Now, I know that Dave Ramsay says to have a full emergency fund for emergencies like the loss of a job. Since Bran is in the military, his job is secured and we are going to change it up a bit. We are still going to contribute to our emergency fund BUT we are going to do it slowly and all the extra money that was going into the EF we are putting it in funds that are super cheap at the moment, on account of Europe having a recession and all. These funds are secured and have been around for 20 plus years so the risk is minimum. We have $2,000 in the EF at the moment, so it should be enough to cover an emergency.
I’m not sure if we are making a bad decision by doing it this way. Bran gets out of the Navy in 21 months and our plan is to have 7 months of expenses for when he gets out. Fortunately, Bran is a Nuclear Engineer/technician, a job that is in high demand, which means he will not find a very difficult time finding a job. Should I change it up and benefit in the long run for the super cheap stocks we will buy or keep putting it all in the EF until it is fully funded?
That’s right, we made our very last car payment. Man, that feels soo good. Now, we are on baby step 3: have 6 months worth of expenses. :D :D To be honest, we are doing baby #3 and baby# 4 at the same time. That’s about the only thing I disagree with Dave Ramsey: pause the retirement investments until you have paid off all debt and have baby step #3 fully funded. I disagreed so we’ve still been contributing every month.
It’s June and we still havent contributed any more in our Emergency fund. I know, I know, we’re behind. We just had a couple necessary hiccups last month. We are good. We havent used any credit cards. We’re doing well. Hopefully we can keep this up for the rest of forever.
The Military finally gave us the travel pay they owed us since December. With it, I was able to pay off my student loan and motorcycle and a little bit of the car. Yay! We only have the Subaru to pay off and we’ll be done!!
It’s funny, when one is on the path to something amazing, somehow obstacles seem to appear out of nowhere.
One of our tires had a bubble which needed immediate replacing. We were told that we couldnt just change one tire because it would mess the car’s alignment and I don’t know. My husband is the expert on cars so ofcourse, we had to replace all four of them. It felt so great paying in cash. No credit cards! Just cash. Felt good. This is a prime example of when one needs to use the emergency fund. It was unexpected and it needed our immediate attention. Thank goodness we have our emergency fund!
It’s true. I use cash for almost everything. It was a little difficult at first because we were so used to plastic. Well, guess what? Plastic makes you spend more. In Psychology Today, it is stated that people pay more attention to prices when they pay in cash than when they pay with plastic. In addition, people tend to tip more than when using cash. Though this is awesome for waiters, it is not so awesome for wallets.Studies show that people tend to spend 12%-18% MORE than when paying with cash.12-18 is ALOT.
I’m going to admit, at first I said, there’s no way I spend more on plastic than with cash. I figured I’d spend the same because I’ve always been very conscious with the purchases I make. Well, not always but most of the time. As it turns out, I have seen big big changes in my spending habits ever since I changed to cash. The first category I saw a big change was in dining. Oh my has that changed. Second category was clothing, and third was what Dave Ramsey calls “blow” money. We spent more than our pockets allowed.
Using cash it’s not for everybody. I was convinced it would not work for our family but I realized that by the end of last month, we had a balance of $517 in cash, that wouldve never happened if we were still using plastic.
I find Mint to be exceptional. I can hide accounts that are inactive or exclude them from the budget. I can change the category of the items I purchased. For example, say I have allocated 150 dollars on dining out. Well, Mint has four subcategories for dining and it takes into account each one for budgeting. I dont like assigning a specific amount for “alcohol, fast food, restaurants, and coffee” so every time we dine out I change it to restaurant and make a memo if it was a fast food. Restaurants is on my budget list. This way I dont have to make 4 budget categories for all of those. Love Mint.
This is an example, I use cash for dining out.
Yay! We are done paying off credit cards. I canceled all of them except for two. Why are they still open when they should be closed? We eventually want to buy a house and we are going to need to have some sort of credit history. Im contemplating using the Chase Freedom (it earns 5% cashback) for groceries and paying it off at the end of the month just so we HAVE credit. However, I really really really dont want to do this. We are used to using cash for everything, and when you have a credit card you ALWAYS end up spending more than you intended to. What should I do??
This, ofcourse, is just a ballpark of where your money should be allocated. It’s not exact and it all depends on your lifestyle. For example, our money for groceries in the household is over 17% because we eat organic and natural foods, but our medical is practically 0% because my husband’s insurance pays it off.
Here are the Dave Ramsey percentages:
Charitable Gifts- 10- 15%
Saving 5-10%
Housing- 25-35%
Utilities- 5-10%
Food- 5-15%
Transportation- 10-15 %
Clothing- 2-7%
Medical- 5-10%
Personal- 5-10%
Recreation- 5-10%
Debts-5-10%
I can not stress enough how important budgeting is. There are so many free financing software tools one can use. I use Mint.com and SeeFinance they are both excellent tools for keeping up with my purchases. I also use a few templates I created to help me with my budgeting. This is an EXAMPLE. You should spend ALL of the money on paper before you even have it. 
