Tag Archives: dave ramsey

Debt Snowball

     Related to my last post “Be Your Own Bank,” is Dave Ramsey’s  concept of “ debt snowballing.”  The idea is to pay off a small debt balance, then roll that money that would be going to that debt to the next largest debt.  In our case, we went after the highest interest debt we had and continued from there…

This way of living has had tremendous benefits.  From Amy Dacyczyn’s The Complete Tightwad Gazette, I learned to apply savings to areas that would create greater savings.  This is deliberate living that requires you to be financially self-aware at all times.

     I guess this last concept is more like a “savings snowball.” In the past, I started by having a yardsale that gave me the money to spend on garden tools and seeds. The money saved by growing our own food (we included the cost of gas and wear and tear on our vehicles to to to the grocery store) was then invested in canning equipment and dehydrators.

     Each year at this time, we make a list of what we are going to put our savings into.  Some of what we will do this year are invest in more chicks (for eggs and meat). While feed has increased, we have started freeranging our hens and realized some savings there.  Even though we pay for feed, we get a lot of garden vegetables from the compost made from the deep litter we use in the coop (for another post–we compost all paper products, junk mail, etc…) But I digress….

     I’d really like to take some snowball savings and invest in some miniature milk goats that I could use for (at least) cheese and maybe milk and yogurt.  So far, I haven’t convinced anyone else that this is a good idea. I’ll let you know….

     Every year, we take some of our savings and invest in more edible landscaping. By retirement, we should have enough fruit and nut trees and bushes to support ourselves without needing to use a grocery store.  In my mind, the ability to feed yourself is insurance. It’s one thing to be poor, it’s entirely another to be poor and hungry. No one need be hungry, even in the city (but more on that in later post…)

     In the meantime, I’d love to hear some of the reader’s lists for what to invest their savings snowball in to help them save MORE money….

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Be Your Own Bank

     Anyone can see that a 700 billion dollar bailout of the banking industry has to have some effect on our schools and pocketbooks.  It will be difficult to pay for these budget deficits with taxes alone—especially if you expect that there will be some loss of jobs due to the economy going south (you figure, there HAS to be some effect there.) I predict that one of the first places that budgets will be cut will be the education system.

     It’s much easier to weather the coming storm if you are in a good financial position. I agree with both Dave Ramsey and Suze Orman about having a couple months pay saved (in a safe bank?)in case of emergency.

     In our case, it has allowed us to be our own bank. If a car needs immediate repair, we are able to pay for it without putting it on the credit card (what we consider to be a loan).


     “Loan” is the f-word in our vocabulary. We avoid paying interest like the plague. While we now have a smallish house loan, we are paying extra each month so as to avoid thousands in interest. I’d rather have that money to invest in things that will improve my quality of living.

 

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Eliminate debt

Today’s post is about saving money at home–a good thing whether or not you are a teacher!  Because teachers are used to researching things, they tend to have great ideas about stretching a dollar! I’ve learned a lot by watching my coworkers.

Personally, I believe that you should eliminate debt from your financial picture.  That way, you can mount any financial problems that come your way. And the problems WILL come your way.

Dave Ramsey and Suze Orman have great plans for doing this.  Dave uses the snowball debt method that involves paying the smallest loan off first, then start applying that to the next largest and so on and so on….  In our case, we started with the largest interest rate and did the same thing.

It’s important to have a nest egg of a couple month’s pay. In this way, you become your own bank and do not have to rely on your credit card for emergencies–thereby paying someone else interest.

In our case, we have a car fund that we pay into instead of paying a car loan. When we have enough money in it to replace our car (and it needs to be replaced) we do it. We research used cars that last a long time and then service our cars regularly. It has really paid off in the long run. The money that could have gone towards interest on a loan is in our pocket!

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