Market Woes

In today's climate of large corporations like Merrill Lynch and AIG going bankrupt, all I have to say is DON'T PANIC. The last couple days on the Dave Ramsey show, callers have been calling in freaking out about what is going on, and it just shows how uninformed the general public is.

Let's take Merrill Lynch for instance. They were mainly a brokerage firm. A lot of people were worried because they managed their 401K's and other investments. Caller after caller kept asking if they needed to pull their money out and put it somewhere else. Short answer: NO. Long answer: you own stocks in your 401k, not stock in Merrill Lynch. If they go away, you still have your accounts safe and sound.

The AIG thing is a bit more complicated. As much as I hate that the government keeps bailing these people out, it was a needed evil to prevent the rest of the housing market to collapse. As much as everyone wants to blame the Bush Administration for this (even though the Democratic controlled congress is the ones who pass the laws), it simply boils down to mis-management of resources. Ideally, Fanny Mae and Freddie Mac should have gone out of business and the market would have filled the gap with other, more stable corporations. However, due to the sheer volume of loans they had out, it would have devastated countless families had they been allowed to go under.

So, to all the regular people out there -- DON'T PANIC. Economic slowdown can be more of a self-fulfilling prophecy than an actual event if allowed to be. If people panic and start pulling their money out of the market, then yes, it will slow down. To be honest, now is the best time to get in the market -- everything is on sale :) . Talk about your perfect BOGO deal. Hang in there, and things will pick up and carry on just like it always has. The American people make it happen, not politicians, not figureheads, not evil corporations. We control what is in demand, and we make it happen.

Revisiting Your Budget

After a few months of both of us working, we realized that we should have a LOT more money left over than we were netting. We had a basic budget, but figured we could handle some of the non-budgeted items on a case by case basis. Let me tell you, that DOES NOT work :).

We decided to sit down and completely redo the budget, and account for all of the out of budget items we could think of. We calculated it by looking back at averages to better estimate some of the over budget categories. Writing all of this stuff down was a very good exercise for the simple fact that we found the $800 we were missing (and it was a bit frightening).

Doing what Dave says by writing every dollar down before the month is something you REALLY need to do. I thought I could manage the extras, but there are too many extras that can creep into the picture and pretty soon you're missing a large chunk of money. Thankfully, after doing this, we came up with an extra $200 to put toward toward our debt snowball.

Here's to keeping that snowball rolling!

A New Month, A New Start

I've managed to partially re-fund our emergency fund with August's leftovers, so now begins the uphill battle to round that fund out to begin to make progress again. Being responsible is hard, but we're slowly doing it.

I've got some quotes out, and Terra is still picking up extra hours, so hopefully this month I'll have more surplus to attack these things. More to come :)