12:58:00 +0000

A new mortgage rescue plan is in the works. This plan would especially focus on the mortgages in and/or heading into foreclosure.

According to reports from the newswire Reuters, President Barack Obama and his Administration are working on plan to subsidize mortgage payments for homeowners who may be running into financial trouble. However, the key point to the new developments is that the plan would target homeowners before they fall behind. Reuters reported, citing sources, that the plan would have a "uniform eligibility test" before even delinquency occurs.

Will this be enough to boost the housing market? I don't know, but I do think that until the Fed gets into the Mortgage Backed Securities market, resulting in pushing interest rates down, the housing market will basically be stalled. I've been floating on my refinance hoping that the rates would drop back down to the 5% and below levels. I'm leaning toward going forward, stop the waiting and just get on with it.

Stimulus Package Housing Impact

noreply@blogger.com (Lance) — Thu, 12 Feb 2009 18:26:00 +0000

from Tyler Osby:
What The New Stimulus Package Means to Housing

For First Time Homebuyers
The first provision is fairly well-known. It gives first-time home buyers an $8,000 tax credit provided they purchase a home between January 1, 2009 and August 31, 2009.
This is a true tax credit.
The $8,000 credit requires home buyers to hold property for at least 3 years. If the home is sold in fewer than 3 years, the tax credit must be repaid to the government. Bummer.
It’s also worth noting that the date range applies closings and not sales agreements.
Closings must occur within these 8 months to be eligible.

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Geithner and Obama Keep Policy of Supporting Zombie Banks

noreply@blogger.com (Lance) — Wed, 11 Feb 2009 17:06:00 +0000

Unless and until policymakers and politicians are willing to face up to reality, we are simply repeating the same mistakes Japan made in the 1990s and allowing " government?s the off live to banks zombie?

These banks will have an insatiable appetite for funds and, like all zombies, will try to eat our brains. From the looks of what's coming out of Washington, maybe they already have.
Posted Feb 11, 2009 11:26am EST by Aaron Task

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Stimulus, Spendulus...Not Stimulating

noreply@blogger.com (Lance) — Tue, 10 Feb 2009 18:22:00 +0000

The senate passes the stimulus bill and the dow drops more than 300 pts (4+%).

I'm not very confident that this "stimulus" will actually stimulate anything.

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Examples to Learn From

noreply@blogger.com (Lance) — Tue, 10 Feb 2009 10:30:00 +0000

Larry Burkett's Earthquake – Part 2

In the next section(s) of the book Larry Burkett gives brief historical synopsis of Germany and Argentina and their economy, or should we say economic crashes. I will not pretend to be a history buff or even fully understand the economic structure and collapse of these two countries' economies, but I can at least pass on what I consider to be the highlights. What I mean by highlights is what think seems relevant to what we are experiencing today. The extra emphasis below is all mine.

The first example is Germany in 1918:

When the German government made the decision to print the money it needed, it was hailed by progressive economists as an enlightened move. The "enlightened" philosophy was that currency should not be linked to precious metals anyway, since it allowed for no direct government control over the economy. This philosophy would eventually resurface in America during the "New Deal."
…
To compensate for the lack of currency, the Reichsbank (the German equivalent of our Federal Reserve) authorized the printing of more currency. This would prove to be the downfall of the German economy and, ultimately, the Republic. As I commented previously, when any government makes the decision to inflate its economy through debt, eventually it will be faced with more difficult decisions about how to repay that debt. As long as the debt is held by its own people, the solutions are somewhat easier because it is in their interests to maintain the system. When the debt is held by foreigners, however, there is no choice but to either pay up or risk losing the ability to trade with other nations. Inevitably the government is faced with three basic choices: default, raise taxes, to inflate the currency.
…
Once hyperinflation struck Germany, bank loans were indexed to the currency devaluation. But since wages were not indexed, the loans escalated far beyond the average worker's ability to repay them. Most average-income workers lost everything they owned. This massive shift of wealth would later pave the way for the National Socialist Party (Nazis) to grasp power. The wealthy got wealthier, and the middle class got wiped out.
…
The deutschemark became worthless. Lifetimes of savings were wiped out, and the only form of trade for most Germans was barter.
…
The net result of hyperinflation was the dissolution of the German government. After the collapse of the economy, Germans turned to socialism, believing that the free-enterprise system had failed them. When the depression of 1929 struck, Germany still had not recovered from the devastating effects of the earlier collapse.

The second example was Argentina in 1940:

In 1940 Argentina was one of the world's fastest developing countries. The example of Argentina is what not to do to an economy. The Argentine leaders were greatly influenced by American economists who followed the theory know as Keynesian Economics. To refresh your memory, this is the philosophy that the central government should control the economy for the "good" of the workers. To implement Keynesian economics requires both a strong central monetary system, such as the Federal Reserve, and the ability to inflate the currency when necessary.
…
By 1980 their debt was $44 billion – nearly matching their GNP and requiring half of the government's income just to service the interest on the debt. … The Argentine government was faced with three choices: default, raise taxes, or inflate the currency.
…
If Argentina had simply defaulted on its debt, virtually all access to any additional loans would have been cut off. The second option of tax increases (and spending cutbacks) would seem the most logical approach. After all, that's what is expected of individuals when they overspend their own budgets, isn't it? But Argentina already had a tax rate of 40 percent and a government that was spending money faster than the people could make it. Instead, the Argentine government, just as the Germans did some sixty years earlier, opted for the easy way out and began to inflate its currency. Simply put, they printed the money they needed.
…
The government estimated that inflation would increase about 20 percent as a result of their actions. Instead it rose by nearly 700 percent! The middle class in Argentina was rapidly being wiped out. Retirees, pensioners, and those living on fixed incomes were destitute in less than a month.
…
By January of 1990 the annualized inflation rate was about 5,600 percent. Prices tripled while Argentineans slept.
…
In an effort to gain at least some degree of control over inflation, the government (at the insistence of the World Bank) established the equivalent of martial law over the economy. The currency was frozen and the printing of any new money was forbidden; wages and prices were frozen; black marketing was punishable by long prison sentences; and so on. This helped to establish some semblance of sanity in an insane system, and by early 1991 inflation was reduced to a mere 300 percent per year.

I see three clear cut issues from what Burkett describes in both of these prior examples.

There were 3 choices as a result of debt: default, increase taxes, print more money (inflate the currency).

Both chose to print more money which led to hyperinflation.

The middle class suffered the most, virtually wiped out. This pointed the nation toward socialism.

Those same three issues are staring America right in the face. We have become a debtor nation and have continued to print more and more money.

See this post on Christian Personal Finance: Is the Fed running the U.S. economy into the ground? If this doesn't alarm you, it should.

Here is the graph of the amount of currency in circulation from the Federal Reserve:

As you can see from the graph, the Fed has greatly increased the amount of currency in circulation during this current recession.

What is our current National Debt? 10.7 TRILLION DOLLARS

With an average interest rate of 3.811%, (link here) the annual interest is 408 BILLION DOLLARS!!

Our Gross Domestic Product was $14.3 trillion as of Oct 2008 (link here).

Previous:

Intro & Background
Part 1 – Seeds of Destruction

Next:
Part 3 – Economic Cycles

Thinking about buying a home in 2009?

noreply@blogger.com (Lance) — Tue, 10 Feb 2009 01:42:00 +0000

If you are thinking about buying a home soon, 2009 may be the best year in a long time. Rates are down as low as they've been in years and now the 2009 Economic Stimulus Package includes a homebuyers tax credit. There is one version in the Senate which has a $15,000 Homebuyers Tax Credit and one version in the House which has a $7,500 credit, but only one of or a completely new version will survive.
There was an earlier version of the tax credit in 2008 as well. Confused yet about the 2008 tax credit and the proposed 2009 tax credit? Click on the links above to read the 2009 Economic Stimulus Package and the $15,000 Homebuyers Tax Credit – All the answers to your questions from the Investing Blog. This post is a good outline of the differences and will be kept it up to date as things progress through congress. So be sure and check back often as the package goes to vote in both houses of congress and then across the president's desk.

Oppose the Spendulus '09

noreply@blogger.com (Lance) — Mon, 09 Feb 2009 18:49:00 +0000

Opposed to the stimulus bill, voice your opposition here:

From the site:

What Does the So-Called “Stimulus Package” Mean For You?
It means you pay.
You pay for more bailouts, more giveaways, more wasteful
spending...and your children and grandchildren pay for trillions of dollars of
debt.
But you can fight back right now. By signing the petition, you can
join the thousands of Americans who are saying NO!

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Giving Myself a Raise!

noreply@blogger.com (Lance) — Thu, 05 Feb 2009 16:55:00 +0000

It's tax time again and one thing that came to my attention this year is the number allowance that I claim on my W-4 form with my employer.

Form W-4 is completed so that your employer can withhold the correct federal income tax from your pay. You should consider evaluating your W-4 allowances each year as you financial situation changes. To complete the W-4 Form, you specify marital status, and the number of exemptions or allowances you wish to claim. As the number of exemptions you claim increases, the amount of tax withheld decreases, and vice versa. You also have the option of specifying additional flat dollar amounts to be withheld.

Image via Wikipedia

Here are the boxes on the form:

Box 1: Name
Box2: SSN
Box3: Marital Status
Box4: Checkbox for name differences
Box5: Number of Allowance
Box6: Additional Amount $, per paycheck
Box 7: Exemption Status
Box8: Employer's Name
Box9: Office Code
Box10: EIN

If you tax return for 2008 is greater than $500, I would suggest evaluating and possibly increasing the number of allowance you claim on your W-4. This can be change any time. Each employer will have a different way of making the changes though so check with your payroll or human resources department. My employer gives us online access to submit changes to our W-4 forms and it will take effect on the next pay period which is nice.

For tax year 2007 our tax refund was more than $5,000 so I increased my allowances from 1 to 2. This was not nearly enough. This year (tax year 2008) our refund is more than $2,500. My employer provided some tables and a worksheet in order to make better decisions on the number of allowances you should claim. I also used a calculator from the IRS to evaluate my allowances. Using both came out with the same results. They indicated that I should be claiming 6 allowances and would still get an estimated return around $500.

So I dug a little farther and using details provided by my employer I was able to look at all my options. What I determined was that each additional allowance would knock $21 off the amount of taxes I was paying each pay period. So then divide $2,500 by 26 pay periods, is $96, then divided by $21 gives me 4.5 additional allowances I could claim to reduce the amount of taxes taken from my pay and therefore reduce the amount of money I was giving the government as an interest free loan. 4.5 plus the original 2 allowances equals 6.5, but since it has to be a whole number, I will settle on 6 allowances.

This will increase my wages by $84 per pay period or $168 per month!

Talk about a raise! My employer said "no pay raises this year", well I'll just give myself a raise.

I'd rather get $168 more per month than one lump sum in March or April. I've learned that I can do more with my money than the government can anyway. All they would do is SPEND it on something I don't agree with. I need to build up my emergency fund, add to my kids college fund, increase my retirement, pay off my house early…I can think of far better ways to use my money than loan it to the government interest free!

To evaluate your allowances and give yourself a raise, use the IRS Withholding Calculator.

Other resources you may find helpful are:
IRS Form W-4 Worksheet (pdf)
IRS Publication 919 How Do I Adjust My Tax Withholding? (pdf)

Dave Ramsey’s Baby Steps – Expanded (Summary)

noreply@blogger.com (Lance) — Tue, 03 Feb 2009 11:43:00 +0000

Over the last couple of weeks I have went through Dave Ramsey's Baby Steps expanding out the smaller sub-steps of each one. In case you missed one of the steps or you are just getting here, below are links to each of the Expanded Baby Steps.

I hope you have or will read through each step and leave comments if you have any questions, ideas, or opinions.

Dave Ramsey's Baby Steps - Expanded
Baby Step 0: Live like no one else…
Baby Step 1.0:Save $1,000 in Baby Emergency Fund (BEF)
Baby Step 2.0: Do debt snowball, paying all your debts from lowest BALANCE to highest
Baby Step 3.0: Save 3-6 months EXPENSES in a Fully Funded Emergency Fund (FFEF)
Baby Step 4.0: Start Contributing 15% of you paycheck to retirement
Baby Step 5.0: Save for kids college fund
Baby Step 6.0: Pay off house EARLY
Baby Step 7.0: Build Wealth & Give - … so now you can live like no one else!!

There is actually one more step that I will be going over soon. It's not part of Dave's steps but it will be one of my financial priorities:

TRUE FINANCIAL FREEDOM

This one might take a lifetime, but it is a worthy goal and one I plan to pursue whole heartedly.

Dave Ramsey's Expanded Baby Steps - Baby Step 7.0

noreply@blogger.com (Lance) — Mon, 02 Feb 2009 14:17:00 +0000

Baby Step 7.0: Build Wealth & Give - … so now you can live like no one else!!

7.1 Giving over and above tithe.

7.2 Investing in paid for real estate and mutual funds.

7.3 Lifestyle and luxury increases.

7.4 Inheritance – Change your family tree.

Our future plan:

Currently we give our tithe to our local church. There are miscellaneous offerings we give throughout the year and we are always blessed by those opportunities. I look forward to doing more of those things when we reach this step.
How awesome would it be to be able to invest in things other than your retirement and college fund(s)! Invest in something that you care about, something that you are passionate about maybe.
I really feel that once we have reached this point, 15-20 years down the line, that the experience we have will completely alter our views on lifestyle and luxury. I'm sure there will be some of increases, but that will not be at the top of our priority list.
Just like Proverbs 13:22 says "A good man leaves an inheritance for his children's children,"

Missed a step? Here are all the previous posts from this series:

Dave Ramsey's Expanded Baby Steps - Baby Step 6.0

noreply@blogger.com (Lance) — Sat, 31 Jan 2009 11:02:00 +0000

Baby Step 6.0: Pay off house EARLY

NOTE: Making 1 extra payment per year (or 1/12^th of a payment extra each month) will reduce the number of payments on a 30 year mortgage by 4 years or more.

Our future plan:

We are going through the process of refinancing our first mortgage. The second will be paid off in a matter of months, woohoo! Once that is complete we will follow straight down the Baby Steps and save 3 months emergency funds, resume retirement contributions, and start a college fund for our son.
Our stretch goal for Baby Step 6 is to pay the house off by the time my wife is 40. When analyzing the refinance, I determined that if we can roll the monthly savings from refinancing, around $100 per month, and then add an additional $375 per month, we could pay it off in a little over 14 years and would meet our stretch goal. I get excited just thinking about be completely DEBT FREE!

Stay tuned, the next and last Baby Step is the best…

Previous Posts:
Dave Ramsey's Baby Steps - Expanded
Baby Step 0: Live like no one else…
Baby Step 1.0: Save $1,000 in Baby Emergency Fund (BEF)
Baby Step 2.0: Do debt snowball, paying all your debts from lowest BALANCE to highest
Baby Step 3.0: Save 3-6 months EXPENSES in a Fully Funded Emergency Fund (FFEF)
Baby Step 4.0: Start Contributing 15% of you paycheck to retirement
Baby Step 5.0: Save for kids college fund

Coming Up Next:
Baby Step 7.0: Build Wealth & Give - … so now you can live like no one else!!

Cut the cable on Cable TV?

noreply@blogger.com (Lance) — Fri, 30 Jan 2009 14:14:00 +0000

Image via Wikipedia

Looking for ways to cut your expenses to save extra money? Maybe for your Debt Snowball?
What about your cable bill?

We have cut out all but basic cable and I have ordered a HDTV tuner so that I can get FREE over the air HDTV. Once I get that all set up, we may cut the cable to cable tv all together (pun intended).

Checkout this article detailing what one couple has done to save $1488 over 16 months.

ABC News: Cancel Your Cable and Still Watch Great TV

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Dave Ramsey's Expanded Baby Steps - Baby Step 5.0

noreply@blogger.com (Lance) — Fri, 30 Jan 2009 11:31:00 +0000

Baby Step 5.0: Save for kids college fund

NOTE: There are 3 common college savings avenues

Education IRA or Education Savings Account
UTMA or UGMA (Universal Transfer/Gift to Minors Act)
State Sponsored 529 Plan

Our plan:

Once the second mortgage is paid off, then we can start retirement back and begin our college fund.
Right now we have some money sitting in an ING account designated for our son. I actually haven’t made up my mind yet exactly which avenue we will use for the college fund. Considering using a Roth IRA in my wife’s name, that way it’s not tied solely to education and then if they don’t need or use it, it’s just extra retirement funds for us.

Another note on steps 4.0 and 5.0, they are typically done at the same time.

Previous Posts:
Dave Ramsey’s Baby Steps - Expanded
Baby Step 0: Live like no one else…
Baby Step 1.0: Save $1,000 in Baby Emergency Fund (BEF)
Baby Step 2.0: Do debt snowball, paying all your debts from lowest BALANCE to highest
Baby Step 3.0: Save 3-6 months EXPENSES in a Fully Funded Emergency Fund (FFEF)
Baby Step 4.0: Start Contributing 15% of you paycheck to retirement

Coming Up Next:
Baby Step 6.0: Pay off house EARLY

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Credit Card Compromise - May Be Largest Ever!!

noreply@blogger.com (Lance) — Wed, 28 Jan 2009 21:07:00 +0000

In case you missed this because it was buried under all the inauguration day hype, the credit card processing company Heartland Payment Systems exposed millions of credit card numbers over a number of months. These were Visa and MasterCard transactions. They didn’t even know about the breach until Visa and MasterCard notified them, and that was LAST YEAR! See articles here and here.

Our local credit union has a actual list (that is continuing to be updated) of the card numbers that were compromised. All I had to do was make a phone call and at this point our debit cards are in the clear. They suggested call again in another week or so just to re-verify.

I also called ING to check on our Electric Orange debit cards. The initial CS rep didn’t have a clue what I was talking about, so she put me on hold and after talking with the fraud department, she said that they had reviewed the accounts and no debit cards were compromised and they were not issuing new cards based on this breach. Very friendly and efficient.

If don’t have an ING account, consider opening one, and if you want a $25 bonus (with $250 deposit) let me know and I’ll get you a referral link.

Dave Ramsey's Expanded Baby Steps - Baby Step 4.0

noreply@blogger.com (Lance) — Mon, 26 Jan 2009 23:44:00 +0000

Baby Step 4.0: Start contributing 15% of your paycheck to retirement

Image via Wikipedia4.1 First fund employer 401K plan up to the match.

4.2 Remainder into Roth IRA, up to contribution limit.

4.3 If Roth IRA is maxed out, go back to the 401K or a standard IRA.

NOTE: Invest in 4 type of mutual funds
· Growth & Income (Large Cap Fund) 25%
· Growth (Mid Cap or Equity Fund) 25%
· Aggressive Growth (Small Cap or Emerging Market Fund) 25%
· International 25%

Here are the personal steps we plan to take when we are ready to continue on this journey:

1. We have followed Dave’s plan and stopped contributing to our retirement for now, until we have paid off the second mortgage on the house. Then we will be debt free except the house and ready to tackle Baby Step 4.

2. My employer does not match any contributions into the 401K. My wife only works part time so therefore doesn’t have a 401K plan. So we jump straight to step 4.2.

3. Maxing out the Roth IRA will get us most of the way to putting 15% in to retirement. If our finances improve, which of course would be nice, we will go to the 401K to take advantage of the tax benefits.

Previous Posts:
Dave Ramsey’s Baby Steps - Expanded
Baby Step 0: Live like no one else…
Baby Step 1.0: Save $1,000 in Baby Emergency Fund (BEF)
Baby Step 2.0: Do debt snowball, paying all your debts from lowest BALANCE to highest
Baby Step 3.0: Save 3-6 months EXPENSES in a Fully Funded Emergency Fund (FFEF)

Coming Up Next:
Baby Step 5.0: Save for kids college fund

OBAMA: We will reverse our dependence on foreign oil…

noreply@blogger.com (Lance) — Mon, 26 Jan 2009 16:06:00 +0000

Image by Getty Images via Daylife

From this morning’s talk from Obama in the East Room of the Whitehouse
1. Energy Economy
a. Clean energy investments
b. 75% of federal building more efficient
2. Fuel Efficient Cars built in America
a. DOT to set standard for year 2011 set by March
b. 35 mpg by 2020
3. Reduce Greenhouse Gas Emissions
a. Work with, not against states
b. Direct the EPA to reconsider requests by California
c. Incentives for developing new energy
4. Global Coalition
a. Time for America to lead
b. America will not be held hostage

LRG: And these things are going to stimulate the economy?

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Some Retail Shopping Advice in 2009

noreply@blogger.com (Lance) — Mon, 26 Jan 2009 14:30:00 +0000

I was reading an article from The Wisdom Journal called Retailers Biting The Dust - where you WON’T be shopping in 2009.

That article lists several retailers that could be closing their doors in 2009. It also goes on further to say that “if you’re holding a gift card from one of these retailers, it might be a good idea to go ahead and use it now.”

I was discussing this with family over the weekend when I was reading this on my iPod Touch and my impression was that they thought this was a lot of doom and gloom. Like maybe they didn’t quite think that this list was a real possibility. We here’s some more evidence released this morning that supports at least one of those companies inclusion on the list.

Sprint Nextel Plans to Cut 8,000 Jobs in Quarter
By THE ASSOCIATED PRESS
Published: January 27, 2009

The job cuts at the wireless provider, which represent about 14 percent of its work force, are aimed at cutting annual costs by $1.2 billion.

Dave Ramsey's Expanded Baby Steps - Baby Step 3.0

noreply@blogger.com (Lance) — Sun, 25 Jan 2009 11:03:00 +0000

Baby Step 3.0: Save 3-6 months EXPENSES in a Fully Funded Emergency Fund (FFEF)

3.1 Start car replacement fund.

3.2 Save 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

3.3 Start furniture or other non-essential stuff replacement fund.

3.4 Move up in car if you still feel the need to (must pay cash for it)

Here are the personal steps we have taken so far as we continue on this journey:

1. In order to provide extra security for the wife, we have almost 2 months already in our EF.

2. We have already purchased a home and we have about 40% equity as of right now, never had PMI.

3. We have started various replacement and non-essential type funds that we contribute to monthly. We did start this with the first budget for 2009, before finishing step 2, as a personal preference because the pay off of the second mortgage is within reach, only a few months from now.

4. We have not started a car replacement fund yet and do not feel we need to move up in car. Our 2 primary autos are a 2005 and 2007. I’m still driving a beater to and from work as well.

Previous Posts:
Dave Ramsey’s Baby Steps - Expanded
Baby Step 0: Live like no one else…
Baby Step 1.0: Save $1,000 in Baby Emergency Fund (BEF)
Baby Step 2.0: Do debt snowball, paying all your debts from lowest BALANCE to highest

Coming Up Next:
Baby Step 4.0: Start contributing 15% of your paycheck to retirement