As we committed to starting our jouney toward financial peace we had no idea what to expect. We listened to our first CD which talked about the need to put away $1,000 for an emergency fund. This posed a problem due to the fact that one we pay our monthly bills, we never had excess to put into any kind of fund. Then in further discussion we found many expenses we could or would need to dispose of. Giving up some of our most prised conveniences could pose a problem in the very early stages or our journey. Our DVR and HD channels will be very difficult to part with. Then we discussed different ways we can start pocketing more money out of our income. minimizing the amount I contribute into my 401K goes against everything I was ever taught in personal finance. Reducing this contribution to 1% would give us an additional $230/mo. These funds will be directly deposited into our savings to establish our emergency fund. This may be our first significant move to start the process. In addition to the saving, we will also be limiting our cahs output as much as possible. I just got back from the store to pick up some Pepsi and came back with RC cola b/c it was $1.30 cheaper. Yea, my attitude may be changing. One small step.
I would love suggestions or encouragment because the changes that will hit our family in the next couple of weeks will be significant.
Entry #1 - $1,000 in Emergency Fund
November 16th, 2009 at 04:25 am
November 16th, 2009 at 05:01 am 1258347687
November 16th, 2009 at 05:03 am 1258347806
I understand, though, not wanting to give up a major source of home entertainment. Maybe you could just cut back to basic cable. Some of our friends did that and they said it wasn't nearly as hard as they thought. If there are shows you're really attached to, you can usually watch them online, at hulu.com for example.
I love me some DVR, so I can see not wanting to lose it...maybe you can look closer at your budget and see if there's a third option.
A lot depends on what you want to accomplish and how fast, I suppose.
Anyway, looking forward to hearing more about your journey!
November 16th, 2009 at 12:35 pm 1258374950
November 16th, 2009 at 12:47 pm 1258375664
November 16th, 2009 at 01:40 pm 1258378810
If you know you are going to be wanting a soda, look for sales and stock up. When you run to the store for one item (like my DH does and it drives me crazy), you are not just paying for the item, but the gas too!
I love my DVR and HD too, but just made a really stupid mistake switching to Direct TV to save a little money each month. However, I agree, cutting your 401K is a mistake. At least contribute to get your full match from your employer.
Post the budget numbers, then we can really given you some advice!
I look forward to reading about young families.
November 16th, 2009 at 02:03 pm 1258380220
Good work on the soda! You may be surprised, over time, at how all the little changes you will make will add up.
November 16th, 2009 at 02:30 pm 1258381800
November 16th, 2009 at 03:15 pm 1258384541
November 16th, 2009 at 04:25 pm 1258388727
November 16th, 2009 at 09:32 pm 1258407175
With the advent of Thanksgiving and the leftovers afterwards, if you are going out to lunch, might I suggest packing a lunch for awhile? The savings can be quite shocking!
If I'm reading your post right, you would be dropping your 401K and putting the extra into your emergency fund? I think it would work ONLY if:
You know how often you can change your 401K withholding. We can change ours quarterly. If you can only change it yearly, then no.
You dropped it to the 1% for just 1 quarter - 3 months @ 230, would be about $700.
And you absolutely put it back up the next quarter.
Are you sure you need DVR and HD?
November 17th, 2009 at 07:57 am 1258444658
Great job on cutting back btw!
November 22nd, 2009 at 03:43 am 1258861390