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 :)

New Month, Same Problems

This month has gone by way too fast. Unfortunately, the extra money I had been looking forward to is being mostly used to break even. Our budget is STILL out of wack -- mainly groceries and gas.

On paper, I'm trying to be conservative to free up money to pay down some of this stuff, but the reality is that I've got four mouths to feed and two cars that need to go quite a ways every week. One thing we are really trying to do is cook more at home and take leftovers for lunch. I've gotten my lunch routine down to a very small amount a day, but it still isn't in the budget. Our emergency fund is still under funded at the moment as well. All I need to do is get ONE thing paid off to gain some traction.

Fortunately (or not) a big medical bill from a hospital here in town has not arrived yet. I got the EOB from the insurance in May showing we owed around $2000. However, it is almost September and I haven't gotten a bill yet. I'm guessing now that it will show up after quarterly review, or at the end of the year when they do their books. There is an off chance some nice person out there just picked up the tab, but that's being too optimistic I suppose. I honestly expect it to hit right around Christmas :).

Throughout all of this, I'm still going to have maybe 600-800 I can put on the Van. Just need to bite the bullet and get that sucker paid off. If anyone wants to use that fancy donate link above, I'd be very appreciative :)

Until next time...

End of July Update

Things have definitely been interesting this month. Tomorrow we get our first big check for my wife, so we are excited. I've actually had some things come up and had to dig into our emergency fund a little, but that's going to be replenished tomorrow. Hopefully we'll have enough left over to actually pay down more on the Van.

The budget really felt some strain this month. Most of which was the extra overhead of two people driving instead of one, but now that we're starting to get checks coming in it is balancing out. After the dust settles I'll post the outcome :).

I'm actually working on a write up between traditional IRA accounts and Roth IRA accounts, so after I've done enough research I'll post my thoughts. Short answer -- Roth's are the way to go. Find out why in detail soon. :)

One Card Down...

I am happy to report that we have paid off one of our cards! No more Khol's charge! Now to tackle the next smallest debt in our debt snowball -- our van. We've got roughly $4900 to go on it and I think we can do that by the end of the year, but probably sooner if we play this right.

Check back later, I'll keep you updated :)

Major Milestone In Sight

My wife and I spent some time the other day to go over finances since she's been working again. Instead of working her extra money into our monthly budget, we decided to apply her money directly to our debt snowball.

Even though the likelihood of her working more than two days a week is fairly high, we decided to go on the conservative and only do our calculations based off of two days. With this in mind, we will be able to pay off one of our cars in six months. What's exciting is that if she works more than two days a week, or if I get some extra money with my side jobs, we can reach this goal much faster.

We also extrapolated this out and found that we would be completely debt free except the house in three years. Factor in raises and extra income and this snowball is starting to get really exciting :).