Well….we paid off our very last car loan. Which means we are DEBT-FREE!!!!!!!!!

Not Normal

We started out with $58,345.16 a little over 2 years ago. When we started with that amount of debt it seemed huge to us, almost insurmountable. We had 2 car loans and a maxed out credit card. Now, 27 months later we have no debt. We aren’t normal, and I love it! The automatic payment scheduled this Friday for our car loan won’t happen. Instead, we’ll get to keep our money, and let it accrue interest in an account, instead of paying interest to someone else.

Change Your Family Tree

If you feel like you never have enough money, or won’t be able to retire when you want, please, please pick up a copy of The Total Money Makeover by Dave Ramsey. It will change your life, I promise.

If you have already begun the journey, and feel overwhelmed or can’t see the light at the end of the tunnel, hang in there. It will get better, and one day you will be celebrating too. Let me know when you are debt-free!

It all started when my dad sat me down in high school with a pencil and a copy of a 1040EZ. I filled out the form and he instructed me in how to fill it out. Ahhh, those were the days. When I joined the Marine Corps and got married I moved up to a 1040A. Things got more complicated and we went to the 1040 and I started using TurboTax to help me file. We got tax refunds for many years before we got smart and figured to have less taxes withheld from our paychecks instead of loaning the government our money all year. There were even a few years while my husband was active duty and deployed to the middle east that our tax liability was $0. We are in a different income bracket now, so while I’m truly thankful for that, our taxes have gone up and gotten a bit more complicated.

I’m done with doing it myself though. In 2008 we sold our house and moved across the country. We had two state income tax forms to file and of course the federal form. If you’ve ever tried doing 2 state income tax forms you know it’s not fun or easy by any means.

So while I have this little voice in the back of my head telling me I’m a failure for not being able to do it myself, I don’t trust my sleep deprived brain enough to file our taxes. I need help. IRS, if you are reading this, why do you have to make it so stinkin’ complicated?!!!

Tired of hearing the fear, doom and gloom that’s filling the airwaves? Join Dave Ramsey for a nationwide town hall meeting and discover what’s happening with the economy, how we got here, and where we’re going. Plus, Dave will answer your questions live throughout the event!…We’ll take questions by phone, email, Twitter, Facebook, YouTube and more.

Here’s the official promotional video with more information. (Sorry, you have to click on a link to see it. I’m stupid when it comes to technology sometimes and can’t figure out to embed the YouTube video. Well, actually I could figure it out, but my 5 month old just woke up from his nap. Gotta be quick during naptimes!)

It’s Just Sticking Your Head in the Sand!

And to this, I say no. I’ve seen a few remarks already about the Town Hall for Hope meeting and a few have been negative about Dave Ramsey’s outlook on the recession and economy. I think Dave Ramsey has such a positive outlook on the economy is because he refuses to sit back and let the doom and gloom take over his thinking. It doesn’t mean he has his head stuck in the sand or isn’t facing reality. Having hope and overcoming your fear does not mean you are in denial. It means you are not letting fear run your life. It means you have a plan and are putting it to action. (Instead of waiting for the government to come up with a plan for you).

Mark Your Calendars

April 23rd, 8:00 PM EST. You can attend the Town Hall for Hope meeting at a location near you. So far they have no plans to rebroadcast it online (please, please change your mind Dave Ramsey and crew!), so it looks like I will check it out at a local venue. So far over 1600 locations have signed up to host it, and that’s in less than 2 days!

I subscribe to a bunch of magazines (all free of course-I don’t ever like to pay for magazine subscriptions). Lately I’ve noticed a dramatic increase in the amount of articles on couponing, saving money on groceries and how to cut down on your credit card debt. This week’s USAA magazine cover has just the following phrase on it”

“Life in the New Economy- Your Home, Your Credit, Your Budget”

Woman’s Day April issue features articles with titles like

“Decorating on a Nickel”

“374 Cost Cutting Tips”

“Save on Groceries”

“Outsmart the New Credit Card Traps”

See a pattern yet? Nightly newscasts feature segments on “Where to Find More Coupons” and other cost-cutting pieces. It’s been the talk in my mom circles and even women’s bible study. Everyone has tips to share on how they save money, do their budget or stories on reducing their debt. Maybe it’s all the talk about the recession but people have money on the brain.

It’s nice to not feel like such an oddball, and I’m learning some great new ideas along the way.

Have you noticed your friends, family and coworkers talking about finances more this year?

PK commented in response:

Actually this is not a very good use of emergency fund dollars. This is a very foreseeable event and a separate car maintenance fund should be in place for this instead of resorting to the emergency fund.

I agree. And disagree.

For those that are out of debt it’s a good idea to set up “sinking funds” account to cover expenses. Things like car repair, new car fund, gift money, vacation, house maintenance are a few examples of things that could be covered with sinking funds. I was under the impression that it’s not advisable to fully fund your sinking funds before you are even out of debt. Which is why we did not put anything in a sinking fund specifically earmarked for car repair. BUT, I fully agree that it’s a good thing to have and we plan on doing that once our debt is fully paid off.

Should we have done this already? Do you have an amount of money specifically put aside for car repair? When did you first set aside the money? Was it before or after you were debt-free?

In our situation we didn’t have to touch the emergency fund. We had enough in our budget that we could have moved from putting into savings and put towards the purchase of a new tire. That turned out to not be necessary. Instead our cost was $25 to take the nail out of the tire and repair it.

How do you handle unexpected car repairs while you are paying off debt?

Today I got another reminder from life about the importance of an emergency fund. On my way to drop some papers off at my sons’ school I fet the car drive a little funny. I thought maybe it was the wet roads. I didn’t think anything more of it but when I stepped out of the school office I was greeted with a very flat tire. No, it didn’t just need a little bit of air, it was flat. Very flat.

My husband is on his way home to check it out. I know we have a spare and I’m sure he’ll replace the flat tire with the spare. But we are going to need to buy a new tire. Which is where our trusty emergency fund comes in. I’m going to look over the budget this week and see if we can buy the tire directly from our budget. Even if we don’t have enough to cover a new tire I am reassured by the fact we have an emergency fund to cover things like a flat tire.

So, how’s your emergency fund? Is it full and ready for you to use in a time of need? If not (I’m sorry I sound a bit preachy here or a bit like a nagging mother) I urge you to cut out extras or earn a little extra money so you can set up an emergency fund. It’s smart to have one at all times, but given the current economic conditions I think it’s even more essential to have a back-up fund.

Ok, I’m going to step off my soap-box now. The little guy (he’s 4 months old now!) just woke up from his nap.

“Pay off Debt” -We are not debt free yet and I’m a bit disappointed that we still haven’t reached our goal. One hold-up is that we need to sell our truck. It’s paid off but we are still waiting on the title so that we can sell it. We’ve ran into a few snags (does anything ever go smoothly?). We are hoping to have possession of a duplicate title this month so that we can sell the truck. Once it’s sold the cash will pay off our remaining debt.

“Sell house and move” - We closed on our house July 30th and moved 2,000+ miles to California. We accepted an offer that was exactly our bottom line and I’m glad we did. Since the summer home sales and prices have slowed even more and I thikn we got out of there just in time.

“Fund Emergency Fund with 3 months worth of expenses” - Yes. And No. When we moved we received a lump sum payment for expenses. It’s sitting in a savings account untouched. Why haven’t we used it to pay off our last little bit of debt? Well… as a husband and wife we try hard to work together as a team on our finances. The amount would fully found an emergency fund for six months, but we still haven’t reached an agreement on what to do with or label this sum of money. One wants to keep it in a savings account earnings interest for a down payment on a house, and the other wants to use a portion of it to pay off debt. Our compromise in the meantime is to just let it sit in a savings account.

“Up retirement savings to 15%” - Effective January 1st, 2009 my husband’s company will match the first 4.5% we put into our 401k. We upped our 401k contributions to 5% a couple months ago to prepare for this.

“Have some fun as a family!” - We’ve definitely accomplished this. We probably could have been a little more gung-ho about paying off the debt in the last year but we would have missed camping trips, a day of sledding in the mountains, a day trip to the beach and other fun. We made a few concessions that we felt were well worth it for our family this past year.

What about the Nikon camera and flat-screen TV?

We did not buy these. I got a small digital camera from mother-in-law and sister-in-law for my birthday. It works great and will do just fine until I can buy a digital SLR camera someday. We also said “no” to the flat-screen TV purchase and have since upgraded to a “new to us” 37″ TV given to us by some relatives. Cost = $0! It’s not anything fancy, but compared to our old 25″ inch TV with blotchy purple spots on the screen, it’s like we have HDTV now.

So 2008 wasn’t too terribly bad. I still wish I could have given that “I’m Debt-Free!!!” yell to Dave Ramsey, but we’ll get there soon. On the positive side of things we became a little better at budgeting, finding free & inexpensive fun things to do for entertainment, and cooking at home more.

So What’s in Store for 2009?

Say good-bye to debt! - We will sell our truck and pay off our remaining debt.

Monthly Meal Plan to reduce our grocery bill- Our grocery budget took a huge hit when we moved to California. Regular prices at the grocery stores are insane ($5-$6 for a box of cereal!!!). Couple that with the fact that 2 major grocery chains (Vons and Ralphs) switched to extremely limited double coupons and raised their prices and my grocery bill has just exploded. I’ve had to switch up my couponing technique a bit but I’ve seem to got it down now. This means that having a 30 day meal plan and shopping for a month’s worth of groceries would be best since I don’t go to the same store every week. I’d like to continue to build my stockpile, work on a monthly meal plan, and work on reducing our grocery bill again.

Save for a house- We are currently renting. We want to get to know the area a little better and look for the right house and school area. Our goal is to also save an additional $36,000 this year towards a down payment on a house. I’m not sure that our down payment will be big enough to buy this year, so we may end up signing another year lease on the rental house so that we can have some more time to save.

Retirement contributions- I’m torn on this one. Do we leave our contributions at 5% (once we are debt-free) while we save for a house? Or should we up them to 15%? We are 32 and 30. I don’t know what is the right choice here.

So there it is. I was brave and looked at whether (or not) we have met our goals for 2008. We’ve made some new ones for this year and I look forward to meeting them.

Have you made any financial goals for 2009?

If you need to fill up make sure you check out Gas Buddy before you head out. I’ve found prices vary at local gas stations as much as $.30-$.40 a gallon. Within a two minute drive today I drove past 2 other stations offering gas for $2.05 and $1.99 before I got to Costco and paid $1.84.

What do lower gas prices mean for our pocketbooks?

Pay Raises for All!

Ok, maybe not, but that’s what it feels like. Money that we’ve been spending on gas can now go towards our snowball. We are paying HALF as much for gas as we were just six months ago. Paying 50% less for gas is a sizable difference and gives us a lot more wiggle room in our budget. With the economy the way it is I’m glad there is at least some relief right now for those who are struggling.

Cheap Food?

Food prices have risen dramatically over the last couple years, especially in the last twelve months. Most food is delivered by trucks that use diesel. While diesel is more expensive than regular unleaded gasoline prices have still fallen. When diesel prices were increasing grocery stores had to raise food prices to cover the increased shipping and delivery costs. It makes sense that when gas prices go back down that food prices will be lowered. I’ve read that we should see lower prices on grocery shelves within 6 months. Here’s hoping!

What Else?

I’m not an economic expert by any means, so I’m opening this up to you for answers. How are lower gas prices affecting you? How do you think they’ll affect other aspects of the American economy?

Blessed Beyond Measure

The little guy joined us on September 30th weighing in at 6 lbs 14 ounces and 19.5 inches long. He has blue eyes and brown hair with a hint of red. Time will tell what his hair really looks like because there isn’t a whole lot there right now. He fits right in perfectly in our family and is adored by his three older brothers.

So… What did I miss?

I’m back to blogging again, and have actually missed it. I’ve spent a lot of time on the couch watching TV while I feed the little guy in the late night and early morning hours. While watching the news coverage of the financial crisis I’ve had a lot of time to think about finances. Since I’ve haven’t had free hands much lately I haven’t been actually able to get my thoughts down on the computer. Nor have I been able to visit any of my favorite blogs or check-in with my readers to see how you all are doing. Like other moms, being a mom comes first for me, and I really needed to step back and take a break. I appreciate everyone’s patience with me and I’m excited to share our little blessing with ya’ll.

p.s. If you find any typos in today’s blog or in the future I blame it on my one-handed typing, ok?

How is everyone else doing? September is only a few days away and winter is right around the corner. The year has flown by for me, and I hope that everyone has been able to make some progress this year on paying off their debt.