My savings challenge

[Gailete]

I was able to get several bills down to small enough amounts to that when we got some 'windfall money' in hands, I was able to pay off two credit card bills as well as the car payment. Boy was that a good feeling. Now working on 3 credit card bills instead of 5, and working on our house mortgage as well as the two much smaller loans for our rental property. I would love to see the rental property loans paid off by the end of this year.

I was checking my latest totals on my savings that are set aside for things such as taxes (we are self-employed) as well as my stock portfolio and my Roth IRA. All these started in the last 10 years or so. Most of the deposits have been made with less than $50 if not smaller amounts. We don't have a lot coming in, but I have my eye fixed on a goal that I want to accomplish. Once the credit card bills are gone away, even if it takes a few years, that money can go into savings. I just want to be in good financial shape by the time I hit 65 which is only a few more years down the road.

Goals that are written down have a higher chance of being accomplished, so the more I write it, the more I can keep it in mind, to help me focus.

[SavingSteve]

It might help to focus on one thing at a time. Then you'd see faster progress which may be more encouraging. What I mean is, pay the minimum on everything except one card/loan which you would channel ALL your extra money to. This could be either the one with smallest balance or one with highest interest rate. Your choice. My preference would be smallest balance since I can knock out the whole thing fairly quickly and see some progress sooner which is really encouraging!

[Smallsteps]

I am often amused by the different advice especially when it come to methods of savings and or paying debt.
The most important thing I feel is if the person doing it is satisfied. while picking the balances with highest % rates paying off first makes perfect mathematical sense a small % on a much larger amount may be costing me the same or more per month or per day then the higher % on a small balance. I track how much each debt is costing per day...

I think people burn out on savings/ debt payoff out of boredom and chasing pennies. It is easy for those whom have expensive habits to cut them out and pat themselves on the back or perhaps those whom make a habit of working more then one job or as much OT as possible. I tried that route was burnt out and unsatisfied ended up spending out of an "I deserve a break mind frame". so I took a job that is strictly 40 or less hours $1 an hour more but
I feel finances are about the same as I am not buying coffee/ energy drinks to try to keep up a 60+ hour pace not to mention home life is better.
my progress continues my total drop in balance in 2 weeks is $560 and 95 added to IRA, 47 to regular savings.

[disneysteve]

a small % on a much larger amount may be costing me the same or more per month or per day then the higher % on a small balance.

Your cost per dollar of debt is determined by the interest rate, not by the outstanding balance. If you have 2 debts, one for $1,000 at 20% and one for $10,000 at 5%, every extra dollar you throw at the 20% debt saves you more money than throwing that same dollar at the 5% debt.

Now it's true that the cost in absolute dollars to service the larger loan is higher, about $41/month vs. $16/month for the smaller loan, but that doesn't mean you are saving more by attacking the 5% debt first. Just the opposite is true.

All of that being said, I totally agree with your point. You need to do what works for you and keeps you motivated and on track for the long term. That's why Dave Ramsey's plan is such a success. It entirely ignores the math and focuses on the behavior.

[FLA]

I don't know how old you are but 350k in retirement on a 30k/yr salary is to be commended. Job well done!

[Gailete]

I am often amused by the different advice especially when it come to methods of savings and or paying debt.
The most important thing I feel is if the person doing it is satisfied. while picking the balances with highest % rates paying off first makes perfect mathematical sense a small % on a much larger amount may be costing me the same or more per month or per day then the higher % on a small balance. I track how much each debt is costing per day...

I think people burn out on savings/ debt payoff out of boredom and chasing pennies. It is easy for those whom have expensive habits to cut them out and pat themselves on the back or perhaps those whom make a habit of working more then one job or as much OT as possible. I tried that route was burnt out and unsatisfied ended up spending out of an "I deserve a break mind frame". so I took a job that is strictly 40 or less hours $1 an hour more but
I feel finances are about the same as I am not buying coffee/ energy drinks to try to keep up a 60+ hour pace not to mention home life is better.
my progress continues my total drop in balance in 2 weeks is $560 and 95 added to IRA, 47 to regular savings.

I agree also. When I realized that with some concentrated focus, I could get my car loan finished early as well as a cc that was around $300. The car loan was due to be finished this summer. So I snowballed them. The cc card had a $25 payment and the car loan a little less that $100. So once they were gone it was a small rock off my shoulder and I knew finally I could really work on paying off bills (last year was excruciatingly horrible financially) so I could finally start working on reversing that trend of increasing debt. Once the car and cc were paid off then I had to decide what to work on next. I could really push a credit card bill, or all of them at once, or the rental mortgage and home mortgage. I decided to do the best I could on the credit cards and make sure I am paying at least (and if possible each month the amount they show that you have to pay each month to have the bill gone in three years) and paying an extra amount on the mortgages. The two smaller ones are at about only 8 months to go instead of over a year. Our house mortgage under the plan I have worked out may actually have it paid off in 6-7 years instead of spring 2030!

Certainly isn't Dave Ramsey's plan, but the thought behind it is the same. Getting those bills paid off as soon as possible and making our financial peace with what we have, I feel so much better seeing the light at the end of the tunnel. Granted it won't be happening today or tomorrow, but someday in the foreseeable future. This forum is one of the helps for many of us to keeping our chins up. No one plan is going to be perfect for everyone and every family, but it is better than not having any plan at all.

[Smallsteps]

updating keeps my progress showing so
early june totals end of july
mort=33700 32995
cc1 2072 1756
cc2 1549 786
car 7692 7400
still dropping so I am making progress...

[Gailete]

updating keeps my progress showing so
early june totals end of july
mort=33700 32995
cc1 2072 1756
cc2 1549 786
car 7692 7400
still dropping so I am making progress...

Very good!

[james.hendrickson]

updating keeps my progress showing so
early june totals end of july
mort=33700 32995
cc1 2072 1756
cc2 1549 786
car 7692 7400
still dropping so I am making progress...

Excellent work - looks like you are within striking distance of paying off that second credit card. Great job. Are you going to keep it open or close it?

[Jluke]

great job..

my suggestion would be to pause on paying the $75 extra on the car loan and put that towards your IRA during August - December...

[Smallsteps]

thanks for the input I am not sure what I will do with CC after paid it has been awhile since it was at 0.... I only have 2 cards and this one has a better rewards/ deals when I do use it.
As for reallocating my pay to amounts.......... I am adjusting and I already am adding 90 to 120 per month to IRA.
My objective has changed some since the light at end of tunnel is near. I have revamped my savings accts to boost my basic emergency fund (about 2000) and then my regular savings ( approx. 9200) that would become my backup fund if ever needed.
due to some stupid moves by my state.... i know my house payment will probably go up next year and i am in the awkward situation to raise the portion my son in law and daughter pay each month. not exactly regular landlord tenant situation since i have many items still there and it is a mutual benefit situation.
Another child is paying 45 every 2 weeks to cc #1 is at same bank so was just easy to set up auto payments. that frees up my cash flow a bit ( paying back a loan made a long time ago)

[Mikehills101]

Well I have created a spread sheet of all debt and as long as I see a decrease in the TOTAL every week of about 200 to 300, I am satisfied. I have a couple of accounts that have a few months worth of living expenses but not as comfortable as some.

I somehow can not get around to the "snowball" or what ever name methods of debt payoff.
I am sending extra money on payments to ALL accounts.... car/ mortgage/ cc with a bit more towards the higher % accounts. I can SEE the arguments to support the many popular methods but I like my way.
I am trying to focus on saving more in retirement and liquid/ emergency accounts but is has been kind of slow going lately. I feel like too many options vying for my every dollar.
At every angle I get bombarded with messages of "debt" is bad and time is running out on some astronomical retirement $$ amount needed. all while trying to live eat/ have a roof over my head it is unrelenting sometimes and I can see why some people just take the idea of "screw it".
I am currently working with some ladies whom are not (in my opinion) in the financial shape for their age group. no savings/ no homeownership very small if any retirement savings even though they will reach that age in a very short time. Call it late start or poor choices previously but it is sad.
Do I feel good about my financial plan in comparison of course but on the same hand I am sure (as I see on this site) many that make me look like I am holding 2 nickels. i guess it is simply a matter of perspective.

Like the idea of creating a spreadsheet. I usually don't monitor it by tracking it through spreadsheet. hanks

[LivingAlmostLarge]

Better to pay something than nothing.

[Gailete]

Better to pay something than nothing.

Even if $5 extra!

Currently a commercial on the channel I watch where some dude is talking about his payment hasn't changed in 3 years and he will be paying it the next 2-30 years at 20%+ interest. Of course let's get him owing more money. But the thing is, if you stop charging and pay even $5 extra month, the amount WOULD have gone down! This family on the commercial doesn't even seem to be trying.

[paparazi257]

Challenge to save money

Welcome you to forum, I am a newbie too. I like your sharing. I am now a new officer. I have to pay alot for rented house, food, transportation. I don't know how to save money effectively