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Author: Dilmatz Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5069  
Subject: My budget -- and confession (long!) Date: 8/7/2003 4:24 PM
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My background: I've been on TMF since 1999. I read that I should get rid of debt which I've been working on for some time since it was sizeable. Got married in 2000 and we've been working pretty steadily on paying stuff off. We've also been working changing our mindsets about spending money.

Confession: I've been trying to write this post for a couple of hours now. Truth is, I'm too embarrassed to post actual income and expenses. I guess I'm hesitant because I know what you're gonna say: don't spend so much on that, you're wasting money here. It just feels so *extravagant* compared to the real struggles of others on this website.

Perhaps mazske's questions will help me to respond in relative comfort:

>>Start a new thread that tells us a little bit about your debt and your plan for paying it off.<<

Right now, we have several cards that we've been consolidating and moving to 0% interest:
Capital One -- balance: 10K, 0%
Two discover cards -- balance: 9K, 0% until Oct. 2003. Much of that is schooling for my wife of which her employer reimbursed a large percentage. We are holding about 6K from that reimbursement, just because the interest is 0% on the card and the money's earning a little bit of interest.

One of our bills is a loan against my TSA -- balance left: about 6K. Interest is 8.5%. When I talked to the money advisor, he thought that what I'm paying in interest is going back into my TSA account. I haven't checked on this, but it doesn't make sense to me. How would they make any money?

Our house, another bill, is worth about $190K and we owe about $113K. Payments are $700/month.

No car payments.

We have a bigscreen TV (5K) and a computer (3K) with no payments/no interest until March 04 and June 04, respectively.

My plan for paying it off is related to my efund, so here's that:

>>As far as building an e-fund up, tell us a little about your current situation as in are you married, kids, living with parents, going to school etc. Depending on your situation would make a difference to me in how much of an e-fund you build up.<<

Married, child from a previous marriage (12), wife wants kids. Money advisor pointed out that my big fear is being laid off, so for that few months, we've been putting about $3K/month into our efund. It's now about $31K. My 6 month estimate if NOTHING changed was $34K. My thinking is that if one of us got laid off, we'd cut back on stuff (satellite, cell phones), thus making the 6 month figure more like $24K.

Other savings we put away, per month, for annual expenses:
Xmas club: $150
Car stuff (insurance, tags, maintenance): $200
Home stuff (Insurance and taxes): $300
Slush fund (vacation): $500

If one of us got laid off, the slush and Xmas club would also stop and that money would go to the efund.

We essentially put my wife's check and little bit of mine, into savings. And she makes a good chunk.

My plan was to continue putting money in the efund and pay the bills when they no longer were interest free. If something should happen between now and then, we could have a nice cushion to fall on.

I think I should keep our money until bills are paid since interest is 0%. I can earn a little bit of interest on the money in the mean time. Is there something wrong with this thinking?

This month, I became frustrated because I felt like there was no room in the budget for home improvement. I want to put $2K into the efund and use the $1K for home improvement *if I need it* and put it back if I don't. The freedom alone to do this helped me to feel better, more in control.

I think we can be debt free within the next 12 months.

So, here it is. I hope you guys don't laugh me off cyberspace...
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