Archive for the ‘emergency fund’ Category

A Debt Reduction Carnival

August 6, 2007

Our First Carnival.
Warning: Many exclamatory statements ahead. I guess we’re just excited, excited, excited about hosting our first ever debt reduction carnival. It certainly has been inspirational to be a part of the debt reduction community, really.

Would You Consider Helping Another PF Blogger?
We’ve learned a lot. So, sit back and click. Would you mind? The pf community is a great place for otherwise scarce information about debt reduction. Pf bloggers are making a public commitment to debt reduction — a powerful motivator. Perhaps you will post something to the next carnival, respond in kind? Since you’re reading this, it only makes sense.

[If the previous paragraph reads like utter dross — please pardon, there’s a reason, to be explained in a later post about marketing that exploits our deepest, largely unconscious needs. Look for it on Wednesday, most likely.]

For the record, these are in absolutely no particular order! Enjoy.

Two Investment Mistakes:
I’m partial to this post, perhaps because it looks into two mindsets, cognitive rules of thumb, heuristics, that can get us into trouble when investing. That’s psychology folks. So read on… It’s hard not to want to spur someone on that has just started a pf blog, whatever the focus — debt reduction, money management, frugality, investment. Check it out!

Building A Better Snowball:
Is it possible to resist such a title. This is an awesome post. If you haven’t read it yet, get thee to consumerism commentary and check it out. It’s got Pink Floyd, it’s got a killer financial plan for getting out of debt, it’s got a credit reduction calculator, did I mention it’s got a plan. For my money, setting up the emergency fund is key, this message cannot be crowed off the rooftops enough. Check it out!

When You Put Your Mind to It:
Clever Dude is not kidding. He shares his method for destroying $58,000 in debt. There’s hints galore for even the most world-weary debt gladiator. One of my favorites is “We Fix Things Ourselves.” It doesn’t take much — not that I’ve done it — to change the oil in your car, does it? Check it out!

Free Credit Reports, A Cornucopia:
Hustlerama offers no less than 15 ways to get a free credit report. Not that I’ve actually ever done this, but this could be the inspiration that finally puts me over the edge. I’m actually kind of worried that some of our behavior has led to some nasty credit comments. Maybe not. An important step in reducing debt: Know where you are, financially. (And for the not-faint-of-heart, scroll down about halfway down his homepage and look in the left gutter — something to roil the emotions of any debt reductionist.) Check it out!

Alternate Income Streams:
I’ve ventured into this area, but think it is underutilized. An occasional CD sold on amazon has bought me the occasional lunch. At businesscreditcards, the focus is New Media Ways to Raise Capital. Some tips you’ve probably not considered. If you’ve got a little time, these could really pay off! Check it out.

David On Finance:
Has got some well considered thoughts on when to consolidate debt. He also uses the phrase “raw power”, which I think is highly under-used in the pf world. If it was good enough for Iggy… David makes some excellent points about credit unions (not always…) and extra payments (ah, the power!). Check it out!

Grad Money Matters:
He calls them myths. I call them heuristics, cognitive shortcuts, rules of thumb. Well, some of them, anyway. There’s a goldmine of good advices and links here. I particularly like what he’s done with the I’ll-never-get-out-of-debt-so-I’ll-give-up mindset. Check it out!

Mighty Bargain Hunter, Putting Things in Perspective:
This is a refreshing post that puts a little forest into the viewfinder (rather than trees). Your debt needs the context of your life. Not other people’s lives. An important thing to be reminded of, that. Check it out!

Sex for $3:
Can you beat that for a deal? Another whale of a post from one of the funniest bloggers around. If you’re not conversant with the ways of Bianca and Basil, you’re in for a treat. Check it out!

OOPS: It appears that the Bizarros have “scrapped” their blog. I’m not sure what this means, but hope it’s temporary. The link may not work. Sorry.

A Book Review. Now I Want to Read This Book.
Books are invaluable motivators for re-focusing. Get it at the library or one of those great used books sites (I kick myself when I think of all the new books I’ve bought — used books are simply no longer the coffee-stained acid-ravaged items we encountered in less-than-savory warehouses.) And of course, Trish at blogging away debt is a certified maven of personal finance. Check it out!

Another Lie About Debt:
Here’s another perspective enhancing article. (Or a link to it.) In the circle of linking, I got this one from blogging away debt. I found it so interesting I broke my goal of having 10 links for this carnival. So now we have a nice prime number. Check it out!

Am I Really Ready to Get Out of Debt?
Okay. So Let’s Make It An Even Dozen. NCN submits some interesting points, ready starting points for self-inquiry. I particularly liked the one about being ready to withstand the opinions of others. Let’s face it, turning down lunch because you don’t want to spend money is awkward, in many circles. Check it out!

Comments?
We’ve enjoyed hosting this incarnation of the debt reduction carnival. If there was anything you particularly liked or disliked, we’d like to hear about it.

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Help! Termites are Eating Our Emergency Fund

July 18, 2007

The optimist in me says it’s a good thing we had started to build an emergency fund. We recently found out that our house has termites and that we’re going to need to tent it for fumigation. Unfortunately, this is going to cost $2400 not including the cost of having to find a place to stay while our termites get gassed out. I transferred funds from our ING account to cover the cost. Glad I didn’t put this on a credit card.

This now means our emergency fund is at $1700. I know that my car still needs even more work done to it. The mechanic said the struts will cost about $600. For now it’s apparently safe. However, I don’t think many cars ever sounds this clunky and junky. As long as I don’t have to drive my boss anywhere I think I can live with it. My kids certainly don’t care.

 So, the pessimist in me is bummed to see the emergency fund get so low and I wonder if I’ll have to wait until my next bonus to see it get some positive activity.

 I hope those termites appreciate the money I’m spending on them. Damn ingrates.

Debt-o-Meter Updated: 13.877%

June 25, 2007

I just updated our debt and emergency fund watch numbers. The good news is that we’ve continued to make some progress on our debt. The bad news is that our cash flow hasn’t been flowing in the right direction and we had to transfer some funds from our savings to our checking to cover expenses until I get paid at the end of the month.

So, how did we get off track? I attribute this to having to buy year-end gifts for teachers and having to increase our childcare costs over the summer. A twenty dollar bill here and there can make a difference on a budget without any fat. A 10 hour day with a $15/hr babysitter obliterates me.

I imagine we’ll have to dip into our emergency fund soon as we learn we have termites and we’ll need to tent. It’s going to hurt. Just when it feels like we’re making progress something else comes up. Anytime anyone goes under our house I cringe because of what they might find. Ignorance is bliss. But then again, that’s how we ended up in so much debt. So, the question is how can you be on top of things and still find your bliss? How can you be a realist on a mission w/out getting totally obsessive and discouraged? I’m hoping to find out…

The Emergency Fund: Five Steps to Creation

June 17, 2007

I read an article called “Creating an Emergency Fund on TheStreet.com’s web site this morning.

The author Jeffrey Strain shares 5 steps to creating an emergency fund. I’ll list them below with some of my own thoughts.

1. Start now
Ladydoughgirl: For me it is tempting to just focus on paying off our debt rather than build an emergency fund. However, we also realized we always have unexpected expenses and better to start an emergency fund than try to scramble and charge those unexpected expenses down the road.

2. Separate the account
Ladydoughgirl: We learned about ING’s high-yield savings account through other personal finance bloggers. We got the referral bonus (I think from Bostongal’s Open Wallet) so we started out with an extra $25 in our account. For me separating the account is crucial. I need to make accessing the money just a bit difficult otherwise I could see my temptation of dipping into it for pseudo emergencies.

3. Make it automatic
Ladydoughgirl: We opted to have an automatic payment sent to our ING account on the 15th and 30th of the month. This corresponds to my pay days. Since the transfer happens at pay day and automatically I don’t feel the pain. If you can’t afford $100 a month, try any amount. I think consistency is key. With $100 a month we’ll save $1200 by the end of the year.

4. Understand its purpose
Ladydoughgirl: This point is a bit sticky. My husband and I were just talking about this. Ideally we would like our emergency fund to be large enough to cover two areas (1) 3-6 months of salary in case I were to lose my job and (2) a hefty sum to cover any unexpected costs (such as car or house repairs) and large recurring items such as property taxes which we find ourselves scrambling to pay 2x a year. Right now our emergency fund will have to focus on #2 and cover those items. Once it gets large enough I’d like to have enough to also cover that 1st scenario.

5. Use it when you need it
Ladydoughgirl: Per #4 we will likely use our emergency fund this year when we have to pay our property taxes. In the meantime they money is sitting pretty in our high-yield ING savings account. This makes me feel much more secure and prepared.

Emergency Fund — Backbone of Personal Finance?

June 6, 2007

I’ve struggled a little with the idea of accumulating an emergency backup fund, especially when we still have high APR credit card debt with big balances (>$20k).

I was schooled in a pay-off-your-debts-before-doing-any-investing philosophy. I think the key is that this emergency buffer is part of the debt-reduction strategy. This post at Debt Free Forever helped me to make sense of the concept.

Now I believe an emergency fund is a crucial component to getting debt-free. Of course there’s a trade off. You should be aggressively paying off your credit cards. But part of the pure evil of credit card debt is those unexpected expenses that you don’t have any cash for. Recently with us it was the car, more than $2000. Now, it’s hard to predict, but I do believe that a couple of these bunker-busting expenses can outstrip your ability to make meaningful dents on your credit card debt.

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