money matters...

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We2Heart Posts : 452 Registered: 10/11/07
Re: money matters...
Posted: Mar 19, 2009 4:47 PM Go to message in response to: karebeartg

MrsWilliams I wouldn't worry too much about the downpayment. Typically most first time buyers don't have that 20% downpayment so there are other options (most have like 3-5%) - FHA like a PP mentioned is a good option for instance.

DH just informed me that mortgage rates are now at 4%? Is that correct?

One of the things that is messing me up with our budget at the moment are utilities. This is the first time we've had to take utility bills other than cable into account. The past 3 months I've freaked out about not having enough to cover the bills, we've always ended up being fine, but I'm tired of looking at our bank statement and thinking "crap, where's the money?" Especially when we now have to pay for DH's night classes. One class is like $3000! I think we will be taking out a student loan for the rest of his masters program. But I'm still stuck getting started on our "bill budget" (as aunt put it). DH typically pays the bills but he's not really a 'budget' person. It hasn't been a problem but I can forsee trying to come up with money to cover bills at some point. We don't exactly keep track of our spending. We have savings but lacking proper budgeting.


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together is a perfect place to be because it's there that you can be delightfully imperfect. and there's nothing closer to perfection than being loved just because you are. 

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 19, 2009 5:04 PM Go to message in response to: We2Heart

I have one savings account...but a spreadsheet to break down where each dollar is designated for. You can find all sorts of awesome budgeting stuff on Dave Rameys Website. He is totally awesome and with his help I got us on track.

I could type TONS about budgeting; my husband calls me the budget Nazi. I can help you get a hold of the Dave Ramsey Cash flow if you like...you can then customize it for your needs. It may take a few months to get everything right but then you will find out where you are spending money that you could cut back on.

Once you see things in perspective you can make better decisions. For example I couldn't beleive how much my husband was spending buying lunch every day! So I said you get $25/week to spend on lunches but beyond that you need to bring your own food! Its much cheaper to make a sandwich than to buy your food each day. PM me if you want more info.


Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 19, 2009 5:13 PM Go to message in response to: DoesntPlayNice

Here is a link to dave ramseys budget form. I have it in excel format if you would like I could email it to you.

http://www.daveramsey.com/media/pdf/fpu_monthly_cash_flow_plan_forms.pdf

I have made mine way more complex but I still have the original template.

Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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We2Heart Posts : 452 Registered: 10/11/07
Re: money matters...
Posted: Mar 19, 2009 5:26 PM Go to message in response to: DoesntPlayNice

Thanks Military Bride! That's probably a good place to start huh?

Yeah - it's all the little expenses that we don't think about especially lunch that adds up. I know DH and I both eat out for lunch most of the week. We used to eat out for dinner often too, but we've gotten into cooking more often. Still, we aren't saving more than we used to so I don't know where its going.



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together is a perfect place to be because it's there that you can be delightfully imperfect. and there's nothing closer to perfection than being loved just because you are. 

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HLYflute Posts : 1,282 Registered: 2/5/07
Re: money matters...
Posted: Mar 19, 2009 6:54 PM Go to message in response to: MrsWilliams2008

I do remember you:-).

I thought I'd reply to this because DH and I have managed to save up money in the neighborhood you're talking about just since we've been married, so about a year and a half. DH is going back to school in the fall and we're hoping to get a house when he's done.

I'm sure our methods won't work for everyone, but I'll tell you what we've done. First, having no debt is a big help. Neither of us has any student loans (yay scholarships!) or credit card debt, and my parents were gracious enough to pay for the wedding, so no expenses there either. The only thing we owe on is one of our cars. We put more than 50% down on that though, so our payment is around $150 a month. I usually put a little extra toward the principal each month. We both work full time, and we make roughly double what we need to survive each month, though realistically we usually save about 1/3. (This is not a whole lot of money though, I'm a teacher and he's in retail management!)

When we get paid, we put all the money in our checking account. Then, we only buy what we need. Anything other than groceries and gas must be on sale. I have never in my life paid full price for any article of clothing, although I have many of them! (Example: recently got a pair of leather sandals from DSW for $1.99. And no, that is not a typo!) I know we should have an account that earns interest, but I'm afraid of bouncing checks. So we just leave the giant pile of money in the checking account until it's needed. There's enough in there now for us to live comfortably for a year. We would like to double that amount before buying a house (so we'll have the amount in there now after the downpayment).

We go out for dinner at a reasonably priced place (coupons if we have them) about once a week. We never eat lunch out. If we go to the movies, we wait until the movie has been out for two weeks and use a supersaver. We don't have a high def. tv, new computers (upgraded mine instead of buying new; they're both from about 2001-2002). I do my own nails instead of going to the salon. Basically, we live frugally, and if we dont' need it and it costs more than about $5, we don't buy it.

I am not a real estate expert, but I am pretty sure you have to put 20% down on a home or else you pay an extra "insurance of payment" fee each month, which I think (according to what I saw on HGTV!) is about $100. My parents are great with money and they said never to buy unless you can put down the 20%.

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MrsWilliams2008 Posts : 1,431 Registered: 7/19/07
Re: money matters...
Posted: Mar 19, 2009 7:46 PM Go to message in response to: We2Heart

Actually, it's just under 5% but projections are that it may be down to 4% come April. I JUST saw this story on ABC news:

http://abcnews.go.com/Video/playerIndex?id=7126528

Thanks alot military bride, seems like a good start!

HLY, you are in a very good place. Keep up the good work! But unfortunately we have two vehicles to pay on. DH graduated with his Masters last May (so that means a student loan too) and at the time, he was riding in a patched up 15 year old clunker that finally quit on him for good when we got married last year. And i need a dependable vehicle for work purposes, so I also had to get a new vehicle in sept 07.

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Happy Together since June 20, 1994

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CaribbeanBride08 Posts : 1,474 Registered: 6/13/07
Re: money matters...
Posted: Mar 19, 2009 7:57 PM Go to message in response to: HLYflute

RyAnne,
Definitely be careful when it comes to PMI. You really, really don't want to pay this because it's very difficult to remove. Like someone else mentioned, you have to build up 20% equity in your home in order to remove it.... and how do you remove it? You have to refinance. So let's say you get a killer rate right now and in a few years when you finally have enough equity in your home to get rid of the PMI you interest rates aren't any good anymore. Long story short, PMI is a bad bad thing - even if it's only $100 or so a month.
Your best bet is to get a second mortgage to cover it (like an 80/15/5 or 80/10/10 loan) and avoid PMI altogether.




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HLYflute Posts : 1,282 Registered: 2/5/07
Re: money matters...
Posted: Mar 19, 2009 8:56 PM Go to message in response to: MrsWilliams2008

With the car loan, try and pay a little extra on it each month if you can, even if it's only $20 or so. Write on your deposit slip, "Apply extra $20 to principal." A good chunk of your payment goes toward interest, especially the first couple years, so this can help you pay down your debt faster. Also, pay your bill as early as possible, as this can also help save on interest. If you can, try to get it so you're paying a month ahead of time. I did both of these and ended up paying off our second car a full year early.

Again, I don't consider myself a financial genius or anything. A lot of my success with money thus far has been pure luck (no student loans, didn't pay for my wedding, etc.). And just with how I was raised, I can't justify spending large amounts of money on things. All the little ways to cut corners really do add up.

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 20, 2009 12:24 AM Go to message in response to: We2Heart

Dear We2,

The fact that you WANT to start getting a handle on your finances, your budget and your spending, is a good thing.

Military Bride offered you some good leads on budgeting tools; look into those.

You can also invest in a money management program like Quicken. I use that, myself.

One of the best tools is a notebook and pencil. Go a month and write down EVERY SINGLE PENNY you spend. Everything.

Check to see if your spending total (bills, cash, savings etc) equals your paychecks. You want to make sure nothing is left out.

Then, put your month's spending in a spreadsheet and see where it goes. Subtract out your fixed non-negotiable expenses to get to your discretionary spending. This discretionary spending is usually in the form of cash, which is why you need to write down in that notebook each and every cash expenditure.

Now, consider where your discretionary spending goes in relation to those activites' worth to you.

Let's say you are a real movie nut. You love to watch the movie on the big screen. But, let's say that you don't care much about restaurant dinners.

Let's say, again hypothetically, that you look at your spending and see that you spend three times as much for restaurant dinners as you do for movies! But you enjoy movies much more!

Cut down on the restaurant dinners and use the money to do what you enjoy more: See movies on the big screen.

The opposite might be true for someone who would just as soon rent a DVD for a movie but loves to go out to dinner.

It's all a matter of your enjoyment priorities. Spend less money, overall, but enjoy it more. Do what you like to do and cut back on things that are less enjoyable.

There are tons of resources on the internet that can offer you suggestions for saving and investment plans. Think of your goals and start making yourself a plan to get there.

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 23, 2009 12:39 PM Go to message in response to: auntofthebride

If you get paid Once a month or have a hard time stretching your money...I suggest the Envelope system! This is taken from Dave Ramsey's site (with some comments from me)

I found out that Grandma's way to handle money still works. People used to always use cash envelopes to control their monthly spending, but very few do in today's card swiping culture. The envelope system is a key component of the Total Money Makeover Plan because it works. Here are a few simple basics for starting a cash envelope system:

  1. Budget each paycheck. Budget is a dirty word to most people, but you must budget down to the last dime if you're going to successfully implement the envelope system.

  2. Divide and conquer. Of course, there will be budget items that you cannot include in your envelope system, like bills paid by check or automatic withdraw. However, you can create categories like food, gas, clothing and entertainment.

  3. Fill 'er Up. After you've categorized your cash expenses, fill each envelope with the money allotted for it in your budget. For example, if you allow $100 for clothing, put $100 in cash in your clothing envelope for the month. (For those of you that get paid Monthly and want to stretch your money...I suggest using your envelope as a weekly envelope rather than Monthly. Each week go to the bank and get the money you have budgeted for that week and seperate it...this way you don't end up with nothing 2 weeks into using this system)

  4. When it's gone, it's gone. Once you've spent all the money in a given envelope, you're done spending for that category. If you go on a shopping spree and spend the $100 in your clothing envelope, you can't spend any more on clothes until you budget for that category again. That means no visits to the ATM to withdraw more money!

  5. Don't be tempted. While debit cards can't get you directly into debt, if used carelessly, they can cause you to over-spend. There's something psychological about spending cash that hurts more than swiping a piece of plastic. If spending cash whenever possible can become a habit, you'll be less likely to over-spend or buy on impulse.

  6. Give it time. It will take a few months to perfect your envelope system. Don't give up after a month or two if it's not clicking. You'll get the hang of it and see how beneficial the envelope system is as you dump debt, build wealth, and achieve financial peace! See....simple!

Certainly, some bills may come in at different times of the month, so you'll need to adjust your written game plan to take it one step further. You need to plan the budget based upon your pay periods.

Say that you get paid twice a month. If you can write down which bills you plan on paying from each paycheck, you will not be left with a surprise bill. Spend each month's income and each individual paycheck on paper BEFORE it comes in.


Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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PharmToxGirl Posts : 5,446 Registered: 8/30/07
Re: money matters...
Posted: Mar 23, 2009 12:54 PM Go to message in response to: CaribbeanBride08

Tobi - I did not have to refinance when I hit 20% to stop paying the PMI. In fact, my mortgage company informed me that I had hit 20%, removed the PMI and adjusted my payments accordingly.

When we just refi'd, our lawyer told us we'll be paying PMI and to keep an eye on it. He said it's unusual for the mortgage company to notify you of when you hit 20%, but when we do we just notify them to remove the PMI.

That also happened to my friend who bought his house not too long ago - he was notified he no longer was required to pay the PMI and his payment was adjusted accordingly.

Maybe that's just Virginia?!?

 

 

 

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 23, 2009 7:29 PM Go to message in response to: DoesntPlayNice

Dear MB,

My brother and SIL have used the envelope system almost their entire 27 years of marriage, and it works for them. They love having a tangible, visual picture of their finances.

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DoesntPlayNice Posts : 809 Registered: 12/17/08
Re: money matters...
Posted: Mar 24, 2009 9:14 AM Go to message in response to: auntofthebride

Most of our bills are paid online but I take out cash each week for our "blow" fund (money put aside specifically for reckless spending...don't worry its only $100/week for us.) also we take out cash for groceries, gasoline, and any other thing that can not be paid online.

The "blow" fund is a good idea for people that are spontaneous. You don't have to put it in any specific category. For example we use this money to go to the movies, or eat out, or buy something from the store we want. That way we don't have to specifically plan money into the "restaurant or entertainment" category because we never know ahead of time what we are in the mood for.

I used to not agree with the envelope system and thought it was dumb....until I tried it and ended up saving alot of money a month. It is easy to go over "a few bucks" when you are using a debit card. but if the money isnt there....it isnt there!

Previously Posted as Military Bride.

Back from Iraq and ready to switch out the ACU's for a Wedding Dress!

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auntofthebride Posts : 9,354 Registered: 4/2/06
Re: money matters...
Posted: Mar 24, 2009 3:15 PM Go to message in response to: DoesntPlayNice

Dear MB,

"(money put aside specifically for reckless spending...don't worry its only $100/week for us.) "

We do exactly the same, but call it an "allowance".

This is OK if you are not in financial trouble. If you are living within your means, and otherwise sticking to a budget, then great, pay yourself an allowance for cash expenses that you don't itemize nor account for.

If a person is in financial trouble, they need to get in the habit of accounting for everything, no exceptions. Money that is "blown" could have been used to pay off a 18% credit card debt, for example.

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mrsJLA Posts : 445 Registered: 5/25/08
Re: money matters...
Posted: Mar 24, 2009 3:34 PM Go to message in response to: auntofthebride

AOTB - I agree with your statement about NOT having a blow fund or allowance if you are trying to get out of debt. That is the first thing that went when we resolved to pay down our credit cards and becme debt free. Both DH and I reviewed (& still do) every penny spent to see where we were overspending and what we could forgo. And although I do miss the occasional allowance/freedom to buy whatever I want (like before I had a house and was married) its just tough cookies.

We need to prove to both ourselves and our creditors that we are responsible with money. Although sometimes, I really hope the next few years flies by. Not only will our CC's be paid off, but so will 1 of our cars, freeing up much more cash. Since we learned our lesson now, we know that when the time comes, although we may get allowances, the majority of that extra money needs to be saved for our future kids and life together. I think this will be one of the more rewarding things I have done lately, since financial freedom can make or break you.

 Jaime :)

Wedding Pictures and the Furbabies: http://web.me.com/me182a

 Lilypie Expecting a baby Ticker

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