Every single freakin’ day

Sometimes the only consolation I can take is knowing that every month, my “I owe the world” amount is going down, and at some point in the future that amount will be zero. At which point, I’ll be screaming “Hooray!” that you’ll be able to hear me on the moon. Until then, I just keep plodding along the VBN path, trying to not mind the trip. At least we have a fine batch of folks on the road with us. Makes the miles go by a little faster.

In that case, here’s what I would do –

step 2: car payment done
step 3: bigger emergency fund to an amount you feel comfy at (not to exceed 3-6 months expenses)
next: back to step 2 for 27,000 house pay off
If still in paying off house stage when child hit 18–could always stop paying extra on house and help child, if wanted—or some extra to house, some extra to help child
Just my 2 ideas on the topic, everyone must do what is best for their personal situation.

My personal baby steps:

Step 1 (BEF): done
Step 2 (pay off debt, except mortgage): I have my not-so-wonderful student loan
Step 3 (6 month fund): working on making my fund bigger while also paying extra to student loan
Step 4 (15% to retirement): have some, but not currently investing
Step 5 (college funds): both kids currently enrolled in college– one junior year, one in sophomore year–cash flowing expenses as we go
Step 6 (mortgage paid): moved to a smaller–fully paid home–both kids living at home commuting to college
Step 7 (build wealth and give): will be nice to do when the time comes!

I guess that’s why it’s called “personal finance”? :)

I have a 15 year old, but have made it pretty clear that we won’t be able to help much with college. He’s not the academic type. That brings up a whole ‘nother can of worms, but he says he wants to be a High School English teacher, and yet he feels that if he makes C’s, that’s ok. Not because that’s the best he can do, but because he’s lazy. I told him I’d pay his tuition to go to Tech school, and set him on the road towards a career. If he’s determined to be an English teacher, he’ll have to find his own way there.
If I sound unsupportive, I’m not. I’ve done all that I can to get his grades up, but it’s on him. Leading a horse to water and all that.

As far as the rental is concerned, I’d hate to dump *more* money into it and then end up selling it. But I guess if that happens, it happens. It’s not a sure-bet we’d get our money back, but there’s a good chance of it.

I think we are just going to put money aside (the way DR recommends when someone is facing lay-off or pregnancy) until we can make a good, solid decision.

Thanks to all of you for your advice. Plenty of time to figure it out 😉

Because of our station in life

kids grown, already retirement age it is all baby step 2 to us. So I can’t really advise you. How soon will you have kids going off to college? That could be a huge deciding factor. If the kids are still really young I’d say, just my personal opinion here, to get the rental paid off so you will have that money to help fund the future college/tech school fund. If they are in their teens, then I’d get the college fund done first.

If you can do it in Babystep 2, why wouldn’t you?

If your snowball has enough momentum and you have a relatively small pay off amount, I would weigh out how many months your continuing to defer retirement savings.
In all actuality, I would probably even consider splitting the snowball amongst retirement and an early payoff – so I guess that would be a slightly modified Babystep 2.

Since the rental has the smaller balance

27,000 vs 66,000 – I would work on paying off the rental after the car.

Of course, roll the car payment that is done into the payments….increase the size of the snowball.

Then, when that one is done—work on the 66,000 one—-all rent coming in + old car payment amount would be extra snowball at that point.

Way to get the snowball rolling.

Lizabeth—who is mortgage free– but working on her pain in the patootie student loan.

That’s what I’m leaning toward

I know I’m supposed to pay the residence before the rental, but the rental is such a small amount….
My dad does pay rent and doesn’t know we plan on selling the house. I don’t want him to feel like we want him out. We don’t. So I think – unless I find out something different between now and then – I will start plowing down the rental.

I understand your tough decision

hopefully if all goes well by mid next summer we will be snowballing on one of our two mortgages and at that point I’ll have to make a major decision on which to do first. The first mortgage will be lower in what is owed by about $10,000 but it is also a lower interest rate than the second mortgage.
The two payments are within $100 of each other, but if I paid off the 1st first I’d only have part of that monthly to put on the second because of needing to put back for taxes and insurance. So it’s very tempting to pay the second off first, but at this point we plan on doing the first first because of the faster pay off on it and the “feeling” of accomplishment. Confused yet? LOL!

I think I agree with Mark

Pay off the rental first. You owe less money on it and when you do sell it, you will have that money to use as needed, whether it’s to pay off the home you live in or add to your emergency fund, or whatever…..Just curious, does you dad pay rent? If so, when you are no longer paying on the rental, the money he gives you can go to pay off your house.

I’d pay off the rental first

Then when you sell it you pay off your house with the proceeds and bam both houses are paid off!
But if you payoff your house first, you have a paid for house, but you still have the rental to pay on while your dad lives there.
Logically, they both payoff the same, but mentally paying off the rental is like paying off a debt. When that is paid for and you sell it, you get a big fat check! Then you take that money and pay off the mortgage on your house. It feels like found or made money!
Notice the word feels, it feels different than just selling the rental and giving the money to the bank to payoff the mortgage on the rental.
Its all about the excitement of being gazelle and paying of the rental and then reaping the benefits by being able to use that money to payoff your mortgage.

A few things

After too many months of being broke, poor and under-employed, we’re finally in a happy spot, income-wise. We should pay the car off in October.
My question for the visitors: I have a rental that my father is renting from me.
I’m not sure what my next move should be. I owe about $27k on it and $66k on my residence. When my dad no longer needs to live there, I want to sell the rental. It’s worth $60-65k.
I could have the rental paid off in a little over a year (after the car is paid off) then start paying extra on our mortgage. Or pay our house off first then the rental, because I might sell the rental within that time?
My dad will be living there as long as he is able to, as far as we are concerned, but we don’t want to play landlord after him.
So should which house should we concentrate on paying down? When I run the numbers, it doesn’t make much of a difference on paper. Either way, WE’RE DEBT FREE in 5 years!!!!

For us, we had the $1K then rolled it into the 3-6 months when we got to that step

Our retirement is totally separate. The FFEF is split between 2 banks, passbook savings at one bank and a regular checking at our “main” bank where more of our accounts are. We can write as many checks as we want to with no penalty and no minimum balance on the savings or checking.

The retirement is made up of traditional IRAs utilizing mutual funds for dh and for me. We max them out each year. But that does not put us at 15% so we are investing in non-retirement accounts using mutual funds. We have never taken anything out of any of these mutual funds (retirement or non-retirement). That is what the FFEF is for.

I am not so sure it matters where the money is parked

It matters that the money for both funds, is available. At some point the BEF will become part of your larger Emergency fund and all of that will roll over into retirement or general savings as you get further and further away from debt.
I wouldn’t stress on having multiple accounts as much as I would be concerned that I have money set aside in case something drastic occurs.

Holly’s correct

At least, I believe so, I haven’t gone through FPU so maybe they explain it better than from what I’ve gleaned from Dave’s books. The $1000 should be readily available so you can use it in a moment’s notice. Stuff it under your mattress. Put it behind a picture frame. Stick it in a simple, savings account at your bank. Just have it there for when you need it asap. Your 3 – 6 month emergency account could be in an ING account (which takes 3 days to access) or where ever you’d like, but it’s there to tide you over in the case of a job loss or some huge emergency, but most likely, an unexpected job loss. Someone definitely correct me if I’m mistaken, but this is how I believe it’s supposed to work.

Hope this helps :)

If you will be able to pay off the debt in 18 months, then stop the 401K contributions. BS3(when you get there) is 3-6 months of expenses. You would build up your $1500 BEF to 3-6 months. As far as BS 4, the goal is 15% of income going to retirement, including a company match.

The little things you mentioned like knowing your name, etc

is what we like about both banks but more so about the local. It is where we ended up getting our mortgage because they had the best terms, hands down. The other bank, Regions, is still somewhat like a small local bank. We know people personally at 1 branches and have 2 acquantainces at other branches. One of the friends is in some sort of manager position at her branch and has been helpful in overriding delays in getting to large checks that are deposited. At some level banks typically put a hold on checks and since she knows our business is run on cash only, she has been helpful in not having to wait on our own money that came from our own business… mostly dividends checks. We don’t plan on going anywhere.

We also found out recently about a local cabinet maker in town who apparently beats out the big box stores (bbs) on bids and uses better quality products. A couple we know is building a house and the contractor hired this guy to do the cabinets and did a superb job using real wood, not mdf or particle board. He came in about 1/2 of what Lowe’s bid. Another couple used him when they built a few months back. They love his work and it was quality products again, all real wood.

I bring that up to say that local is sometimes much better products/services than BBS and with better quality. Just thought it tied into the discussion about local/national banks. Don’t assume a local small business will cost more. Usually they answer to the local consumer not a board of directors. If the local consumer is not happy, they won’t be in business long, for the most part.

I have BOA and haven’t had many problems

I only recall 1 over the past 21 years and it was straightened out right away. This happened before we had direct deposit on DH’s travel expenses and right after they merged with Barnett Bank. I tried to do the deposit at the window–“new” teller, she was from Barnett and refused the deposit. It was an expense check and an escrow refund check from BOA. I wasn’t taking any money out and the reason I always did the window was so I wouldn’t have to unload 3 kids. Once I spoke to the manager, it never happened again.

I do have a credit union account–savings and that is also the bank we are using for our new business. I haven’t used the credit union account out of the country, but my kids have used theirs when traveling to relatives out of state.

I understand the theory behind a small bank and a credit union

My main business account is with a small local bank where my funeral home is located and my business is probably amongst the first businesses they associated themselves with. My granddaddy in law used to tell stories about when the bank came to town in the first place. I stay for sentimental reasons, the fact that they know us by name and know everything about our account and the vendors we pay monthly and our other monthly expenses. It took them a long time to get debits, become part of the ACH system, electronic checks, bill pay etc and have many things like you note about “security”. I won’t get rid of them, but they aren’t my personal bank and never will be.

I don’t bank with nationwide banks like BOA, or Chase, I do use I guess what is called a regional bank, Suntrust. Maybe they are national… They are big enough to handle my international travel, I just made a phone call to tell them I would be out of the country and I noticed no difference in using my debit card in paying my hotel bills, travel excursions etc. Cash is easier for conversion though for most things so I don’t think that matters in banking terms. Shopping on line, electronic bill pay etc I’ve never had any problems with.

I originally started with internet only banks… ING, Emigrant Direct, there was another one which escaped me. I used them (as long as they were FDIC insured) just as placeholders, savings accounts, checking accounts as a way to put some distance in between my money and my shoe habit. Not for serious banking. ING has changed over the years, more mainstream, with the electric orange checking account and especially now since they have been purchased by Capital One. The bank I can’t remember closed I believe, I remember getting a check from them, and I put it into Emigrant Direct, back when they were really displaying super high interest rates. Again, not serious banking. I am trying PerkStreet for much the same reason, a place to park money so that its not close when the urge to buy a pair of Louboutin’s strikes. I like the fact that both checking and savings are available from the beginning, but I will say that its been over a week, and still no paperwork, no listing of my actual account number(s) so this might not bode well in the future if they make it almost impossible to deposit money.

I am not brave enough to go to a full fledged internet bank as my only bank. But a bank that allows you to conduct business globally is a good thing. If the bank restricts your transactions on obscure policies known only to them, that wouldn’t a good match make for me.

Remote deposit is a really wonderful thing to have

You can take a photo of any check you receive and deposit it immediately into your checking account. Because we have checks that come in on an irregular basis that won’t do direct deposit or paypal and we live 30 miles from the closest bank (other than the one in our small town that hasn’t even heard of an atm yet) remote deposit is a huge thing for us.
Often we can take the photo and within 5 minutes the deposit shows on our account online with #2 bank. If they weren’t the only bank we have that we could shop online with I’d make them my main bank.

I don’t know enough about the big banks to make a comment or referral on those

Our “main” bank is Regions but I just looked and they are not good. They are in the southeast. We have free online banking and bill pay, images of checks, etc. All that you are looking for but I am not sure what “remote deposits” are so I don’t know if they do that.
We chose to park roughly 1/2 of our FFEF there because of hurricane evacuation. Almost anywhere we would go in the southeast has a Regions or in a nearby parish(county)/town.
Our other bank is a local bank. It is slower to implement some things but we do have free online banking through them.
These 2 banks do pretty much all we need. We have not had any purchases or transactions cancelled or rejected as you have. I am sorry to hear about your experiences.

Oh, I expect he knew exactly what he was saying

A lot of these folks count on consumers not knowing their rights and not knowing their options. They use fear to drive the reaction they want to see. The moment the consumer speaks up and says “I already know you have no legal authority to do this”, the game is over. I wouldn’t even get into the amount of the bill, how they found you after all these years, any of it. Just tell them you already know they have no legal authority to pursue payment of this bill, and if they continue to try, you’ll press charges, which DO have authority.

If the statute of limitations has really gone well beyond your state’s limits, then this is intimidation

I wonder if it would be a good strategy to call his office, inform them that this bill is well beyond the statute of limitations, and if they continue to pester you, you’ll file harassment charges. I would expect that to dry up this conversation in a hurry. Attorneys enjoy using the law to flog others but they are quite sensitive to being flogged by it when the tables are turned. And he’s clearly out of line. Use that tool; it’s there for that purpose.

My dh had a car repossessed in his early twenties

The company called us for years. I told them it was before we got married, so not my problem. 15 years after we were married, they sent him court documents and said they were going to attach his checking account. They got some money out of a checking account that we use as a pass through account to pay our car payment. Luckily on the day they attached to it the car payment wasn’t in there. Hopefully this collection is done, but you never know.

Zero balance budgeting is mentally challenging me

With every dollar having a name on paper it’s mentally challenging to see my paycheck go in and instantly be gone. I know that it’s because I’ve taken cash out to pay bills, moved money into savings, and paid bills, but it’s still just “gone” so fast.
I try to focus on how fat my envelopes are and that my debt snowball is going down, but I’m having hard time getting over the new way of budgeting where my checking account always looks bleak.
Anyone else struggle with that?

That seems crazy to me too

Do you remember what insurance you had at the time? If so I would call them and see what they can dig up. Ask if they can send you proof of what they paid. They may still have it in their system.

I don’t keep my EOB’s that long. Not 13 years anyway. I do have some from 5 years ago though.

Doctor bill from over 12 years ago

My daughter had tubes put in her ears when she was 13 months old, she is going to be 14 in a few months. I just got a bill in the mail from a lawyer looking for $60. The doctor she saw retired and he turned all his old collections over to this lawyer. I don’t even remember if I paid it or what the insurance covered. How long does everyone keep medical record information like that? This seems crazy to me. The lawyer’s office is looking over the records now to see what was paid, they did say if I don’t pay the $60 then I’ll incur court fees.. etc.

Sorry you’re having such major issues

I looked through that list of “can’t-do’s” and was just amazed you’ve put up with them for so long. I also would hesitate to go with either of the major national banks you mentioned – you already know of my profound hatred for Chase so I won’t go on that tirade. I have pretty much the same feelings about BofA for some similar reasons. But have you considered a national credit union? DH has had his money with Boeing Employee Credit Union forever, which is a regional credit union based here, and he never had any of the issues you mention with travel outside the state. Heck, he was spending money hand over fist in Manhattan a number of years ago when we went to a family reunion. Pbcloans.com – no credit check needed for online payday loans and there’s got to be some regional credit unions down there, particularly since Texas touts itself as the second biggest state, which you could tap into. Also, it used to be that a lot of these credit unions were restricted to employees only, or their family members, but that requirement has been lifted for a lot of banks. One more thing – there is a national credit union network, such that if you have membership at one credit union, you can do most of your banking at ANY credit union within that network. So for instance, out here, I have an account with Qualstar Credit Union (a very small state credit union for employees of certain companies), and then the Boeing Employees CU. I can go to a branch of either, and do my banking for that other CU. Hope that makes sense.

After all the issues I had with Chase, and a few similar issues with BofA, I’ll never bank at a regular “bank” again. I’m a credit union gal from here on out. But in any case, I hope you find something that works for you.

I would look into the % of inflation protection

How the elimination period is calculated – days (calendar or business) or weeks. The maximum lifetime benefit and whether or not it can be interrupted. Any cash benefits and how they are dispersed if needed.

The original question asked of me was whether or not the Premium was guaranteed, and upon looking at my information, the premium is indeed a lifetime guaranteed premium so while I’m starting off younger than recommended with a policy, I can’t complain.

I think for me, since I just have one child (and lately she’s not dependable), it is important that my policy can be used for in-home care, not just for facility placement. Coverage for me is 100% for both home health care and assisted living facility. This could quite possibly mean that I can stretch my lifetime benefit longer by resisting incarceration as long as possible.

I went to my insurer with a list of requirements for my policy, and crafted a policy which would meet my specifications. I understand that I will be able to tweak the policy over time and if there is a cost differential I can make those modifications as well.

A friend here in California

was just moved into her third facilitity, has a horrible variety of alzheimers. Her daughter cared for her for years and when her own health was impacted badly by the stress the three children moved her into the first. The disease has progressed to a really sad state. This last home is $9,000.00 a month. She’s 95.

We have not yet gotten long term care insurance and am concerned

as well, about the questions like “what if I don’t qualify later due to health?” Dh and I both had a mother who had alzheimers for a number of years before passing. My maternal grandpa also had it so it seems there is some predisposition to it on that side. Dh’s mom had an aunt who seemed to have had it as well. We don’t want to wait to late to get it and not be able to qualify due to alzheimers or other illnesses, etc. We have only one dd, now 26, who will not be able to care for us physically due to her own physical issues. Dh is 57 and I am 51 so we are too far off the recommended age. I am anxious to read what others have done.

On another note, dh did take a positive financial step. He got us an umbrella policy for us. It covers anything that happens at home that is unrelated to work. He opted for $1 million in coverage. It was about $450/yr. for it. That will make us rest better. There is someone who is over at our home from time to time who used to be a friend and is now someone we tolerate. We are concerned he could be one who looks for ways to make “free” money if you kwim. He is not the reason we bought it though. We felt we needed it regardless of whether he is at our home or not.

Dh also shopped around for auto insurance on his truck which is part of our business. The ins. he had was going up enough to make him look around. He found some at Geico where we have our personal vehicles. They shaved quite a bit off State Farm. I think it was about $1000/year that we saved. That savings came about even with increasing the payouts we have for medical, etc.


if you’re already incapacitated by 50 or 60 its not a waste and since we don’t ever know when we might not be able to perform 2 or more activities of daily living, I don’t think its too much to consider earlier. There is no set age when one can start receiving long term care in an assisted living community. When you have no one else to care for you and you don’t want to encumber your children, its good to have in your arsenal of smart financial decisions.

I agree that you should have inflation protection on your policy and what I like about my policy is the cash benefit I can receive of 35% of my coverage no questions asked. This will save people from making that vile error of reverse mortgaging.

I look at insurance – the entire spectrum- as better to have and not need, than to need it and not have it.

Another 401K question, and another question

A short time ago I asked a question about 401K contributions through my husband’s work. Currently 9% is taken out. It’s been that way for a while even though we have a $2800 debt, the debt came last Nov. So my question at the time was should we cut back on the 401K contributions in order to pay off the debt faster. The consensus from the group was no. And I agree. But at the time someone brought up that DR recommends adding to a company 401K to whatever the company will match. Well hubby’s work used to match up to 9%, but we’ve found out that is not true, The came up with a “new improved” system. It totally sucks for everyone involved except them! They are only matching 20 cents per dollar, and I am not sure to what % They are calling it an incentive program where if regions meet the “quota” set for them (by corporate of course) then they get more matching…as well as other compensation. Well they set the bar way too high and there is no way this region can meet their quota.

So my question is, what does DR recommend as far as 401K. Should we continue at 9% with the goal of 15%? Should we only contribute upto whatever % the company will match? What do we do to fund the rest of the percentage?

Also, I am confused about emergency fund so I hope someone can help. Are we to have $1000 emergency fund AND 3-6 months of living expenses? We have a $1500 ER fund (I’ve found we need to have higher than $1000 due to the cost of living here) and are starting to slowly build our living expenses fund since our $2800 is interest free for the life of the loan. I know not what DR suggests, but a year and a half ago my hubby was laid off and was out of work for 6 months. To feel a little safer, we feel that is what we need to do. Anyway, I just want to know are these two separate accounts?


My mother paid for many years and is still paying premiums for her LTC insurance. Her policy was purchased in the days before “Assisted LIVING” was in vogue. Her policy covers “NURSING HOME CARE”.
Essentially, assisted living is similar in cost and care of nursing homes, but enables the patient to enjoy more independence while still being cared-for and watched-over 24/7. It took 11 months to get the LTC Insurance to pay anything for her care, so we paid out-of-pocket $44,000.00 and even then, the LTC is only paying $45 a day for assisted living, when her policy would pay $90 a day for nursing home care. Problem is that she has Alzheimer’s but is not bad enough to qualify for nursing home care, and she would HATE giving up her assisted living apartment and all of the activities that they provide.
Also, if she were in a nursing home, the quarterly insurance premiums would cease.
My dealings with the LTC Ins. Co. has been very frustrating. I went to an Elder Care lawyer about Mother’s situation, and the lawyer basically said that there is no way to force them to pay their fair share. For myself and my husband, we plan to save as much as possible and pay our own way rather than purchasing LTC Ins.
If anyone has had any luck getting a LTC co. to pay full benefits for assisted living even though their policy reads “nursing home care”, PLEASE contact me.

I’m referring to daily care for the elderly

nursing homes, assisted living, nursing services in the home when the elderly cannot care for themselves anymore and need someone to take care of them. It does not cover medical services just the care of the patient for daily living. It has to be started when they are still relatively in good health, probably not perfect health because not many seniors are in perfect health. If someone is diagnosed with Alzheimer’s or something, it is too late to get the coverage, but if something runs in the family that leaves the person unable to care for themselves, it would be important to have. We think that what my FIL died from is genetic, so my husband has a chance of getting it, so I would get the insurance for him.