Author: Mrs. Seriously Frugal

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Baby Step #6 – Pay Off the House Early

In our last post, we discussed baby step #5 and mentioned how steps 4, 5 and 6 are to be worked on simultaneously. And, that it is our humble opinion, steps 4 (investing 15%) and 6 should take precedent over saving for your children’s college (step #5).

Now, on to the debate that every single personal finance blog has touched on at least once; do you pay off your home early or invest more money? Which one will be better, financially speaking, in the long run. There are a ridiculous number of variables to consider: Do you plan on staying in your home long term? What is the interest rate of your mortgage? How much is your home worth? How much principal do you have remaining to pay off? What return do you expect on your investments? How soon do you plan to retire? What do you anticipate the rate of inflation will be? It’s enough to make you dizzy.

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Commentary on Step 5 – Saving for College

Here we are at baby step #5, saving for your children’s college.  As you likely know, Mr. Ramsey’s guidance is to work on steps 4, 5, and 6 at the same time.  He does keep this step more vague then the others due to the differences in family circumstances, from those who do not have children to those who have a boat load, creating a much bigger challenge in saving for college for the entire brood.

Most of what we’ve read, heard, and watched from Dave himself about this part of the journey implies it’s a non-negotiable step if you have children.  This is concerning, as everyone’s situation is different.  To be fair, Chris Hogan, one of the “Ramsey Personalities”, has shared on more than one occasion that one size does not fit all and, furthermore, making sure you can afford to retire should take priority.  Amen to that!
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baby step # 4 – investing

Once you have reached this part of the Dave Ramsey plan you are now instructed to invest 15% of your household income into ROTH IRAs and pre-tax retirement. We will not get into the pros and cons of various types of investing in this post, but instead of focusing on the amount. So, this will be a short one.

Investing money is a very important step in winning with money. It is a necessity to save money for your future if you ever plan on retiring. On the flip side, none of us have any idea what life will throw at us and we may not be one of the lucky ones who actually get to choose when to stop working.

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Is Baby Step 1 Too Small?

Over the next seven weeks we are going to be delving into Dave Ramsey’s baby steps and how we tweaked them to work for us.  I realize this may ruffle a few feathers as there are many strict adherents to his financial peace protocol, and with good reason. Mr. Ramsey has designed a plan that works for many people, and it was a great starting point for us as we were completely clueless when it came to financial matters.

That said, there are many of us who do not fit into the “average American” bell curve; in fact, our circumstances place us on the fringe of the curve.  For our one-income family of six, with multiple chronic illnesses, $1,000 for a starter emergency fund is a complete joke.  It is certainly better than nothing, but $1,000 barely covers anything, even if you do have health insurance.
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Who Knew 0 Was Such a beautiful number?

Calculator with coins
Give every penny a job!

In a previous post, I ranted about how all the money ran through our hands with nothing to really show for it.  Our lives finally began to change when we ran across Dave Ramsey, read his book, took a financial peace class, listened to his radio show, and started working the modified baby steps.

What helped us most from all that we learned was the zero-based budget.  It is so simple.  You take what you bring home each month, assign a job to every cent and stick to your budget.  It is amazing how, when you take the time tell your money what to do, it doesn’t  just disappear.  Gaining control over your money gives you confidence and control; when you want to win with money, control is a very important piece of the puzzle.

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A Trip to the Discount Market

Yes, we stuffed all those cool things into that box!

On the same day that we ventured out to a bakery outlet we also made a stop at a discount market. Although it’s called a discount market, I think a better description for this place would be “salvage grocery store”. The store sells food that is past its “best by” date, or that has cosmetically damaged packaging. While many of you may be put off by the idea of buying food “seconds”, Mr. Frugal Source and I have been purchasing food in this manner for years from several different stores and we have never had any safety issues with any of the food we’ve purchased. We are careful what we buy, making sure the package is completely sealed, cans are not too dented and items are not too far out-of-date for our taste.

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Our First Trip to a Bakery Outlet

Quite a haul for just under $15.00!

Everybody likes to save money, especially those of us into pinching pennies.  If you’re like us, you’re always looking for new and interesting ways to stretch your dollars.  We recently found a “new-to-us” way to save some grocery money when we learned of a couple of bakery outlets in our nearby city.  This time around, we decided to stop at the Aunt Millie’s thrift store as it was the closest to another planned stop.

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We have nothing to show for it

If I was to take a couple of hours and add up all of the money that we have made since we were married all those years ago, I would look at the total and throw up.  Yep, I would literally puke and wonder where in the world did all of that money go?

We have always lived in a decent houses in safe-ish neighborhoods, had clean and mostly decent clothing, and have driven reliable vehicles.  But when you look at the debt we have been in and how long it is taking us to get completely out of debt, I realize we do not have lots of great memories to show for our money woes.

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Why are we here?

Before we start sharing the details of our story, it seems appropriate that we should first introduce ourselves, and give you a little background into who we are and why we started The Frugal Source.

We are a family of six; we’re a mom and dad with 4 teenagers, several rescue pets, and some backyard chickens thrown into the mix just for fun. We live in the Midwest of the United States and are a one income family. There are many reasons for this, and we will explore each in its turn as we share our journey.

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