a little and a lot

Monday, February 18, 2013

Dave Ramsey Koolaid

Ok, we drank the koolaid.

For Christmas, I gave Nick a "marriage book club."  He and I both really enjoy reading.  We are also both hopeless TV junkies tired at the end of the day, and we usually end up chilling on the couch.  I proposed that we each read one book at the same time per month and then discuss what we think about it...AKA, the marriage book club.

The first book for January was Dave Ramsey's "Total Money Makeover," which seemed appropriate given our annual interest in getting fit & getting financially back on track each January.

Oh boy, it messed with me.

I know money is a personal matter for everyone, but I have a feeling we're not the only ones who feel like we run out of money before we run out of month.  We tried setting up a specific budget a long time ago, back when I was a church secretary and Nick was a full-time student--our bills took up 90-something percent of our income!  We tabled the issue, and never picked it back up.

A year and a half ago, when we decided I would stay home with Rhet, we knew things would be tight financially, but we never examined it down to the dollar.

After reading this book, we finally got real with how much debt really have and what we're going to have to do to get rid of it.  I feel so liberated!  Even though we're still on the very first "step," it feels good to have a plan and to finally have the ability to tell our money where to go.

Dave repeats himself a lot, and one of his big things is working toward financial goals (paying off debt, particularly) with "gazelle-like intensity."  I respond well to goal-setting and motivational speeches, so Dave naturally struck a chord with me.

Here are a few things we've done to fine extra room in our budget--some of them may sound crazy to you, but remember--we're working with gazelle-like intensity over here!

1. Look at every single bill you pay and figure out how to make it lower.
This may seem like a "duh" statement, but in the past we've just paid what the paper told us we owed and didn't take them to think any more about it.
  • We switched our electricity/gas/water bill to "Budget Billing."  This is an option in which they average out your bills from the past year so you pay the same amount every month.  Much easier to plan around.  (Don't worry--they reconfigure your savings/extra every year and make adjustments.)
  • We switched our cable broadband internet to the slowest speed (AKA cheapest per month cost) and signed up for a 6-month promotion to get the bill even lower for a bit.  $20/month!  (Because of the amount of budget cuts/changes we've made that in turn have us relying on cable internet, we couldn't slash this anymore than what we did.  Dial-up just wasn't going to cut it for now.)
  • We called our car/renters' insurance agent and asked what we could do to get our bill as low as it could go.  This meant raising some deductibles (Dave has emergency savings in his plan, so that would cover things) and reevaluating the way we use our vehicles.  In all, we shaved $60/month off of our bill!
  • We don't get cable TV.  We use an HD antenna with our smart TV, and we we do pay for (an ancient, grandfathered) TiVo subscription at a low cost.  We quit our Hulu subscription (which we had in case one of our channels got iffy for whatever reason in the middle of recording Downton Abbey), knowing we could watch a show on the computer or iPad if we missed it on TV.  We subscribe to Spotify Premium for $10/month instead of purchasing music.  We have considered dropping our Netflix subscription, but we're holding onto it for the time being we're using it often.
  • I made a commitment to slash our eating out (a HUGE weakness) to $20/pay-period and reeeeeally trying to cook on the cheap ($100/pay-period).  Check out how that's going over on Frugal Foodie!
  • Here is the craziest one that is also saving a bunch of money: I quit my cell phone service.  We both have iPhones that we used with AT&T.  I was off-contract, and when I started looking into it, I realized I could definitely lower my bill.  (Nick still has about 9 months left on his contract--we are budgeting for buying him off of it because the money we save will pay for the cost of the buy-out almost immediately!)  There are several ways I could have gone with this, and I will probably modify what I've done later once we have eased off our gazelle-like intensity :) but for now, this is what I do:
    • Before I cancelled my service with AT&T, I "ported" my number to Google Voice (for $20).  This allowed me to keep my phone number that everyone knows, no matter what I decided to do for my phone service.
    • Also before canceling my service, I made sure to request my iPhone to be unlocked, so I could use it with another carrier in the future.
    • I purchased a SkypeIn phone number.  As a trial, I purchased mine for $18 for 3 months, but you can also pay $60 for the whole year.  This gave me a phone number to use as a forwarding number with Google Voice.  (When people call the phone number they know as "mine," Google Voice will accept the call and forward it to my new Skype number.)
    • I also purchased SkypeOut Credit as a trial.  (If I end up spending more than $2.99/month, then I'm just going to get a SkypeOut subscription that allows me unlimited calling minutes for that total per month.)
    • So here is how using my phone works:
      • I make outgoing phone calls using the Skype app (which is set up to show my known Google Voice number for caller ID) on my iPhone over wifi.
      • I receiving incoming calls through the Skype app on my iPhone over wifi (which are forwarded from Google Voice).
      • I text my friends with iPhones through the normal texting app on my iPhone with iMessage over wifi.  If I'm texting with an iPhoneless friend, I use Google Voice, which uses my Skype credit.
    • The good part: I get to use my oh-so-useful and beloved iPhone for about $2.99/month (after the initial $38 start-up cost) on the same phone number that everyone knows...this saves us about $60-80 per month!  The bad part: If I am not on a wifi network, I can't use my phone...AKA: I am living life in 1992.  As a stay-at-home mom, I am often...well, staying at home.  Duh.  And if I'm out and about and need to use my phone, there are places with wifi I can go to.  I approached all the "what if's" with a "this is a temporary super-cheap solution...in an emergency, I can rely on the kindness of strangers and provision from God" attitude.
    • Once Nick is able to switch is network, we'll probably get him a prepaid plan & simcard from a much cheaper competitor and he'll limit his data as much as possible.
You guys, it feels SO GREAT to have the money that we need to save and to pay off debt instead of despairing that it disappeared every month.  Sure, it's kind of painful to make cuts that are really inconvenient and not fun.  But the payoff is literally worth it.  Hope I inspired you to find some "extra money" in your budget, too!


Anonymous said...

Wahoo! Way to go...sounds like you do have gazelle-like intensity. :). We too tried Dave's advice, molding it to what worked best for us (I like to write it all out on paper), and it definitely has been liberating to tell our $ where to go. It's been what allowed us to live on one income, and taught us to live within our means. I gave up my cell, we got rid of cable, and we use cloth diapers...got some crazy looks along the way, but we wouldn't trade the freedom it brought us. If you get tired along the way, I'd love to encourage you. Love you! (And I will call soon to catch up!)

Anonymous said...

Probably should've identified myself. Whoops! -Lori :)

Adopting Rhet: Click on the timeline above to read more