Anyone else overwhelmed by Dave Ramsey's website, and some ??'s

[jenimay]

SOmeone suggested his site for financial help. Anyway, I checked it out, and don't even know where to start. After about ten minutes trying to navigate the site, I gave up. Anyone have any other suggestions for us on where to get some motivation and financial help, or give me help with him??
Here's a little background: Dh and I are in an "okay" place right now financially. We married young, had kids young(we're 30 and 28 and our kids are 7.5, 6.5 and 2), and it was a struggle, but we made sure we never lived in poverty and we have achieved our goals: 3 years ago dh got a job as a regional airline pilot, and I graduated college 3 weeks after our youngest was born and have since worked on-call for the hospital as a social worker. Dh is usually home to watch the kids when I work, which is great.
Anyway, we currently live in a lower cost of living area, but are looking to have to move to a more expensive place when he upgrades to captain within the next year. He will have an increase in salary, but it may all even out. Anyway, we would like to get ahead of the game. We have started saving for retirement. We currently save per month: $250 in IRA's and $80 in 401K that is matched. We have about $6000 in retirement so far. We have one car payment, and a motorcycle payment, and of course student loans. We usually are able to pay off our credit cards, so that's not and issue.
I consider myself frugal, with the occasional splurge. But we are not able to save much money(besides retirement). I need motivation I think. Dh and I have never been good at saving. I think for the last couple of years it's been so nice to actually have money to spend, we usually find something to spend it on. We bought our first home Feb 2004, and although it was only 4 years old, it needed work, so that's where a lot of it goes. And then there's our yearly vacations. We budget wisely and fly free, but it's still money that could be saved I guess. So anyone have any suggestions on resources? Even though we're at a better place than 5 years ago, I know we could be doing even better. Thanks!
Jeni

 

[tinaluis]

Perhaps checking some of Dave Ramsey's books out of the library would be more helpful. I tried navigating the website too and found that having the books to read was better for me. One of the things that stuck out about your post was that you're thinking of "upgrading" your house in a few years. After you've read Ramsey's books you may reconsider that and instead invest the extra $$ that your DH gets from his new position. His books basically encourage you to live below your means (read -- stay in your current home if that is cost effective) and to find ways to save on EVERYTHING. Good luck to you!

 

[jenimay]

Perhaps checking some of Dave Ramsey's books out of the library would be more helpful. I tried navigating the website too and found that having the books to read was better for me. One of the things that stuck out about your post was that you're thinking of "upgrading" your house in a few years. After you've read Ramsey's books you may reconsider that and instead invest the extra $$ that your DH gets from his new position. His books basically encourage you to live below your means (read -- stay in your current home if that is cost effective) and to find ways to save on EVERYTHING. Good luck to you!

Hi, thanks for the input. As far as upgrading, we have to move to probably Denver/Colorado Springs, maybe Salt Lake (as dh would be required to sit reserve for a couple of years and it wouldn't be feasible to commute as he does now). Almost everywhere besides where we live-lol, the cost of housing is higher, and I think cost of living overall is more. We wouldn't necessarily be buying bigger/better.


Jeni

 

[Chicago526]

In Dave's books (go get them, they are worth it!) he recomends that your total monthly house payment (mortgage, taxes, homeowners) should not exceed 25% of your monthly TAKE HOME pay (after taxes, insurance, 401K etc.) So, if you take home pay is $4000 a month, you should pay around $1000 a month total for your housing costs. Use that as a guide when looking for a new home, so you know that you can really afford it.

Dave would tell you to do the following:

First, get an emergency fund started. He recomends $1000, but I say that's low, try for $2000 if you can. This is for things like the car breaking down or needing to patch a hole in the roof, true emergencies, and not Best Buy haveing a sale on t.v.'s. This is so while your doing the other steps, if something comes up you won't have to put the emergency on a credit card. Once that's established, then:

Unless the motercycle is used for everyday transportation, get sell it. If you do use it everyday, then pay it off ASAP. Get rid of the payment and use that money for other things. If the bike is worth less than the loan, then pay it off ASAP and then sell it to use the money for other steps (this also saves the extra insurance cost for having the bike).

If you have no credit card debt (and it sounds like you don't), pay off the car loan ASAP (use the money from the sale of the motorcycle to get a jump start on that.) Every month you don't have a payement is interest saved. Once you pay off the car, never have a car loan again if you can help it (and whatever you do don't ever lease). Buy used cars, 1 to 3 years old, never new. Cars depreciate the most the first few years after purchase, let someone else take the loss. Cars are so well made thes days, you'll still get 5 to 10 years use out of them, and you may still get what's left of the warrenty.

Once the car is taken care off, pay off those student loans.

Once all your debt is paid off, then start to fully fund your emergency account, you should try for 3 to 6 months of living expences. Add up all your bills for the month, multiply that by 3,4,5, or 6 (however many months you want in reserve), and that's what you should save. Once that's done, start to fully fund your 401K, IRA or other retirement savings. Get with a financial guy to figure out what you need to save to retire the way you want. Also fund college savings.

He also recomends paying off your mortgage early if possible, but I feel that retirment and college savings come first. If you've got that under control, then look at paying off the house early.

That's it in a nutshell, but the books are worth the read and are very inspirational.