I've been pretty open about our road to become totally debt-free. I need to give everyone an update on our progress.
Jonah (8 months old at the time) attending his 1st family budget meeting!
So...a re-cap.
We are doing Dave Ramsey's 7 baby step program. We became debt-free but the house in Feb of 2011 (baby step 2). We had our 3-6 month emergency fund in place in Feb of 2012 (baby step 3). After that we started saving for Jonah's birth, I call that baby step 3b(baby). I made that one up! Then we started saving cash for a "newer" car, and I will call that baby step 3c(car). I made that up too! Then, Kyle got a new job and we transferred his retirement over to a Roth IRA. We had to pay taxes on that. I will call that baby step 3d(duh), yup made that up. We'd rather pay the taxes now, while the money has not grown, than to pay the taxes when we retire when the money has grown and we are in a bigger tax bracket. Look at me talking like I know what I am talking about! I've learned a lot!
THEN...
Life happened.
We've had things pop up that we've had to pay for. I am SO thankful for our emergency fund. I won't bore you with too many details, but I will name a few things that happened.
Kyle ate some ice and broke a tooth. Sounds harmless, but it ended up costing us $3,000. That is some expensive ice.
Our cars are older (2002) and we've had to maintain those...
Forced home repairs happened...
Just stuff happened!
So the bad news is that we are having to rebuild this emergency fund. Kyle found another retirement fund from an old job that he rolled over to a Roth. Now we save for that too. We are having baby # 2 and we save for that.
The good news... it was NOT stressful. We didn't have to worry about where the money was coming from. It was nice to just write a check and be done.
Sometimes I get frustrated that our wheels are just turning. Then I have to step back and take another look at how far we've come. Seriously, I'm mad because we had to use some of our emergency fund? Really Angie?? There are people out there living paycheck-to-paycheck. People that have debt up to their eyeballs. And here I am pouting that we had to use our SAVED CASH? We have worked so hard to get to this point and I need to be proud! Reality check! I'm sure a lot of people would love to have this problem!!
Even though we've had to take some steps back, we are still doing awesome!
Our goal is to own our house. We want zero debt as soon as possible!
If it means that we drive our 2002 model cars for 2 or 3 more years until we have the cash to pay for a newer car, then so be it. We are in this together.
Why I love my husband. He sent me a text that read...
"Budget meeting when Jonah goes to bed?"
WE.CAN.DO.THIS!!!
Yay Dave!! I'm a fan too (going to see him live in a few weeks!!) and we have no debt either! We were so siked when we both finally paid off our student loan debt. I have a question about the roth. I have two old 401ks (not my current one at current job but from previous jobs). I have been trying to decide if I wanted to roll those into my current 401k or into a roth. Why do you think you will be making more at retirement if you are retired? Wouldnt everyone be in a lower tax bracket once you are retired?? Email me bc I'd love to hear your thoughts!
ReplyDeletehere is what i gathered from consulting kyle (who is teaching FPU! ha!) lets say you had $20,000 in an old 401k. and you transferred that to a roth. you'd pay $4000 on taxes now. if you did not, you'd have to pay more when you cashed it out when you retire...so if that $20,000 grew to $800,000...you'd have to pay taxes on the $800,000 not the little $20,000. i am just making up numbers here! hopefully when we retire, we will have a BIG net worth so we will all be in a higher tax bracket and sadly, we'd have to pay more taxes =( so we get slapped on the hand for working hard and have to pay more taxes. that is how i understand it. kyle said that you could transfer it to your 401k now but you might not have as much control over it. we have a super investment guy to helped us out. i'd ask your investment guy! all this info is over my head but that is how i learned it! congrats on paying off student loans!!! so much fun!
DeleteGreat job!!! We need to seriously buckle down and get back on the DR track.
ReplyDeletethanks! its not easy but i feel like its a way of life now! ha! hey, you're less a house now so im sure it'd be easier to get back on the DR track now that you have a big stress off your plate!!
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