TMMO April 2009 Progress & YNAB Pro Preview

Attending Dave Ramsey’s Town Hall for Hope web cast at the same church where Chris and I took the Financial Peace University course last year reminded me that I hadn’t reported on our progress towards debt-free status in a while. The truth is that things have pretty much been running on autopilot without much need for tinkering on our parts since we set up all of the automatic transfers through our banks and lenders.

Since October 2007, we have gotten quite a bit done, though not necessarily with what Dave Ramsey would dub gazelle intensity.

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$19.99 Champion Sports Bra Sale plus 20% off

Gosh, I love it when Champion runs their semi-annual $19.99 sports bra sales!. They always seem to know when my motivation is flagging and could use a little boost by way of a cute new pink sports bra with high motion control and wicking Double Dry lining. 😉

Even better, through 3/29, you’ll also get an additional 20% off your entire order as well as free shipping for orders over $100. I doubt that I’ll hit that free shipping threshold, but 20% sure isn’t bad, especially since several styles in discontinued colors are only $15.99.

The $19.99 sports bra sale runs through April 27, but the 20% off ends this Sunday, so pop on over and take a look if the girls need a little pick me up, LOL. (And if you don’t happen to be a female, they also have an $8.99 Double Dry workout gear sale going on for the men, too.)

ChampionUSA.com

Champion Clearance Sale @ OneHanesPlace

Woohoo!

There’s another great Champion sports bra and workout gear clearance sale going on at OneHanesPlace.com through the end of the month!

Several different styles of sports bras (usually $30 or so) are on sale for $9.99-$15.99, and there are also plenty of workout bottoms and wicking sports tops in the mix for $15 or less.

Check it out, and get an additional 20% off with promo code 611357 if you order before 3/11/09! (Enter the code during checkout–there’s a button on the same page where you enter your payment information.)

Oh, and there is a nice selection of men’s workout clothing, too, but who cares about that? 😉

Expanded Baby Steps to Financial Peace

I typed up the following overview of Dave Ramsey’s Baby Steps to Financial Peace last year after taking the FPU course. It’s based on an existing expanded baby steps list, some quotes from the DaveRamsey.com site, and some of my favorite related links and resources. If your finances need an overhaul in 2009, check out the steps below and give some thought to giving them a try.

The Expanded Baby Steps to Financial Peace

Both Dave Ramsey’s Financial Peace University course and his Total Money Makeover book are based on the premise of following seven Baby Steps to Financial Peace. These steps are to be completed in order for best results, but inevitably questions like “Where in the Baby Steps should I start saving for a house downpayment?” and “When do I get life insurance?” that are not covered specifically in the original seven steps always come up.

Luckily, the folks over at the MyTotalMoneyMakeover.com forums have come up with a pretty comprehensive list of expanded Baby Steps for us to use. In the unlikely event that your particular situation is not included in these expanded steps, try posting your question in the free Living Like No One Else forum.

So without further ado, let’s take a look at the Expanded Baby Steps!

Baby Steps 0.X: Before You Begin

These are the “pre-Baby Steps” that should be taken care of before you begin the official program. Your chances of success will improve greatly if you can set the stage by making sure you are adequately insured, knowing where you money is coming from and going to every month, getting rid of unnecessary expenses and possessions, and completing as many of these items as possible.

  • 0.1 Commit to NEVER borrow money EVER for ANYTHING other than possibly a house.
  • 0.2 Talk with spouse and get him/her on the same page as you concerning finances.
  • 0.3 Do a written budget.
  • 0.4 Temporarily stop all retirement contributions.
  • 0.5 Get current on all bills. (You MUST have Shelter, Food, Utilities, Basic clothing)
  • 0.6 Get Health insurance NOW (chances of getting sick w/ major medical bills are larger than that of death), especially if you have children.
  • 0.7 Get Life insurance NOW if you have considerable debt/your family couldn’t make it financially if you died. Especially important if you have children !! Social Insecurity provides only a small amount of coverage if you have dependents.
  • 0.8 Amputate “toys” (bikes, boats, ATV’s etc) if they will keep you from completing the snowball within 12 months
  • 0.9 Cut lifestyle (Cut CATV, Cellphone, Regular phone “extra’s”, Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. (depending on income)

Tools & Resources:

* If you do not have Microsoft Excel installed on your computer, you can download OpenOffice.org for free to view the spreadsheet or use Google Docs online.

Baby Step 1: Save $1000 in a starter emergency fund

This is the first official Baby Step. Dave Ramsey states that most families can come up with this amount in around a month. Save only the $1000 for now (or $500 if your annual household income is under $20,000), then move onto Baby Step 2. The $1000 starter emergency fund (EF) should take care of the most common unexpected expenses like car repairs that would normally send you back into credit card use when you are trying to pay down your debts.

From Daveramsey.com:

An emergency fund is for those unexpected events that are not regularly planned for happening in life – you lose your job, there’s an unexpected pregnancy, the car’s transmission goes out, or, or, or. Something like this WILL happen. Money magazine says that 78% of us will have a major negative event happen in any given 10-year period of time. So get a rainy-day fund, an umbrella.

This beginning emergency fund will keep life’s little Murphies from turning into new debt while you work off the old debt. If a real emergency happens, you can handle it with your emergency fund.

It’s also the perfect time to get in the great habit of budgeting. John Maxwell says, “A budget is telling your money where to go, instead of wondering where it went.” You don’t have to start a household budget with a perfect month. Start where you are. Write down what you have today. Income and expenses. From then on, spend all your income on paper with purpose before the month begins.

No more borrowing! It’s time to break the cycle of debt!

How do you get this $1000 together?

  • Hold a garage sale!
  • List smaller, easily-shipped items (tech items do well) on eBay, Amazon, or Half.com.
  • List bigger items on your local Craigslist for pick up ONLY, and watch out for scammers!
  • Get a second job in the evenings or on the weekends. This isn’t forever–just until you power through Baby Step 2.
  • Cut back on non-essential spending.
  • Cancel subscriptions to luxury services.
  • Visit the IRS Withholding Calculator and see if you have been overpaying your income tax each month. (Hint: If you usually get a big, fat refund every April, chances are you can free up a lot of money by just changing your withholding for the rest of the year.)

Expanded Baby Step 1 Actions:

  • 1.1 Chop up your credit cards (CC’s). You have an EF now, no NEED to keep those CC’s !!
  • 1.2 Amputate cars that you can’t pay off within 24 months (You have an EF to fix the “bondo buggy” if something should happen.)
  • 1.3 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid-for “bondo buggy” (You have an EF ya know!)

Baby Step 2: Pay off debt using Debt Snowball

2.0 Pay off all debt except for the house using Debt Snowball

From Daveramsey.com:

The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior. The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted.

You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.

So list your debts in order with the smallest payoff or balance first (excluding the house). Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first.

Expanded Baby Step 2 Actions:

  • 2.1 Start car replacement fund (do not PURCHASE car until step 3 is done or old car dies)

Tools:
Use the Lloyd’s Debt Snowball spreadsheet to plan your Debt Snowball payments. If you do not have Microsoft Excel installed on your computer, you can download OpenOffice.org for free to view the spreadsheet or use Google Docs online.

Baby Step 3: 3 to 6 months of expenses in savings

Baby Step 3: 3 to 6 months of expenses in savings

Once you’ve paid off all of your debt except for the house, it’s time to pad that $1000 starter emergency fund up to a full three to six months of basic living expenses so you will be truly ready for the bigger emergencies that may crop up: job loss, extended illness or injury, etc.

Having a fully-funded EF will also allow you to reduce the cost of certain types of insurance (esp. car and medical) by increasing your deductibles.

From Daveramsey.com:

Congrats! Now that you’ve completed the first two Baby Steps, you have momentum! But wait… don’t start throwing all your “extra” money into investments quite yet.

It’s time to build up your full emergency fund.

Ask yourself, “Self, what would it take for you to live for 3 to 6 months if you lost your income?” Your answer to that question is how much you should save.

An emergency is something you had no way of knowing it was coming, something that has a major impact on you and your family if you don’t cover it. A great place to keep this money is in a money market account.

Remember, this stash of money is NOT an investment; it is insurance you’re paying to yourself, a buffer between you and life.

Expanded Baby Step 3 Actions:

  • 3.1 Start furniture or other non-essential stuff replacement fund
  • 3.2 Move up in car if you still feel the need to (must pay cash for it)

Tools & Resources:
Dave recommends keeping your emergency fund in a money market account or other liquid bank account that pays a decent amount of interest but is NOT an investment account. Here are some reliable online savings accounts and a frequently-updated list of high-yield checking accounts:

Baby Step 4: Invest 15% of household income into Roth IRAs and pre-tax retirement

From Daveramsey.com:

If you’ve reached this step, you have no payments (but the house) and have saved 3 to 6 months of your living expenses.

It’s finally time to get serious about building wealth.

I don’t suggest investing more than 15% because the extra money will help you complete the next two steps – college savings and paying off your home early.

Well, why not less than 15%? Some people want to invest less or none so they can get a child through school or pay off the home super-fast. I hate to tell you, but the kids’ degrees won’t feed you at retirement, and if you throw all your money into your house, you’ll end up having to sell it to eat and buy the book 72 Ways to Prepare Alpo and Love It. Bad plan.

Expanded Baby Step 4 Actions:

  • 4.1 Take your first vacation since finding Dave if you can pay cash for it. (No using the EF !!!)
  • 4.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI.

Tools & Resources
It’s possible that you already know everything about opening a retirement account and investing in mutual funds, but on the off chance that you need some pointers, here are some excellent starting points:

Baby Step 5: College funding for children

From Daveramsey.com:

Whether you are saving to go college or you’re saving for your child to go, the important principle is to start NOW! You should have already started Baby Step 4 – investing 15% of your income – before saving for college.

In order to have enough money saved for college, you must aim at something. Your assignment is to determine how much per month you should be saving at 12% interest in order to have enough for college. If you save at 12% and inflation is at 4%, then you are moving ahead of inflation at a net of 8% per year!

NEVER save for college using:

  1. Insurance
  2. Savings bonds (only 5-6% growth)
  3. Zero-coupon bonds. (only 6-8% growth)
  4. Pre-paid college tuition (only 7% inflation rate)

The best ways to save for college are with Education Savings Account (ESAs) and 529 plans.

Remember, college IS possible without loans!

Tools & Resources
Here are a few quick links to education calculators, general information, and low-cost mutual fund companies offering ESAs and 529 plans:

Baby Step 6: Pay off your house early!

From Daveramsey.com:

Can you imagine what life would be like if you had absolutely no payments – not even a house payment?!

You’re not too far from making that a reality! You’ve come this far in the Baby Steps; now it’s time to throw all that “extra” money into the largest investment you’ve probably ever made: real estate.

As you attack this last debt, you will gain momentum much like you did back in Baby Step 2 with the Debt Snowball. Remember, having ABSOLUTELY NO PAYMENTS is totally within your reach!

Remember:

  • When selling a home, think like a retailer.
  • When buying a home, think like an investor.
  • Never get more than a 15-year fixed mortgage.
  • Don’t tie up more than 25% of your income in house payments.

Tools & Resources:
Check out the calculators and sites below to help you determine the value of your home and how much can be saved by paying it off early!

Baby Step 7: Build wealth and GIVE!

From Daveramsey.com:

You can’t shake hands with a clenched fist. – Golda Meir

HOORAY! You are now debt free, house and all! Doesn’t it feel… weird?

“What am I going to do now that all this money isn’t tied up in debt and house payments?” you may be asking yourself.

Build wealth and give like never before. Continue to work toward leaving an inheritance for generations to come. Bless others now with your excess. It’s really the only way to live!

Vow to never have a fistful of dollars held so tightly that those precious dollars never get away. Some people think if they clutch those dollars tightly enough, never giving, they are on the path to wealth. The real world teaches that the opposite is true.

Just try it. Let me know if it doesn’t work.

Tools & Resources:
While many people will choose to give to their religious organization first, those who also wish to give to secular charities might be interested in the following sites which evaluate and/or provide information about legitimate, registered charities or provide you with investment opportunities that will help disadvantaged individuals worldwide via microloans:

  • Charity Navigator – Impartial ratings of charities and charity search engine
  • GuideStar – Another charity rating site (Free registration required)
  • Zopa CDs – Invest in a guaranteed rate CD and help someone out at the same time!
  • eBay’s MicroPlace – Your investment dollars fund organizations that make loans to the world’s working poor.
  • Kiva.org – Lend directly to a specific entrepreneur in the developing world – empowering them to lift themselves out of poverty.

Reminder: 1 Year of Amazon Prime for $59

Just in case anyone out there has not already heard of this deal, if you sign up for Amazon Prime expedited shipping via the link below before December 30, 2008, you will save $20 on the usual $79/year membership.

Amazon Prime for $59

Split it with a few family members or friends (you can have up to 4 other members besides the primary account holder under the same membership) to sweeten the deal even more. And don’t forget: If you sign up now, your membership will get you through NEXT year’s Black Friday and holiday shopping. 😉

What is Amazon Prime?

Amazon Prime is a membership program that gives you and your family “all-you-can-eat” fast shipping for eligible purchases. For an annual membership fee of $79, you will enjoy:

Fast Delivery

* Free Two-Day Shipping on more than one million in-stock items sold by Amazon.com.
* Upgrades to One-Day (Overnight) Shipping for just $3.99 per item.
* Two-Day and One-Day shipping usually apply across business days. Prime also offers special weekend and other shipping options for qualifying merchandise
* Free Standard Shipping for eligible items shipped to P.O. boxes in the continental United States (excluding Alaska, Hawaii, and U.S. territories, possessions and protectorates) and APO/FPO addresses with U.S. zip codes.

Simple Shopping

* No minimum purchases required.
* Members-only 1-Click buttons on product pages.
* No need to think about shipping charges when you order.

Convenient Sharing

* Shared benefits with up to four family members living in the same household.

$10 Off Any 2 Software Downloads at Palm.com

Palm.com’s Software Connection store is running a $10 off promotion when you purchase any 2 downloadable software titles before December 23. There are titles for Palm OS, Windows Mobile, and even a few Windows and Mac desktop programs, though these are usually just desktop companions to the mobile versions.

Some handy pieces of software I use daily:

HanDbase Pro – A database program that allows me to make custom applications for just about anything I need on my Treo – Fabric tracker, karaoke song database, home inventory, packing list, recipe file, and more. There are literally hundreds of free applets already made for HanDbase.

Diet & Exercise Assistant – A food and exercise log that travels everywhere I do. You can customize the food database with your own entries just in case stuff like “Homemade Kashi Golean protein bar” isn’t included by default. It’s like having Fitday in your pocket.

Ultrasoft Money – This software can work as a standalone personal finance manager and budgeter, or it can sync up with your desktop installation of Microsoft Money. I wuvs it.

Shadow Plan Handheld & Desktop – An advanced outliner that is great for project planning, taking notes, making lists, brainstorming, and generally feeding my OCD tendencies. My grand Five Year Plan is made in Shadow Plan.

Stock Manager – Track your retirement and investment portfolios on your PDA! Available for Palm and WinMobile.

I also just picked up Adarian Money for Palm and Windows, another personal finance manager that comes with lifetime free updates. I am planning ahead for the fall 2009 expiration of my Money 2007 online access. I’m also shopping around for a decent Palm dictionary and thesaurus package to provide me with my vocabulary fix when out and about.

Use code WINTERBUNDLE at checkout to get $10 off any two software titles from the Palm Software Connection store.

WINTERBUNDLE offer valid only on downloadable software titles purchased from the Palm Software Connection. Offer expires December 23, 2008 at 11:59 pm PST.

Only one use per account, but the code seems to work even if one of the software titles is free, so if you just want one program (or don’t mind creating multiple accounts), you can simply add one of the free programs below to your cart and get $10 off the price of the software you actually want. 😉

$0.00 fillers –
LeDice
Backgammon II Lite
Matrix Screensaver
Stopwatch
Soft Reset
Santa (Shopping List)
MileageX
Gift Tracker

(Search for more…)

$0.99 filler – SoloSync (If $0.00 fillers stop working.)

eHarmony Friends and Family 3-for-1 Coupon Codes

As some of you may know, my husband Chris and I met through the online dating site eHarmony over four years ago. We’ve been rather revoltingly happy ever since (even when freezing our tushies off while appearing in the latest round of eHarmony TV commercials), which is why I wanted to share the love this holiday season and post some eHarmony coupon codes that will give you three months of membership for the price of a single month, or under $20/month. That’s right in line with the monthly fees at other online dating sites that don’t provide the personality screening and guided communication options that make eHarmony a better fit for those of us who are more interested in real relationships versus just a date for the weekend. 😉

For eHarmony Friends and Family, get a 3 month subscription for the price of 1 ($59.85), good till 12/31/08.

For eHarmony.com:
New subscribers: FAFDECA8
Former subscribers, who want to resubscribe: FAFDECE8

For eHarmony.ca (Canadian residents):
New subscribers: DCANFAFA
Former subscribers, who want to resubscribe: DCANFAFE

Just select the 3 month plan on the subscription page, and enter the coupon code above.

Two Nintendo DS Cooking Apps for under $10

For my fellow Gamer Foodies out there, check out these two Amazon.com deals on a pair of brand new cooking titles for the Nintendo DS handheld system:

Personal Trainer: Cooking (list price $19.99) is only $4.95 today (Saturday only), and get this: What’s Cooking? with Jamie Oliver (list price $29.99) is actually only $7.90 (not the already good $9.95 sale price) if you scroll down on the product page to the Best Value box and click on the “Add both to cart” button that will put the game AND a Nintendo DS Play Stand in your cart. The Play Stand is a handy accessory that will hold your DS console up on your kitchen counter at the proper viewing angle within voice recognition distance while you are busy cooking away.

These two apps are great stocking stuffers for the cooking-impaired gamers in your life–students, new grads, single young guys who spend way too much money on take out meals, or even yourself. They both include 100+ recipes as well as step-by-step animated and audio instructions on how to prepare each dish. Give that starving student in your life a gift that will provide them with one of the most important life skills they can have: the ability to make their own meals from scratch.

Just make sure they already own a Nintendo DS!