Appealing our taxes (and other $$ saving ideas?)

[Karenj2]

Just some background - the only debt that DH and I have are our cars, although we bought new cars around the same time. (yes, I know, that was dumb) We've been to the Dave Ramsey classes, and are FINALLY getting our butts in gear about trying to pay off that debt & follow the DR "way". So, we're trying to think of as many ways as possible to reduce our expenses, and I wanted to run them by you, to see if you can think of any additional things we can cut back on...

1. We're appealing our property taxes. I don't know about other neighborhoods, but in ours, there are quite a few people that appeal their taxes every year (which works in this economy). We talked with a friend that is helping us, and we'll probably save about $1300 a year by appealing this year.
2. We're probably going to switch from Comcast to Verizon FIOS for our phone/internet/cable. (I haven't completely convinced DH, even though we could save about $65/month.)
3. If it makes sense and we can, we'll refi our mortgage. At the moment our interest rate is 4.125%, so if we can drop a full percentage point, I think it'd be worth it. (Getting down to 3.125% could save us about $300/month.)
4. We're also going to stop paying extra on our principal, and put that towards paying off the cars. (We were paying $280/month.)
5. We're thinking of TEMPORARILY stopping/reducing our 401ks. The biggest thing holding me back is that I don't want us to forget to re-start it. But, the DR way has you putting money into 401ks AFTER you've paid off your debt.
6. And, any "extra" money we get (refunds, re-payments, etc. are going towards the car.)

Are there any other things you can think of that we could try to reduce the costs of? (Beyond garage sales, & spending less in general?)

 

[bsnmomtomany]

Just some background - the only debt that DH and I have are our cars, although we bought new cars around the same time. (yes, I know, that was dumb) We've been to the Dave Ramsey classes, and are FINALLY getting our butts in gear about trying to pay off that debt & follow the DR "way". So, we're trying to think of as many ways as possible to reduce our expenses, and I wanted to run them by you, to see if you can think of any additional things we can cut back on...


[*]We're appealing our property taxes. I don't know about other neighborhoods, but in ours, there are quite a few people that appeal their taxes every year (which works in this economy). We talked with a friend that is helping us, and we'll probably save about $1300 a year by appealing this year.
[*]We're probably going to switch from Comcast to Verizon FIOS for our phone/internet/cable. (I haven't completely convinced DH, even though we could save about $65/month.)
[*]If it makes sense and we can, we'll refi our mortgage. At the moment our interest rate is 4.125%, so if we can drop a full percentage point, I think it'd be worth it.
[*]We're also going to stop paying extra on our principal, and put that towards paying off the cars.
[*]We're thinking of TEMPORARILY stopping/reducing our 401ks. The biggest thing holding me back is that I don't want us to forget to re-start it. But, the DR way has you putting money into 401ks AFTER you've paid off your debt.
[*]And, any "extra" money we get (refunds, re-payments, etc. are going towards the car.)


Are there any other things you can think of that we could try to reduce the costs of? (Beyond garage sales, & spending less in general?)

Cash envelopes! I spend way less with this system.

 

[tar heel]

If you're getting a 401K match, it would be dumb to stop contributing. Dave Ramsey has some good ideas, but he isn't right on everything. Personally, I think he's wrong on retirement savings period.

 

[disny_luvr]

How about reshopping for a lower rate on your car/house insurance policies? I've never done this before (probably should) but I know others that have and were able to save some money.

 

[arthuruscg]

+1 tar heel,

Is the interest rate on the cars higher then your home mortgage? I would pay the loan off with the higher interest rate first.

Also, what is the interest rate on the cars compared to your 401k average return? I would bet your 401k is having a higher return then the interest you are paying on the cars. Also, with some auto loans there is a prepayment penalty equal to the amount of interest you would have paid over the course of the loan. So, you could be stuck paying the same amount of interest+ principle weather you pay the car off in 36 months or 2 months.

David Ramsey message is pretty good, but it is "made for TV". Which means, he makes it easy and sweeps away the details that matter in individual financial planning.

 

[SaraJayne]

Unless Dave Ramsey will be paying for your retirement, completely disregard the 401k advice.

 

[shelwoj]

We actually saved a bunch of money by refinancing our car loan (never again once it's paid off) through our credit union. It's not a tip you hear often but it worked for us.

 

[stsomewhere]

Keep paying into 401K. You will be losing money if your employer contributes to it.

My sister is into the Dave Ramesy way.

It does not work for us.

 

[ilovemk76]

If it makes sense and we can, we'll refi our mortgage. At the moment our interest rate is 4.125%, so if we can drop a full percentage point, I think it'd be worth it. (Getting down to 3.125% could save us about $300/month.)

Are you saving $300 on the exact same or a sooner end date or is the savings on the monthly payment but the end date is alter. The later is not a real savings (even with the drop in rate you could pay more over the life of the loan)


We're also going to stop paying extra on our principal, and put that towards paying off the cars. (We were paying $280/month.)

Is this $280 in addition to the $300 savings above?


We're thinking of TEMPORARILY stopping/reducing our 401ks. The biggest thing holding me back is that I don't want us to forget to re-start it. But, the DR way has you putting money into 401ks AFTER you've paid off your debt.

I believe this is only true if you can pay-off your debt in a year or less.



Earn more income.
Eat out less.

 

[Karenj2]

Thank you all for your responses! We are also working with the YNAB program to keep to our budget (we had fallen off the wagon, but we're back on now.)

If you're getting a 401K match, it would be dumb to stop contributing. Dave Ramsey has some good ideas, but he isn't right on everything. Personally, I think he's wrong on retirement savings period.

Unfortunately my company did away with matches 5 years ago, the same time they had a raise freeze...

If it makes sense and we can, we'll refi our mortgage. At the moment our interest rate is 4.125%, so if we can drop a full percentage point, I think it'd be worth it. (Getting down to 3.125% could save us about $300/month.)

Are you saving $300 on the exact same or a sooner end date or is the savings on the monthly payment but the end date is alter. The later is not a real savings (even with the drop in rate you could pay more over the life of the loan)


We're also going to stop paying extra on our principal, and put that towards paying off the cars. (We were paying $280/month.)

Is this $280 in addition to the $300 savings above?


We're thinking of TEMPORARILY stopping/reducing our 401ks. The biggest thing holding me back is that I don't want us to forget to re-start it. But, the DR way has you putting money into 401ks AFTER you've paid off your debt.

I believe this is only true if you can pay-off your debt in a year or less.



Earn more income.
Eat out less.

- I'd have to look at my notes again, but I think we're currently 13 years into a 15 year loan, and I *think* I was going down to a 12 year loan.

- The $280 was over & above the previous amount. If we don't refi, we're still paying that amount in addition to our normal monthly payment.

- That's what I'm thinking (about the 401k), and why I hesitate to include that... As I said above, my company doesn't match at all, and currently DH is contributing more than what his company matches. We were thinking of dropping down our contributions for a year (mine to 1% and his to whatever the company matches), but the other thing for us to consider is it could put us in a higher tax bracket.

Bsnmomtomany - I like that idea in theory, but there are a lot of things that we do that (like automatic payments) where we need a CC. Plus, cash tends to "disappear", where I can better account for CC charges. I think using YNAB has & will help us do the cash envelopes electronically, so we can (at this time) continue to use CCs. (Whic we pay off in full every month).

Disnylvr(?) - I think that's the next thing to explore! Good idea!

Also, we're not whole hog into the Dave Ramsey way - we just figured that we needed to be more proactive with our finances, and figured that taking an active stance on our debt, even though we're not hurting financially, is a good call.